QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Large, accelerated filer | ¨ | x | |||||||||
Non-accelerated filer | ¨ | Smaller reporting company | |||||||||
Emerging growth company |
Page | |||||
March 31, 2024 | December 31, 2023 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Trade receivables, net (allowance for credit losses of $ | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Long-term restricted deposits | |||||||||||
Property and equipment, net | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Operating lease right of use asset | |||||||||||
Other non-current assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Stockholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
Trade payables | |||||||||||
Employee and payroll accruals | |||||||||||
Lease liabilities—current portion | |||||||||||
Accrued expenses and other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Lease liabilities—non-current portion | |||||||||||
Other non-current liabilities | |||||||||||
Warrants liability | |||||||||||
Commitments and contingencies (Note 6) | |||||||||||
Stockholders’ equity: | |||||||||||
Common stock: $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Revenue | $ | $ | |||||||||
Cost of revenue (1) | |||||||||||
Research and development (1) | |||||||||||
Sales and marketing (1) | |||||||||||
General and administrative (1) | |||||||||||
Depreciation and amortization | |||||||||||
Operating loss | ( | ( | |||||||||
Finance (income) expenses, net | ( | ( | |||||||||
Loss before taxes | ( | ( | |||||||||
Taxes on income | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Net loss per share common share—basic and diluted | $ | ( | $ | ( | |||||||
Weighted-average number of shares used in computing net loss per share: | |||||||||||
Basic and diluted |
Common stock | Additional paid-in capital | Accumulated deficit | Total stockholders’ equity | ||||||||||||||
Shares | Amount | ||||||||||||||||
Balance as of December 31, 2022 | $ | $ | $ | ( | $ | ||||||||||||
Stock-based compensation | |||||||||||||||||
Issuance of common stock | |||||||||||||||||
—exercised options and RSUs vested | — | ||||||||||||||||
Net loss | ( | ( | |||||||||||||||
Balance as of March 31, 2023 | $ | $ | $ | ( | $ | ||||||||||||
Common stock | Additional paid-in capital | Accumulated deficit | Total stockholders’ equity | ||||||||||||||
Shares | Amount | ||||||||||||||||
Balance as of December 31, 2023 | $ | $ | $ | ( | $ | ||||||||||||
Stock-based compensation | |||||||||||||||||
Issuance of common stock | |||||||||||||||||
—exercised options and RSUs vested | — | ||||||||||||||||
Net loss | ( | ( | |||||||||||||||
Balance as of March 31, 2024 | $ | $ | $ | ( | $ |
Three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation | |||||||||||
Change in fair value of warrants | ( | ||||||||||
Loss on foreign exchange, net | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Trade receivables, net | |||||||||||
Prepaid expenses and other assets | ( | ( | |||||||||
Operating lease right of use assets | |||||||||||
Trade payables | ( | ||||||||||
Employee and payroll accruals | ( | ( | |||||||||
Operating lease liabilities | ( | ( | |||||||||
Accrued expenses and other liabilities | |||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Internal use software capitalization | ( | ( | |||||||||
Purchases of property and equipment | ( | ( | |||||||||
Withdrawal of short-term bank deposits | |||||||||||
Investment in short-term bank deposits | ( | ||||||||||
Net cash (used in) provided by investing activities | ( | ||||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from loan | |||||||||||
Payment on loan | ( | ( | |||||||||
Proceeds from exercise of options | |||||||||||
Net cash (used in) provided by financing activities | ( | ||||||||||
Effect of exchange rates on cash, cash equivalents and restricted cash | ( | ||||||||||
(Decrease) increase in cash, cash equivalents, and restricted cash | ( | ||||||||||
Cash, cash equivalents, and restricted cash at the beginning of the period | |||||||||||
Cash, cash equivalents, and restricted cash at the end of the period | $ | $ | |||||||||
Supplemental disclosures: | |||||||||||
Income taxes paid | $ | $ | |||||||||
Interest paid | $ | $ | |||||||||
Non-cash transactions: | |||||||||||
Right of use assets obtained in exchange for operating lease liabilities upon lease modification | $ | $ | |||||||||
Reconciliation of cash, cash equivalents, and restricted cash: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Long-term restricted deposits | |||||||||||
Total cash, cash equivalents, and restricted cash | $ | $ |
Three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Customer A | % | % |
March 31, 2024 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
Assets: | |||||||||||||||||
Money market funds | $ | $ | $ | ||||||||||||||
Liabilities: | |||||||||||||||||
$ | $ | $ |
December 31, 2023 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
Assets: | |||||||||||||||||
Money market funds | $ | $ | $ | ||||||||||||||
Liabilities: | |||||||||||||||||
$ | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
ROU assets | Lease liabilities | ROU assets | Lease liabilities | ||||||||||||||||||||
Real estate | $ | $ | $ | $ | |||||||||||||||||||
Total operating leases | $ | $ | $ | $ |
Three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Operating lease cost | $ | $ | |||||||||
Short term lease cost | |||||||||||
Variable lease cost | |||||||||||
Total lease cost | $ | $ |
Three months ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Cash paid for amounts included in the measurement of lease liabilities | $ | $ |
Three months ended March 31, 2024 | |||||
2024 remaining | $ | ||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 | |||||
Thereafter | |||||
Total undiscounted lease payments | $ | ||||
Less: imputed interest | ( | ||||
Total operating lease liabilities | $ |
Three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Cost of goods sold | $ | $ | |||||||||
Research and development | |||||||||||
Sales and marketing | |||||||||||
General and administrative | |||||||||||
Total expensed | $ | $ | |||||||||
Internal use software capitalization | |||||||||||
Total stock-based compensation | $ | $ |
Three months ended March 31, 2024 | |||||||||||||||||||||||
Number of options | Weighted average exercise price | Weighted average remaining contractual term (in years) | Aggregate intrinsic value (in thousands) | ||||||||||||||||||||
Outstanding at December 31, 2023 | $ | ||||||||||||||||||||||
Granted | $ | ||||||||||||||||||||||
Forfeited | ( | $ | |||||||||||||||||||||
Expired | ( | $ | |||||||||||||||||||||
Exercised | ( | $ | |||||||||||||||||||||
Outstanding at March 31, 2024 | $ | $ | |||||||||||||||||||||
Exercisable options at March 31, 2024 | $ | $ | |||||||||||||||||||||
Vested and expected to vest at March 31, 2024 | $ | $ |
Three months ended March 31, 2024 | |||||||||||||||||||||||
Number of units | Weighted average grant date fair value | Weighted average remaining contractual term (in years) | Aggregate intrinsic value (in thousands) | ||||||||||||||||||||
Outstanding at December 31, 2023 | $ | ||||||||||||||||||||||
Granted | $ | ||||||||||||||||||||||
Vested | ( | $ | |||||||||||||||||||||
Forfeited | ( | $ | |||||||||||||||||||||
Outstanding at March 31, 2024 | $ | $ | |||||||||||||||||||||
Expect to convert at March 31, 2024 | $ | $ | |||||||||||||||||||||
Three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
US | $ | $ | |||||||||
Canada | |||||||||||
APAC | |||||||||||
EMEA | |||||||||||
LATAM | |||||||||||
Total revenue | $ | $ |
March 31, | December 31, | ||||||||||
2024 | 2023 | ||||||||||
(Unaudited) | |||||||||||
Israel | $ | $ | |||||||||
US | |||||||||||
Rest of the world | |||||||||||
Total | $ | $ |
Three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Options outstanding | |||||||||||
Unvested RSU outstanding | |||||||||||
Warrants outstanding |
Three months ended March 31, | |||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||
(in thousands) | % of revenue | (in thousands) | % of revenue | ||||||||||||||||||||
Revenue | $ | 36,738 | 100 | % | $ | 30,485 | 100 | % | |||||||||||||||
Cost of revenue | 8,732 | 24 | % | 8,265 | 27 | % | |||||||||||||||||
Research and development | 6,321 | 17 | % | 7,117 | 23 | % | |||||||||||||||||
Sales and marketing | 11,626 | 32 | % | 11,637 | 38 | % | |||||||||||||||||
General and administrative | 10,535 | 28 | % | 9,650 | 32 | % | |||||||||||||||||
Depreciation and amortization | 2,624 | 7 | % | 2,030 | 7 | % | |||||||||||||||||
