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Please wait. The conference will begin shortly. Welcome to Nexxen's earnings call for the 3 and 12 months ended December 31, 2023. [Operator Instructions]. This call is being recorded, and a replay of today's call will be made available on Nexxen's Investor Relations website. I will now hand the call over to Billy Eckert, Vice President of Investor Relations for introductions in the reading of the safe harbor statement. Billy, please go ahead.
Thank you, operator. Good morning, everyone, and welcome to our first official earnings call as Nexxen. During today's call, we will discuss our financial and operating results for the 3 and 12 months ended December 31, 2023, as well as our forward-looking guidance. This morning, we issued a press release, which you can access on our updated IR website at investors.nexxen.com. Please note, all financial results are here on today's call for the 3 and 12 months ended December 31, 2023, as well as the 3 months ended December 31, 2022, reflect the combined financial performance of Nexxen and Amobee, while results for the 12 months ended December 31, 2022, and these results were Amobee only from September 12, 2022 through December 31, 2022. Given how that transpired in 2023, including our rebranded Nexxen and the completed integration of Amobee, we're approaching this quarter's call a bit differently. During today's call and only for this quarter, you'll hear from our Chief Product Officer, Karim Reese, who will set the stage for how the digital advertising industry is evolving and how our platform and business model positions us for success now and in the future. Then we'll turn the call over to our Chief Executive Officer, Ofer Druker, to discuss, amongst other things, the evolution of our strategic business partnership and revenue initiatives and follow that with an overview of our Q4 and full year 2023 financial results and update on our forward-looking guidance for our Chief Financial Officer, Sagi Niri, before turning the call back to Ofer closing remarks. During today's conference call, we will make forward-looking statements. All statements other than statements of historical fact could be deemed as forward-looking. We advise caution and reliance on forward-looking statements. These statements include, without limitation, statements and projections regarding our anticipated future financial and operating performance, market opportunity, growth prospects, strategy, financial outlook, partnerships and anticipated benefits related to those partnerships and forward-looking views on macroeconomic and industry conditions as well as any other statements concerning the expected development, performance and market share or competitive performance relating to our products or services. All forward-looking statements are based on information available to us as of the date of this call. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results to differ materially from those implied by these forward-looking statements, including unexpected changes in our business or unexpected changes in macroeconomic or industry conditions. More detailed information about these risk factors and additional risk factors are set forth in our filings with the U.S. Securities and Exchange Commission, including, but not limited to, those risks and uncertainties listed in the section entitled Risk Factors in our most recent annual report on Form 20-F. Nexxen does not intend to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Additionally, the company's press release and management statements during this conference call will include discussions of certain measures and financial information in IFRS and non-IFRS terms. We refer you to the company's press release for additional details, including definitions of non-IFRS items and reconciliations of IFRS to non-IFRS results. At this time, it is my pleasure to introduce Karim Rayes, Nexxen's Chief Product Officer. Karim, please go ahead.
Thanks, Billy. Hello, and welcome to everyone joining us today. As Bill noted, I'm Karim Rayes, and I'm the Chief Product Officer at Nexxen, and I served in the role for over 5 years. Without a Dow 2023 was a transformational year for Nexxen, highlighted by major advancement and enhancement to our technology and products, which is why we felt it was sitting for me to open the call today. In 2023, we rebranded the company and integrated the largest acquisition in our history, strengthened our tech and data assets and enhance our talent base with industry-leading experts in attic veterans. With all this happening, it was a bit difficult to articulate our story, value proposition and industry position in real time. So before Ofer provides an update on our strategic business initiatives, I will provide a brief overview of the industry and highlight why we are confident that our tech platform model is differentiated. I will also explain why our model and platform enables us to help customers achieve flexibility and greater success in both the current and future digital advertising ecosystem enables our customers to address challenges by cookies application and strongly position us for long-term growth and market share gains. The industry has undergone significant changes over the past few years that have driven advertisers and agencies to become more sophisticated and rely heavily on data and technology to navigate a fragmented and rapidly evolving digital media landscape. Because potential touch points with customers exist across an increasing number of formats and devices, advanced technology and strong data capabilities are critical to enable advertisers to research [indiscernible] API. This has driven advertisers to shift from exclusively by media to buy against audiences by working with data field asset partners like Nexxen that offers the type of granular solutions that solve for the challenging task of identifying and reaching target audiences. These targeting strategies are being challenged and finding solutions for our customers is more important than ever as we've seen companies like Apple and add significant changes that affect the ability of apps to track users and share data with third parties. Google has also started dedicating cookies, which, over time, will no longer be a viable option to help advertisers track users. Fortunately, we've been investing in solutions to tackle these challenges and believe we are well positioned to take advantage of these disruptions to capture market share. Nexxen has built and developed an incredibly advanced tech and data stack that not only helps customers navigate these challenges, but also enables them to drive enhanced return on investment and reach their target audiences regardless of where they consume content. Our platform unites some of the most comprehensive and forward-thinking tech and data solutions in the programmatic marketplace, enabling greater efficiency and effectiveness for our customers on both sides of the ecosystem. Over the last 7 years, we've successfully integrated 5 major strategic acquisitions, resulting in the creation of an advanced and unified full tech stack. Our platform offer state-of-the-art self-service DSP, data-driven creative solutions, a self-service SSP with strong video and CTV capabilities and a TV ad server, all connected via our robust data planning and identity platform. This unified platform focuses primarily on helping customers maximize their outcome by leveraging data to achieve powerful results across our programmatic activities. Including all of the acquisitions Nexxen has made and the R&D investment by those companies prior to our acquisition as well as the investments we've made integrating those companies. We estimate that roughly $1 billion of total R&D investment has gone into the creation and unification of our platform. As I mentioned earlier, it is imperative