Q3 2019 Earnings Call
Greetings and welcome to tell our yes said quarter 2019 earnings conference call.
Oh, Hi, Oh, I guess, if they are in listen only mode.
Question answer session will follow the formal presentation.
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I'll now turn the conference over to your host Mr., Andrew Posen, Vice President Investor Relations. Please go ahead.
Good morning, welcome to Laureus third quarter 2019 earnings call.
During the course of today's call you may make forward looking statements, including statements regarding to Larry's future financial and operating results [noise] future market conditions and management's plans objectives for future operations. These forward looking statements are not historical facts, rather are based on the company's current expectations and beliefs.
And our based on information currently available to us.
The outcome of the events described in these forward looking statements is subject to known and unknown risks and uncertainties that could cause actual results to differ materially from the results anticipated.
These forward looking statements, including but not limited to those factors contained in the risk factor section of the company's most recent annual report on Form 10-K for the year ended December 31st 2018 filed with the FCC on March 19th 2019 ended our future FCC filings and reports by the company.
Including its Form 10-Q period ended September Thirtyth 2019.
All information provided in this conference call is as of today November .
2000 like gene.
After as required by law, we undertake no obligation to update publicly any forward looking statements made on this call to conform to the statements conform statements actual results or changes our expectations.
Commentary today will include non-GAAP financial measures, we believed that the use of these non-GAAP financial measures provides an additional tool for investors to use an understanding company performance, but note that these measures should not be considered in isolation from whereas a substitute for natural information for poor prepared in it.
Coordinates with gap.
Reconciliations between GAAP and non-GAAP metrics, our reported results can be found in the earnings press release issued today, a copy of which can be found on our website and now I'll turn the call over to Mark Sikorsky.
CEO .
Thanks, Andrew Good morning, and welcome to our third quarter 2019 earnings call.
This morning, we reported quarterly results in line with our expectations, reflecting continued returns from the successful execution of three strategic pillars of our plan.
The focus on growing Rctv business constant technology innovation, and a commitment to premium publishers and a transparent ecosystem as a result, our total revenue grew 23% year over year to 16.6 million, which CGD growing 115% and our market leading platform continues to expand its global footprint.
Customers.
TV is central to our technology Road map strategic investments in market positioning we continue to see impressive growth in this business both in absolute dollars and as a percentage of total revenue CTV revenue grew to $7.3 million for the core and represents nearly 45% of our revenue up from 39% of our revenue.
Last quarter.
Last year in Q3, CGD was only 25% of our revenue.
Our CTV momentum has also driven an impressive 27% increase in platform. He CPM up year over year to $15.68 from $12 in 32 cents.
As part of our commitment to technology innovation, we released several platform enhancements that maximize inventory yield for our partners and improve it by traditional TV advertising capabilities, helping make broadcast advertisers more comfortable transacting on CTV.
First we launched a suite of addressable audience based buying solutions called target audience connect by integrating first and third party data sources textual data and campaign performance metrics to ours, we have p. interest publishers extract the highest value from there to most critical assets their audience and their contract.
Well I audience KLAX concludes three key products first contextual connect allows advertisers to reach years three show level genre and device targeting in addition to waitlist and black that's preferences further and still trust. This feature is increasingly relevant as AD buyers began to shift dollars from traditional GB Oh, Gee and expect a T.D. like.
Show level alignment.
The second products performance connect enables advertisers to buy against key campaign goals, such as Viewability completion rate, you CPM and click through rates on a turnkey fashion.
The third product addressable connect enables advertisers using any DSP to target desired audience is using the publisher Hi, Jerry first party data as well as verified audience data from leading third party sources like Nielsen.
This enables the growing number of subscriber based E Vod CTV providers to leverage their viewer data to intelligently drive higher Cpms, we're particularly excited about addressable connect which has been like for less than three months. That's already has hundreds of private deals running globally across many of our top publishers.
We've seen great market traction with these data driven products as they enable marketers to successfully reached the right do you work in the right contracts that power publishers to maximize imagery yield increasing the value proposition a programmatic CTV for both.
Our second key technology isn't as initiatives this quarter expanded on our already industry, leading brand safety controls.
Our enhanced creative communication status tool, we added new levels of transparency and communication features to make it easier for demand partners and publishers to transact seamlessly on our BMP, allowing yes piece to submit creative.
