Q2 2020 Earnings Call
My New this conference call leaves me recorded I would now like to turn the call over to your host Lauren Dillard head of Investor Relations.
Thank you operator, good afternoon and welcome. Thank you for joining us to discuss our fiscal 2022nd quarter results with me today or Scott, how our CEO , Warren Jenson, President and CFO , and James or a president and Chief commercial officer.
Today's press release in this call may contain forward looking statements that are subject to risks and uncertainties that could cause actual results to differ materially.
For a detailed description of these risks please read the risk factor section of our public filings in the press release a.
A copy of our press release and financial schedules, including any reconciliation to non-GAAP measures is available at library of Dot Com also during the call today, we'll be referring to the slide deck posted on our website at this time I'll turn the call over to Scott. Thank you all and good afternoon, and thanks for joining us today.
We delivered another outstanding quarter highlighted by record bookings.
Accelerating top line growth.
Growing ecosystem momentum and a relentless focus on improving operational execution.
The quarter total revenue was up 39% or subscription business grew 31% driven by or enterprise, an agency channel and marketplace. Another was up over 80% fueled by the continued strength of our data market place an acceleration of our advanced television business.
From an operational standpoint, we made significant strides to scale, our infrastructure and build a strong pipeline of customer focused product innovation.
During the quarter or engineering teams completed the migration to the Google cloud, establishing a solid foundation for durable long term growth.
In addition, our integration of data plus math is pacing ahead of plan.
Customers remain incredibly excited about the combination and our field teams are seeing early indicators that validate the large cross sell opportunity.
And finally, we remain disciplined in our approach to capital allocation and are delivering on our commitment to you our shareholders during the quarter, we repurchased more than 80 million of stock in fiscal year to date have repurchased approximately 100 Delhi.
Our recent momentum is being fueled by the strong secular trends face an enterprise marketers today.
As the world becomes more multichannel consumer behavior is shifting and organizations are increasingly realizing that true competitive advantage lies in providing meaningful customer experiences.
Experiences that are personalized relevant and cohesive across all channels and interactions.
Data is at the center of this and data driven experiences are the key to brand differentiation and retention.
In concert consumer expectations are at an all time high and data privacy and security are more important today than ever before.
Identity and data connectivity played a critical role in each of these mega trends and enterprises are increasingly turning the library, because we are the safe and secure choice to enable their omni channel customer data strategies.
We are winning in the market because of our open a neutral approach the breadth of our ecosystem and tremendous network effects that fuels and our steadfast commitment to data governance.
I would like to spend the remainder of my time addressing two important topics the durability of our growth and see CPGA readiness.
Durability of growth.
Worn and I, often talked about the different levers of growth at lybrand, including our core initiatives that will drive continued growth in the coming years and the longer term bets, we are making to sustain our growth for the next decade and beyond.
At Lybrand, we're maniacal, we focused on delighting in growing our customers, a mindset, which directly aligns with the land and expand component of our model.
I am excited to share that this was our largest ever bookings quarter, surpassing our previous record by 50%.
This quarter bookings were roughly split between new logo and Upsells and we continue to see nice growth in average deal size.
We made broad additions across our enterprise customer base, adding approximately 30, new customers and bringing our direct subscription customer count to 720.
We remain optimistic about the expand driver of our growth Ics equation.
We'll never be satisfied.
And over the past eight years, we've always tried to be transparent about the areas, where we feel like Brad can improve.
Last quarter I talked in some detail about our focus on improving our core subscription retention churn in sales effectiveness.
We're not yet where we aspire to be but our efforts are having an impact.
Subscription net retention was 109% in the quarter and while we are aiming higher we outpaced the expectations, we shared several months ago.
During the quarter, our marketplace and other business grew by more than 100%, excluding Facebook fueled by the growing trend towards B.Y. odie or bring your own data.
As brands continue to build more sophisticated third party data strategies, they are increasingly turning to our marketplace to streamline their buying needs.
And we feel well positioned to benefit from this trend heading into the holiday season this quarter.
In addition, we're pleased to share that our third party.
It is now live at Amazon.
TV also had a standout quarter.
It was up roughly 75% in Q2, and we expect elevated levels of growth in the back half of the year.
As I mentioned upfront the data plus math acquisition has generated a lot of excitement across our customer base and we're very pleased with how its pipeline is building.