that advertisers continue to have the ability to leverage data to find and reach target audiences. It's hard to underscore that point enough, which is why we feel we have significant differentiators to our data platform, which sits between our DSP and SSP. Our platform ingests data from several sources, including first-party data onboarded directly from our customers, unique Nexxen data assets and multiple third-party data sources from web, social media, mobile, linear TV and digital television environments. Our customers can leverage this data to plan, activate and measure their campaigns on our platform as well as amplify the profile and reach of their own first-party customer data to achieve better results and greater efficiencies while also benefiting from insulation against data privacy changes and reduce overall tech costs. To put the scale of our data footprint into perspective, we work with over 1,000 advertising agency customers as well as over 1,600 [indiscernible] customers, and that third-party data relationship with over 65 partners, including LiveRamp, Experian, Lumen and others. We also have access to TV and streaming viewership beta across roughly 50 million U.S. households through partnership with major TV and streaming data players, such as VIDAA, Hisense and Peerlogix. Our platform has direct access to publish ads on roughly 225,000 sites and apps and handles roughly $199 billion daily ad requests. Roughly 86% of our campaigns are now beta enabled and 39% of all campaigns are using our first-party Nexxen data. We believe that as data is becoming more valuable to our customers, so too is the value proposition of our platform. A large part of our focus throughout 2023 was on the integration of our latest acquisition Amobee. Merging the 2 platform while retaining the best assets each platform has to offer while also bringing new solutions to market was in a Herculean task, and I would like to thank our product and R&D teams for their hard work to achieve this goal in an incredibly short period of time. It was critical for us to complete this integration as quickly as possible to continue to accelerate our rate of innovation in 2024 and beyond. With the successful completion of this integration, we further differentiated and enhanced our platform for our customers. From a technology perspective, the acquisition was beneficial for several reasons, but I'd like to specifically highlight 3 key progress that significantly improved our solution market. The first is GMLBDSP, which is now referred to as Nexxen DSP after combining the Tremor Video DSP and following our rebrand. While we, of course, already operated in the DSP part of the acquisition, the addition of Amobee DSP solution dramatically enhance our self-service capabilities while enabling us to run campaigns more effectively across all formats. Moreover, the lower for performance tool in the Amobee platform, combined with Tremor's PTV and video capabilities enables us to bring performance-related PTG products to market, directly tying outcome to delivery. The second project I'd like to highlight is our cross-screen TV planning solution, which now enables us to plan across both linear and digital TV from the onset for our customers' campaigns. This is an important product that enables our clients to win now and in the future as viewership is not only moving from traditional linear TV to digital, but because it's also still common to see customers is both mediums in parallel. We are confident that our cross-screen planner provides the optimal holistic view necessary to effectively plan and maximize the reach of campaign across the entire TV ecosystem. Finally, I want to highlight our Nexxen discovery platform, which we also gained through the Amobee acquisition. This still sits at the heart of our audience planning capabilities and is powered by proprietary panels leveraging and combining web, social media, TV and first-party audience data to help us identify and target the right users at the right time. Nexxen Discovery is also an important component to our cookie deprecation strategy has enabled us to create custom cookies audiences for our customers. With this latest integration complete, we now operate a self-service platform that can plan holistic TV campaigns, find and reach audiences wherever they consume media, have direct access to premium supply and provide cost advantages for customers by entering strongly differentiating us with advertisers, agencies and publishers. As our partners generate stronger comparative returns through a singular platform that solves their holistic needs, we believe they will allocate more budget to that platform over time and be more willing to adopt additional solutions. This concept is foundational to our strategy. We believe that our technology positions us well to attract new customers and increase spending and product adoption over time with existing customers. Further, as we continue to grow our contribution ex TAC, our platform will achieve high level of operating leverage, which should result in increased profitability. This enables us to make additional strategic investments in our platform to build new products and fuel further tech innovation that benefits customers, further optimizing their return and ultimately driving more budgets and setting to our platform. In terms of our platform holistic capabilities, we believe that we now have all the key pieces in place to use to optimally service customers in the programmatic marketplace without the need for a major acquisition anytime soon. Looking forward, we also feel confident in our ability to navigate the new challenges facing our industry, particularly around identity and privacy regulation changes. In addition to the cost benefit of our end-to-end platform, the strategy also enables us to bring a unified and energy solution to market as our demand and supply platform share the same person and household identity graph. We're in the custom bringing to market a new unified identity solution that not only incorporates traditional identifiers like device IDs and cookies, but also includes other major universal ID solutions, including UID2 and rent ID. At the heart of this graph, it's the next person in household ID. This technology paired with our end-to-end platform enables us to seamlessly onboard and deploy audiences at scale across our ecosystem for frictionless planning, activation and measurement of advertising campaigns. Beyond our core identity solution, we also operate proprietary contextual targeting products powered by Nexxen Discovery and our early adopters of Google Privacy Sandbox. Our goal is to provide our customers with both choice and flexibility in navigating the challenge facing our industry. While disruption brings both risk and opportunity, we see these changes to identity as an opportunity for us to gain market share because of the way we've intentionally built and develop our tech products and data stack. In 2024, we'll continue to focus on enhancing and expanding our self-service enterprise capabilities to increase the attractiveness of our platform. Also, with the Amobee integration behind us, resources previously dedicated to the integration have been redirected towards innovation. For example, we've been developing solution closing AI and machine learning to speed up development time, improve our algorithms and enhance our audience discovery and activation tools. We're also putting significant focus on continuing to enhance our ACR data capabilities as we seek to expand to new international markets and integrate with new strategic partners. I'm incredibly excited to be part of the second data forward company that is well positioned to grow its digital advertising market share as we continue to work hard to capitalize on the opportunities that lie ahead of us. With that, I'm happy to turn the call over to Ofer.