That's for publish reviews once a creative ideas approved can't pay work flow becomes fully automated as a DSP can bid with confidence knowing their creative will serve when it winds and auction.
This first to market tool is essential for premium CTV publishers that require consumer brand experience that replicates the quality of their broadcast product.
Our innovative product of assets continue to deepen our relationships with premium publishers and help when new ones as well.
This quarter, we added several global video publishers to the roster of leading media companies using our platform.
And the U.S., we launched new partnerships with crowd media, which owns a hallmark family of channels Eplex TV streaming service that enables consumers to watch live local TV broadcast as was curated collection of online shows news program.
Outside the U.S., we are excited to announce our first deal Japan with watch pads, leading broadcasters.
We also continued our impressive VIP expansion to Canada, driven by the sales and operational resources, we successfully integrated through the acquisition, we completed 2018 [noise].
It's hard to Canada team recently added the global mail well the core in the press three of the best known and most respected publishers in the market swaps list. The platform partners. In addition to Bell, Canada, which we announced last quarter. These publishers for bias the significant momentum as we finish out the year.
And Australia.
Together with a consortium of Australian publishers, including seven West Media Network 10, Sps Foxtel media pedestrian group and Daily Mail recently announced the launch of a programmatic editorial video marketplace built onto RSV MP.
The consortiums goal is to create higher of your engagement with short form editorial content and drive additional demand via a more seamless advertising experience our collaboration with these premium publishers as another example of twice as technology has thought leadership, attracting the biggest and best video brands around the world.
With new addressable C. D C TV products enhanced the M.P. toolsets and those premium publisher inventory, we believe targets in a strong position to capitalize on upcoming political campaign season.
We believe CGD will play a pivotal role in the upcoming elections for the next year. So 60 years, the best placed for candidates to connect with their constituencies what's in their living rooms via the site salad motion of TV.
With over 30% of U.S. households, whoever no longer reach of all through traditional TV ctb is becoming essential to reach and engage voters.
A recent report from advertising analytics and cross screen media estimates political AD spending for the next election cycle could reach $6 billion in the U.S., but approximately 1.6 billion of that projected for digital video.
In keeping with our CGD thought leadership track record earlier. This year, we conducted a research study was sling TV to better understand how the TV viewing habits of younger voters core CTV sweet spot might impact. The 2020 elections. This C.T.D. first generation is comprised of roughly 52 million people, aged 18 to 29 well.
Mostly college educated and the majority of which are cord cutters for core networks.
They will make up 20% of the 2020 voting block and the study found that nearly half of them are undecided on a candidate. Moreover, the study found that young voters deeply mistrustful, social media content and its advertising.
We believe this creates a significant opportunity for political campaigns to reach these voters on CTV. That's why has dedicated resources to deliver on the political see opportunity.
In summary, Q3 was a strong quarter our focus on CTV continues to drive our growth as it approaches a majority of our revenue.
As more consumers cut the cord Warsi TV content becomes AD supported.
And more CGD publishers embrace programmatic technology, we're well positioned to take advantage of this opportunity.
Our TV like technology advancements enable greater Addressability and did your video helping shifts linear TV dollars, the CTV and deliver higher advertising yield opportunities for our publisher partners. This has helped create stronger stickier platform relationships.
Our expanding roster a premium publishers around the globe and our commitment to transparency independents has established a clear leadership position for Florida amongst a world a black box solutions and conflicted walled gardens. We believe this will gain added importance as advertisers from political its consumer product companies seek try.
Yes, Ben used to deliver their message.
All of these efforts reinforce our confidence that we had a great position to grow our business and deliver value to our shareholders I will now turn the call over to John to walk you through the financials in more detail.
Thanks Mark.
This quarter were reported revenue of 16.6 million up 23% from the same period last year and then adjusted EBITDA loss of 300000 slightly down from last year.
Our gross profit increased 13% to 13.1 million from last year, well, our gross margin decrease year over year to 79.4% and 80.8% year to date through the first nine months of the year.
The decrease in our gross margin primarily reflects the continued positive contribution from our out stream solution, which has acted to support our desktop and mobile business operates at a lower gross margin.
Importantly, our core CTV business operates with a gross margin of around 88%.
[laughter] Ptv revenue continues to drive our overall revenue growth and increased 115% to $7.3 million from the same period last year and represents nearly 45% of total revenue.
CTV continues to be the core focus of our strategic marketing a technical investments and the business continues to grow at an exponential rate.
