Adcore Inc. (ADCO) Earnings Call Transcript & Summary

Greetings, and welcome to the Adcore Investor Presentation Webcast. [Operator Instructions] As a reminder, this conference is being recorded. At this time, I'd now like to turn the call over to Glenn Axelrod of Bristol IR. Thank you. You may begin..

Thank you, [ Darryl ], and thank you, everybody, for joining our webcast today with Adcore. The purpose of today's presentation is to give Bristol's audience, a better understanding of the business through a presentation, and then questions with management. The discussion is going to be led by CEO, Omri Brill, who is also joined by Yatir Sadot, CFO; and Martijn van den Bemd, Chief Partnership Officer. You'll see the presentation and the webcast. If you like a copy and you don't have one simply e-mail me at [email protected], and I'll be happy to send you a copy. We'll break for questions at the end of the formal presentation. When we do break, we encourage questions. [Operator Instructions]. I won't read the forward-looking statements, but I do state that they do apply, and I reference them on Page 2 of this PowerPoint. With that said, once again, thank you for joining us. Remember, this is fairly informal, and we do encourage questions to help you better understand the business and its growth path. And now, I'll turn the call over to Omri to start his part of the discussion and presentation.

Thank you, Glenn, and good morning, everyone. It's my pleasure to tell you the -- story today. I truly obviously when they like what I have to tell you today, and let's get started. So the -- the next page is going to be a general disclaimer. I want to give you an opportunity of 1 to 2 minutes to read the disclaimer. Hopefully, everybody had a chance to read it. Time flies very fast, I guess, in Tel Aviv, Israel. And so -- we are Adcore. Adcore is a leading AI-powered marketing technology company. The company offers a suite of digital marketing solution, seamlessly managing an automatic digital marketing generally in an effortless and accessible way. The company's vision is effortless marketing. We believe marketing should be effortless and accessible to everyone. And in the sense, we, our engineers are working very hard every day, in order to make the lack of customers very easy, make media and advertising accessible and affordable. And this is where the company is doing quite successfully in the past couple of years. So, some investment highlights when we talk about Adcore and I know that under the current market condition, probably a lot of you asking some very important question when you're looking into company. If the company is growing? Does the company good gross margin? It is profitable? And basically, if it a propriety technology? And I glad to report is basically Adcore checks all the support equation. So yes, the company is fast growing. We've seen 45% revenue year-on-year growth in Q1 2023 and gross profit grew 35% year-on-year during this quarter. We maintained good margin, 40% margin -- gross margin in Q1 2023. The entire year in 2021 was 43%. The company is profitable. The core ad-tech activity generated adjusted EBITDA of CAD 350,000 in Q1 2023. And if we look at the entire year of 2022, the core ad-tech activity generates more than CAD 2.5 million in adjusted EBITDA. And the company enjoys proprietary technology. We have all-inclusive marketing app suite for a complete media journey and this basically technology allow us to scale our activities to be profitable and give us the last advantage and edge in the market. And when we talk about the market, the company actually benefit from a huge addressable market. So, online ad spending is estimated to more CAD 900 billion in 2023. And actually, when you see from the right graph, this graph is going to grow a lot. By 2026, it's projected to be almost CAD 1.2 trillion. So this represents 30% growth over a course of just 3 years, already massive market is growing and becoming bigger, bigger in the next couple of years. When we look a bit under the -- of this impressive market, we actually see Tectonic Industry change in our industry. These are two very important graphs that basically represents a very big opportunity for Adcore. So on the next slide, we can see the blue portion of the slide with Google and Meta's or formerly Facebook market share within the U.S. market. And what we can see, that up until 2017, this market share will actually increase to almost 50%. And then, since 2017 up until today, Google and Meta's are actually dominance fading out. So basically, they are losing market share and these other emerging channels are gaining more and more market share. And if you look at the right graph, we can see the same story happened on a geo level. So basically [Technical Difficulty]

Omri, can you see if you muted yourself by accident, please?

Can you just reach out to him, maybe something wrong with his phone?

The line is still connected, but I will dial back out. Please stand by. Okay. Omri, can you hear us?

Yes.

Okay. We could hear you now as well.

That's amazing. Okay. Should we continue?

Yes, you can continue.