Thank you, Karim. That was a great overview and explanation of how our tech ecosystem capabilities and differentiated model positions us for success and to gain share in the digital advertising ecosystem. Welcome everyone to our first earnings call after rebranding to Nexxen, which we celebrated on February 28 when we ranked the NASDAQ closing bell in Times Square. From our perspective, the [indiscernible] of our brands under Nexxen now reflects the true strength and value proposition our entire tech stack offers customers and prospects. And we expect it will open doors to larger multi-solution deals over time. We believe the rebrand, combined with the steps taken in 2023 to increase brand awareness and better position our sales force and product marketing narrative is beginning to play off. Hence, we are excited to see these efforts continue to gain traction. We have continued to focus on growing our streaming TV and data relationship enhancing and expanding our customer offerings, building deeper industry ties and introducing our new tech and data capabilities to position ourselves to drive significant long-term partnerships with major TV players and agencies. We are hyper focused on further enhancing our presence in broader streaming and CTV advertising ecosystem and are confident this will serve as a long-term growth driver for Nexxen given our long training DNA and strategic positioning within video and CTV. We believe our strategic emphasis and indexing towards these trends will enable us to achieve outsized long-term growth, particularly as customers seek premium advertising solution as market headwinds refers to become tailwinds, which we have cautious optimism for in 2024. I'm pleased to report we are once again working with LG, one of the main CTV players in the industry after years of not doing business together, following our favorable settlement agreements and multiyear strategic partnership with Alfonso and LG. Through the strategic partnership, Nexxen gained important access to monetize some of LG's premium CTV inventory and Alfonso will leverage Nexxen data-driven discovery and segmentation tools to enhance advertisers and partners engagement on their media properties. We look forward to partnering with Alfonso and LGE for years to come and to building a solid relationship with them to benefit customers in the CTV advertising arena. With the addition of LG to our partnership poster, we can now proudly say we hold strong relationship with all major CTV OEMs, reflecting a massive value proposition for our TV advertising customers. The OEMs play an important role in the CTV ecosystem, and it's important for a company like Nexxen to all strong relationship with them to benefit advertisers and agency customers seeking to gain significantly expanded global audience reach potential. For example, as part of our CTV OEM strategy, we expanded our strategic partnership with TCL Falcon. Beyond solely granting our advertising customers access to CTV and OTT supply in the TCL channel to also exclusively sell TCL native display inventory as the preferred supply partners. This deepen partnership enabled Nexxen to offer customers expanded reach across the significant and growing number of TV screens with flexibility across formats to enhance advertising outcomes, especially when combined with the overall reach created in combination with our other major TV partnerships. In addition, we teamed up with out-of-home advertising group feels to broaden our CTV out-of-home opportunities for clients across the advertising ecosystem. The -- this partnership delivered immersive high impact ad experience by reaching audiences on screens in best portals and restaurants, hitting another CTV touch point within our larger TTV out-of-home offering. We also made strong headway enhancing and expanding our TV intelligence solutions into new markets and increasing our access to highly desirable TV and streaming data, which we believe benefit customers looking to find and reach target audiences across the global streaming and TV ecosystems. We believe these efforts position us to attract new customers and achieve outsized long-term CTV revenue growth. As the industry continues to increasingly rely on data to boost efficiency and effectiveness advertising across the streaming and CTV landscape. We believe Walmart intending acquisition of easier strongly highlights the value and importance the market and industry plays on data, particularly ACR data. We also feel ACR data is becoming more and more of reality in the Open Web. In our opinion, Walmart acquisition, further highlights the incredible value of the multiyear exclusive global ACR data agreements we have with VIDAS, the primary CTV operating system for icons and Toshiba, which are some of the fastest-growing TTV OEMs. Notably, we recently expanded our TV Intelligence solution with scale premium on the go, streaming data from platforms like Netflix, Hulu and DC Plus through a new exclusive partnership with PeerLogix. This partnership enabled us to capture streaming viewership data for audiences or mobile devices and tablets outside of connected TV, which we find critical as consumers viewing preferences continue to evolve to increasingly seek flexibility to seam content across several devices. Our TV Intelligence solution is an extensive data set that includes access to set-top boxes, traditional daily vision, ACR, on-the-go streaming and cross-screen panel data and can currently provide insight into TV and streaming leadership data across roughly 50 million households in the U.S. alone. We offer this solution to advertise our customers to further differentiate our platform through access to critical scale data necessary to optimize streaming and TV planning, targeting and measurement. This robust data offering often results in our customers achieving enhanced ROI and greater efficiency as plan