Filed pursuant to Rule 424(b)(3)
SEC File No. 333-258223
PROSPECTUS SUPPLEMENT NO. 1
(to Prospectus dated April 12, 2022)
ironSource Ltd.
72,661,102 CLASS A ORDINARY SHARES
This prospectus supplement updates, amends and supplements the prospectus contained in our Post-Effective Amendment No. 2 to our Registration Statement on Form F-1, effective as of April 11, 2022 (as supplemented or amended from time to time, the “Prospectus”) (Registration No. 333-258223). Capitalized terms used in this prospectus supplement and not otherwise defined herein have the meanings specified in the Prospectus.
This prospectus supplement is being filed to update, amend and supplement the information included in the Prospectus with information on ironSource’s first quarter 2022 financial results, which is set forth below.
This prospectus supplement is not complete without the Prospectus. This prospectus supplement should be read in conjunction with the Prospectus, which is to be delivered with this prospectus supplement, and is qualified by reference thereto, except to the extent that the information in this prospectus supplement updates or supersedes the information contained in the Prospectus. Please keep this prospectus supplement with your Prospectus for future reference.
Our Class A ordinary shares are listed on the New York Stock Exchange under the symbol “IS.” On May 11, 2022, the closing price for our Class A ordinary shares on the New York Stock Exchange was $3.17 per share.
Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 17 of the Prospectus and other risk factors contained in the documents incorporated by reference therein for a discussion of information that should be considered in connection with an investment in our securities.
Neither the Securities and Exchange Commission, the Israeli Securities Authority nor any state securities commission has approved or disapproved of these securities or determined if the Prospectus or this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is May 12, 2022.
IRONSOURCE LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except for number of shares and par value)
(Unaudited)
March 31, | December 31, | |||||||
2022 | 2021 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 441,225 | $ | 778,261 | ||||
Accounts receivable, net of allowances of $814 and $437 as of March 31, 2022 and December 31, 2021, respectively | 267,603 | 232,049 | ||||||
Other current assets | 59,472 | 42,382 | ||||||
Total current assets | 768,300 | 1,052,692 | ||||||
Long-term restricted cash | 3,435 | 3,495 | ||||||
Deferred tax assets | 6,262 | 2,012 | ||||||
Operating lease right-of-use asset | 36,292 | 34,116 | ||||||
Property, equipment and software, net | 28,272 | 25,131 | ||||||
Investment in equity securities | 20,000 | 20,000 | ||||||
Goodwill | 456,354 | 240,299 | ||||||
Intangible assets, net | 197,727 | 54,221 | ||||||
Other non-current assets | 35,479 | 18,857 | ||||||
Total assets | $ | 1,552,121 | $ | 1,450,823 |
IRONSOURCE LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(U.S. dollars in thousands, except for number of shares and par value)
(Unaudited)
March 31, | December 31, | |||||||
2022 | 2021 | |||||||
Liabilities and shareholders’ equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 284,689 | $ | 247,362 | ||||
Operating lease liabilities | 10,082 | 7,525 | ||||||
Other current liabilities | 67,989 | 53,949 | ||||||
Total current liabilities | 362,760 | 308,836 | ||||||
Deferred tax liabilities | 11,335 | 6,514 | ||||||
Long-term operating lease liabilities | 30,296 | 30,076 | ||||||
Other non-current liabilities | 2,375 | 2,829 | ||||||
Total liabilities | 406,766 | 348,255 | ||||||
Commitments and contingencies | ||||||||
Shareholders’ equity: | ||||||||
Class A and Class B ordinary shares, no par value; 11,500,000,000 (Class A 10,000,000,000 and Class B 1,500,000,000) shares authorized; 1,021,306,573 (Class A 677,342,226 and Class B 343,964,347) and 1,018,468,804 (Class A 652,938,412 and Class B 365,530,392) issued and outstanding at March 31, 2022 and December 31, 2021, respectively | — | — | ||||||