Okay. Right. Sorry about the technical issues. Hopefully, everything going to be okay moving forward. So let me go -- start again the last slide, which is the Tectonic Industry changes. So we already understand that digital ad spend to massive market, almost $1 trillion in 2023 numbers and projected to be even $1.2 trillion by 2026. But, if you look under the hood, we see a very interesting change in our market. So the next slide is basically market share bank channel in the U.S. And basically, what we can clearly see is that up until 2017, Google and Meta's market share will increase. But since 2017, as we now say they are losing market share and other channels are basically gaining market shares on their expense in a way. And if you look at the right slide, then we see the same story at on a geo level. So U.S. is losing market share in other regions of getting market share. And basically, this makes fast-forward the word of online advertising in 2023, much more diversified, much more complex. So basically, many other more channels are not just Google and Meta, many different regions that you need to address and that put Adcore in a very interesting and strategic position. So in order to, I would say, benefit from this massive change in the market, the company decided to do too many efforts to going public in 2019. The first effort that the company decided to do is to expand its geographical expansion or footprint. And basically since, let's say, one office in 2005 the company in 2017 opened office in Australia, in Melbourne and then once we get public in 2018 we decided to grow faster and opened in 2019 an office in Canada and then followed by 2020 in on call 2021 in Shanghai, China, and 2022, we opened a subsidiary in the U.S. So basically, the company expanded a lot in the past couple of years, and we are quite happy with the current footprint, we were able to achieve. And that actually puts us to the second [indiscernible] company started to do, which is what we call vertical integration. So historically, Adcore were very good in offering solution around campaign creation optimization, we use to a special app developing that what we call now at Adcore views that was the first original app that Adcore developed. And basically, the company works quite good around this specific, I would say, taskforce in the mid of January. But, when we look at the media journey, it actually doesn't start with campaign creation optimization and definitely doesn't end in campaign creation optimization. So, it actually start with the account creation and then probably when I need to do media research and planning, feed creation and optimization with your e-commerce website, then you are ready to create your company to optimize them. But then, you would also probably need to monitor your campaign and analyze your campaign. And obviously, we are financing and budgeting management as well. So what the company started to do that we don't want to give a very tenor solution just around 1 taskforce, you want to be able to cater all the different taskforces. And therefore, we developed different apps to the solutions to the different touch points around the media journey. And basically, they put the company in a much better strategic position, and we can see it on the next slide. So if you look at the right side, we can see, let's say, the advertising growth starting in -- sorry, 2007 was quite easy or cheaper. The clients could approach Google directly, open a Google account and as we see in the previous graph, they see very good coverage because Google was very dominant back then. But then fast forward, let's say, 5 years ago, maybe needed to also to open a Facebook accounts. And that's, again, going to give you quite a good coverage. But nowadays, everything is far more complex. There's multichannels, obviously, you have YouTube, you have Instagram, you have TikTok, you have [indiscernible] you have Twitter, you have multiple channels, you have multiple region and basically for the client to have a direct relationship for every single channel or every different [indiscernible] is quite complex, if one can imagine. And this is exactly where Adcore solution comes into play. So Adcore is basically a single access point or 1 access point to all the different signs in all the different retail, we have partnership with all major channels. We operate in -- so we called in all regions, and that put Adcore in a very strategic position and the same story applies to the client's media journey. Again, we now today can give a solution across the entire journey, starting from campaign creation, feed creation and sufficient basically monitoring, reporting, analyzing and obviously, financing as well. So basically, very large I would say, shift in our industry and Adcore actually is very strategically positioned to benefit from this shift. If we talk a bit about the Adcore technology or the Adcore marketing cloud, basically, which is our suite of marketing apps, then you can see on the marketing cloud of what Adobe is with the creative cloud. So Adobe put together almost more than 10 for sure different apps under 1 roof, which we call the Creative Cloud. And let's say the time they can get an access to this cloud and basically utilize any of these tools, whether its Photoshop and other tools that Adobe app and Adcore basically want to take the same concept and apply to the marketing world. So with a single access to Adcore marketing cloud, the marketer with the access to now move the 7 different apps that Adcore has to offer. And equally important, it should be up in the client solution for a different touch point within media journey. So, when we look at the apps, basically that are under the cloud, we can see the following app. Media Blast which is an account opening account budgeting app. So using Media Blast the client were [indiscernible] easily create a Google ad accounts and Microsoft ad account finance these accounts, allocate partners to this account to start advertising. So [indiscernible] first step. And then obviously, if you're an e-commerce website, you would be probably in art like effortless marketing, which can easily create a feed for your Shopify [indiscernible] app for example. And then, if you need more advance feed optimization, you can use our Feeditor app which is built for feed optimization including AI enrichment and other powerful app functions, then let's say, once you created your account, you finance your account, you created a feed, you optimize the feed, the next step will be creating an optimized campaign. This is where we have the used app. And then obviously, maybe you would like to monitor your campaign when your activity map on your campaign, the Alerter app that we developed to monitor your campaign 24/7, your