created through our planning tools can be seamlessly activated in campaigns through our DSPs. Our TV Intelligence offering has been pivotal in attracting additional advertising dollars and serve as a strong selling point for prospective sales conversations, particularly around viewability, which is important for many major verticals. We believe it is a critical solution for customers looking to upgrade their planning and advertising efforts across the evolving and converging linear and streaming landscape. VIDAA global ACR data, which we can exclusively monetize through our SDK integrated into Hisense and other VIDAA Power TV flows through our data platform and TV Intelligence solutions. Hisense the second largest distributors of smart TVs globally in 2023. Near the end of 2023, VIDAA announced they [indiscernible] a reach of over 25 million connected TV in market and announced they already exceeded $26 million so far in 2024. VIDAA's usage has been growing dramatically. And during December 2023, VIDAA users generated over 2 billion monthly streaming hours. As a reminder, VIDAA serves as the primary CTV operating system for Hisense and Toshiba, Smart TVs and a subsidiary of Hisense. So Hisense is highly aligned with VIDAA's growth strategies. VIDAA and Hisense rapidly growing TV footprint have also enabled us scale necessary to offer our TV intelligence solution outside the U.S. to markets such as the U.K., which launched in Q4. Since we launched our U.K. TV viewership audience offerings, we see notable customers adoption, which drove an uptick in advertising dollars flowing through our platform in that market, which we expect to reflect a significant growth of utility in 2024 and beyond. In 2024, we will look to extend the offerings to additional European and other international markets, giving us additional international growth pathways. The value proposition of Smart TV ACR data is becoming more and more obvious and compelling for both advertisers and partners seeking to license the data to use to their clients. Again, this is evident by what Walmart did in February when it announced its intent to acquire Vizio, a major smart TV OEM with its own CTV operating systems. Walmart understands that to win with advertisers and grow its advertising revenue, the Smart TV and operating systems hold a tremendous amount of critical consumers and household data that is incredibly effective to enable advertisers to reach target audiences. This is the exact reason Nexxen investment in VIDAA and long-term partnership with them is so unique and differentiating. Data partnership like we have with VIDAA, where we have exclusive right to distribute their global ACR data through at least the end of 2026, are also enabling us to diversify into data licensing revenue streams, reflecting an exciting growth trajectory and new frontier for our business. We are seeing significant demand for data licensing partnership for measurements and planning providers and for major DSPs, seeking to leverage this growing footprint of global TV data for audience targeting. We believe our ability to distribute this data for licensing purposes, not only reflect a strong growth of futility, but also helps expand our recognition within the industry, better enabling us to solidify our leadership position within the TV and tech ecosystems. Next on Discovery, our data fuel BI tool that ingest content consumption data to enhance audience knowledge for extended reach is also continuing to differentiate our holistic platform offering and is attracting higher levels of spending for new and existing customers. Nexxen Discovery has been adopted by key industry partners, and we feel we are bringing this powerful solution to market at the right time, ahead of what's expected to be a record-setting year in the U.S. for political ad spending. Thanks to the discovery tool, we are seeing significant interest from political advertisers and agencies ahead of the U.S. election cycle later this year. In previous cycles, political wasn't an incredibly material vertical for us. However, with the addition of Nexxen Discovery and an increased dedicated sales focus on the vertical, this could change in an election year where e-Marketer estimated over $12 billion in U.S. political spending and anticipate a record-setting year for political TV spending in the U.S. In addition to growing our partnership, expanding our data scale and reach and diversifying our revenue base, we were also successful in Q4 and throughout 2023, adding new customers on the buy and sell side of the ecosystem while continuing to retain our major customers. During Q4, we added 111 new actively spending first-time advertisers customers across entertainment, food and beverage, automotive and finance verticals as well as others. This also included the addition of 14 new enterprise self-service advertiser customers highlighted by some of the world's most recognizable CTV publishers, broadcasters and CPG brands as well as the addition of 3 new independent agencies leveraging us in a self-serve capacity. During 2023, we added an impressive 334 new actively spending first-time customers. The company also added 89 new supply partners, including 78 in the U.S. In Q4, across several verticals and formats, including CTV, broadcast TV, mobile and mobile gaming publishers. During 2023, we added 372 new supply partners, of which 327 were U.S.-based. Before I turn over the call, I would like to add a personal note. After years of working hard to acquire, connect and add layers of innovation to our product lines, I believe the combination of our rebranding and all the hard work from our product and tech teams to integrate Amobee have led us to the point we are at in our journey today, where we can bring a lot of value to customers across the ecosystems. Now it's time for us to execute. With that, I'm happy to turn the call over to Sagi.
