focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
ShareNicelyNow…Although the RNS today stated that questions can be submitted at any time during the live presentation tomorrow, I have taken the liberty of copying to IR today, the five questions you raised in post 318 along with a snippet (or two) from that post. I’ve highlighted that these queries are of considerable concern to many shareholders, and I have asked that Ofer Druker, Yaniv Carmi or Sagi Niri provide answers to all of them.
The email….
In the view of many Tremor shareholders, the 3Q earnings report, presentation and conference call, was a public relations / investor relations disaster and Tremors share price has responded accordingly. Many therefore, feel relieved at the opportunity now being afforded to them to address major issues of angst, via tomorrow’s Investor Meet Presentation.
The following queries are of considerable concern to many shareholders. I am herewith requesting that Ofer Druker, Yaniv Carmi or Sagi Niri provide answers to all the following questions at the Investor Meet presentation tomorrow afternoon. Accordingly, please forward the following….
- how much CTV revenue was dependent on the LG data feed / ex Alphonso - I reckon a quarter to a third.
- can you give guidance to what CTV revenue will be in Q4 (Magnite did)
- how well is the CTV marketplace doing
- guidance appears low, and the EBITDA margin is low, given you have just done 55%, the margin should be higher, on higher income (more so, given September was you best ever month)
- Re SPO, unfortunately the market is going the other way, with OEMs forming DSPs walled gardens, and the likelihood that broadcasters and media companies will form their own SSPs. Is there really a future for the open internet ad tec companies, or will advertisers be basically held to ransom by an inefficient structure.
Xxxxx xxxxxxx. Shareholder
ShareNicelyNow re you remark …. clearly a public relations / investor relations disaster. A chance to ask the right questions which the analysts failed to ask!
Those were my immediate thoughts as well. I reckon IR have received one or two (many?) very angry emails from shareholders, resulting from, what was, in my view, a rather inadequate 3Q earnings report, conference call and cover-up job. They certainly got one from me.
In the light of the RNS today…Job done. Let’s hope tomorrows Meet the Company presentation helps put the angst it has caused, to bed. I would encourage anyone who has a beef, to air it, and to do so via IR rather than vent it on this BB alone. That way you add pressure where the pressure belongs.
gdog re your...I find the 'record breaking' $23 million for Q4 CTV to be rather lame.
I know you do, and I am not overly amoured with it either but like it or not, it is a new quarterly record revenue for ctv.
gdog....I believe the chat board you are referring too was Interactive Investor ( iii ) and the person you refer too was called sobeit. I think both are mort.
courtesy, thesequestors advfm....and I concur.
...as mentioned previously, the other ad-tecs had similar CTV stories. Viant, the closest to TRMR in terms of CTV and video % revenue, went from CTV 13.2m in Q2 to $10.7 in Q3. And they explained the reasons which were perfectly understandable. TRMRs was 1m less and there's an inquest.
gdog re your.....Here I am talking about the fact that mgt. did not mention a word about the sequential decline from Q2 to Q3 in CTV. That's on them. Totally. That's not at all a good look.
Granted, but isn't it just as confusing (or incompetent) that not one of the analysts during Q&A asked the question as to why 3Q ctv revs were flat?
gdog regarding mgnt failure etc...this courtesy of thequesto advfm....
TRMR is not alone in the CTV observation. Viant explained that their similar experience in CTV was due to certain key verticals (auto, CMG - representing circa 45% of their revenue in Q32020) pulling back on ad spend. They went on to say that a lot of this was confined to Q3, was due to supply chain issues and not seen in Q4. They are providing guidance of 50% growth from Q2, in Q4 - the same as they got in 2020. If TRMR gets anything like their growth in 2020 then it will smash guidance - that's what I think they are trying to do, based on the Perion experience.
gdog....it was me that opened this topic yesterday, but quite frankly I wish I hadn't. Most of us have known about all of this for five months+. There was quite a high % rejection at the AGM but it was passed by the large shareholders and things now are, as they are. If these guys out- perform then they can have their ill-gotten’s and I will walk away with mine. If they don’t, I will lick my wounds and move on. Also, worth adding here that if they don’t then their own share pile won’t be worth a lot either.
gdog re…. Radium, know about what since last April? The massive allotment of RSUs and PSUs? This part of the comp package was noticed to the SEC on 12 July.
But am I incorrect in saying that you have been invested here, on the AIM, from well before 12 July and had researchedTremor thoroughly, beforehand.