website, your data feed. So if something goes work with any of your digital assets, you will get an instant notification to your e-mail, for example. And then, Semdoc the advanced reporting and analyzing tools that we develop and obviously, [indiscernible] well, which is more performance-oriented type of app that we developed. So if you can clearly see that there are multiple apps, multiple app solutions, but a very comprehensive solution with the clients we can generate. And if we look at an example our marketing class with like a perfect audience for this type of solution, then we can look at like a potential client like [indiscernible], and that's a very big passionate brand operates in the U.S., but also in other markets like Australia and U.K. and other places around the world. And obviously, is big enough operating more than 1 channel, so they can do a Google activity, Instagram activity, YouTube, TikTok, Microsoft and many others. So this is actually a perfect example because if you remember before, like life was very easy, let's say, 10 years ago or maybe 1 market U.S. and 1 channel Google that's not the case anymore. So again, this type of the advertisers now multiple, region multiple channels, as a need a solution like the Adcore marketing cloud in order to answer reports this activity. So starting from the feed creation, feed submission and obviously based on the feed campaign creation optimization, monitoring via the Alerter app and basically analyzing the reporting via the Semdoc app. So yes, a lot of proximity for this type of client and a lot of solutions we can add them across this journey. So -- if we talk about the company's financial and basically everything that we took up as we now are reflecting with the number, then we can see that are reflecting quite well -- if you look at the company's yearly revenue, which is the right to slide, the black bar, then we can see 2018 was CAD 12 million revenue, 2019 with CAD 15 million in revenue, 2020 was CAD 23 million in revenue, 2021 was CAD 35 million in revenue, 2022 was CAD 27 million in revenue. We see a slight decrease between '21 to '22 because the company took a strategic shift and decided to focus on more high margin revenue in 2022, on the expense of low margin revenue. But I'm happy to report that moving forward to 2023, the company expects to see growth across the entire, let's say, an important market. So revenue gross profit and adjusted EBITDA are expected to grow again in 2023. And if you look at the left graph, which is the blue part we can see the quarterly numbers of revenue, and this is actually a very good demonstration, how the advertising industry quarters are basically because of seasonality, usually, they start slow in Q1 and pick up and 2022 was a classic year in this regard. So Q1 was CAD 4.3 to CAD 4.7 of most in revenue. Q2 2022 was CAD 5.1 and then CAD 7.5 almost in Q3, Q4 was CAD 8.7 and Q1, again, in 2023, you can see that it's down from Q4 to 6.8, but actually, when we look year-over-year, there's a big increase of 45%. So it's a market start for us for 2023. And on the right side, we can see like an health mix of global revenue, EMEA being the largest region for us with almost 50% of their revenue, APAC is the second largest one with almost 30% and North America is 23%. But actually, both EMEA region and North America regions grew at last was even a -- EMEA grew at established 80% in 1 year and North America grew 61%. So very impressive growth over a very [indiscernible] these 2 regions. Also APAC grew, but not as much. If you look at the next slide, which is the quarterly breakdown, then we can see in Q1 2023, the company $6.8 million in top line revenue. That's again, 25% increase year-on-year. So that's quite impressive. $2.7 million in gross profit, 35% increase year-on-year. So again, very impressive. Adjusted EBITDA of $0.1, as If we look at the core asset activity and working capital was almost $9 million. The company has also been able to maintain a very healthy balance sheet. As of March '23, the total assets was almost $17 million. Cash position for the company as of May '23 was $7.3 million. And if you can see on the right graph, the company bearing no debt. So basically, the company is completely debt free, which is always good to be in the current market and the current interest rate. A bit about the cost table and comparables on the left side, you can see the cost table of the company, total outstanding shares of 61 million, promotion is 19 million, which is 30%, a bit more than 30%. But with another metics interesting to see that during the last 12 months, the company purchased a and canceled almost 4 million shares. So the company believes that the share price is currently not reflecting good enough the true company valuation. That's why we announced NCIB last year. We actually recently announced the renewal for this type of [indiscernible] and we continue to purchase shares for calculation and grow as we believe that the current share price don't really reflect what we believe should be the right company valuation. And if you take -- if you go to the comparable slide, then we put over there Ad Tech company some big present that everybody know like the Trade Desk for example, some Canadian company now also received in the last [indiscernible]. And you can also see people that comparables that basically, again, Adcore is undervalued and basically can be a massive upside for the company for the share. So, to round up what is Adcore, a value proposition and why we believe that to a such a great story to tell. So, as we told you the Tectonic change all in the advertising industry, Google and Meta are losing market shares, this is why both new channels and new markets as well. And basically, what used to be very set up until 10 to 5 years ago now become much more complex and diversified. And this complexity is a very strategic opportunity for a company like Adcore as you can see exactly the middle and be like an app between the clients and the different channels and the different regions. And fast growing company, 40% of the yield growth in revenue, 35% in gross profit, good gross margin and profitable. We have proprietary technology with the different apps the solutions for different touch point because the client's media journey. And maybe the most important there's plenty of headroom to continue to grow. Bear in mind that Adcore currently manage around $1 billion in ad spend, this is art of the number that we remember, $900 billion in 2023 level. So this means almost 0.1% of this ad spend. So there's multi potential for us to continue to grow, to gain more market share. And, I think, that's probably the most exciting thing about the company's story. And with that, I can already go to the Q&A session.