Our quarterly core operating expenses, which exclude noncash items increased 16% from the same period last year due mostly to increases in our headcount.
As a percentage of revenue we continue to demonstrate operating leverage with core operating expenses for the quarter at 81% of revenue down from 86% of revenue in Q3 2018.
This is a significant reflection of our commitment to managing our cost base and driving our top line growth to our EBITDA.
Our balance sheet remains strong with working capital of 41 million no debt and an unused credit line of 25 million.
Let's finish or call. This morning, with our expectations for the remainder of 29 team.
We're tightening our guidance range for the full year, what the revenue between 69, and 71 million and adjusted EBITDA between two and 4 million.
Well not going to open the lineup for some questions.
Yes.
At this time, we will be conducting a question and answer session. If he would like to ask a question. Please press Star then one on your telephone keypad.
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Your first question comes from assembled though some part of college annuity. Please go ahead.
Hi, Thanks for taking my questions can you explain quickly what the EBITDA calculation change was regarding the lease cost from prior corporate first facilities.
That's a concurrent lease of the old building that you weren't occupying because I thought that was already included in the gene I previously and that was done well.
Yeah, Austin, John here, so [noise] before they'd be the leasing change came into effect on January 1st prior to January 1st.
Operating cost leasing expense, whereas especially into the piano right. There was an offset into EBITDA.
In 2019, we actually take the operating lease expenses and we capitalize them.
So there's a an asset with an offsetting liability on the balance sheet, we except when we go in for the calculation that EBITDA and pull out the operating expense that would have flushed through the piano last year, we offset that against even though so it's apples to apples versus last year.
Okay. Thanks, now sort of shifting to topline metrics can you talk about auction dynamics improvements and if that contributed to pricing expansion in the quarter and if so is there way to think about how much more of that will impact pricing going forward or if it's just sort of a continuum.
All incremental thing.
Yeah, Hey, us it's a great question. This is mark I'm no auction dynamics in the ability to optimize you know the return for our publishers is a you know isn't in cost and you know technology investment for us in a constant focus for us.
Because it allows us obviously to extract more from wash REIT and the parts of the BNP that we've built out to take advantage of that are things such as.
Some of the AI tools that we have around.
For management for our pricing partners, but also you know basic things like the creative reach deal tool, which allows people to actually if they win ensure that the ads are being delivered so that you know it's less of a pricing dynamic issue, but more of a delivery.
The issue so it's something that we're constantly focused on it is a yeah a functional investment in the tool set that allows us to take more share from in places, where we do not have an exclusive rights agreement.
So we see that as all kind of incremental growth that is built into the way. We look at overall growth and you know as we said before we believe that you know a majority of our revenue increases come from same store sales and by that meeting on what we can extract.
From those publishers I'm from the inventory they have and what share we can take from our competitors in those places so.
Our ability to can't manage auction dynamics across the board it becomes critically important and that's why we do talk so much about technology investments what we've done in the CGD fraud building out tools like addressable, which allow us to kind of extract more from the same inventory by leveraging targeting data.
So it's an important part of what we build outs important part of our investment scheme and I think it's allowed us to continue to kind of maintain that faster than market growth, which I. You know one of the things. It's important to note. It's a little bit of a change is that you know this morning. He market. It came out with stats for C.T.D. This year that drove that 40 per.
For the year, you know were growing at at nearly triple digits for the year I think a lot. It has to do with our ability to kind of manage those auction dynamics on the C.T.D. side, I think a T to extract a more for our partners.
Got it that's really helpful and my last question I, just wanted to drill down into mobile and desktop.
Can you speak to which of those channels, maybe suffered the largest decline and what's your current outlook for them.
Yes, so we haven't broken it out specifically in the past it at least on these calls but you know it's it's clearly when we look at relative pressure on both the mobile and desktop business. It's really the desktop business that sees the you know the most negative pressure on it.
Just due to the fact that a desktop as a business from a macro perspective is declining year over year. So if you look at industry statistics.
Desktop video will actually shrink over the next several years, so you've got that dynamic and the fact that you know it's it's an area in which if you look at our partners and the people that were focusing on the CTV space.
It's it's an area that just isn't that important to that Brady you know, they're growing the growth part of their business is really in large screens and to some extent electronics that mobile. So the biggest pressure that we have you know the negative pressure on either this year is isn't the desktop area most of that.