Thank you, Ofer. Today, I will review the key financial and operational drivers of our performance over the 3 and 12 months ended December 31, 2023, and we'll also discuss our guidance. In Q4 2023, we generated contribution ex TAC of $90.5 million, reflecting a 12% decrease from Q4 2022. This decrease was driven by continued challenging market conditions that this proportionately impacted the budgets and spending of some of our higher spending small and midsized agencies to whom we are heavily indexed, a trend we experienced throughout 2023 as well as a continued shift by those customers and over to our lower-cost programmatic solutions. Full year 2023 contribution ex TAC increased over 1% compared to full year 2022 as programmatic revenue or contribution ex tax attributable to programmatic activities in our core business grew by roughly $24.6 million, which slightly outpaced a roughly $20.2 million decline in contribution ex TAC related to our noncore legacy non-programmatic business line. Throughout 2023, we were impacted by challenges related to the complex integration of Amobee, which contributed to a weaker than initially anticipated contribution ex TAC. Keep in mind, with Amobee, we took a roughly 1,000 person company and integrated it with our pre-existing employee base of around 600 employees to create a roughly 900 employee company at the end of 2023, a massive task, which required a tremendous amount of the management team's focus. While competitors were able to focus exclusively on teaching customers for 2023, as soon as the acquisition closed, we were occupied with redefining our offering, refining our story in markets as well as enhancing our platform capabilities, talent base and marketing efforts for the longer term. Additionally, the amount of time resources and focus required to combine platforms and integrate Amobee stack, establish our sales leadership team and train our teams to sell an expanded product suite negatively impacted sales growth largely through spending associated with several re-manage service clients, but we now believe we have the right platform and team in place and are seeing notable improvements. The good news is the bulk of these challenges are now behind us, and we are confident that Nexxen sales be strongly positioned to drive growth in 2024 as they are exclusively focused on selling as opposed to integration initiatives and are armed with a significantly enhanced platform loaded with in-demand tech and data capabilities. We continue to believe the short-term pain related to integrating Amobee will be well worth the long-term gain. We are also cautiously optimistic market conditions will improve in 2024 and agency customers will increasingly migrate from the lower cost solutions they sold in 2023 to our premium programmatic video and streaming solutions such as CTV. From a vertical perspective, in Q4 2023, we experienced strength in finance, education and automotive as well as in display and PMPs. Conversely, we observed weakness in entertainment, partially due to the SAG ATRA strike retail due to some of our agency accounts significantly reducing spending and CTV as customers continue to focus largely on lower cost options like display and mobile video. Despite the migration by select customers to our lower-cost solutions, we were pleased the vast majority continue to stand within our broad suite of offerings, highlighting the strength of our flexible and diversified business model. Contribution ex-TAC in Q4 and throughout 2023, was also impacted by a strategic mix shift towards self-service enterprise solutions, which carry lower take rates, but are favored by larger agencies opening the pathway to much larger volume deals over time. Self-service enterprise solutions are typically less vulnerable to advertising demand shocks, which is a core reason we are focusing on self-service and are accepting of some store campaigns in order to capitalize on the long-term gains we expect. Self-service contribution ex TAC doubled in Q4 2023 from Q4 2022 and more than doubled in full year 2023 versus full year 2022. Programmatic revenue was $86 million in Q4 2023, reflecting a 9% decrease from Q4 2022. Conversely, programmatic revenue for full year 2023 increased 9% from full year 2022, largely due to the Amobee integration. Programmatic revenue as a percentage of revenue increased to 90% for both Q4 and full year 2023 from 88% in Q4 2022 and 82% in full year 2022. CTV revenue for Q4 2023 was $19.9 million, reflecting a decrease of 40% from Q4 2022. We've recently observed what we believe to be a short-term transition by some of our advertisers and agency customers away from CTV into lower-cost solutions like mobile video as well as displays, which we believe reflects cost-saving efforts and the evolution of streaming preferences as consumers increasingly stream content on mobile phones and tablets, in addition to unconnected TVs. Our platform's advanced data planning and audience finding tools are designed to help customers find audios targets and extend reach regardless of where content is consumed. Amid recent uncertainty that has impacted budget and spending less macro immune customers have sought our performance-based programmatic solutions and are trying to maximize audience reach through lower CPM options and don't necessarily care about the specific media or devices within our ecosystem that they signed users on. To highlight this point, contribution ex tax from mobile increased 5% year-over-year, contribution ex tax from display increased 21% year-over-year and contribution ex TAC from audio increased 71% year-over-year in Q4 2023. As market conditions improve, major streaming services like Amazon and Grace ad-supported model, attracting new advertisers to CTV and linear dollars shift more aggressively to streaming. We believe that CTV advertising demand will increase and the current supply versus demand imbalance will decrease, resulting in increased CTD pricing over time. Despite near-term weakness, CTV will remain a key investment area and is expected to be a long-term growth driver for Nexxen. As linear budgets continue to shift wood and converge with digital, we are well positioned to