Operating loss | (3,100) | (8) | % | (8,214) | (27) | % | |||||||||||||||||
Finance (income) expenses, net | (42) | — | % | (2,475) | (8) | % | |||||||||||||||||
Loss before taxes | (3,058) | (8) | % | (5,739) | (19) | % | |||||||||||||||||
Taxes on income | 3,176 | 9 | % | 2,824 | 9 | % | |||||||||||||||||
Net loss | $ | (6,234) | (17) | $ | (8,563) | (28) | % |
Three months ended March 31, | |||||||||||||||||||||||||||||||||||
2024 | 2023 | Variance | |||||||||||||||||||||||||||||||||
(in thousands) | % of revenue | (in thousands) | % of revenue | $ | % | ||||||||||||||||||||||||||||||
Cost of revenue | $ | 8,732 | 24 | % | $ | 8,265 | 27 | % | $ | 467 | 6 | % |
Three months ended March 31, | |||||||||||||||||||||||||||||||||||
2024 | 2023 | Variance | |||||||||||||||||||||||||||||||||
(in thousands) | % of revenue | (in thousands) | % of revenue | $ | % | ||||||||||||||||||||||||||||||
Research and development | $ | 6,321 | 17 | % | $ | 7,117 | 23 | % | $ | (796) | (11) | % |
Three months ended March 31, | |||||||||||||||||||||||||||||||||||
2024 | 2023 | Variance | |||||||||||||||||||||||||||||||||
(in thousands) | % of revenue | (in thousands) | % of revenue | $ | % | ||||||||||||||||||||||||||||||
Sales and marketing | $ | 11,626 | 32 | % | $ | 11,637 | 38 | % | $ | (11) | — | % |
Three months ended March 31, | |||||||||||||||||||||||||||||||||||
2024 | 2023 | Variance | |||||||||||||||||||||||||||||||||
(in thousands) | % of revenue | (in thousands) | % of revenue | $ | % | ||||||||||||||||||||||||||||||
General and administrative | $ | 10,535 | 28 | % | $ | 9,650 | 32 | % | $ | 885 | 9 | % |
Three months ended March 31, | |||||||||||||||||||||||||||||||||||
2024 | 2023 | Variance | |||||||||||||||||||||||||||||||||
(in thousands) | % of revenue | (in thousands) | % of revenue | $ | % | ||||||||||||||||||||||||||||||
Depreciation and amortization | $ | 2,624 | 7 | % | $ | 2,030 | 7 | % | $ | 594 | 29 | % |
Three months ended March 31, | |||||||||||||||||||||||||||||||||||
2024 | 2023 | Variance | |||||||||||||||||||||||||||||||||
(in thousands) | % of revenue | (in thousands) | % of revenue | $ | % | ||||||||||||||||||||||||||||||
Finance (income) expenses, net | $ | (42) | — | % | $ | (2,475) | (8) | % | $ | 2,433 | (98) | % |
Three months ended March 31, | |||||||||||||||||||||||||||||||||||
2024 | 2023 | Variance | |||||||||||||||||||||||||||||||||
(in thousands) | % of revenue | (in thousands) | % of revenue | $ | % | ||||||||||||||||||||||||||||||
Taxes on income | $ | 3,176 | 9 | % | $ | 2,824 | 9 | % | $ | 352 | 12 | % |
Three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Net cash provided by operating activities | $ | 4,652 | $ | 368 | |||||||
Net cash (used in) provided by investing activities | (2,594) | 6,827 | |||||||||
Net cash (used in) provided by financing activities | (19,957) | 250 | |||||||||
Effect of exchange rates on cash, cash equivalents and restricted cash | (90) | — | |||||||||
(Decrease) increase in cash, cash equivalents, and restricted cash | $ | (17,989) | $ | 7,445 |
Three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Net cash provided by operating activities | $ | 4,652 | $ | 368 | |||||||
Gain (loss) on foreign exchange, net | (90) | — | |||||||||
Capital expenditures | (2,541) | (3,180) | |||||||||
Free Cash Flow | $ | 2,021 | $ | (2,812) |
Three months ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Net loss | $ | (6,234) | $ | (8,563) | |||||||
Net loss margin percent | (17) | % | (28) | % | |||||||
Depreciation and amortization | 2,624 | 2,030 | |||||||||
Stock-based compensation | 3,838 | 4,625 | |||||||||
Finance (income) expenses, net (a) | (42) | (2,475) | |||||||||
Retention bonus expenses (b) | 92 | 297 | |||||||||
Legal claims | 928 | 314 | |||||||||
Severance cost (c) | — | 821 | |||||||||
Other | 14 | 272 | |||||||||
Taxes on income | 3,176 | 2,824 | |||||||||
Adjusted EBITDA | $ | 4,396 | $ | 145 | |||||||
Adjusted EBITDA margin percent | 12.0 | % | 0.5 | % |
Incorporated by Reference | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exhibit Number | Description | Form | File No. | Exhibit | Filing date | Filed furnished herewith | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3.1 | 10-K | 001-40048 | 3.1 | 03/03/2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3.2 | 8-K | 001-40048 | 3.1 | 02/05/2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4.1 | 8-K | 001-40048 | 4.1 | 12/06/2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4.2 | 8-K | 001-40048 | 4.2 | 12/06/2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4.3 | 8-K | 333-252440 | 4.1 | 02/18/2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4.4 | 10-K | 001-40048 | 4.4 | 03/03/2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
31.1 | * | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
31.2 | * | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
32.1 | ** | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
32.2 | ** | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
* | Filed herewith. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
** | Furnished herewith. |
INNOVID CORP. | ||||||||
Date: May 07, 2024 | By: | /s/ Zvika Netter | ||||||
Zvika Netter | ||||||||
Chief Executive Officer | ||||||||
Date: May 07, 2024 | By: | /s/ Anthony Callini | ||||||
Anthony Callini | ||||||||
Chief Financial Officer | ||||||||
1. | I have reviewed this Quarterly Report on Form 10-Q of Innovid Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): | |||||||||||||||||||||||||||||||||||||||||||||||||
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Zvika Netter | ||||||||
Zvika Netter Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Innovid Corp.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Anthony Callini | ||||||||
Anthony Callini Chief Financial Officer |
/s/ Zvika Netter | ||||||||
Zvika Netter Chief Executive Officer |
/s/ Anthony Callini | ||||||||
Anthony Callini Chief Financial Officer |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Trade receivables, allowance for doubtful receivables | $ 316 | $ 321 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 140,136,905 | 141,194,179 |
Common stock, shares outstanding (in shares) | 140,136,905 | 141,194,179 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|||
Income Statement [Abstract] | ||||
Revenue | $ 36,738 | $ 30,485 | ||
Cost of revenues | [1] | 8,732 | 8,265 | |
Research and development | [1] | 6,321 | 7,117 | |
Sales and marketing | [1] | 11,626 | 11,637 | |
General and administrative | [1] | 10,535 | 9,650 | |
Depreciation and amortization | 2,624 | 2,030 | ||
Operating loss | (3,100) | (8,214) | ||
Finance (income) expenses, net | (42) | (2,475) | ||
Loss before taxes | (3,058) | (5,739) | ||
Taxes on income | 3,176 | 2,824 | ||
Net loss | $ (6,234) | $ (8,563) | ||
Net loss per share common share—basic (in dollars per share) | $ (0.04) | $ (0.06) | ||
Net loss per share common share— diluted (in dollars per share) | $ (0.04) | $ (0.06) | ||
Weighted-average number of shares used in computing net loss per share: | ||||
Basic (in shares) | 142,376,026 | 136,008,998 | ||
Diluted (in shares) | 142,376,026 | 136,008,998 | ||
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DESCRIPTION OF BUSINESS |
3 Months Ended |
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Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS Innovid Corp. together with its consolidated subsidiaries, the “Company” or “Innovid”, is an enterprise software platform for the creation, delivery, measurement, and optimization of advertising across connected TV (“CTV”), mobile TV and desktop environments. We provide critical technology infrastructure for many of the world’s largest brands, agencies, and publishers, and empower them to create ad-supported TV experiences people love. Our cloud-based platform tightly integrates with the highly fragmented advertising technology and media ecosystems, and includes three key solutions: ad serving, creative personalization, and measurement. Innovid Corp. was originally incorporated as ION Acquisition Corp. 2 Ltd. (“ION”), a special purpose acquisition company, on November 23, 2020 and Innovid Corp. was the surviving entity following the completion of its merger with ION on November 30, 2021 (the “Transaction”). On February 28, 2022, the Company completed the acquisition of all the outstanding shares of TV Squared Limited (“TVS”) an independent global measurement and attribution platform for converged TV and a private company limited by shares incorporated under the laws of the Scotland in a combination of cash and stock and stock option issuances.