He is negative you know headwinds coming from just a decline in the sector as a whole as we've noted in the script Weve shored up or you know some of that decline with our you know the upstream business and making sure that we can take advantage of any small pockets of growth there, but really if you look at it it's the.
It's the desktop part of that you know that business that really has the most negative pressure on it.
Great. Thanks, very much for taking my questions [laughter].
Thank you. Your next question comes from Kyle Evans from Stephens incorporated. Please go ahead.
Morning, Thanks for taking my questions.
I know slim could has been fully integrated and you're not going to break that out but margins suggested it continuing to grow as a percent of overall revenue could you at a high level talk about how the upstream.
Do you know just before you just referred to it as a pocket of growth and help US also think about how we should be transitioning that longer term from a gross to net revenue recognition I've got some follow ups. Thanks.
Yeah, I'll take the first part of that and John can take the second [noise].
Ben as we've noted in the last few calls we've been pleasantly surprised with the ability for.
That business to continue to grow in light of the you know a space that is not you know arguably not our core focus nor one of the hottest spaces in digital today. So you know how to get out stream business, that's been able to shore up some of the pressure, which I just noted on the desktop part of the business and the desktop industry has been.
It really positive in weve been able to enjoy that growth from that business.
More importantly from that acquisition as Weve also noted is the ability for that team to continue to grow our core or G.M.P. business in Canada and some of the at the recent deals that they've been able to close with bell and clear that car and lot press and other.
There's really signifies the fact that a not only was this a good investment for us from you know.
Building it out stream business, but also it's been a great investment for us from starting to expand our our core platform footprint into new markets. So so net net you know you know we continue to do you.
Be pleasantly surprised by the performance of that group as we've also noted though you know our core focus as an organization is to continue to build out our position as a leader in the CTV space and that is you know our vision that is what we're driving towards its and that's why.
When we look at the real asset that we've been able to gain through that acquisition. It's there further capability and able to expand our footprint on the VIP side to kind of build out CTV relationships outside of the U.S.
Okay and then.
This is John speaking on the other part of the question. So the majority of Slim could revenue is accounted for a gross basis, which is what you're referring to that's not a desire. That's just the way. They county rigs suggests we have to do it oh not all some cut revenue, but the majority I'd say about 80% of it as gross the rest is that because its gross.
It has a negative impact on the combined gross margin up a company and we already told you earlier that CTP gross margin is in the high Eightys, 88%.
What's really driving that in the accounting to be gross accounting is that the way that folks like the transact business.
Now stream right now, it's very insertion order oriented and once there's an insertion order involvement it's gonna be gross not net so the our desire to get this to a net [noise] net accounting down the Pike, we're going to keep working with that but it's a it's pretty been pretty much of a slug right now though to get that backed in it.
Great. Thanks, Mark I'd be interested to get your perspective on record as recent acquisition of data now I'm not sure if that has any.
Meaningful impact to your business, specifically, but if it does I'd love to hear it and then if it doesn't.
I'd like to kind of get your broader view of how that may or may not change the broader.
Connected TV landscape.
Yes, it's a great question I think you know I'll start with the macro and kind of and burned down to the micro yeah from a macro perspective I think it shows you know, it's a definite market kind of validation as a position that we've taken since you know day, one of Washington area, which is.
The idea that as more people cut the cord and more people go towards watching video over the top through channels such as ROE coup that you know the advertising dollars will follow and consistent with what we saw with mobile and desktop those advertising dollars will be increasingly transacted.
Grammatically.
And you know that is the thesis of upon which you know to Florida is built and we're seeing that playing out in the larger macro market. So you know Roque, who is the venue through which I would say you know a vast majority of their AD sales have been a direct and non programmatic.
Their investment in a programmatic platform, which they own to start moving inventory through there basically says you know hey, we believe in this programmatic positioning for our business, we're going to invest in added we think that's where a majority in the future of our revenue is gonna come from when it comes to add sales. So.
I do think it's a it's a pretty strong validation of that thesis around you know programmatic driving the future of see TV advertising.
You know specifically to us I think it has a a few relevant or you know and factors. The first being you know that as the programmatic transaction. It seems to be dollars becomes more mainstream and you see macro players like Amazon and Roque too.
And others kind of pushing more dollars there that only benefits us right only benefits. The fact that as TV dollars start to shift to see TV that an increasing number of those TV dollars that end up in CGD will be transacted programmatically, that's a great macro tailwinds.