Extract….Tremor International Ltd (AIM/NASDAQ: TRMR), a global company offering an end to end software advertising platform, announces that, as previously disclosed on 30 APRIL 2021, effective upon completion of the Company’s dual listing on Nasdaq on 22 June 2021, Tremor granted restricted share units (“RSUs”) and performance share units (“PSUs”) to Ofer Druker, Yaniv Carmi and Sagi Niri, in the amounts and subject to the terms approved by the shareholders on 30 April 2021 and as disclosed in the resolutions within the Notice of EGM, dated 26 March 2021. The RSUs and PSUs granted upon completion of the U.S. dual listing are detailed below. Etc, etc…
https://www.sec.gov/Archives/edgar/data/1849396/000119312521213555/d129518dex991.htm
And the AGM approval...
https://www.lse.co.uk/rns/TRMR/results-of-egm-6tbtkg6dqksb6a6.html
But we have all known about this since last April. Well nearly all of us.
re...I would rather have Ofer in charge and a shareprice of £7, than Brian Mukherjee or Ted Hastings and a shareprice of £1!
In a nutshell. Therin lies the rub.
I must agree that, on the face of it, the RSU/PSU grants look to be a tad over the top. To some extent the saving grace is that they vest gradually over a three-year period and, whereas the 6.7 million share allotment is dilutionary for shareholders, assuming these guys perform, the impact should be mitigated from the increased revenues and earnings that we deserve to see, as we travel through the three- year vesting period. And so the emphasis here must weigh heavy on the statement… ‘assuming these guys perform’.
Over the next three years (12 qtrs) the RSU allotments vest at a rate of 8.33% per qtr and the PSU’s at 33% per year. (I presume in July each year for the PSU’s).
People can make their own assessment….From slide 12 of the CC presentation, comparing the first 9 months of 2020 with the first nine months of 2021, revenue has grown about 93%, the contribution ex-tac has doubled and adjusted ebitda is x5. Adjusted EPS is forecast to be up by +38% for this FY and +31% for the next FY and we expect to end the year with about $355 million in cash ( no debt) and cash is forecast to grow to nearly half a billion dollars, by this time next year. The rest of the parameters are available in the links below.
Link to finnCap Note below…
https://www.finncap.com/research-portal#/portal/finncap/research/8_31629
Link to CC....
https://edge.media-server.com/mmc/p/ri5hqnob
gdog...unfortunately, you need to register with finnCap in order to access their reports and it looks like you are not permitted to do that from over there. The note on Tremor is 22 pages long and it can't be copied. Unless someone can think of a way around this (and I can't at this moment), I don't think we can get the report to you.
gdog...Clarification regarding this...There is a further $50 million lined up for next year, according to finnCap.
Perhaps it is clearer to state it this way. According to the finnCap note, estimated share based payments for FY 2021 c. $42million and estimated share based payments for FY 2022 c. $50.3million.
Correction....In the paragraph headed Restricted Stock Unit, RSU...where appropriate replace 'employee' for the word 'employer'.
gdog, I’m no guru on matters relating to share based compensation but here goes. You can google for more info if needs be.
Most, if not all Tremor executive compensation is via RSU’s and PSU’s and golane has highlighted that three Exec Directors picked up 6.7m in PSUs/RSUs valued at $67m just for completing the IPO on Nasdaq, all have a three year vesting period from June 21 and another 6.5m shares were allocated to a different group scheme in April 2021. There is a further $50 million lined up for next year, according to finnCap. Hope this and the following information helps…
There are differences between ShareOoptions, Restricted stock unit, (RSU’s) and Performance Stock Units, (PSU’s).
Share options grants....
Share options granted by a company give the holder the right to buy shares from that company at some date in the future. The holder of the options has no voting rights or rights to dividends in respect of the options. The price at which the shares are to be bought, often called the exercise price, is usually set when the options are granted. The option holder will, therefore, when looking to exercise the options to buy the shares compare the exercise price to the then current market value to see if it is worth exercising the options.
Restricted stock unit? RSU...
These are free but may come with restrictions, granted in tranches over time, and related to performance targets and other things.
Restricted stock units are a promise made to an employee by an employer to grant a given number of shares of the company's stock to the employer. Generally, RSUs are granted based on a vesting schedule, meaning the employer must continue to work at the company for a specified period of time before the full value of the RSUs can be awarded. At vesting the employee takes ownership of the stock and becomes liable for the tax due on the value of that stock.