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited interim condensed consolidated financial statements have been prepared in accordance with US GAAP for interim reporting and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X. Any reference in these notes to applicable guidance is meant to refer to the authoritative US GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). Accordingly, such financial statements do not include all the information and footnotes required by US GAAP for complete financial statements. In management’s opinion, these unaudited condensed consolidated interim financial statements contain all adjustments of a normal recurring nature necessary for a fair presentation for a fair presentation of the financial statements for the interim period presented. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2023, as reported in the Company’s 2023 Annual Report on Form 10-K. The Company’s significant accounting policies and practices are as described in the Annual Report. Use of Estimates The preparation of the condensed consolidated interim financial statements in conformity with US GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported in the financial statements. The results for interim periods are not necessarily indicative of results to be expected for the year or for any future periods. In management’s opinion, these unaudited condensed consolidated interim financial statements contain all adjustments of a normal recurring nature necessary for a fair presentation of the financial statements for the interim period presented based upon information available at the time they are made. Actual results could differ from those estimates. Prior Period Reclassification Certain amounts in prior year’s condensed consolidated balance sheet have been reclassified to conform to current year’s presentation. Accounting Policies Trade receivable, net The Company records trade receivables for amounts invoiced and yet unbilled invoices. The Company’s expected loss allowance methodology for trade receivables is based upon its assessment of various factors, including historical experience, the age of the trade receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. The estimated credit loss allowance is recorded as general and administrative expenses on the Company's condensed consolidated statements of operations. Concentrations of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, deposits and trade receivables, net. The majority of the Company’s cash and cash equivalents are invested in deposits with major banks in the US, Israel and UK. The Company is exposed to credit risk in the event of default by the financial institutions to the extent of the amounts recorded on the accompanying consolidated balance sheets exceed insured limits. Generally, these investments may be redeemed upon demand and, therefore, bear minimal risk. The Company’s trade receivables, net is mainly derived from sales to customers located in the US, APAC, EMEA, and LATAM. The Company mitigates its credit risks by performing ongoing credit evaluations of its customers’ financial conditions. The Company has no off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements. During the three months ended March 31, 2024 and 2023, one customer accounted for more than 10% of the Company’s total revenue as presented below:
Software development costs Software development costs, which are included in property and equipment, net, consists of capitalized costs related to the purchase and development of internal-use software. The Company uses such software to provide services to its customers. The costs to purchase and develop internal-use software are capitalized from the time that the preliminary project stage is completed, and it is considered probable that the software will be used to perform the function intended. These costs include personnel and personnel-related employee benefits for employees directly associated with the software development and external costs of the materials or services consumed in developing or obtaining the software. Any costs incurred for upgrades and functionality enhancements of the software are also capitalized. Once this software is ready for use in providing the Company's services, these costs are amortized on a straight-line basis over the estimated useful life of the software, which is three years. The amortization is presented within depreciation and amortization in the condensed consolidated statements of operations. During the three months ended March 31, 2024 and 2023, the Company capitalized internal-use software cost of $2.5 million and $3.5 million, respectively. Impairment of long-lived assets Long-lived assets, including property and equipment and finite-lived intangible assets, are reviewed for impairment whenever facts or circumstances either internally or externally may indicate that the carrying value of an asset may not be recoverable. If there are indications of an impairment, the Company tests for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset to the carrying amount of the asset or asset group. If the asset or asset group is determined to be impaired, any excess of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss. No impairment was recognized during the three months ended March 31, 2024 and 2023. Goodwill and acquired intangible assets Goodwill and acquired intangible assets have been recorded in the Company's financial statements resulting from various business combinations. Goodwill represents the excess of the purchase price in a business combination over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed. Goodwill is not amortized as it is estimated to have an indefinite life. As such, goodwill is subject to an annual impairment test. The Company allocates goodwill to reporting units based on the expected benefit from the business combination. Reporting units are evaluated when changes in the Company’s operating structure occur, and if necessary, goodwill is reassigned using a relative fair value allocation approach. The Company operates in one operating segment and this segment is the only reporting unit. ASC 350, Intangibles—Goodwill and other (“ASC 350”) requires goodwill to be tested for impairment at least annually and, in certain circumstances, between annual tests. The accounting guidance gives the option to perform a qualitative assessment to determine whether further impairment testing is necessary. The qualitative assessment considers events and circumstances that might indicate that a reporting unit's fair value is less than its carrying amount. If it is determined, as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative test is performed. The Company elects to perform an annual impairment test of goodwill as of October 1 of each year, or more frequently if impairment indicators are present. No impairment was recognized during the three months ended March 31, 2024 and 2023. Separately acquired intangible assets are measured on initial recognition at cost including directly attributable costs. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Customer relationships and acquired technology are amortized on a straight-line basis over the estimated useful life of the assets; approximately 11 years and 6 years, respectively. Amortization of customer relationships and acquired technology is presented within depreciation and amortization in the condensed consolidated statements of operations. Fair value of financial instruments The Company applies a fair value framework to measure and disclose its financial assets and liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Includes other inputs that are directly or indirectly observable in the marketplace. Level 3 - Unobservable inputs which are supported by little or no market activity. The Company’s financial instruments consist of cash and cash equivalents, restricted deposits, trade receivables, net, trade payables, employees, payroll accruals, accrued expenses and other current liabilities. Due to the short-term nature of these instruments, historical carrying amounts approximate fair value. The Company’s investments in money market funds are classified as cash equivalents and measured at fair value. The Company measures its warrant liability at fair value. The following tables present information about the Company’s financial instruments that are measured at fair value on a recurring basis:
As of March 31, 2024, the Company’s warrant liability represents the warrants (refer to Note 4), that were assumed in the Transaction, which were originally issued in connection with ION’s initial public offering. The Company’s warrants are recorded on the balance sheet at fair value with changes in fair value recognized through earnings. The Company’s warrants are within Level 1 of the fair value hierarchy. This valuation is subject to re-measurement at each balance sheet date. The Company determines the fair value of the warrants by using the closing warrant price. Revenue recognition Most of the Company’s revenue is derived from digital ad solutions, where the Company provides an ad serving platform for use by advertisers, media agencies and publishers. Standard, interactive and data driven digital video ads are delivered through this ad serving platform. Advertising impressions are served via the Company’s cloud based ad serving platform to various digital publishers across CTV, mobile TV, desktop TV, display and other channels. InnovidXP, the Company’s cloud based cross-platform TV Ad measurement solution, measures the efficiency of CTV advertising and in-flight optimizations for TV marketers. The customers get insights into the effectiveness of their TV and digital advertising. The Company also provides creative services for the design and development of interactive data-driven and dynamic ad formats by adding data, interactivity and dynamic features to standard ad units. The Company recognizes revenue when its customer obtains control of promised services in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company recognizes revenue in accordance with ASC Topic 606, Revenue from contracts with customers (“ASC 606”) and determines revenue recognition through the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when a performance obligation is satisfied. For arrangements with multiple performance obligations, which represent promises within an arrangement that are capable of being distinct and are separately identifiable, the Company allocates the contract consideration to all distinct performance obligations based on their relative standalone selling price (“SSP”). SSP is typically estimated based on observable transactions when these services are sold on a standalone basis. Revenue related to ad serving is recognized when impressions are delivered via the Company’s ad serving platform. The Company recognizes revenue from the display of impression-based ads in the contracted period in which the impressions are delivered. Impressions are considered delivered when an ad is displayed to users. Revenue related to Innovid XP solution is recognized over time, since the customer simultaneously receives and consumes the benefits provided by the Company’s performance. Revenues for this measurement subscription is recognized over the service period. Revenue related to creative projects is recognized when the Company delivers an ad unit. Creative services projects are usually delivered within a week. The Company’s accounts receivable consist primarily of receivables related to products and services, for which the Company’s contracted performance obligations have been satisfied, the amount has been billed and the Company has an unconditional right to payment. The Company typically bills customers monthly based on actual delivery. Payment terms vary, mainly with terms of 60 days or less. The typical contract term is 12 months or less for ASC 606 purposes. Most of the Company’s contracts can be cancelled without cause. The Company has the unconditional right to payment for the services provided as of the date of the termination of the contracts. The Company applies the practical expedient in ASC 606 and does not adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Deferred revenue represents mostly unrecognized fees billed or collected for measurement platform services. Deferred revenue is recognized as (or when) the Company performs under the contract. Revenue from ad serving solutions via Innovid’s ad serving platform was 75.3% and 73.0% of the Company’s revenue for the three months ended March 31, 2024 and 2023, respectively. Revenue from measurement subscriptions was 21.2% and 23.0% for the three months ended March 31, 2024 and 2023, respectively. Creative services were 3.0% and 3.9% of the Company’s revenue for the years ended March 31, 2024, and 2023, respectively. Costs to obtain a contract Contract costs include commission programs to compensate sales employees for generating sales orders with new customers or for new services with existing customers. The Company elected to apply the practical expedient and recognize incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less. Most of the Company’s commission are commensurate. If commissions are not eligible for the practical expedient, the Company capitalizes these commissions. Capitalized commissions are amortized over three years. As of March 31, 2024 and December 31, 2023, capitalized commissions were immaterial. Recently issued accounting pronouncements not yet adopted As an “emerging growth company,” the JOBS Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflect this election. Income taxes In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 is intending to improve transparency of income tax disclosure by requiring income tax disclosures to contain consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. This standard affects the disclosure of income taxes not the accounting for income taxes. This standard is effective for the Company for the annual period beginning after December 15, 2025, with early adoption permitted. The Company is evaluating the impact of the adoption of ASU 2023-09. Segments In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires public entities to disclose information about their reportable segments’ significant expense and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. This standard is effective for the Company for annual periods beginning after December 15, 2023 and interim periods beginning after December 15, 2024. The Company is evaluating the impact of the adoption of ASU 2023-07.
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LEASES |
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LEASES | LEASES Innovid's lease portfolio primarily consists of real estate properties. Short-term leases with a term of 12 months or less are not recorded on the balance sheet. Innovid does not separate lease components from non-lease components. The Company is a lessee in all its lease agreements. The Company records lease liabilities based on the present value of lease payments over the lease term. Innovid generally uses an incremental borrowing rate to discount its lease liabilities, as the rate implicit in the lease is typically not readily determinable. Certain lease agreements include renewal options that are under the Company's control. Optional renewal periods are included in the lease term when it is reasonably certain that the Company will exercise its option. On February 7, 2024, we amended our New York lease agreement extending the term to 2034. The lease contains an option to extend the lease for an additional five year period, lease additional space, and early termination, which are not reasonably certain to be exercised. Variable lease payments are primarily related to payments to lessors for taxes, maintenance, insurance and other operating costs. The Company's lease agreements do not contain any significant residual value guarantees or restrictive covenants. The Company has the following operating right-of-use (“ROU”) assets and lease liabilities:
Lease expense components recognized in the interim condensed consolidated statement of operations was as follows:
As of March 31, 2024, the weighted-average remaining lease term and weighted-average discount rate for operating leases were 9.7 years and 7.2%, respectively. Supplemental cash flow information regarding the Company's operating leases were as follows:
Future minimum commitments under the Company’s operating lease were as follows:
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WARRANTS |
3 Months Ended |
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Mar. 31, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
WARRANTS | WARRANTS As of March 31, 2024, the Company had 3,162,453 public warrants and 7,060,000 private warrants outstanding. The majority of the private warrant terms are identical to the public warrants resulting in use of the same price for valuation purposes. See Note 2, Summary of Significant Accounting Policies, for details regarding the fair value of the warrants and see Note 8, Finance (Income) Expenses, Net for details regarding the gains and losses.