Super. Thank you, Omri, for that. [Operator Instructions] We do have quite a few questions in the queue already. So we'll just get going. So first question, Omri is other marketing cloud competitors must be using marketing technologies. It seems Adcore software algorithms appear to provide a lot of automation. Are your technologies that much more differentiated or unique that you're winning market share?

Yes, it's a great question. I would say Adcore USP are as follows: a, the fact that Adcore has multiple apps to multiple steps to stages in the market journey and Adcore in a very strategic position because we can acquire clients for example because you need the feed optimization tools, then we reach out to Adcore started to use our Feeditor app, but then, we have the opportunity to cross-sell and upsell these clients to many different other apps and solutions that we can provide. So we've already invested money in this client. And basically, there's no need to invest additional money in basically [indiscernible] but now we have an upsell opportunity or cross-sell opportunities. So that, I would say, is one very important USPs at the company has. And other important USPs the company, I would say, is the different partnerships that we have, strategic partnerships that we have with all the major channels and basically our footprint in many different locations across the globe. So yes, we can give the client an access to, let's say, now we want to be in Google in China, for example. We have partnership with Google in China. You want maybe to [ CREDO ] in Israel. We have a partnership with [ CREDO ] in Israel and so on and so on. So basically that another very strong value proposition.

Okay. Super. Sort of speaking on the same theme. Is this service applicable to a new brand launching? And does it interact with an influencer community? Or can it take the place of blogging or influence given the reach of automation?

Yes, it's a great question. I would say the following. We don't have influencer component into the core solution or suite of solutions. So that I would say, separate effort that somebody would need to do it, if you would like to do it. And we leak out to new brands that there answer is yes, of course. It doesn't matter for us, if you are a new player, if you are an existing player, maybe you already large enterprise brands, we have, let's say, different solutions to different types of businesses and different ups for every business size, I would say.

Okay. And again, with the same theme, does this take over the individual function of SEO or for a small company such as a small cosmetic manufacturing company in either business to business or business to consumer?

Yes. So the services or solutions the company is provided is the around paid media. So, paid media is last SEO. SEO is the organic media so that we can a different, I would say, stream within marketing. But yes, for all your paid media efforts that give you a very comprehensive solution.

Okay. I know in the beginning of the presentation, you -- your intro referred to Adcore as an AI-driven company. The question here is, how do you see AI disrupting the industry and your business strategy and plans, are you planning on using these capabilities?

Our next question will be TBC. Nobody knows yet how we are going to use the industry. We do expect, obviously, influence. I would say, something that we're not too sure that we use AI as basically enabler or something that allows us to scale, to give better solutions and the company is very, I would say, focused on implementing as much AI solution now, that we can in the different apps. So for us, actually, AI is a [indiscernible].

Okay. Next question. Tell us about a typical customer how did they use Adcore, how often for what -- for what services? And how much does this typically customer pay Adcore?