One metric we track inside our TV business is what percent of the top 500 largest TV advertisers transact with networks using data plus math metrics.
The goal being 100% overtime.
Today, roughly 45 brands are making TV buys based on data plus math metrics and the outcomes that matter most of them.
This is a stat that sparks optimism on two fronts, one how quickly we've achieved double digit adoption among existing clients, we too how many more prospects remain for us to pursue.
Let me share a representative example.
One of our existing library of retail customers has been a longstanding onboarding measurement data store account.
But there's also a large TV advertiser.
Leveraging data plus math, they are now able to measure what matters on TV.
Which for them our store visits and in store transactions.
Better still at the same time, a major network also signed with data plus math to guarantee on outcomes for this brand as well.
Which is an important proof point supporting our thesis that data plus math has tremendous opportunity for both the buy and sell side.
Everybody benefits.
Of course.
Measurement is only one area of the advanced TV ecosystem, we serve.
Ramp is unique in that it we play across all areas of advance TV, including addressable data driven linear and CTV.
Our vision for library MTV is to leave the transformation to a more personalized and data driven TV ecosystem.
We are one platform for planning activating measuring and optimizing every dollar spent on television.
We have included more examples in the appendix of our slides for those interested and digging a little deeper on television.
James will walk through our go to market strategy in more detail momentarily, but our recent success gives me a lot of confidence in the durability of our growth and then our path to 1 billion.
Next CCP a readiness.
Another key initiative this year is to establish lybrand.
The trusted best and essential industry standard for connected data.
Quarter. This effort is the work we're doing around CCP a readiness.
We recently held three different customer advisory days.
And in each Ccps, Jay was a huge topic of conversation.
The good news is that customers and partners are looking to us to provide guidance and set the standards for how the industry should operate.
Well, we are working toward broad compliance with TCPA, one specific area of focus for us is assisting the mini sophisticated companies collect any form of people based data.
Roster, which includes brands publishers and data providers in providing the right level of notice and choice to consumers undersea cpis.
One benefit of being a global company is that we've done this before with GDPR and have a solid playbook to follow.
We are working closely with our ecosystem to identify which changes must be made to privacy policies notices to consumers and our contracts with partners and customers.
Our consent management platform factor is also demonstrating the important role it can play in ensuring consumer preferences are captured and maintained.
We also remain heavily engaged with regulators as both the state and federal level to ensure the right balance between consumer protection.
Continued data innovation business outcomes and a level playing field.
In summary customers and partners are looking for us to lead and we are building products and services that embraced privacy transparency.
And importantly, great consumer experiences.
While we recognize there's still much Influxes draft regulations get finalized we are well positioned to work through regulatory guidance as it becomes clarified.
Again.
We have included additional slides on this topic in the appendix for those who want to learn more.
To conclude I'd like to personally thank our exceptional customers.
Nurse and lybrand papers for their ongoing support and hard work.
Im very pleased with our execution in the quarter and with the foundation, we are building for durable long term growth.
The market trends fueling our business remain intact, and we look forward to extending our recent momentum into the back half of the year.
Thanks again for joining us today I'll now turn the call over to James who will discuss our go to market efforts in more detail.
Great. Thanks, a lot Scott and good afternoon, everyone.
Scott said like ramp had a very solid quarter, we're seeing great progress with many of the initiatives. We put in place of in the last few quarters as Weve demonstrated by a strong performance in Q2 I'd like to spend the next few minutes accomplishing a few things first quick review of our high level go to market strategy, we outline.
At Analyst day, one year ago second I'll share with you some of the programs we put in place to execute against the strategy and third I'll review a few the key metrics. We are tracking that give us confidence we are on the right path. We are executing well and we are setting the groundwork for $1 billion revenue goal and that's why 24.
Let's review the go to market strategy, we outlined a year ago as we discussed and our high level strategy is similar to many SaaS technology company land and expand we focus our commercial efforts on engaging the Reits that have prospects, enabling them with our platform and ultimately growing our committed revenue with them.
By activating more and more high value use cases, but given the platform nature of our business. Our go to market strategy has an additional lever beyond land and expand we also have the ability to extend by enabling incremental marketplace revenue streams outside of our core subscription business library its unique position in the market.
Allows us to land expand and extent so how are we doing against the strategy, let's start with the land portion as Scott stated Q2 was our largest booking quarter ever beating our previous record by more than 50%. We closed our largest new love the deal in recent history, a multiyear partnership with a major marketing cloud provider.