Treasury shares, at cost, 6,745,955 Class A ordinary shares held at March 31, 2022 and December 31, 2021 | (67,460 | ) | (67,460 | ) | ||||
Additional paid-in capital | 1,071,566 | 1,042,589 | ||||||
Accumulated other comprehensive income | 533 | 495 | ||||||
Retained earnings | 140,716 | 126,944 | ||||||
Total shareholders’ equity | 1,145,355 | 1,102,568 | ||||||
Total liabilities and shareholders’ equity | $ | 1,552,121 | $ | 1,450,823 |
IRONSOURCE LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Revenue | $ | 189,665 | $ | 119,713 | ||||
Cost of revenue | 40,087 | 20,140 | ||||||
Gross profit | 149,578 | 99,573 | ||||||
Operating expenses: | ||||||||
Research and development | 34,656 | 20,410 | ||||||
Sales and marketing | 75,289 | 48,721 | ||||||
General and administrative | 22,847 | 15,547 | ||||||
Total operating expenses | 132,792 | 84,678 | ||||||
Income from operations | 16,786 | 14,895 | ||||||
Financial expenses, net | 346 | 1,029 | ||||||
Income before income taxes | 16,440 | 13,866 | ||||||
Provision for income taxes | 2,668 | 3,622 | ||||||
Net income | $ | 13,772 | $ | 10,244 | ||||
Basic net income per ordinary share | $ | 0.01 | $ | 0.01 | ||||
Weighted-average ordinary shares outstanding – basic | 1,018,117,047 | 645,295,222 | ||||||
Diluted net income per ordinary share | $ | 0.01 | $ | 0.01 | ||||
Weighted-average ordinary shares outstanding – diluted | 1,084,682,754 | 711,685,249 |
IRONSOURCE LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
(Unaudited)
Three Months Ended March 31, | ||||||||
2022 | 2021 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 13,772 | $ | 10,244 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 13,735 | 5,343 | ||||||
Share-based compensation expenses | 24,385 | 16,810 | ||||||
Non-cash lease expense | 184 | 227 | ||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | 1,317 | (1,246 | ) | |||||
Loss on disposal of property and equipment | 2 | — | ||||||
Interest accrued and other financial expenses | — | 107 | ||||||
Deferred income taxes, net | (3,835 | ) | (827 | ) | ||||
Changes in operating assets and liabilities, net of effects of businesses acquired: | ||||||||
Accounts receivable | 16,470 | (851 | ) | |||||
Other current assets | (16,151 | ) | (14,750 | ) | ||||
Other non-current assets | (17,447 | ) | (3,297 | ) | ||||
Accounts payable | (4,985 | ) | (6,657 | ) | ||||
Other current liabilities | (6,595 | ) | 5,851 | |||||
Other non-current liabilities | (258 | ) | 199 | |||||
Net cash provided by continuing operating activities | 20,594 | 11,153 | ||||||
Net cash used in discontinued operating activities | — | (5,168 | ) | |||||
Net cash provided by operating activities | 20,594 | 5,985 | ||||||
Cash flows from investing activities | ||||||||
Purchase of property and equipment | (1,382 | ) | (473 | ) | ||||
Capitalized software development costs | (3,848 | ) | (3,015 | ) | ||||
Purchase of intangible assets | — | (1,950 | ) | |||||
Acquisitions, net of cash acquired | (353,626 | ) | (89,340 | ) | ||||
Maturities of short-term deposits | — | 17,590 | ||||||
Net cash used in continuing investing activities | (358,856 | ) | (77,188 | ) | ||||
Net cash (used in) discontinued investing activities | — | �� | ||||||
Net cash used in investing activities | (358,856 | ) | (77,188 | ) | ||||
Cash flows from financing activities | ||||||||
Repayment of long-term loan | — | (2,500 | ) | |||||
Payments of deferred offering costs | — | (1,060 | ) | |||||
Exercise of options | 2,483 | 297 | ||||||
Net cash provided by (used in) continuing financing activities | 2,483 | (3,263 | ) | |||||
Net cash provided by (used in) discontinued financing activities | — | — | ||||||
Net cash provided by (used in) financing activities | 2,483 | (3,263 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | (1,317 | ) | 1,246 | |||||
Net change in cash and cash equivalents and restricted cash | (335,779 | ) | (74,466 | ) | ||||
Cash and cash equivalents and restricted cash at beginning of period | 781,756 | 203,087 | ||||||
Cash and cash equivalents and restricted cash at end of period | $ | 444,660 | $ | 129,867 |