Adcore, yes. So I would give you an example of two, I would say, potential clients or typical clients. And the first one would be actually an ad agency. So an ad agency can move for potential I would say solution for the client and there is probably ad agency will have anywhere from,I don't know, 10, 20 clients, are quite small to sometimes even hundreds of clients is quite big. And these clients will be usually because of the multiple industry, let's say, e-commerce travel agent and will have different needs. So for this agency probably to manage all these clients, many new will be a very difficult task and as they're going to look to help them automate some or all the marketing tasks. And basically, Adcore because of its comprehensive solutions, give them a very attractive, let's say, solution to their needs. So they can have access to the Adcore marketing cloud after, let's say, 7 different apps within this cloud, they basically get a lot of their day-to-day marketing fully automated. So this, I would say, is one potential client and another that will be direct advertisers. So this company that is usually -- it kept small, but early it can also be quite big, like [indiscernible] this example. And basically, again, it will have complex marketing needs, and if we look for a technological solution to automate its marketing efforts.

Next question, are you exclusively a demand-side platform and are revenues generated as a percentage of the ad spend by clients?

Yes. So Adcore is not a demand side and we not DSP or anything like that. So that's more ad spent let's say, QTS or trade into programmatic. Adcore is mainly doing paid media. Programmatic can be some of the solution, we can enable, but we are not programmatic company in this regard. So we mainly would do probably search campaigns, shopping campaigns, social campaigns to apply programmatic would be another addition to this media mix, but it's not, I would say, demand mix. . And with regard to business model then like these business model that is reflected, I would say, percentage of ad spend, so there's many to do-it-for-me type of clients. And if we're talking about do-it-yourself type of clients, I would say, it's more tough place forward model. So you have a license fee, and you're going to pay extra for what we call automation tasks. So basically, as you automate more stuff, you would end up paying more eventually.

Okay. Thank you. One of the slides covered the regions where you're active. And I have a couple of questions on this topic, so I'll just sort of combine it into one. So first, is there any differences within the regions that drive growth, number one? And then number two, a part of this question is -- do you see any particular region that is growing faster? And if so, why?

So that's actually a very good question. I would try to answer it in few layers. I would say, a, the faster the company is very well diversified in a geo location has a very good global footprint. It's very good for us because we can see over the years that maybe start during some years, some markets have grown faster in than other and vice versa. So the fast growing is up and doing [indiscernible] the APAC region for us was the big role, like we saw the market growth coming from this region and then post COVID, actually declined. And vice versa last post COVID, we see North America picking up a lot; EMEA region is picking up a lot. So the fact that the company is diversified, it's actually very good for us and this allows us to been able to show a continuous growth over the year. So that would be my best response. My second one would be, yes, let's say, over the past even so, we saw massive growth comes from the EMEA region, we saw massive growth coming from the North America region. And I would say the following: a, North America, this a strategic region for us and the company put a lot of effort to expand over there. So we recently -- in the last year, we opened a U.S. subsidiary. We recruit the U.S. sales force as well. So this is strategic that we took a lot of effort in, and we sort growing quite nicely because of this effort, and that's always something nice to see. And within the EMEA region, I would say it's mainly growing because I would say to most established region for us. This is not the one reason; number two, there's a lot of new initiatives that we started that actually started in Sweden and already generated a lot of growth for us and a lot of revenue.

Okay. Super thank you. We have some financial-related questions. So I'll get into that part now. So I know, you touched on this topic during the presentation, but maybe expand on it. And the question is, Adcore generated cash in 2018, 2019, 2020 and actually generated CAD 5 million in 2020. Since then, it looks like the model has changed, what happened and what is the fundamental difference now?

Okay. As I touched best again in my presentation in 2022, the company decided to take some kind of shift in its strategy and focus more on our gross margin type of customers. And basically, this type of shift processes in 2022. But as a result, we needed to teach some clients that come with, I would say, the generous historically good cash flow to the company, but wasn't very profitable in terms of margin. So we give up these clients in order to improve our gross margin, and what the company expected to see in 2023 that we're going to continue to growing cash flow but to maintain, let's say, the 40% to 50% gross margin, which is where we want to be. So 2022 was the transition in that regard and 2023 should be back in more, but when gross margins are within the, let's say, the desire range as well.

Okay. Another financial question for you. Are your charges always in the clients' currency or standard like U.S. dollars? Do you see inflation playing any important role?