We also closed five new logo deals with annual contract value greater than $400000 and 13 transaction with acds over $200000. The recent market momentum can be attributed to couple of primary factors first more and more companies are recognizing the importance of data driven approach to the customer experience.
Library, its leadership position and helping companies enabled us is making us become a must have technology. Our sales team is capitalizing on this trend by building the largest new local pipeline we've ever had.
Second we done quite a bit of work refining our approach on new logo acquisition late last year, we launched a new field strategy team. This team has implemented a variety of programs that devoted to this effort.
And we are now beginning to see these pay offs.
Through our field strategy, we implemented expanded product and sales training program, we rolled out more powerful new logo playbooks that leverage many of the best practices. We've learned over the years and we refined our account segmentation approach to ensure we have our best resources, our highest value prospects.
Let's now look at the expand portion of our strategy in Q2, we beat our upsell bookings target and saw.
Nice improvement in our churn metrics, we closed six upsell deals that were larger than $600000, an annual contract value with the largest one being a $1.7 million up sell deal with one of our agency holding company clients. We also signed a $1 million up sell deal with a major television program, enabling them to offer expanded.
Advanced TV use cases to their advertisers.
Our data plus math acquisition is already contributing to our account extension strategy for the quarter, we built a pipeline of more than $20 million and close data plus snap up sell deals with nine existing clients.
Let me highlight one of these examples for you a major insurance company that's been a vibrant ideal client for few years, they're a big TV Advertiser and are now leveraging the data plus not technology to optimize all aspects of their linear addressable and OTI advertising decisions.
All of this has resulted in our subscription net retention increasing to 109% for Q2 as you. All know this is a trailing metric and we're still seeing the impact of a few larger upscale comps from year ago, our momentum with with improved up sell performance and the progress with data plus now gives us confidence.
Subscription that retention is trending in the right direction again, Warren will share more specifics on this in his section.
Well, we're very pleased with the progress we saw in Q2.
Similar to the efforts on our land portion of our go to market. We're seeing the benefit from another number of improvements we've made to drive greater account expansion early in Q2, our field strategy team rolled out a new white space in account planning tool to standardize our account planning process since we implemented debts.
Our upside pipeline has grown by more than 60%. Additionally, we took steps to increase accountability within our account management function. Our customer success team is fully focused on renewals and driving engagement on existing products sold and our commercial leads team is focused on account expansion, we're already seeing positive results here.
Okay and feel there's more to come.
The work our field strategy team has done on training and playbook development has also been applied to our account expansion efforts, we rolled out new up sell playbooks by use case site and have expanded our account management training.
As I mentioned earlier like perhaps unique position in the market gives us an additional level for growth our ability to extend our marketplace business leveraging our SaaS platform.
Keep in mind the revenue we generate marketplace business comes from the same existing subscription customers. We have as Scott mentioned earlier Q2 was another strong quarter for our marketplace business data marketplace and other revenue was up 118% excluding Facebook.
You will recall from our analyst day last year the concept that bring your own data this is where brands and agencies leverage data packages to build unique audiences by combining them with their first party data and with other second and third party data sets.
One example of this is our consumer social offering when Facebook shutdown partner categories that third party data marketplace. Many of our brand clients still wanted to leverage third party data within Facebook with our consumer social data package. They still can't do librarians data marketplace, they're able to license data and build unique and powerful.
The answer is that can then be targeted on many black media platforms, including Facebook, we've seen very strong adoption here and had 73 clients leverage this in Q2.
We continue to bring additional data packages to market recently launched a measurement data package and a virtual CRM data package for our CPG clients a key challenge for many CPG brands is the lack of CRM data through this data package. They are now able to build a virtual CRM to power their people centric marketing.
We attribute much of our marketplace success to the subject matter expert sales model, we rolled out late last year.
These esa needs are able to extend our existing SAS relationships and drive marketplace growth on top of our traditional subscription business.
As you note subscription net retention metric I mentioned earlier does not include any of our marketplace revenue subscription net retention is an important metric, but we don't feel and captures the whole story at library of growth.
And we'll be introducing in that new platform net retention metric that looks at the entirety of the growth we can drive from existing customers.
I'd like to conclude by leaving you with three points to remember first I will land expand and extend model is working we're seeing solid growth from all three of these levers second our model is scaling we've seen continuous improvement and rep productivity and we'll end the year with sales and marketing expense as a percent of revenue improving.