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LONG-TERM DEBT |
3 Months Ended |
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Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT On August 4, 2022, two wholly owned subsidiaries of the Company, Innovid LLC and TV Squared Inc, entered an amended and restated loan and security agreement with Silicon Valley Bank (the “2022 A&R Agreement”), to increase the revolving line of credit from $15,000 to $50,000 (the “New Revolving Credit Facility”). The 2022 A&R Agreement and the New Revolving Credit Facility were amended by a First Loan Modification Agreement dated August 2, 2023 (the “2023 Modification Agreement”). The interest for the New Revolving Credit Facility is payable monthly in arrears. The New Revolving Credit Facility bears interest at an annual rate which is the greater of (a) WSJ Prime Rate plus 0.25% or (b) 4.25%, on the aggregate outstanding balance. Additional fees include fees in an amount of 0.20% per annum of the average unused portion of the New Revolving Credit Facility to be paid quarterly in arrears. The maturity date of the 2022 A&R Agreement, as amended by the 2023 Modification Agreement, is June 30, 2025. The New Revolving Credit Facility is subject to certain customary conditions precedent to the credit extension as stated in the 2022 A&R Agreement and is secured by substantially all of the Company’s assets and continues to place limitations on indebtedness, liens, distributions, investments, asset sales, transactions with affiliates and acquisitions and conduct of business, all as defined in the agreement. The New Revolving Credit Facility requires the Company to comply with all covenants, primarily maintaining an adjusted quick ratio of at least 1.30 to 1.00. As defined in the 2022 A&R Agreement, “adjusted quick ratio” is the ratio of (a) quick assets to (b) current liabilities minus the current portion of deferred revenue. “Quick assets” are determined as the Company’s unrestricted cash plus accounts receivable, net, and is determined according to US GAAP. The Company is also required to maintain the minimum quarterly adjusted EBITDA as defined in the 2022 A&R Agreement, as amended by the 2023 Modification Agreement, if the Company does not maintain the quarterly adjusted quick ratio of at least 1.50 to 1.00. As of March 31, 2024, the Company is in compliance with all the covenants. The Company utilizes the credit line on an as needed basis. In January 2024, the Company repaid $20.0 million under the credit line and has not subsequently drawn from it. See Note 8, Finance (Income) Expenses, Net for interest expense. FINANCE (INCOME) EXPENSES, NETThe Company recognizes the gains and losses from the remeasurement of its warrants liability in “finance (income) expenses, net” in the condensed consolidated statements of operations. The unrealized (loss)/gain from changes in the fair value of the Company warrants for the three months ended March 31, 2024 and 2023, was a loss of $0.2 million and a gain of $2.7 million, respectively. The Company recognizes interest expense in “finance (income) expenses, net” in the condensed consolidated statements of operations. Interest expense for the three months ended March 31, 2024 and 2023, was $0.1 million and $0.4 million, respectively. Interest income for the three months ended March 31, 2024 and 2023, was $0.4 million and $0.3 million, respectively.
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COMMITMENTS AND CONTINGENT LIABILITIES |
3 Months Ended |
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Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | COMMITMENTS AND CONTINGENT LIABILITIES Pledges and bank guarantees 1.Innovid LLC pledged 65,000 common stocks of its Israeli Subsidiary, NIS 0.01 par value each, in connection with the line of credit (see Note 5, Long-term Debt). 2.The Israeli Subsidiary pledged bank deposits in an aggregate amount of $0.6 million in connection with an office rent agreement and credit cards. 3.Innovid Inc. obtained bank guarantees in an aggregate amount of $0.2 million in connection with its office lease agreements. Legal contingencies On March 4, 2022, a lawsuit was filed in the United States District Court for the Western District of Texas by the Nielsen Company (US) LLC against TV Squared, alleging infringement of US Patent No. 10.063.078. On June 1, 2022, TV Squared moved to transfer the case to the Southern District of New York, which was granted on January 18, 2023. On March 23, 2023, TV Squared moved for judgment on the pleadings that the asserted claims of the Nielsen patent are invalid because they are patent ineligible under 35 U.S.C. 101. The Court has not yet ruled on TV Squared’s motion. Meanwhile, discovery commenced while the motion has been pending. The Court conducted a hearing to construe the patent claims on January 10, 2024, but has not issued a ruling yet following that hearing. On April 15, 2024 the Court issued an order to stay the case for ninety (90) days and to extend various deadlines as set out below, to allow the parties to continue settlement negotiations without incurring the substantial costs associated with the impending close of fact discovery and deadlines for expert reports. The close of fact discovery is currently set for September 30, 2024, and the date for close of expert discovery as February 7, 2025. No trial date has yet been set and the plaintiff has not specified the amount sought in the litigation. Given the uncertainty of litigation and the preliminary stage of the lawsuit, the Company is unable at this time to give an estimate of the amount or range of potential loss, if any, which might result to the Company if the outcome in such litigation was unfavorable. As of March 31, 2024, the Company has not recorded a loss contingency.
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock-based compensation expense under all plans was as follows:
Stock Options Stock option activity under all plans was as follows:
The aggregate intrinsic value of exercised options in the three months ended March 31, 2024 was $0.1 million. As of March 31, 2024, the Company had approximately $2.1 million of total unrecognized compensation cost related to non-vested stock options. That cost is expected to be recognized over a weighted-average period of 2.1 years. Restricted Stock Units RSU activity under the 2021 Plan was as follows:
The weighted-average grant-date fair value of RSUs generally is determined based on the number of units granted and the quoted price of Innovid’s common stock on the date of grant. The fair value of shares vested during the three months ended March 31, 2024 was $5.0 million. As of March 31, 2024, $17.5 million of unrecognized compensation cost related to RSUs is expected to be recognized as expense over the weighted average period of 1.8 years.