Yes. Usually, we charge in local currency. So this means that, if we sell clients in Australia, they probably would pay in Australian dollar, if clients, let's say, in Hong Kong, they will probably pay in Hong Kong dollar and so on. So this is one. For us inflation actually is an opportunity because it is inflation in the advertising cost, then basically is a good thing for us because the company has no debt. So we don't see the negative part of inflation. We can also see the positive part of inflation. So I don't want to -- like I don't Fed listen to afternoon, but we -- under the current inflation rate, it's still okay for us.

Okay. The next question is somewhat guidance related. So if you can't answer completely understood, but I'll ask it anyway. In what future quarters do you expect to produce positive after-tax earnings?

Okay. So, like we touched before in the presentation, and you can look at the buildup of, let's say, the revenue in the quarterly revenue, then I would say, again, this is not a guidance, but this is nothing that based on historic another, then Q4 should be where the company will become positive in all metrics.

Okay. Follow-up question on the last point, Omri, is regarding the profitability from 2018 and 2020, was the difference just the margin profile? Or was there something else behind it?

Yes. I would say a few things. When the company became public, we did a lot of investments to expand the business. So we opened a lot of office sales from a single office that we have 2 offices we have 3 going public, we decided to open the Toronto office and then 2 offices in China, that is China region and another office in the U.S. So that's still quite a big investment from the company. Again, the company make a decision -- a strategic decision to expand this up as well. So from a single app to 2 apps, 3, 3 going public. We now have 7 different app covering, giving a very compressive coverage of the media journey. So take -- we went public in order to grow the business. And in order to grow the business, we needed to invest money in R&D into your expression and other stuff. We also have a new initiative that we call Amphy that required investment in the last couple of years. So okay, all in all, I would say, the following. And in terms of geolocation or geoexpansion, the company's is happy of what we said today. So we don't expect to see any, I would say, additional massive investments over there. In terms of Amphy our development, again, we have a very good coverage probably we're going to continue to invest in R&D because we need to invest in R&D all the time. But again, we achieved a lot over the course of the last, I would say, 2 to 3 years as well. And even Amphy, which requires a big investment in the company, we have a very clear road map to reduce this investment to the bear minimum by Q3 and Q4 as well. So I say that give us a lot of confidence in the sense the company now already be the majority of the investment is in a very good strategic position. And now, we can focus on growth, profitability and basically, you can already start to see the shift in, let's say, Q1 results, for example.

Okay. I have a couple of questions on a different topic now. So I'll sort of combine them. So first, can you discuss what Amphy is and your capital investment in Amphy? And also the platform's recent growth?

So Amphy is online educational platform the company opened during COVID. We saw an increase on a demand for this type of solution. It's menu that it offers like online learning, which most of the other platforms don't offer, they only offer a prerecorded DoD type of learning. Total investment in Amphy is 2.7, around CAD 2.7 million to date. And what was the last question regarding Amphy?

I guess the two questions, one from a different individual one from the same one is, number one is, are you still investing in it? And two is, can you talk about its, I guess, current and potential growth?

Okay. So yes, we are still investing in Amphy but most of the investment, which was a lot building the platform, we could let's say the teacher and the software base was already done and the company have a clear road map to reduce, I would say, the monthly [indiscernible] rate from the top, it was 120,000 monthly to 30,000 monthly in Q4, so that's going to become much, I would say, low investment moving forward, which is I think it's a positive news for the company. And with regarding to Amphy potential, it's still a young business. So it's a bit hard to say what is Amphy full potential, but if you're talking about educational market, in general, then we're talking about a CAD 100 billion-plus market, which is a massive market.

Okay. I have a few more questions in the queue here. And to our audience, if you do have any follow-up questions or any additional questions, please use the text box to go ahead and ask it now. So next question for you, Omri, is -- are you seeing the current environment in retail playing out in your favor with end consumer that is, I guess, stretched with the current economic environment. How is that impacting both e-commerce spend and your business?

Okay. So it's a good question. I would say, first, regarding Adcore business today is a very diversified business. So Adcore not only serving e-commerce type of clients, although this is, I would say, still probably the majority of the businesses uses Adcore. But, we also serve travel [indiscernible] for example, but obviously, a very big and post COVID for example [indiscernible] clients and other type of clients as well. So that allows us to be more diversified. So it's not very industry focused in that sense, this is one. I would say with regards to retail-specific. What we saw that post COVID, which was mainly in the first part of 2022, we saw some adjustments. Obviously, clients was like a COVID peak or boom for retail online activity and then store was reopening, let's say, in the U.S., Canada, U.K. and other places as well. So, we saw some declines. We need to do some inventory adjustments and stuff like this that we sold in the first part of 2022. But then, we saw the second part of 2022 was actually, I would say, strong again. And we see this momentum carried well into 2023 as well. So I know there's a lot of discussion about recession and other stuff, so I would say, majority of the climate in Adcore actually running quite strong, and we now doesn't see currently a big impact. Maybe some clients are impacted in some, I would say, niche. But I would say, in general, we don't see massive impact.