Over F. why 19.
And finally library of how degree quarter, we are well positioned for strong second half and a strong fly 21.
Im really proud of with team accomplished in Q2, and I look forward to our continued success in future quarters. Thanks for your attention I'll now hand off to warrant.
Thanks, James and good afternoon, everyone.
We're pleased to report another great quarter highlighted by the strength of both our subscription revenue growth and the outstanding performance of marketplace.
A few call outs.
Our business is strong demonstrating its importance in the ecosystem and its durability.
Revenue was 90 million of 39%, excluding the impact of Facebook revenue was up 43%.
Subscription revenue of 72 million was up 31% and represented approximately 80% of total revenue.
Marketplace had a blow away quarter revenue of 18 million increased by 118%.
While transactional make no mistake. This business is highly predictable highly accretive and a durable part of the ecosystem.
Our growth has been consistent and consistently strong.
Looking at the last 14 quarters revenue has increased by more than 40% in 11 quarters and by more than 30% in 13.
Even more importantly, our AR has grown by more than 30% in 13 of the last 14 quarters.
Next operationally, we continue to tighten our gross margin is again climbing and was 63% this quarter.
Excluding transition spending a 5 million our non-GAAP operating loss was $15 million, our migration to the Google Cloud is now complete.
Data plus math and factor are fully integrated.
Transition spending is behind us.
We have finished any material transition service reliance on axiom.
And lastly, as you look at your estimates for Q3, you'll see we are getting close to cash flow breakeven.
Finally, we continue to support our shareholders in the quarter, we repurchased 1.7 million shares for 80 million.
Fiscal year to date, we have repurchased 2.1 million shares for approximately 100 million.
Now for the remainder of my remarks, I'd like to provide and talked about the four quarters of LIBOR Emps growth.
And update our guidance.
Four corners of growth, please turn to slide nine.
This chart highlights for metrics, which we believe frame our forward growth prospects first subscription net retention previously referred to US dollar based net retention.
Next platform net retention.
Third growth in a R.R.
And finally marketplace growth.
A few call outs in explanation.
Subscription net retention.
The level set subscription net retention looks at the year over year growth in subscription revenue from customers, which had subscription revenue in the prior year period.
This lagging metric is obviously important but it does not include growth associated with new logos growth in subscription revenue from existing customers, who may have only been a marketplace customer in the prior year period.
Out of course growth from marketplace.
In the current quarter subscription that retention was 109.
As we look ahead to both Q3 and Q4, we now expect subscription net retention to be between 107 and 110%.
The improvement in the quarter and for the year was and is being driven by stronger up shop, Upsells and usage trends.
Platform net retention.
This metric looks at year over year growth in revenue from customers, who were a source of any revenue in the prior year period.
This is obviously a much more comprehensive metric and more reflective our of our overall historical same store sales performance.
In the quarter our platform net retention was 119%.
As you look at our historical performance you can also see the overall rate of net expansion has been highly consistent and stable.
For the balance of our fiscal year, we expect this growth metric to be between 110 and 115%.
Growth in a ARR this leading metric measures the year over year growth associated with the fixed portion of our subscription revenue.
We have presented this metric both in the aggregate and excluding the impact of last year's transaction with IP G.
In either case, you will see a strong performance trend.
And finally growth in marketplace.
This trailing 12 month metric, while lagging complements the growth in a our.
Approximately 17% of our subscription customers are now using marketplace up from 10% a year ago.
Taken together the trends are compelling and demonstrate our strength consistency and durability of our performance.
RPL, Please turn to slide 10.
RPL was a measure of contracted revenue, which is not yet been recognized it does not include any contracted revenue where a contingency exists.
Nor does it include any nonprime contracted transactional revenue.
The current portion of our PEO is contracted revenue, we expect to recognize over the next 12 months.
As we look at the strength of our ending a are the performance of marketplace and the current portion of ARPO, we're confident in our growth outlook.
Now onto guidance, please turn to slide 12.
Many of you have asked if we have de risked our guidance for the potential impact to CCP Ed.
The short answer is we have tried to do exactly that but to be clear, we don't have perfect knowledge and as Scott mentioned, there's still much to be finalized.
Therefore, we would ask you to be conservative with your estimates.