capitalize through our unique solutions like our cross-platform planners, Nexxen Discovery and TV Intelligence. CTV reflected 23% and 29% of our programmatic revenue in Q4 and full year 2023, respectively, which we expect to expand over time as macro headwinds is ad-budget and CCB spending expand and CPG pricing dynamics improve. Video revenue continued to account for most of our programmatic revenue at 67% in Q4 2023 and 69% for full year 2023. Although this presented the failure over year, we believe they remain well above the industry average. While we have flexibility to service customers across display and video, we continue to strongly believe that video is the best long-term option for Nexxen and its advertisers as it reflects the most engaging format. As market conditions improve, we believe the shift towards display will reverse. And when this happens, we expect to achieve outsized growth because of our high exposure to and positioning within video. The year-over-year decrease in video revenue as a percentage of programmatic revenue in Q4 was due to increased demand for display solution by select customers and year-over-year decline in CTV revenues. The full year 2023 versus 2022 decrease was a by-product of larger programmatic revenue base, a 34% increase in display contribution ex TAC, driven by the integration of Amobee and diversification into revenue streams like audio, data and converged TV planning. In full year 2023 versus full year 2022, contribution ex TAC from our cross-platform planner increased over 330%. Contribution exec from our data products increased nearly 300% and contribution ex TAC from audio increased over 425%. In Q4 2023, we generated $32 million of adjusted EBITDA compared to $36.9 million in Q4 2022. Adjusted EBITDA was affected by Amobee, whose business lines are less profitable than the pre-acquisition stand-alone Nexxen business and a weaker comparative spending environment for some of our less macro immune customers. As we said in the past, as we generate higher levels of contribution ex TAC, the majority will flow through to adjusted EBITDA, given the strength of our operating model, which provides strong and increasing degree of operating leverage, which is the key reason our adjusted EBITDA margin expanded in Q4 2023 compared to Q3 2023. In Q4 2023, we generated an adjusted EBITDA margin of 33% on a revenue basis and 35% on a contribution ex TAC basis compared to 34% on a revenue basis and 36% on a contribution ex TAC basis in Q4 2022. We also achieved a net revenue retention rate of 73% during 2023 compared to 80% in 2022. While the rate decreased due to reduced spending and shift to lower cost option by select customers, the company retained an overwhelming majority of its highest spending accounts and successfully added new customers on both sides of the ecosystem throughout the year. Turning to our cash flow, we generated $43.6 million in net cash from operating activities in Q4 2023 after generating net cash from operating activities of $23.9 million in Q4 2022. During 2023, we incurred approximately $6 million in severance and retention bonus related costs associated with the reorganization of Amobee employees into Nexxen. As of December 31, we had $134.3 million in net cash and $80 million undrawn on our revolving credit facility. We don't plan any major near-term acquisitions and believe we have all the critical tech components our business needs to succeed in the foreseeable future. In the near term, we leverage our cash for the ongoing needs of the business, investments in internal growth and innovation initiatives as well as ongoing and potential future share repurchases. For full year 2023, share-based compensation was $19.2 million, which we expect to decrease in full year 2024. We also generated non-IFRS diluted earnings per ordinary share of $0.10 in Q4 2023 compared to $0.15 in Q4 2022. In December 2023, we were excited to launch our new $20 million ordinary share repurchase program to take advantage of what we believe to be a discounted valuation opportunity. In Q4, we repurchased 221,506 ordinary shares, reflecting an investment of approximately GBP 446,000 or $566,000. These investments will increase in Q1 as purchases in Q4 were minimal, given the program didn't begin until December 20. If shares remain at what the Board believes continue to reflect discounted valuation levels and the company remains cash generative as we currently anticipate, we will consider launching [indiscernible] repurchase program after completing the current program. Finally, I now turn to our outlook. For full year 2024, we expect contribution ex TAC in the range of approximately $340 million to $345 million and adjusted EBITDA of approximately $100 million and anticipate programmatic revenue will reflect approximately 90% of full year 2024 revenue. For full year 2024, we expect R&D and sales and marketing expenses to reflect similar percentages of contribution ex TAC to full year 2023, but for G&A and depreciation and amortization to decrease as percentages of contribution ex TAC compared to full year 2023. Additionally, we anticipate increased diversification into scaling revenue streams like data licensing and audio and for CTV revenue to return to growth in full year 2024. While ongoing near-term uncertainty continues to impact budgets and spending for some of our customers and those customers are continuing to favor our lower-cost solution. We have cautious optimism we can achieve greater growth in 2024. Our renewed focus on selling as opposed to integrating and our significantly enhanced test and dataset positioned us well, and we believe we may begin to experience market tailwind as opposed to headwind later this year. We feel we provide a massive advantage for customers as we can service across the entire advertising supply chain, have a long-standing stream in DNA and Unitech, creative data, best-in-class service and flexibility under one roof, enabling us to adapt to our customers' diverse needs and grow with them over time. I believe we have a bright future ahead of us following the milestones our teams achieved in 2023 -- with my remarks completed, I will turn the call back over to Ofer.