Okay. I guess, technology-related question for you. With regards to your suite of marketing applications, which of your offerings are your clients utilizing the most? Or would you say it's pretty even across the board?

So that's a great question. I would say, always the go-to probably for us and, let's say, the [indiscernible], which is our field optimization and submitting platform. So I would say that's probably the most used app in our suite. But, we also see an increased use in other apps as well. So, I would say one started to use, for example, [indiscernible] then it become more easy to convert them to use the -- to use other apps as well because they already see the value for it. They are more open to try other apps, and then it become more easy for us. So for us, it doesn't really matter, how do we start the let's say, business with Adcore whether it's [indiscernible] or other app because we know that eventually probably we can convert it to become full at co-marketing cloud user.

Okay. A couple of more questions for you, Omri. You have a comparable table on Slide 21. Who would you say, within that table is your most direct competitor, how would you distinguish your business between that competitor? And I guess, what is the most unique part of your business that separates you? And is there a moat advantage that our audience should be thinking about, as it relates to you versus anyone on that table?

Okay. That's a great question. I would say the following, like fortunately or unfortunately, we don't really have a specific direct competitor from this list. Actually, for a few reasons: a, there are not a lot of public tech companies believe it or not. So there's a lot of ad tech company or advertising companies, but the public ones, there are not too many. This is one reason. And another reason, I would say for whatever reason, whether in it's totally reason or other reasons, a lot of the companies obviously are actually programmatic companies. And Adcore will not doing programmatic. We can allow programmatic advertising for our clients, but I would say, we are not a programmatic company. We do paid media automation, which is mainly Google, Meta, formerly Facebook and many other types of channels. So also it's different, I would say, solutions for different more comprehensive solution for online marketing.

Okay. Super. I've got one more question in the queue unless another one comes in. And I'll ask it now, and afterwards, we can give some closing remarks. And again, this question is, I guess, a little bit guidance related, so I'll let you determine, how to answer it. Based on your NCIB share buyback and your current cash balance, is it right to infer that the company's confidence in strong profitability this year?

Yes. Again, like this is like forward-looking statement for the entire year. So -- and that's not something that the company usually like used to give. But I would say the following: the company, and we now sit in both the last earnings call and the earnings call before when we summarized 2022. We expect 2023 to be a very strong year for the company. We expect to be able to show growth across all metrics top line, middle-line, bottom line as well, and we are seen with this expectation to date. I think Q1 was the phenomenal start of 2023, we saw massive growth across the Adcore. And again, very much in the advertising business Q1 is the slowest month in the fourth quarter, so in the year. So being able to demonstrate such a strong quarter, give us a lot of confidence of what well can achieve in the entire year.

Super. I did have one follow-up question regarding your apps that came in, so I'll ask it, and then I'll ask you on closing remarks. On average, how many apps do customers use?

That's an interesting question. I would say the average and that don't quote me on the exact, exact number is around 2. So that's the average. Obviously, there are some clients that would utilize 3 to 4 apps, some of them only use 1, but I would say the average, now is around 2.

Okay. Excellent. I think you did a great job here, Omri. Any closing remarks, and then, we'll end the call.

No. I think like, we got a lot of engagement from the audience, which is always great. They asked a very good question that people were listening to, what they have to say. And what we have to say about the company. I think, like my closing remarks can be the roundup slide. You know like Tectonic change in our industry, which represents a very strategic opportunities for the company. And the company is stopped growing good merging and profitable, which is always good, especially under a challenging market condition. Proprietary technology, a suite of different apps coming and we expect in the media journey and plenty of adopt to growth. So, we're tracking only getting started, and we still have a lot of platelet to grab in the future.

Super. Thank you, Omri. Thanks to your team. Thanks to our audience, and this concludes this presentation.

Thanks, everyone.

Thank you. This does conclude today's presentation. You may disconnect at this time. We appreciate your participation. Enjoy the rest of your day.