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FINANCE (INCOME) EXPENSES, NET |
3 Months Ended |
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Mar. 31, 2024 | |
Other Income and Expenses [Abstract] | |
FINANCE (INCOME) EXPENSES, NET | LONG-TERM DEBT On August 4, 2022, two wholly owned subsidiaries of the Company, Innovid LLC and TV Squared Inc, entered an amended and restated loan and security agreement with Silicon Valley Bank (the “2022 A&R Agreement”), to increase the revolving line of credit from $15,000 to $50,000 (the “New Revolving Credit Facility”). The 2022 A&R Agreement and the New Revolving Credit Facility were amended by a First Loan Modification Agreement dated August 2, 2023 (the “2023 Modification Agreement”). The interest for the New Revolving Credit Facility is payable monthly in arrears. The New Revolving Credit Facility bears interest at an annual rate which is the greater of (a) WSJ Prime Rate plus 0.25% or (b) 4.25%, on the aggregate outstanding balance. Additional fees include fees in an amount of 0.20% per annum of the average unused portion of the New Revolving Credit Facility to be paid quarterly in arrears. The maturity date of the 2022 A&R Agreement, as amended by the 2023 Modification Agreement, is June 30, 2025. The New Revolving Credit Facility is subject to certain customary conditions precedent to the credit extension as stated in the 2022 A&R Agreement and is secured by substantially all of the Company’s assets and continues to place limitations on indebtedness, liens, distributions, investments, asset sales, transactions with affiliates and acquisitions and conduct of business, all as defined in the agreement. The New Revolving Credit Facility requires the Company to comply with all covenants, primarily maintaining an adjusted quick ratio of at least 1.30 to 1.00. As defined in the 2022 A&R Agreement, “adjusted quick ratio” is the ratio of (a) quick assets to (b) current liabilities minus the current portion of deferred revenue. “Quick assets” are determined as the Company’s unrestricted cash plus accounts receivable, net, and is determined according to US GAAP. The Company is also required to maintain the minimum quarterly adjusted EBITDA as defined in the 2022 A&R Agreement, as amended by the 2023 Modification Agreement, if the Company does not maintain the quarterly adjusted quick ratio of at least 1.50 to 1.00. As of March 31, 2024, the Company is in compliance with all the covenants. The Company utilizes the credit line on an as needed basis. In January 2024, the Company repaid $20.0 million under the credit line and has not subsequently drawn from it. See Note 8, Finance (Income) Expenses, Net for interest expense. FINANCE (INCOME) EXPENSES, NETThe Company recognizes the gains and losses from the remeasurement of its warrants liability in “finance (income) expenses, net” in the condensed consolidated statements of operations. The unrealized (loss)/gain from changes in the fair value of the Company warrants for the three months ended March 31, 2024 and 2023, was a loss of $0.2 million and a gain of $2.7 million, respectively. The Company recognizes interest expense in “finance (income) expenses, net” in the condensed consolidated statements of operations. Interest expense for the three months ended March 31, 2024 and 2023, was $0.1 million and $0.4 million, respectively. Interest income for the three months ended March 31, 2024 and 2023, was $0.4 million and $0.3 million, respectively.
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INCOME TAX |
3 Months Ended |
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Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | INCOME TAX The Company recorded net provisions for incomes taxes of $3.2 million and $2.8 million for the three months ended March 31, 2024 and 2023, representing effective tax rates of (103.9)% and (49.2)%, respectively. The increase in tax expense primarily results from a shift in the Company’s foreign earnings, resulting in higher profitability and current tax expense, with no offsetting deferred tax benefit as a result of an overall valuation allowance. Additionally, GILTI adjustments and large temporary differences in the US associated with the capitalization of research and development costs continue to cause the US to generate current federal and state tax expense with no corresponding deferred tax benefit due to the Company's valuation allowance. Unless the US tax rules around research and development (Section 174) are modified, there will continue to be an adverse impact on the Company’s effective rates for income taxes paid.
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SEGMENT REPORTING |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING | SEGMENT REPORTING The Company operates and manages its business as one segment, which primarily focuses on the software platform for ad serving, measurement, and creative. Our CEO is the chief operating decision-maker, and manages and allocates resources to the operations of the Company on an entity-wide basis. Revenue by geographic location was as follows:
Property and equipment, net and ROU assets by geographic location was as follows:
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NET LOSS PER SHARE |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET LOSS PER SHARE | NET LOSS PER SHARE The following potential common shares, presented based on amounts outstanding at each period end, have been excluded from the computation of diluted net loss per share attributable to common stockholders for the periods indicated their effect would have been anti-dilutive effect:
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Pay vs Performance Disclosure | ||
Net loss | $ (6,234) | $ (8,563) |
Insider Trading Arrangements |
3 Months Ended |
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Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended |
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Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited interim condensed consolidated financial statements have been prepared in accordance with US GAAP for interim reporting and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for Quarterly Reports on Form 10-Q and Article 10 of Regulation S-X. Any reference in these notes to applicable guidance is meant to refer to the authoritative US GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). Accordingly, such financial statements do not include all the information and footnotes required by US GAAP for complete financial statements. In management’s opinion, these unaudited condensed consolidated interim financial statements contain all adjustments of a normal recurring nature necessary for a fair presentation for a fair presentation of the financial statements for the interim period presented. These unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2023, as reported in the Company’s 2023 Annual Report on Form 10-K. The Company’s significant accounting policies and practices are as described in the Annual Report.
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Use of Estimates | Use of Estimates The preparation of the condensed consolidated interim financial statements in conformity with US GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported in the financial statements. The results for interim periods are not necessarily indicative of results to be expected for the year or for any future periods. In management’s opinion, these unaudited condensed consolidated interim financial statements contain all adjustments of a normal recurring nature necessary for a fair presentation of the financial statements for the interim period presented based upon information available at the time they are made. Actual results could differ from those estimates.
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Prior Period Reclassification | Prior Period Reclassification Certain amounts in prior year’s condensed consolidated balance sheet have been reclassified to conform to current year’s presentation.
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Trade receivable, net | Trade receivable, net The Company records trade receivables for amounts invoiced and yet unbilled invoices. The Company’s expected loss allowance methodology for trade receivables is based upon its assessment of various factors, including historical experience, the age of the trade receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. The estimated credit loss allowance is recorded as general and administrative expenses on the Company's condensed consolidated statements of operations.
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Concentrations of credit risks | Concentrations of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, deposits and trade receivables, net. The majority of the Company’s cash and cash equivalents are invested in deposits with major banks in the US, Israel and UK. The Company is exposed to credit risk in the event of default by the financial institutions to the extent of the amounts recorded on the accompanying consolidated balance sheets exceed insured limits. Generally, these investments may be redeemed upon demand and, therefore, bear minimal risk. The Company’s trade receivables, net is mainly derived from sales to customers located in the US, APAC, EMEA, and LATAM. The Company mitigates its credit risks by performing ongoing credit evaluations of its customers’ financial conditions. The Company has no off-balance-sheet concentration of credit risk such as foreign exchange contracts, option contracts or other foreign hedging arrangements.
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Software development costs | Software development costs Software development costs, which are included in property and equipment, net, consists of capitalized costs related to the purchase and development of internal-use software. The Company uses such software to provide services to its customers. The costs to purchase and develop internal-use software are capitalized from the time that the preliminary project stage is completed, and it is considered probable that the software will be used to perform the function intended. These costs include personnel and personnel-related employee benefits for employees directly associated with the software development and external costs of the materials or services consumed in developing or obtaining the software. Any costs incurred for upgrades and functionality enhancements of the software are also capitalized. Once this software is ready for use in providing the Company's services, these costs are amortized on a straight-line basis over the estimated useful life of the software, which is three years. The amortization is presented within depreciation and amortization in the condensed consolidated statements of operations.
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Impairment of long-lived assets | Impairment of long-lived assets Long-lived assets, including property and equipment and finite-lived intangible assets, are reviewed for impairment whenever facts or circumstances either internally or externally may indicate that the carrying value of an asset may not be recoverable. If there are indications of an impairment, the Company tests for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset to the carrying amount of the asset or asset group. If the asset or asset group is determined to be impaired, any excess of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss.