From a customer our partner perspective, we've worked with date is you opt for the last several years that they started to build out there CGD competencies and you know the the strategy upon which I think a real who has publicly stated that they're going to use data do is to come.
Can you expand what they call kind of.
You know audience extension type campaigns that may fall outside of the ropes you universe and you know that again, you know may bode well for US is as a as a partner data do the fact that we provide inventory outside of the roka universe as well. So you know I think that it's you know again, it's a further.
Certification of programmatic as it real force in CTV, we I think are sitting in a really good spot to take advantage of all you know both the macro tailwinds and in this case of some of the specific microtel lenses are micro factors as well so you know again.
Generally I think a good thing for the marketplace and a good things virtual ARIA.
Great. Thank you.
Oh.
Thank you. Your next question comes from Jason Cryo from Craig Hallum Capital Group. Please go ahead.
Good morning, Thanks for taking my questions I'm, Mark just wonder to focus for a minute on the Q4 outlook. So if we look at the Q3 results, we see see TV remaining a big growth driver a source of all performance, while you know mobile and desktop leg that a little bit. So wondering if you can kind of break it down that Q4 outlook in how we should think about that.
Trend line moving quarter over quarter, I'm kind of the balance of what goes into C.T.V. versus the contribution on the desktop mobile side.
Yeah, I mean, that's great question, Jason. They look we you know we have not been shy about saying that the feature of this business is connected television and that trend continues to play itself out quarter to quarter as you see more of our business be being see TV.
That trend will continue into Q4.
We see strong you know connected TV growth going into that quarter, and you know, which will result in you know likely stronger cpms, a bigger percentage of our business being connected TV and you know I think that say you know that is playing out again.
Yes, you know our investment strategy and you know our overall business thesis of becoming the you know the leading platform and see TV. So net net we see CTV growing as a percentage of our business.
We see a you know continued outpacing of the general market growth rate for CTV within our business and you know Qg Q4 is gonna be interesting one for us because I think it'll be one in which you know a close to a majority of our business will be CGD it'll be the first time of the company's history.
So we're going to see a as we've noted in the past a much more TD like a seasonality and I think that's is gonna be a you know anything perspective for US is a company moving ahead.
No. It was actually going to be my next question. Just do you guys have kind of Oh timeframe for youth. When you think we see that crossover into see TV or maybe you're not prepared to kind of pinpoint when that that transition starts.
Yeah, I mean, I think you know look we've stated this before which is like you know.
We want all parts of our business to grow, but we know that where our biggest investments are CGD and that's where the focus is and that is at some point will reach this inflection point you know based on our current trends and where we're looking you know, we're not going to pin that down to a day or date, but you know if you extrapolate out.
Where we're heading the kind of growth that we're seeing a C.T.D. the market Tailwinds that we have you know, it's it's fair to say that yeah sometime in the first half next year you know <unk>.
Majority of our business will likely be CGD.
Okay, Great and then just last one for me Yeah, we're seeing a lot more new streaming platforms hit the market you know yet Apple last week Disney next week, and then a couple more on the horizon for early next year in and you know, while you may or may not be working with some of those just wanted to get your thoughts on what that means.
For to L'oreal, having more options out there for consumers.
Yeah, I mean look anything yet we're starting to reach you know critical massive has not only the number of you know platforms out there, but the number of people who are engaging with those platforms and literally cutting the cord I think a in the you know the recent call that we heard from from 18 tea.
Yeah, the number of cord cutters actually our is accelerating which I think there was a surprise around that.
So we're reaching critical mass across the board. What is also interesting as you noted is a lot of these services are coming out as you know as Vod.
Services.
With rumored Eva Todd you know variations coming out shortly after that I think we are also reaching you know this.
Reaching a point of subscription fatigue, which we've talked about since day. One is that there's going to be a limited you know portfolio of subscription based services that people are gonna be lender placed pay for the rest of their viewing portfolio will really be made up of aid Vod players. That's only good for us right in and I think.
That's even you know with rumored.
You know transitions of even such things as the Peacock network, which was supposed to be a fully s. faade.
Network coming out is potentially in a lot opportunity as well you're seeing the you know the increase in advertising supported platforms out there actually creating.
A greater proliferation of opportunities for us as a company to help those guys monetize you know monetize that inventory. So again I think these are great market Tailwinds for US that you know you know this from a sector perspective. It just shows more advertising opportunities you know front for growth across the board.
