TRMR.L Regulatory News (TRMR)

 THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310 

Tremor International Reports Results for the Third Quarter and Nine-Month Period Ended September 30, 2021

Company Generated Record Contribution ex-TAC of $76.7M for Q3 2021, an Organic Increase of 54% Year-Over-Year

Programmatic Revenue Increased 56% in Q3 2021, Driven by 115% Growth in CTV and Representing Continued Strong Organic Growth

TEL-AVIV, Israel - November 11, 2021 - Tremor International Ltd. (AIM/NASDAQ: TRMR) ("Tremor" or the "Company"), a global leader in Video and Connected TV ("CTV") advertising, offering an end-to-end technology platform that enables advertisers to reach relevant audiences and publishers to maximize yield on their digital advertising inventory, announces its financial results for the three- and nine-months ended September 30, 2021.

"I'm pleased to report another record quarter, the strongest in Tremor's history," said Ofer Druker, Tremor's Chief Executive Officer. "Core to this performance is the strength of Tremor's end-to-end technology and business platform, highlighted by a focus on CTV, which covers the three pillars of our business: DSP, DMP and SSP. Our end-to-end technology platform provides simplicity for our customers, better data empowerment for advertisers and media partners, and is accelerating the industry's move towards supply path optimization. Our core growth driver for the quarter was in CTV services, and our revenues grew 55% organically year-over year compared to Q3 2020." 

Mr. Druker added, "We continue to deliver on our promise to expand and enhance our end-to-end CTV capabilities for customers as evidenced by our October acquisition of Spearad, an advanced CTV ad server technology enabling header bidding, which further complements our end-to-end platform offering. In addition, we recently announced our partnership with VIDAA, a smart TV operating system preinstalled on most TVs manufactured by Hisense and integrated into a number of premium original equipment manufacturers including Toshiba. This partnership further expands our US and international footprint and accelerates our growth in those key markets, while differentiating ourselves through exclusive access to VIDAA's global automatic content recognition (ACR) data. As we look ahead, we will continue to evaluate additional strategic acquisition opportunities, while making further investments in our product, R&D, sales and marketing to advance future growth and increase our market share."

Third Quarter 2021 Financial Highlights ($ in millions, except per share amount)

Third Quarter and Nine-Month Highlights:

Record Financial Performance Strengthened by Significant Programmatic Activity 

Strong growth in Programmatic activity reinforces the Company's strategy to further enhance its end-to-end platform while leveraging technology, data and business intelligence. Momentum underpinned by strong performance in video across all screens, highlighted by growth in CTV:

• Q3 Contribution ex-TAC increased organically by 54% compared to Q3 2020 Contribution ex-TAC of $76.7 million

o Nine-month Contribution ex-TAC increased organically by 93% year-over-year to $213.4 million

• Q3 Programmatic revenue increased 56% compared to Q3 2020 to $68.9 million driven by continued strong performance in CTV

o Nine-month Programmatic revenue increased 104% year-over-year to $192.1 million

• Q3 Adjusted EBITDA increased 116% compared to Q3 2020 to $42.3 million

o Nine-month Adjusted EBITDA increased 402% year-over-year to $107.2 million

Continued Growth in CTV and Video Spending

CTV remains a key strategic focus for Tremor as the industry continues to shift towards programmatic buying.

• CTV revenue grew by 115% compared to Q3 2020 to $20.0 million in Q3 2021

• CTV revenue accounted for 26% of total contribution ex-TAC in Q3 2021 compared to 19% in Q3 2020

• Video revenue represented 82% of total contribution ex-TAC for the nine-month period ended September 30, 2021, up from 75% in the nine-month period ended September 30, 2020

Expanded Partnership Roster and Achieved Important Business Wins

• Unruly added 35 new US supply partners in Q3 across critical growth verticals in sports, entertainment and lifestyle, as well as Original Equipment Manufacturers (OEM) and Multicast Video On-Demand (mVOD) businesses

• Unruly's product team streamlined revenue opportunities for publishers by rolling out consolidated and enhanced header bidding adapters on both the client-side and server-side

o Publishers can now access Tremor Video demand for all Unruly formats via a single adapter, rather than legacy versions

• Tremor Video observed a major increase in adoption of its data-driven Creative offering, Tr.ly, since 2020, including expansion across CTV, as well as a substantial increase in client usage of our custom QR code solution for CTV

Strong Margin Profile

• By running its own data centers alongside cloud-based computing, Tremor continues to deliver consistent performance, quality, and cost efficiency

• The Company's financial model allows high efficiency and lower operating costs leading to operating leverage, economies of scale, and strong productivity

• Compared with other ad-tech peers, Tremor has one of the highest margin and operational profitability financial structures, resulting in a 49% adjusted EBITDA margin in Q3 2021 on a reported revenue basis, and 55% on a Contribution ex-TAC basis