As a reminder, our guidance guidance excludes items, including stock based compensation purchased intangible amortization and restructuring charges.
NF way 20, we now expect to report revenue of between 376, and 381 million up between 30% to 33%.
non-GAAP operating loss of between 63 and 68 million.
While this estimate includes $11 million of transition costs. Please keep in mind transition spending is now behind us and our migration to GCP is complete.
For Q3, we expect revenue of up to 101 billion.
Gross margin to be an excess of 65%.
An operating loss of approximately 9% of revenue and to be within close proximity of positive operating cash flow.
For Q4, we expect our operating loss as a percentage of revenue to be in the low double digits driven by spending for ramp up higher variable compensation seasonal increases in payroll taxes and higher spending in preparation for SCPA.
You can find other guidance assumptions on slide 14.
With that let me close with a few final thoughts.
This was another great quarter for life ramp we are building lasting solutions that embraced privacy consent transparency and great customer experiences.
We operate in a world that needs a neutral safe Haven, and we are that company.
Our trend lines are clear our business is strong it's highly predictable and durable.
We build products, our customers want and need and have multiple long term growth levers in place.
This is an inflection point.
We are now through transmission spending and our GCP migration, we have a path to profitability and ample liquidity to see us through our progression and finally, we remain incredibly optimistic about our long term opportunity.
On behalf of all library offers thanks again for joining US today, operator, we'll now open the call two questions.
Thank you at this time, if you like to ask a question you may do so by pressing Star then the number one you had telephone keypad will pass one moment to compound that can day roster.
Your first question comes from the line of Dan Saumen with BMO capital markets.
Hi, good afternoon, everyone.
Maybe weren't I could just follow up on the guidance for a moment and your comment a moment ago about about de risking first TCPA.
I'd just like to understand what you mean, there little bit better because when we look at your retention ratios reaccelerating when we look at.
Some of the Big partnerships, you signed with other players in the ecosystem lately.
It it seems like the opposite it seems like you businesses is picking up and people are coming to you.
In light of that so when you talk about de risking the guidance for that is that a at thoughts about being cautious on how much that acceleration continues or is it more around the sort of actual technical impact that it could have to the methodology for your products.
And then I've just got one follow up after that.
Right.
So let me say a couple of things down is one we feel appropriately confident in our back half outlook.
There are several things that we think are 100% working in our favor an incredibly strong performance in a are.
As both James and Scott mentioned, we had an incredible bookings quarter as well.
Marketplace.
Last quarter, 76% growth to 118% growth this quarter. So when we look at a are are we look at the strength of marketplace. We look at the strength of our current portion of RPL backlog and our our overall metrics, we feel appropriately confident in the back half of the year in our forward growth outlook now.
That said.
We also are cautious relative to the impact of Ccps, we don't know everything so we've given a lot of extra care to look at our bookings to look at our closure rates what's in our pipeline.
Some of the technical challenges that we're working through and as best we could we tried to de risk that in our guidance to ensure that we in fact, Duke.
Deliver on what we say.
As I mentioned, we don't have perfect knowledge, there's still a lot to be done, but we feel weve been appropriate in taking into account both our confidence.
And our forward outlook, along with at trying to take some measure for the things that are uncertain.
Great and maybe just one follow up.
Thank you, but going a little further down the the income statement just to margins without giving any guidance or anything as you noted a moment ago, you've gotten past a lot of.
I don't know if we are relatively temporary costs, whether that's the shift to Google cloud, whether that sort of lingering transaction costs.
Driving a little bit pass the standup of a corporate costs for the company a year after now being independent.
You weren't do you think you're back to the point.
Sort of pre sale of the legacy axiom assets, where library I've really enjoyed a nice time within the company there were.
Both you were investing in product, but also delivering margin at the same time it feels like you're back to that sort of position, but I'd love to hear more color on that thanks.
I would tell you it yes.
Now obviously growth is never linear not every ratio is going to go into right direction every single quarter.
But we feel Dan just as you highlighted this is really an inflection point. This has been a massive your considerable transformation and transition at library.
We stood up a public company infrastructure, we migrated in brick record speed to the Google Cloud and now we're at this inflection point, where it's all behind us.
As we prepared for the call over we're talking about this inflection point the best way. We can summarize it was to say that literally from this point forward every single line item at our income statement can benefit from revenue leverage.
And again, it's not always going to be exactly linear on every line, but in principle. We are now to point to deliver on exactly the point you just made.