Thank you, Sagi. While results in Q4 and throughout 2023, were challenged by difficult market and advertising conditions, particularly for our small and midsized agency customers, we feel we created a solid foundation for the future. We completed the integration of Amobee, which was the largest company we ever acquired. While it was a challenge that required a massive amount of attention, resources and energy, we were able to make it happen through our unwavering focus on our vision and robust acquisition and integration experience. The acquisition bolstered our self-serve stack and added unique and differentiated planning capabilities such as the discovery tool and the ability to plan across the converged TV ecosystem, which we believe enable us to attract new customers and position our existing customers for success. The acquisition also enabled us to grow our U.S. and international customers and partners switch and brought us amazing industry experts and ad tech veterans that enhance our talent base across all aspects of the organizations. We also successfully rebranded to Nexxen, which we feel is so important to better present our company and platform solution within the industry and to the financial markets. We now feel we are well positioned with all the key elements we need to succeed in the video streaming and TV advertising ecosystem and to grow and take market share in 2024 without the need for another major acquisition or the heavy listing focus and resource dedication required to execute a major integration. We believe our unified platform now reflects one of the most scaled data reach and advanced test platform in the industry for customers on both sides of the ecosystem. It was built through several years of R&D and 5 major acquisitions that reflects roughly $1 billion in total R&D investments. In 2024 and beyond, we will continue to seek to grow our new customer base and increase revenue relationship and product adoption with existing customers while also focusing on growing our self-service enterprise customer base, data customer base and relationship with major agency, PTV and broadcast partners. We believe this will enable us to grow contribution ex TAC and expand profitability, which we can then reinvest in tech and product innovation to benefit our customers and share repurchases to drive added long-term value for our shareholders. As a management team, we feel we are in the strongest position we have been in for some time to accelerate our growth and take our rightful place amongst the leaders in the ad tech ecosystem and are excited for what this year can bring. As always, I want to thank our customers, employees and shareholders for their continued support, and we look forward to continuing to work hard to grow our business and expand and enhance our offering and capabilities to the benefit of all stakeholders. Operator, we will now take questions.
[Operator Instructions]. Your first question comes from the line of Matt Swanson from RBC Capital Markets.
Yes. Congratulations on a year of investment completed. Now that we're through kind of the heavy lifting of the integration as you spoke to, Ofer, maybe Karim, if you're still on, what are the key areas of investment you're shifting to in 2024, now that you can maybe focus on the things you want to do more than what you need to do with the integration? And then so gee, if I can sneak kind of a half question and after that, just how you think about those investments in terms of the adjusted EBITDA guidance we just got.
Thank you, Matt. Good question, of course. Karim can, of course, join me. But in general, I think that our -- we finished basically the integration of all the elements that we acquired over the years into one platform, end-to-end solution that is putting a focus on CTV, video and data. I think that our major thing that we are going to put emphasize now this time in the near future is about our data and to combine the identity graph that we got into one graph that we will hold and manage because this is the essence, I think, of the differentiation, basically, the amount of data and the capability that we are connected across the end-to-end solution with all the platform to our DMP and the ACI agreement, exclusive agreement that we have for the next couple of years is giving us advantage around that time, we want to utilize it. And I will hand over to Karim to talk a little bit more about the graph and the CMP.
Sure. So this year... I'd say the focus of the investment to continue to improve our identity solution, add more partners to it, expand our graph. Beyond that on the data, it's a lot of focus on our direct assets. So we're launching our ACR solution globally. As Ofer mentioned earlier, we launched in the U.K. We're live in the U.S. We're launching multiple other countries in 2024. So we'll be working on the expansion and then continue to improve our first-party onboarding of data and tools around that to help serve our customers.
I will hand over now to Sagi to...
Yes, Matt, regarding your question, all the investments that both Karim and Ofer mentioned are already embedded within our 2024 plan and guidance. We think that all of these investments will bear fruit in 2024 and, of course, onwards. And it will take us in 2024 to our 30-ish% of adjusted EBITDA margin and probably and hopefully, going forward into 2025, it will go higher.
Your next question comes from the line of Laura Martin from Needham.
I'll stick to one. So one of the questions I have for you is the war in Israel, how much do you think it affected the fourth quarter financial performance, how -- and related to that, how many people actually were -- what percent of your FTEs got called into the word? And are they all back now? And could that be a non-recurring area of weakness that doesn't actually affect -- is better for 2024? What's your point of view on that?
Thank you, Laura. First of all, of course, the events of October 7 affected us maybe in oral in our mindset and so on. But in Israel, our business is not basically based in Israel. It's based in the U.S. and across Asia and Europe. So it's less affecting our day-to-day business doing business. Regarding the teams that are in Israel, I think that they did an amazing job to basically cover for the people that were called to the army, and we didn't felt a real slowdown in anything that meaningful that we are doing. And people are coming in and out. So basically, we have about 20% of our team in Israel that was related or going to the army out of, let's say, 185 people, about 20% we called occasionally to the Army. And it's not like something that is affecting us or will affect us. We will do better next year. It's not like a helping us this way because basically the people that we stay in the office and stay working with the cover for the people that went to the army, they get extra hours and retain them for that.
Next question comes from the line of Andrew Marok from Raymond James.
Maybe building off of an earlier question in your prepared remarks. How are you thinking about prioritization on the several growth vectors you kind of outlined in the call. Is there anything that needs to be in place first before you move on to other aspects of your growth outlook? And how should we be measuring kind of those interim mile markers along the way?