Fourth Quarter and Annual Financial Guidance

Tremor's guidance is based on the expectation that the global economy will continue to recover and that there will be no major Covid-19-related setbacks that may cause economic conditions to deteriorate or otherwise significantly reduce advertiser demand. Our guidance also takes into account the widespread global supply chain issues that limited advertising activity in Q3 2021 in certain verticals such as automobile manufacturing, with the anticipation that these challenges will continue to have an impact in Q4 2021. Our wide range of revenue streams and verticals help mitigate the impact faced by others from these challenges and accordingly, Tremor estimates:

o Q4 2021 Contribution ex-TAC of at least $85 million

o Q4 2021 Adjusted EBITDA of at least $42 million

o Annual 2021 Contribution ex-TAC of at least $298.4 million

o Annual 2021 Adjusted EBITDA of at least $149 million

This guidance reflects anticipated full-year organic Contribution ex-TAC and Adjusted EBITDA growth of approximately 62% and 150%, respectively.

Management remains confident in the medium- to long-term prospects of the Company with Tremor well-placed to further benefit from the resurgence in the global digital advertising industry that is expected to continue.

Use of Non-IFRS Financial Information

In addition to our IFRS results, we review certain non-IFRS financial measures to help us evaluate our business, measure our performance, identify trends affecting our business, establish budgets, measure the effectiveness of investments in our technology and development and sales and marketing, and assess our operational efficiencies. These non-IFRS measures include Contribution ex-TAC, Adjusted EBITDA, Non-IFRS Net Income (Loss) and Non-IFRS Earnings (Loss) per share, each of which is discussed below.

These non-IFRS financial measures are not intended to be considered in isolation from, as substitutes for, or as superior to, the corresponding financial measures prepared in accordance with IFRS. You are encouraged to evaluate these adjustments, and review the reconciliation of these non-IFRS financial measures to their most comparable IFRS measures, and the reasons we consider them appropriate. It is important to note that the particular items we exclude from, or include in, our non-IFRS financial measures may differ from the items excluded from, or included in, similar non-IFRS financial measures used by other companies. See "Reconciliation of Revenue to Contribution ex-TAC," "Reconciliation of net income (loss) to Adjusted EBITDA," "Reconciliation of net income (loss) to non-IFRS income (loss)," and "Reconciliation of IFRS income (loss) per share to non-IFRS income (loss) per share" included as part of this press release.

o Contribution ex-TAC: Contribution ex-TAC is defined as our gross profit plus depreciation and amortization attributable to cost of revenues and cost of revenues (exclusive of depreciation and amortization) minus the Performance media cost ("traffic acquisition costs" or "TAC"). Contribution ex-TAC is a supplemental measure of our financial performance that is not required by, or presented in accordance with, IFRS. Contribution ex-TAC should not be considered as an alternative to gross profit as a measure of financial performance. Contribution ex-TAC is a non-IFRS financial measure and should not be viewed in isolation. We believe Contribution ex-TAC is a useful measure in assessing the performance of Tremor International, because it facilitates a consistent comparison against our core business without considering the impact of traffic acquisition costs related to revenue reported on a gross basis.

o Adjusted EBITDA: We define as total comprehensive income for the period adjusted for foreign currency translation differences for foreign operations, financing expenses, net, tax benefit, depreciation and amortization, stock-based compensation, restructuring, acquisition and IPO-related costs and other expenses (income), net. Adjusted EBITDA is included in the press release because it is a key metric used by management and our board of directors to assess our financial performance. Adjusted EBITDA is frequently used by analysts, investors and other interested parties to evaluate companies in our industry. Management believes that Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate directly to the performance of the underlying business.

o Adjusted EBITDA margin: we define as Adjusted EBITDA as a percentage of Contribution ex-TAC.

o Non-IFRS Income (Loss) and Non-IFRS Earnings (Loss) per Share: We define non-IFRS earnings (loss) per share as non-IFRS income (loss) divided by non-IFRS weighted-average shares outstanding. Non-IFRS income (loss) is equal to net income (loss) excluding stock-based compensation, cash and non-cash based acquisition and related expenses, including amortization of acquired intangible assets, merger related severance costs, transaction expenses. In periods in which we have non-IFRS income, non-IFRS weighted-average shares outstanding used to calculate non-IFRS earnings per share includes the impact of potentially dilutive shares. Potentially dilutive shares consist of stock options, restricted stock awards, restricted stock units, and potential shares issued under the Employee Stock Purchase Plan, each computed using the treasury stock method. We believe non-IFRS earnings (loss) per share is useful to investors in evaluating our ongoing operational performance and our trends on a per share basis, and also facilitates comparison of our financial results on a per share basis with other companies, many of which present a similar non-IFRS measure. However, a potential limitation of our use of non-IFRS earnings (loss) per share is that other companies may define non-IFRS earnings (loss) per share differently, which may make comparison difficult. This measure may also exclude expenses that may have a material impact on our reported financial results. Non-IFRS earnings (loss) per share is a performance measure and should not be used as a measure of liquidity. Because of these limitations, we also consider the comparable IFRS measure of net income (loss).