That's great. Thank you very much more.
Thank you.
Your next question is from the line of Sam detailed with if I'd.
Hi, This is Oliver on for Sean.
So I just wanted to ask what's the white space should think about net client adds going forward.
And I also know that Joey to talk on international but can you discuss some of your progress and adoption rates and other countries.
Sure. So this is James I'll start on the net customer adds so we're we've been consistent right about net customer out around 30, or so between 25 in 30 per quarter and Thats. The trend, we we expect to see moving forward.
Now the certainly some opportunity for us to expand that but thats really what we've built into our model at this point.
And we feel pretty good about being able to hit that quarter ending quarter out.
Great and then let me Chad just for a moment about international.
In terms of product adoption I'd say, there three things that we're focused on internationally that are working extremely well and we believe help a lot of long term promise.
First thing is what we're doing in our data sharing platform and many of you have heard us talk about the work that we've done with Carrefour, We believe this breakthrough.
The second thing is measurement and then the third thing while it's still very nascent is TV now in the near term, though I want everybody to be aware that what we're seeing tremendous long term demand from customers. They are a couple of short term transition things that we're going through that will reduce our growth rates, we repeat that again.
Growth rates in the near term.
Specifically as I think many of you are aware the IC, all which is the UK regulator issued guidance for RGB This past summer.
The implementation of that guidance, which we in the industry are going through is slowing our growth right now in particular in the UK, but it is having an impact and we'll have an impact in the back part of the year. The second transition that we're going through which we believe will benefit us in the long term is the shift away from third party data.
In Europe to more second party data or or very natural data sharing relationships just as we're doing today and I alluded to with Carrefour. So the good news as that we're in a position to be a primary beneficiary of this shift towards second party data and per seat and same.
Time, what we know is that we're seeing significant demand for our data sharing.
Platform as well as for measurement and early positive signs in TV.
Okay. Thanks.
Thank you.
Your next question is from the line of Stan Zlotsky with Morgan Stanley .
Perfect. Thank you so much guys.
A couple of quick questions from my end.
One on just putting us a finer point on Dan's question earlier, when we think about TCPA and potential.
Potential impact whether positive or negative which one.
His next year maybe.
A better year for us to be thinking about.
More material impacts as we set our models.
And then have a quick follow up.
Yes.
So stand this is Scott.
You know CCP takes goes into effect on Jan one or potentially six months from when the final regulations are written so any impact we would expect to see.
Next year that said.
We've spent the better part of the last six months preparing ourselves for CCBI in terms of Remediating, our policies all of our client contracts.
Ensuring that privacy by design is built into all of our products.
The hard part will be quite frankly, our readiness.
But rather is helping all of our clients and partners ensure that they're ready as well and again I.
I think we're way in front of the curve year end GDPR has been a good blueprint for us to follow the fact that we purchased factor.
Is a big thing because it allows us to get consent management in front of all of our partners. So they can do that in a turnkey way.
Our most popular sessions for attendance at our ramp ups ramp ups on the road.
Both television and SCPA, where the CCP has been drawing standing room, only we launched the micro site and the news letter. So we can continue to communicate any changes with clients.
And what we're finding is that theres a lot of demand from clients to us for one on one.
Legal and counseling session. So that they will be ready. So all this is I think we're really well positioned I think that theres a flight to quality here that we might be the beneficiaries of.
But.
I will also the same time say the final CCP a language still has not been.
Written and so.
I can't say with a crystal ball that so.
There won't be any impact, but I think we've done a good job preparing for it.
Okay, perfect and then.
Similar high level question.
A couple of announcements that you guys put out recently off of the partnership of Rubicon and yesterday, the partnership with media math.
Really caught our eye specifically the media math partnership.
Given the.
Uneven nature of that relationship.
We've already in the past.
Maybe walk us through what those announcements mean to to you guys on on a going forward basis Thats. It from me. Thank you.
Yes, Dan first off thanks for asking and noticing that we are Super excited about this partnership with maybe Matt longtime come in they are a great company and I've known Joe.
Their CEO for for the better part of 10 years and that he is one of just the great.
Tech leaders in this space and so I like what he's doing with the source capability.
Really pleased that we can integrate identity link into that more broadly speaking to the string of partnerships that we've announced I think that.