Performance Stock Unit? PSU...
Also, free but may come with restrictions and/or granted in tranches over time. The grant is often attached to meeting performance targets and/or other things.
You typically receive the shares after the vesting date. Vesting schedules are often time-based, requiring you to work at the company for a certain period or meet agreed performance criteria, before vesting can occur.
With RSUs, you are taxed when the shares are delivered, which is almost always at vesting. Your taxable income is the market value of the shares at vesting. Example: Your company grants you 2,000 RSUs when the market price of its stock is $22. By the time the grant vests, the stock price has fallen to $20. The grant is then worth $40,000 to you before taxes.
Hence, why directors or indeed anyone awarded PSU’s/RSU’s, sell some of their shares immediately upon vesting, to cover the tax that has become due.
curlykev, re your... I agree that on the face of it, t.... the timing of their selling does seem to be having an effect on the share price...
• From the RNS …The Ordinary Shares were sold on the NASDAQ Global Market pursuant to previously established non-discretionary plans to trade in the Company's Ordinary Shares in accordance with the terms of Rule 10b5-1 promulgated under the U.S. Securities Exchange Act of 1934
• The amounts, pricing and date of their transaction(s) is pre-set in accordance with the Rule 10b5-1 plan and in advance of any actual sale by Tremor’s execs
• the Rule 10b5-1 plan … Link
https://www.mofo.com/resources/insights/200228-common-questions-rule-10b5.html
gdog, this courtesy gowlan, advfm… some thoughts from him in regard to directors share based compensation and how it impacts adjusted EBITDA. Just adds another layer of complexity...
Extracts… the liberal use of share based compensation may also be holding us back and $42-$50m in share based payments in successive years seems overly generous. Three Exec Directors picked up 6.7m in PSUs/RSUs valued at $67m just for completing the IPO on Nasdaq, with a three year vesting period from June 21. Another 6.5m shares were allocated to a different group scheme in April 2021. But are they worth it? It seems excessive as the entire sector is thriving and there is a strong element of the rising tide lifting all boats about our performance. However they were approved by shareholders so presumably Mithaq and Toscafund are happy?
Excessive share based compensation also distorts the metrics, because it is added back to ebitda to get ‘adjusted ebitda’ And maybe not a big deal in most cases but unfortunately we are looking at extreme levels of compensation here To put it in context the forecast Q4 adjusted ebitda of $42m is really only worth $22m to us, because there is another $20m hit in share based compensation coming up (according to Finncap) that has been adjusted away. So the various peer comparisons being trotted out involving adjusted ebitda to show that we are undervalued against peers are not valid unless they also have similarly outsized share option schemes Which I do not believe to be the case but have only had a quick look at Perion.
Just for reference I did a brief look at the Q3 reports of Perion and Criteo, taking the nine months figures Perion had $3.7m in share based comp, versus adjusted ebitda of $40.7m, so 9.1% of adjusted ebitda Criteo had share based compensation of $32m versus adjusted ebitda of £212m, so 15.1% of adjusted ebitda Tremor had share based compensation of $23.7m, or 22.1% of adj ebitda of $107.2m But for the full year we expect Tremor share based compensation of $42m and adj ebitda of $149m, so 28% of adj ebitda is probably a more accurate run rate So running at twice that of Criteo and three times that of Perion.
Brimach, unfortunately there is another $50m lined up for next year, according to Finncap.
gdog ...Spelling…Predjudical=Prejudicial and affidavids = affidavits.
Granted, the $23 million is both a record high and not as high many thought it might be for what is our best qtr of the year. The behaviour of the sp today is telling us that investors are also asking the same questions as you are.
Therein lies the worry gdog. However as I said to SNN the estimate of $23million in revs from ctv in 4Q is a new record high for any qtr to date. This has been discussed to death on advfm. To what extent, if any, is that flatness related to Alphonso turning off the LG TV data spigot after breaking its contract with Tremor in September? Tremor is seeking substantial damages for Tort from that action and is also seeking recovery of unpaid loans and advances totaling circa £11million, (allegedly). So those court docs, affidavids etc have been in the public domain for those wishing to seed doubt. Tremor may have lost some custom along with the LG data. We don't know ,and as you say, it has been burried rather than discussed. Perhaps they can't deal with this for predjudical reasons.