I will let maybe Karim. I will take it. I think that, first of all, we have teams that are working on parallel on all the fronts of what we are doing. So as I said, all the heavy integration that was done for between the DSPs and upgrading the DMP as on already done in 2023. I think that what we are doing now is just finalizing the last elements of the DMP, which is to connect all the identity graph into one, which will bring us a lot of value connected also to our discovery tool that will enable us to create like more insights, more smart segmentation for clients that was to target. But I think that it's done through the teams that are dealing with data. So it's not -- we don't have to wait. It's already on the work, and it will is supposed to be done by -- in the next couple of -- in the next 2 to 3 months, basically. So I don't see any -- it will not slow us down or nothing that needs to be in parallel. The rest of the things that we are doing is about -- we are able now to move some more resources to innovation because last year, a lot of our manpower a lot of our attention, a lot of our, let's say, our mind was, first of all, to conclude the integration of the platform, which are very heavy platform to integrate. And now I think that basically, we are expecting our teams to go back to innovation like they did in the last years. And we have a lot to do like around again story if you're mentioning it again, but data per logic integration, ACR expanding into more countries, integrating all these capabilities into our systems is meaningful. And I think that this is the innovation that we are looking to get, which is around basically CTG that we are doing already for the last couple of years. Okay. So that's it basically. Thank you, Eric.
Your next question comes from the line of Matt Condon from JMP.
Maybe just on the guidance. Can you guys parse through how much of it is just execution on your part or the improvement in execution versus a general macro recovery that we're going to see potentially in 2024?
So I will take this question. And Sagi, if you want to add something, let me know. In general, I think that it's -- as we mentioned also in discrete and when we are talking about 2023, I think that, again, our attention was on integration. We need to remember that we basically acquired a company of 1,000 people in the end of '22 in the last quarter. We need to integrate it into a company of 600 people. We cut cost of about $65 million last year on run rate, which is very massive. And, in general, I think that now it's about a lot about execution. And, of course, if the market will be better, it will help us even more, but we cannot control it. What we can control is the execution of our team, putting more focus on doing business than integration. And as I said before, creating more innovation that can drive more business partnership and more business coming into our business. Sagi you have something to add? So Sagi doesn't have something to add.
Your next question comes from the line of Eric Martinuzzi from Lake Street.
Well, I wanted to get a better sense of seasonality in the flow of the contribution ex TAC. Your guidance for 2024, very robust there at the midpoint, I've got 9% for the year. And my own model for the first quarter, I only had about a 5% growth rate for contribution ex TAC. And I'm wondering what your comfort level is with -- should we be modeling this kind of level loaded throughout the year on the growth rate? Or is it slightly less in Q1 and maybe more in Q4?
Yes. So I think first, we believe strongly in our guidance. Second, I think we have, as we mentioned before, better drivers for this year contribution ex TAC and trend as a whole. So we signed a settlement agreement with LGAD, the former Alfonso, which is giving us much more reach and a lot of other opportunities. Of course, all the new products that Karim and Ofer mentioned. And of course, on top of that, a well-positioned sales force after the huge integration that we did over there in 2023, and we are already in Q1, like seeing the pipelines and the fruits of that.
And in general, always the second half of the year is stronger than the first half of the year for us historically.
Your next question comes from the line of Mark Kelley from Stifel.
I was hoping maybe you could just go back to the political commentary that you offered. I would imagine that having the linear TV tool, this election cycle is probably a benefit to you, given that a lot of those budgets are still largely linear. I guess, when you're talking to those types of advertising clients, I guess, do you expect more digital this year? Is it still going to be primarily linear TV? And, I guess, how do you fit into that ecosystem now that you've got all these different assets that you didn't have 4 years ago? And then maybe one quick clarifying question, if I could. Did you guys say that you expect CTV CPMs to increase from here? I thought I heard that in the prepared remarks. I just want to make sure I heard that correctly.
Just to cover the last point, we didn't say that about CPM or CTV. When we are talking about political, I think that for the first time, just in my career, we are coming ready for that in a meaning that we have very strong tools that are enabling basically to check -- to create segments according to sentiment according to how people are related to ideas and parties and so on. And I think that it's giving us a lot of advantage in the market basically in order to gain some of the dollars that are going to political in order to support different candidates. And we are, of course, already in discussions. We built a dedicated team for that. And we feel the good vibe and the good support that we are getting from the market. For basically, first of all, the segmentation tools and the data related to the segmentation to the data that is related to political campaigns and activity, which is very meaningful. The second thing, of course, our capability around linear TV and cross-platform is helping also because it basically can save some of the money of the parties when they want to promote a candidate to make more money, work for them in a smart manner if they're using our platforms and our technology because it basically enable them to identify where they need to invest their money in order to make it more effective and it's cross platform across linear and digital. In general, we believe that this year, like if you are looking from -- in perspective to other before that were elections, I think that more money will go to digital basically because the level of linear connection went down. So people when they want to reach targeted users in different regions of the country, they will have to use also digital in order to do that. And that's exactly where we are strong at, and we believe that this will enable us to win more of these dollars and to bring them to our P&L basically.
And just to add to that, political probably will influence our second half of the year, Q3 and mainly Q4.
As there are no further questions, I would like to thank our speakers for today's presentation, and thank you all for joining us. This now concludes today's conference. You may now disconnect.