There are two things going on number one is I think it the validation of our entire philosophy, we have long talked about being neutral agnostic and whatever skepticism major partners had about that its seems to really have melted away over the last six to 12 months and whether it's the eyes.
We announced for Amazon's DSP the store sales measurement capabilities that we have with Google and the trade desk or integrations that we have with Facebook.
We are walking the walk that we aim to catalyze anyone and everyone in the industries. The second thing that I hope is not lost on anybody is I think the string of announcements as a measure of progress that we've made in our authenticated traffic solution.
De risking the entire ecosystem for a world in which third party cookies may not always be the the standard.
We started talking about Ats like literally 60 months ago, and where we stand now we have 10 sspx either under contract or already implemented including index and Rubicon mixed up will be open exome pub, Matt.
We have 20, dsps, including the Middleby pretty low and most recently.
Mediamath. So I think the world has taken notice they have standardized on identity linked and I think thats good for the entire ecosystem.
Okay perfect. Thank you so much.
Your next question is from the line of Kirk Materne with Evercore ISI.
Yes, thanks, very much congrats on a quarter and thanks very much for the incremental supplemental details Medac I really appreciate you all in Lauren putting that together I think it's really helpful. Around you got any for Ford metrics. So.
Great. Thanks Grant.
Yes, I guess, maybe just to start obviously, we look the air our serve X. I PC nice jump this quarter, which is obviously great to see has anything changed in the marketplace was it just a matter of kind of.
Being maybe a little bit more consistent getting deals across the door, maybe upselling deals at a little bit more consistent cliff you just maybe provide a little bit more color on that front that'd be great start. Thanks.
Yes, so I'll I'll go and take this is James Yeah, I think there's a couple of things happening first as I mentioned in my remarks, you know there's a number of programs we put in place over the last few quarters and we're starting to see the the fruit from those efforts. So so it is creating some really nice signals for us that we're getting better at what it is than we do and I think thats it.
Hi, good sign.
Second piece of that is on.
We're already starting to see a lot of traction developed with data plus math and I mentioned, we signed up sell deals with nine of our existing customers around that and that's certainly contributing to our to our a our growth.
And then finally, we had a couple of larger transactions. This quarter, we mentioned one of them earlier with the marketing cloud company and that certainly helps us as well so really good signals. We got great pipeline, we're really bullish on the second half of this year and its half by 21, some really really good signals.
Okay, and maybe just a follow up down of as James or warm will take this one, but obviously marketplace and it had a huge quarter well above what we were thinking.
What kind of visibility do you have in that you mentioned that you do have visibility into that but it's obviously not add more traditional subscription model. So when we think out over the next couple quarters or the next year.
How do you feel I just had you get confidence in sort of this kind of.
Growth rates are obviously, you're probably not not sustainable, but how do you get comfortable with sort of a more of a what kind of run rate that business can grow at maybe over the longer over a longer period. Thanks sure. Other instart, James and then I'll hand, it off worn out a little more color.
When you look at the durability of our revenue streams, obviously committed revenue is most durable, but given the run rate that we have in the track record we have.
Our growth of marketplace, we get a lot of predictability with it and there's there's things that we can do to make us feel very very comfortable with the outlook based on on historically, what we have been doing and that's really what we apply to this now as you said.
We had a couple of really great quarters, and we don't expect and we aren't planning to have another 118% quarter in the second half of this year, but there is a lot of momentum happening on the marketplace side, you Scott mentioned earlier the.
Third party data.
With Amazon and that could be huge for us as well. So so we're seeing some really good things happening that give us a lot of confidence in the our ability to continue to grow.
Our marketplace business faster than our than our our core growth rates and then Kirk I would only add to that that it's about building a history of sufficient scale that this transactional revenue does become predictable and so we now have a really pretty good handle on seasonality our quarters are big enough that a lot of the noise is out of it.
This there'll be some noise here in there, but the businesses have sufficient scale that you can actually plus the trend lines pretty clearly.
Super Thanks for taking my questions.
Thank you.
Your next question comes from the line of Tim Nolan with Macquarie.
Hi, Thanks, very much like to come back one more time on the net retention question and if you could just to elaborate a bit more on why you think the overall platform net retention number the 119 number.
Why are you confident that the marketplace portion of that.
Remains.
You know strong sustainable.
I mean it is it is as you referred to it is somewhat I guess discretionary spending may seem quite confident still.