All right that's it for me thank you.
It.
Thank you. Your next question comes friendly Kral from B. Riley incurred please go ahead.
Great. Thanks, Thanks for taking my question a couple quick one just first on.
On the audience connect tools kind of curious how they jive with the kind of regulatory environment. If we go into 50 P.A. next year or do you think that these audience connect products kind of make for platform.
More relevant and and where they built kind of with that in mind and then just curious.
You know, perhaps if you could maybe just qualitatively talk about the potential uplift in few P.M. as it relates to a better targeting.
Yes, it's great question Lee so.
You know, we when we look at the audience connects suite of tools. The idea there was to do two key thing to both create.
You know a more addressable advertising opportunities in cases, where there maybe.
A lack of individual level data so to provide more TV like you know addressability for advertising buyer, so whether that's context or show level information just.
Just to make the be CTV buying experience much more like TV, but it doing so at a very you know privacy friendly and you know clean data perspective. So that was kind of you know section, which is hey in cases, where there you know there may be challenges around.
We'll level data, let's provide tools that allow buyers to two hobby TD like buying experience you know so that when they're moving dollars from TV to see TV. There's a consistency there. So that was piece one the second was in cases, where there is no data conflict or challenges around data when a publisher akshay.
Police owns data has an opt in and clean data trail with the consumers how can they leverage that to actually gives them a addressability plus right given them, an even stronger way for advertisers to reach you know consumers on him in a more targeted fashion and I think this.
Suite does that so the idea is to take advantage of you know of.
The capabilities of CGD, while doing so and it really privacy friendly and flexible manner that you know.
Courage is TV dollars to move to see TD, but also use TV buyers and even greater reason to want to do dollars. There because there is a more accurate audience reach capability.
As far as what we've built into models around or.
You know revenue growth from this yeah. We look at all this is being part of our overall strategy to again extract more.
From our current publishers and in that means a giving them the ability to sell their inventory at a higher CPM, because it's more targeted which again and based on our model drives more revenue for us, but also creates an opportunity for us to take more share from that or from our competitors by having stronger tools.
So you know we don't quantify specific growth rate based on this but we do think this is an important part of you know our current and you know track record of growing faster than what the industry has grown at and again, we've mentioned you're looking at it industry that's growing at about 40%.
Growth rate this year were more than doubling that based on RCT growth rate and I think tools like this play a big part of that.
Got it and then I'm specifically on the a political advertising.
Front, where do you guys kind of anticipate that to become a tailwind for you guys I guess as of today or is that kind of more of a second half 2020, Florida.
Potential year over year growth driver for you.
Yeah. It's it's a great question and this is another place where you know we're cautiously optimistic but it's really unknown. It's it's unknown waters right now for connected television right. We've done some research around it that really.
You know pizza pretty good story around why CTV should play a pretty significant role in the next election in particularly when you see guys like Twitter and other social networks kind of walking away from political advertising.
There's only really going to be two values through which to reach consumers with a significant amount of <unk> potential voters are they live video and we believe that's gonna be television.
Which provides pretty limited addressability beyond just geo targeting and actual targeting and then see TV, which provides the you know it the addressability and targeting capabilities that are found in social with the full screen sites out in motion that you know advertisers or I'm, sorry, political advertisers have always.
You know embraced and the T.D. World. So you know, we think we've seen a trickle of of kind of advertising and political advertising coming in over the last several months.
I really think this dynamic here is going to probably be a 2020 dynamic but this is again uncharted territory. This will probably be.
From all you know recent reports be the highest spending campaign season in the history of the world and Yeah. That's not an exaggeration. When you look at the numbers and with estimates being at $1 billion plus going to digital video. Yeah. We do think that there is certainly an opportunity for us as a company take advantage that.
When that starts hitting I think you know again I, it's it's totally new because by the last election cycle in 16.
At least from a presidential perspective, CTV wasn't a real factor I think you know we're heading into a year in which he will be a real factor not just because of you know the things we mentioned before about Addressability and you know relevancy and also the fact that you've got it you've got a medium now which is reached critical mass.
Looking at 30% of households was not being reachable through traditional television. So I think it's gonna be a really interesting here for you know the political advertising, a universe and particularly for us and our role that we play in that.
Got it and then one last quick one a you know where spot acts kind of in a strategic review.