Third Quarter and Nine-Month 2021 Financial Results Webcast and Conference Call Details

· Tremor International Third Quarter 2021 and Nine-Months Ended September 30, 2021 Earnings Webcast and Conference Call

· November 11, 2021 at 6:00 AM/PT, 9:00 AM/ET and 2:00 PM/GMT

· Webcast Link: https://edge.media-server.com/mmc/p/ri5hqnob

· Participant Dial-In Number:

o US/CANADA Participant Toll-Free Dial-In Number: 844-692-7011

o UK Participant Toll-Free Dial-In Number: +44 20 3107 0289

o INTERNATIONAL Participant Dial-In Number: 929-517-0922

o Conference ID: 1196197

About Tremor International

Tremor is a global company offering an end-to-end technology advertising platform, operating across three core capabilities - Video, Data and CTV. Tremor International's unique approach is centered on offering a full stack of end-to-end solutions which provides it with a major competitive advantage within the video advertising ecosystem.

Tremor Video helps advertisers deliver impactful brand stories across all screens through the power of innovative video technology combined with advanced audience data and captivating creative content. Tremor Video's innovative video advertising technology has offerings in CTV, in-stream, out-stream and in-app.

The media side of Tremor International, Unruly, drives real business outcomes in multiscreen advertising. Its programmatic platform efficiently and effectively delivers performance, quality, and actionable data to demand and supply-focused clients and partners. Tremor International has a meaningful number of direct integrations with publishers, unique demand relationships with a variety of advertisers and privileged access to News Corp inventory. Unruly connects to the world's largest DSPs and is compatible with most Ad Age top 100 brands.

Tremor International is headquartered in Israel and maintains offices throughout the United States, Canada, Europe, Asia-Pacific and Australia and is traded on the London Stock Exchange (AIM: TRMR) and NASDAQ (TRMR).

For more information visit: https://www.tremorinternational.com/

For further information please contact:

Tremor International Ltd.Billy Eckert, Investor Relationsir@tremorinternational.com

KCSA (U.S. Investor Relations)Adam Holdsworth, Investor Relationsaholdsworth@kcsa.com

Vigo Consulting (U.K. Financial PR & Investor Relations)Jeremy GarciaAntonia PollockTel: +44 20 7390 0230 or tremor@vigoconsulting.com

finnCap Ltd.Jonny Franklin-Adams / James Thompson (Corporate Finance)Tim Redfern / Dicky Chambers (ECM)Tel: +44 20 7220 0500

Stifel Nicolaus Europe LimitedFred WalshAlain DobkinNick AdamsRichard ShortTel: +44 20 7710 7600

Forward Looking Statements

This press release contains forward-looking statements, including forward-looking statements within the meaning of Section 27A of the United Stated Securities Act of 1933, as amended, and Section 21E of the United States Securities and Exchange Act of 1934, as amended. Forward-looking statements are identified by words such as "anticipates," "believes," "expects," "intends," "may," "can," "will," "estimates," and other similar expressions. However, these words are not the only way Tremor identifies forward-looking statements. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding Tremor's continued short and long-term growth prospects, as well as evaluation of additional strategic acquisition opportunities, while making further investments in its product, R&D, sales and marketing to advance future growth and increase its market share. Tremor's ability to deliver consistent performance, quality and cost efficiency, the continued shift in the industry towards programmatic buying, the growth of CTV, benefits of any of Tremor's commercial partnerships and any other statements related to Tremor's future financial results. These statements are neither promises nor guarantees but involve known and unknown risks, uncertainties and other important factors that may cause Tremor's actual results, performance or achievements to be materially different from its expectations expressed or implied by the forward-looking statements, including, but not limited to, the following: negative global economic conditions, potential negative developments in the COVID-19 pandemic and how those developments may adversely impact Tremor's business, customers and the markets in which Tremor competes, changes in industry trends, other negative developments in Tremor's business or unfavourable legislative or regulatory developments. Tremor cautions you not to place undue reliance on these forward-looking statements. For a more detailed discussion of these factors, and other factors that could cause actual results to vary materially, interested parties should review the risk factors listed in Tremor's Registration Statement on Form F-1, which was filed with the U.S. Securities and Exchange Commission (www.sec.gov) on June 17, 2021. Any forward-looking statements made by Tremor in this press release speak only as of the date of this press release, and Tremor does not intend to update these forward-looking statements after the date of this press release, except as required by law.

Tremor, and the Tremor logo are trademarks of Tremor International Ltd. in the United States and other countries. All other trademarks are the property of their respective owners. The use of the word "partner" or "partnership" in this press release does not mean a legal partner or legal partnership.

Adjusted EBITDA Reconciliation

Contribution ex-TAC Reconciliation

Non-IFRS Net Income Reconciliation

(1) Non-IFRS income (loss) includes the estimated tax impact from the expense items reconciling between net loss and non-IFRS income (loss)

(2) Non-IFRS earnings (loss) per share is computed using the same weighted-average number of shares that are used to compute GAAP earnings (loss) per share in periods where there is both a non-GAAP loss and a GAAP net loss

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATION AND OTHER COMPREHENSIVE INCOME

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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY

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CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

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