RE: Re sold out bunch of crooks17 Aug 2022 14:24
Hi Dog, and all. I'm still here, just!
I tend to avoid posting highly negative comments on specific shares and so have not commented. The only positive was the 30% increase in gross CTV spend. If we adjust for Alphonso (I have worked on a third in the past), so the comparative ex Alphonso would be about 32 - 33m, so a very high jump in CTV spend, which should be expected given it's growing, TRMR's constant PR waffle on it and the various developments here (TV Intelligence, Comscore, Vidaa, expanded reach).
This makes the negatives worse. Non CTV revenue has dropped off a cliff, and very suddenly since the Q2 guidance was issued, ie over say a six week period. This is clearly continuing into Q3, so much so they were unwilling to guide on Q3, even when pushed in Q&A on the call. Q3 could easily be down by $15 - $20m. With others holding up (Magnite and Pubmatic) and TTD on the path of business as usual, something is seriously wrong. I am questioning their model and their protestations regarding its effectiveness - as the others sign up increasing, sizable long term SPO deals, less business is left to go through TRMR. It is getting very price competitive on the supply side, and TTD is a monopoly on the buy side.
As Rusty says re acquisitions, they have never kept the revenue they seem to buy, as they buy businesses with falling sales. The outlook for 2023 is for some growth in Tremor (probably mostly CTV related) and for Amobee to remain flat. They will not have seen the full books yet, because due diligence rules limit what they can see (they are a direct competitor, so this prevents them gaining competitor's detailed numbers and saying, thanks boys, we don't want to buy you now, but useful to know all your secrets!) To some extent they are buying blind, as with R1. They have also paid way too much, again. The clue was on the Amobee call, when Sagri said it would take a long time to get the whole ecosystem back on track to TRMR's margins.
The suggestion that long term growth is 12 to 16% pa, went down like a lead balloon, when the others state long term growth rates of 25 - 35% - again questions their model and the area of the market they are targeting. The Q&A was awkward and embarrassingly unprofessional. A complete change of character for the company.
To come out with what is really a massive profit warning on this year and next, has taken my confidence in the company and the sector. TTD and DV are near monopolies, and those two will become major tech players. I think the market has it right with the relative valuations. Prior to this, TRMR sp seemed to be on the rise nicely, towards closing the valuation gap.
I was looking for $200m EBITDA this year, not next, and then $250m + for 2023 and then $350m + for 2024 as Amobee kicks in. Now it's all out the window! The only hope is that guidance proves to be conservative and that the recession is short lived.
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