You know if that would quit being filled defender a week or two ago and then obviously because they did it for you announced it was real crew just kind of your thoughts on publisher relationships as you kind of have some of these.
M&A events over the last quarter.
Yeah, Hey look we have.
I think I've always had the position that you know market kind of turmoil creates great opportunities and I think this is no. This is no exception when you know the ownership.
Are you know structure of of they have a competitor is up to question and particularly in a world in which you know walled gardens can really turned off a potential publisher partners and the concern that a competitor may end up in a walled garden. It just creates opportunity for us not only does it mean that you know there I spent.
Got it off the ball, but it also means that you know a.
Deepening partnership with a company that maybe up for sale to a walled garden. It creates questions in a lot of publishers mine. So you know we greedily take advantage of those concerns and I think it creates opportunity for us and have you seen this quarter. You know we had a pretty exceptional CTV growth I think.
A lot of that is based in the fact that we're able to drive some additional share with partners.
Got it thanks for taking my question have you.
Got it.
Thank you. Your next question comes from Mark Argento from Lake Street Capital markets. Please go ahead.
Hey, guys.
A quick ones here first off obviously.
Okay.
People anticipated.
You guys sounds like you're well position is there any opportunity on the M&A side to get them both.
<unk> positioning and really take advantage of a quick things are moving.
Then my second one.
Right now that you see.
Where do you think that can trend.
Right.
That's a couple of quarters. Thanks.
Thanks, Thanks for the questions Mark you know on the M&A front you know we've we've stated previously you know we're always looking for interesting acquisitions that can help accelerate our position you know in the market either globally or by giving US a you know more robust tool set that can help drive.
I've yield for our partners or provide more insight a in their capability in our capability. So they can kind of extract more from their own inventory you know, we certainly don't comment on any potential M&A that we have you know obviously before it happens, but you know there I think we are consistently looking.
For those opportunities to see it kind of build out the platform. We did it I think our our acquisition that we did last year has helped to expand that global footprint. As I mentioned is which is one of our you know key objectives and in any market. So in Canada as well as in France, which we added new partner in recently, so I think you know.
We're looking on that global perspective for acquisitions, but we're also looking at small technology tuck ins and I think the nice part of where the market sits today is that you know there are a lot of the AD Tech jewels out there I think have been under recognize that are looking for a home and you know we consistently you know.
Look for an opportunity push those into our platform. So you know a little bit are they a relatively vague answer around that but you know the with the driving perspective is that it's something we're coffee looking to invest and it's something that we you know believed that there are opportunities for us to get you to grow and based on our track record with the ACA.
Position last year, we know we can successfully integrate those companies to help drive growth for us.
The second aspect of that with E. C. P M.
No.
We've seen steady growth in CPM based on not just the share shift toward CTV, but also in the fact that been able to help does publishers honestly TV front and get more from from their current inventory through the tools that we built I think we're gonna see you know we were pleased.
Only surprised with the continued growth year over year as we've said before I think that growth is going to slow a bit because as we start reaching critical mass on the CTV side, you know that a lot of that juice, that's kind of driven the CTV <unk> or the a CPM growth.
We'll start to flatten out a bit but nonetheless, I think we're gonna see continued gradual growth de CPM as both the share of our business in CTV grows as a percentage of overall business and as you know our tools continue to extract more value from the same inventory and I think tools like we've launched on the addressable side.
You know, which are really just getting their legs on a commercialization side those will help us kind of push those numbers up as well. So I think we've got a couple a decent factors that will help with the CPM growth, but as we stated in the past I mean, we've got a lot of the big pop out of there it'll continue to grow, but but you don't expect a slight flattening out of that.
The CPM growth over the next several quarters.
Thank you.
You got it.
Thank you we have reached the I'm just a question answer session and I will now kournikova kinda stomach cycle asking for closing remark.
Thank you operator, thank you all for joining US this morning and closing this was another strong quarter. We continued to expand our leadership position CGD just now nearly a majority of our revenue continued to make advancements our platform technology to create more opportunities for see desires for TV buyers to move to CGD maximize yield for publisher.
And we continue to deepen our publisher relationships and expand our footprint around the globe, while creating a fully transparent ecosystem.
Through the successful execution of our strategy, we are hitting key milestones and delivering on our expectations for the year. This gives us confidence our outlook as we head into 20 Twond.
Thanks for your participation in the call. This morning, and we look forward to updating you in the months ahead.
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