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Goodwill and acquired intangible assets | Goodwill and acquired intangible assets Goodwill and acquired intangible assets have been recorded in the Company's financial statements resulting from various business combinations. Goodwill represents the excess of the purchase price in a business combination over the fair value of identifiable tangible and intangible assets acquired and liabilities assumed. Goodwill is not amortized as it is estimated to have an indefinite life. As such, goodwill is subject to an annual impairment test. The Company allocates goodwill to reporting units based on the expected benefit from the business combination. Reporting units are evaluated when changes in the Company’s operating structure occur, and if necessary, goodwill is reassigned using a relative fair value allocation approach. The Company operates in one operating segment and this segment is the only reporting unit. ASC 350, Intangibles—Goodwill and other (“ASC 350”) requires goodwill to be tested for impairment at least annually and, in certain circumstances, between annual tests. The accounting guidance gives the option to perform a qualitative assessment to determine whether further impairment testing is necessary. The qualitative assessment considers events and circumstances that might indicate that a reporting unit's fair value is less than its carrying amount. If it is determined, as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative test is performed. The Company elects to perform an annual impairment test of goodwill as of October 1 of each year, or more frequently if impairment indicators are present. No impairment was recognized during the three months ended March 31, 2024 and 2023. Separately acquired intangible assets are measured on initial recognition at cost including directly attributable costs. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Customer relationships and acquired technology are amortized on a straight-line basis over the estimated useful life of the assets; approximately 11 years and 6 years, respectively. Amortization of customer relationships and acquired technology is presented within depreciation and amortization in the condensed consolidated statements of operations.
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Fair value of financial instruments | Fair value of financial instruments The Company applies a fair value framework to measure and disclose its financial assets and liabilities. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Includes other inputs that are directly or indirectly observable in the marketplace. Level 3 - Unobservable inputs which are supported by little or no market activity. The Company’s financial instruments consist of cash and cash equivalents, restricted deposits, trade receivables, net, trade payables, employees, payroll accruals, accrued expenses and other current liabilities. Due to the short-term nature of these instruments, historical carrying amounts approximate fair value. The Company’s investments in money market funds are classified as cash equivalents and measured at fair value. The Company measures its warrant liability at fair value.
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Revenue recognition | Revenue recognition Most of the Company’s revenue is derived from digital ad solutions, where the Company provides an ad serving platform for use by advertisers, media agencies and publishers. Standard, interactive and data driven digital video ads are delivered through this ad serving platform. Advertising impressions are served via the Company’s cloud based ad serving platform to various digital publishers across CTV, mobile TV, desktop TV, display and other channels. InnovidXP, the Company’s cloud based cross-platform TV Ad measurement solution, measures the efficiency of CTV advertising and in-flight optimizations for TV marketers. The customers get insights into the effectiveness of their TV and digital advertising. The Company also provides creative services for the design and development of interactive data-driven and dynamic ad formats by adding data, interactivity and dynamic features to standard ad units. The Company recognizes revenue when its customer obtains control of promised services in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company recognizes revenue in accordance with ASC Topic 606, Revenue from contracts with customers (“ASC 606”) and determines revenue recognition through the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when a performance obligation is satisfied. For arrangements with multiple performance obligations, which represent promises within an arrangement that are capable of being distinct and are separately identifiable, the Company allocates the contract consideration to all distinct performance obligations based on their relative standalone selling price (“SSP”). SSP is typically estimated based on observable transactions when these services are sold on a standalone basis. Revenue related to ad serving is recognized when impressions are delivered via the Company’s ad serving platform. The Company recognizes revenue from the display of impression-based ads in the contracted period in which the impressions are delivered. Impressions are considered delivered when an ad is displayed to users. Revenue related to Innovid XP solution is recognized over time, since the customer simultaneously receives and consumes the benefits provided by the Company’s performance. Revenues for this measurement subscription is recognized over the service period. Revenue related to creative projects is recognized when the Company delivers an ad unit. Creative services projects are usually delivered within a week. The Company’s accounts receivable consist primarily of receivables related to products and services, for which the Company’s contracted performance obligations have been satisfied, the amount has been billed and the Company has an unconditional right to payment. The Company typically bills customers monthly based on actual delivery. Payment terms vary, mainly with terms of 60 days or less. The typical contract term is 12 months or less for ASC 606 purposes. Most of the Company’s contracts can be cancelled without cause. The Company has the unconditional right to payment for the services provided as of the date of the termination of the contracts. The Company applies the practical expedient in ASC 606 and does not adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Deferred revenue represents mostly unrecognized fees billed or collected for measurement platform services. Deferred revenue is recognized as (or when) the Company performs under the contract. Costs to obtain a contract Contract costs include commission programs to compensate sales employees for generating sales orders with new customers or for new services with existing customers. The Company elected to apply the practical expedient and recognize incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less. Most of the Company’s commission are commensurate. If commissions are not eligible for the practical expedient, the Company capitalizes these commissions. Capitalized commissions are amortized over three years. As of March 31, 2024 and December 31, 2023, capitalized commissions were immaterial.
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Recently issued accounting pronouncements not yet adopted | Recently issued accounting pronouncements not yet adopted As an “emerging growth company,” the JOBS Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act. The adoption dates discussed below reflect this election. Income taxes In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 is intending to improve transparency of income tax disclosure by requiring income tax disclosures to contain consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. This standard affects the disclosure of income taxes not the accounting for income taxes. This standard is effective for the Company for the annual period beginning after December 15, 2025, with early adoption permitted. The Company is evaluating the impact of the adoption of ASU 2023-09. Segments In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires public entities to disclose information about their reportable segments’ significant expense and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. This standard is effective for the Company for annual periods beginning after December 15, 2023 and interim periods beginning after December 15, 2024. The Company is evaluating the impact of the adoption of ASU 2023-07.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedules of Concentration of Risk, by Risk Factor | During the three months ended March 31, 2024 and 2023, one customer accounted for more than 10% of the Company’s total revenue as presented below:
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Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables present information about the Company’s financial instruments that are measured at fair value on a recurring basis:
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LEASES (Tables) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operating ROU Assets and Lease Liabilities | The Company has the following operating right-of-use (“ROU”) assets and lease liabilities:
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Summary of Lease Cost | Lease expense components recognized in the interim condensed consolidated statement of operations was as follows:
Supplemental cash flow information regarding the Company's operating leases were as follows:
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Schedule of Operating Lease, Liability, Maturity | Future minimum commitments under the Company’s operating lease were as follows:
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STOCK-BASED COMPENSATION (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-based Compensation Expenses | Stock-based compensation expense under all plans was as follows:
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Schedule of Share Based Payment Arrangement, Option, Activity | Stock option activity under all plans was as follows:
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Schedule of Share Based Payment Arrangement, Restricted Stock Unit, Activity | RSU activity under the 2021 Plan was as follows:
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SEGMENT REPORTING (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue and Property and Equipment, by Geographical Areas | Revenue by geographic location was as follows:
Property and equipment, net and ROU assets by geographic location was as follows:
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NET LOSS PER SHARE (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potential common shares, presented based on amounts outstanding at each period end, have been excluded from the computation of diluted net loss per share attributable to common stockholders for the periods indicated their effect would have been anti-dilutive effect:
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2024
USD ($)
reportingUnit
|
Mar. 31, 2023
USD ($)
|
Dec. 31, 2023
USD ($)
|
|
Summary of Significant Accounting Policies [Line Items] | |||
Impairments of long-lived assets | $ 0 | $ 0 | |
Number of reporting units | reportingUnit | 1 | ||
Goodwill impairment | $ 0 | $ 0 | |
Payment term | 60 days | ||
Ad serving services | 75.30% | 73.00% | |
Measurement serving services | 21.20% | 23.00% | |
Creative serving, percentage | 3.00% | 3.90% | |
Capitalized commission costs | $ 0 | $ 0 | |
Customer relationships | |||
Summary of Significant Accounting Policies [Line Items] | |||
Acquired finite-lived intangible assets, weighted average useful life | 11 years | ||
Technology | |||
Summary of Significant Accounting Policies [Line Items] | |||
Acquired finite-lived intangible assets, weighted average useful life | 6 years | ||
Software development costs | |||
Summary of Significant Accounting Policies [Line Items] | |||
Useful lives (in years) | 3 years | ||
Capitalization cost | $ 2,500,000 | $ 3,500,000 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Concentration Risk (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Revenue Benchmark | Customer Concentration Risk | Customer A | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 17.00% | 15.00% |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Liabilities: | ||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Warrants liability | Warrants liability |
Fair Value, Recurring | Level 1 | ||
Assets: | ||
Money market funds | $ 14,307 | $ 32,264 |
Liabilities: | ||
Warrants liability | 511 | 307 |
Fair Value, Recurring | Level 2 | ||
Assets: | ||
Money market funds | 0 | 0 |
Liabilities: | ||
Warrants liability | 0 | 0 |
Fair Value, Recurring | Level 3 | ||
Assets: | ||
Money market funds | 0 | 0 |
Liabilities: | ||
Warrants liability | $ 0 | $ 0 |
LEASES - Narrative (Details) |
Mar. 31, 2024 |
Feb. 07, 2024 |
---|---|---|
Leases [Abstract] | ||
Renewal term (in years) | 5 years | |
Operating lease, weighted average remaining lease term | 9 years 8 months 12 days | |
Operating lease, weighted average discount rate, percent | 7.20% |
LEASES - Schedule of Operating ROU Assets and Lease Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Operating Leases Assets And Liabilities [Line Items] | ||
ROU assets | $ 11,129 | $ 1,435 |
Lease liabilities | 11,558 | 1,834 |
Real estate | ||
Operating Leases Assets And Liabilities [Line Items] | ||
ROU assets | 11,129 | 1,435 |
Lease liabilities | $ 11,558 | $ 1,834 |
LEASES - Lease Costs Recognized in the Condensed Consolidated Statement of Earnings (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Leases [Abstract] | ||
Operating lease cost | $ 496 | $ 463 |
Short term lease cost | 270 | 263 |
Variable lease cost | 38 | 21 |
Total lease cost | $ 804 | $ 747 |
LEASES - Supplementary Cash Flow Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 441 | $ 523 |
LEASES - Schedule of Operating Lease Liabilities Maturity (Details) $ in Thousands |
Mar. 31, 2024
USD ($)
|
---|---|
Leases [Abstract] | |
2024 remaining | $ 1,249 |
2025 | 2,099 |
2026 | 986 |
2027 | 1,508 |
2028 | 1,538 |
Thereafter | 9,899 |
Total undiscounted lease payments | 17,279 |
Less: imputed interest | (5,721) |
Total operating lease liabilities | $ 11,558 |
WARRANTS (Details) |
Mar. 31, 2024
shares
|
---|---|
Public Warrants | |
Class of Warrant or Right [Line Items] | |
Warrants outstanding (in shares) | 3,162,453 |
Private Warrants | |
Class of Warrant or Right [Line Items] | |
Warrants outstanding (in shares) | 7,060,000 |
LONG-TERM DEBT (Details) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Aug. 04, 2023 |
Aug. 04, 2022
USD ($)
subsidiary
|
Mar. 31, 2024
USD ($)
|
Aug. 03, 2022
USD ($)
|
|
Line of Credit Facility [Line Items] | ||||
Number of wholly owned subsidiaries | subsidiary | 2 | |||
Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Proceeds from line of credit | $ 20,000 | |||
Repayment of line of credit | $ 20,000 | |||
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit | $ 50,000 | $ 15,000 | ||
Annual interest rate (in percent) | 4.25% | |||
Average annual fee unused portion (in percent) | 0.20% | |||
Line of credit quick ratio | 1.30 | |||
Quarterly adjusted quick ratio | 1.50 | |||
Revolving Credit Facility | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Prime rate (in percent) | 0.25% |
COMMITMENTS AND CONTINGENT LIABILITIES (Details) - USD ($) $ / shares in Units, $ in Millions |
Apr. 15, 2024 |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|---|
Commitments and Contingencies [Line Items] | |||
Ordinary shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Bank guarantees | $ 0.2 | ||
Subsequent Event | |||
Commitments and Contingencies [Line Items] | |||
Number of days | 90 days | ||
Israeli Subsidiary | |||
Commitments and Contingencies [Line Items] | |||
Bank deposits pledged | $ 0.6 | ||
Subsidiaries | |||
Commitments and Contingencies [Line Items] | |||
Shares of subsidiary pledged (in shares) | 65,000 | ||
Ordinary shares, par value (in dollars per share) | $ 0.01 |
STOCK-BASED COMPENSATION - Stock Option Activity Under Plan (Details) - Legacy Plan and 2021 Plan - Employees - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expenses | $ 3,838 | $ 4,624 |
Internal use software capitalization | 280 | 365 |
Total stock-based compensation | 4,118 | 4,989 |
Cost of goods sold | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expenses | 397 | 441 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expenses | 700 | 1,174 |
Sales and marketing | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expenses | 1,141 | 1,579 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Stock-based compensation expenses | $ 1,600 | $ 1,430 |
STOCK-BASED COMPENSATION - Narrative (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Intrinsic value | $ 0.1 |
Cost not yet recognized | $ 2.1 |
Period for cost yet to be recognized | 2 years 1 month 6 days |
Employees | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value, vested | $ 5.0 |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Cost not yet recognized | $ 17.5 |
Period for cost yet to be recognized | 1 year 9 months 18 days |
FINANCE (INCOME) EXPENSES, NET (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Short-term Debt [Line Items] | ||
Interest income | $ 0.4 | $ 0.3 |
Paycheck Protection Program | ||
Short-term Debt [Line Items] | ||
Debt related interest expense | 0.1 | 0.4 |
Warrant | ||
Short-term Debt [Line Items] | ||
Unrealized (loss) gain | $ 0.2 | $ 2.7 |
INCOME TAX (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 3,176 | $ 2,824 |
Effective tax expense (benefit) | (103.90%) | (49.20%) |
SEGMENT REPORTING - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2024
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
NET LOSS PER SHARE - Securities Excluded from Computation of Earnings Per Share (Details) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Options outstanding | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from computation of earnings per share (in shares) | 6,461,330 | 10,803,393 |
Unvested RSU outstanding | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from computation of earnings per share (in shares) | 7,072,792 | 10,563,758 |
Warrants outstanding | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from computation of earnings per share (in shares) | 10,222,453 | 10,222,500 |
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