That you can retain those client and continue to sell more to them. So just a bit more color on that would be great. Please and then.
Two other quick ones.
The.
You've talked about getting toward profitability during fiscal 21, I Wonder if you have any other commentary around that and timing within that and then lastly, still have a super strong balance sheet any question any comments. Please on use of cash thanks.
Let me first.
Sure cohort.
So in terms of.
The stability.
That broader platform metric and in particular, the data marketplace portion of it.
We see a couple trends going on that we think of fuel demand for our data marketplace number one is a flight to quality.
With that in times of.
Regulation.
Importance of gathering consents for data.
Rather than a client going out as.
Striking a number of one off.
Hawk relationships. They can access all of the ethical data providers within our marketplace and we will have done a lot of to work for them.
In addition is the ease of use.
So again instead of having to go out and strike 20 different contracts.
We have hundreds of data suppliers available, we're plugged into our grid for all their available.
Turnkey notice and so it's just an easier way to buy and it's a safer way the bye.
Which underscores that flight to quality.
Great.
A couple other things that I'd just point out in terms of our confidence and just to put some math behind the strength of the business. If you look at.
Slide nine of our deck, where we presented the four corners of growth.
These are trailing 12 month number. So every period represents 12 months of growth and Q2, 49%, 68% 60 60 81.
So there is a trend line of very very strong performance over multiple 12, 12 month periods, which which give us a lot of confidence.
Couple of things then to the follow up questions.
First of all we do remain committed to profitability and halfway 21.
We would remind everyone to something that I know Scott is said and I repeated and that is if there is an opportunity that we feel merits doubling down on we would not hesitate to do that that said, we remain committed to profitability by 21.
In terms of our use of cash we do have and fortunate to be in a position of having a great balance sheet.
Our capital allocation priorities remain the same first of all fund our growth opportunities and our operating needs to have acquisition flexibility. We want to continue just as we've done to be very selective but have flexibility to make acquisitions and then just as we have in the past in that context real.
To support our shareholders through our share buyback.
Great. Thanks, a lot.
Thank you.
Your next question comes from the line of Robert Cool, Brad with Wells Fargo Securities.
Good afternoon, and congratulations on the quarter wanting to ask on Facebook and B.Y. I D. I think you said you have 73 customers numbering third party data into Facebook.
To replace the partner categories functionality.
Just a few questions related to that I think couple of course back you said you had about 250 customers.
Using the integration so just want to it seems like you would have a fair amount from way to go there, but just please correct. This is we're wrong on that.
Second are you seeing this is sort of a starting point for broader use would be why I'd for programmatic. Another use cases, and then finally I think part of your categories is pretty popular among cpgs and some other markers you may have had pretty limited first party data assets. So wondering if the wide serving as a starting point for some new customer discussions with some of those types.
Types of marketers, where you might be able to help them with other things like second party partnerships or anything you might say about that thank you very much.
Sure, Yes, so on the Facebook the.
The social package that I talked about earlier on where you were referring to is the clients that we work with we may be pushing the first party data into Facebook that was the number in the 200. So yes, there's a lot more runway for us here with the third party data 73 is it's still early on but we think theres theres a lot of growth still to be had with that on but we're very happy with.
Progress we've seen over the last few quarters there.
The second question you had or the second comment you had about.
About piece, but could you can repeat that.
Well just are you seeing that in the starting point for for broader biodiesel and programmatic cannot be used cases, and then and then finally, starting to catalyze discussions with Cpgs and others, who might not have had fairly significant first party asset fees on your platform in the past.
Yes, very much so and as I mentioned earlier. This this whole idea of these data packages that we can bring out to brand that is a car core part of our marketplace strategy and our growth strategy and as you said there are certain segments out there like CPG, where they don't have a whole lot of their own data and putting together packages such as the virtual CRM package that we put together.
Or some of the various.
Transactional packages that other companies have that they can leverage become really powerful.
Book is one destination that can leverage that and these packages. There's there's many others that we work with and they are using them in other places and and like I said. This is a this is a key part of our strategy and the other part about this that's interesting is many times even though this is marketplace revenue. Many times, we can get brands to commit revenue associated with it so.
You creates a lot more predictability in this sort of transactional business.
Great. Thank you.
Your next question is from the line of Brett Huff with Stephens.
Hey, guys. This is Joel on for Brian . Thanks for taking my questions. Congrats on a nice quarter.
Great. Thanks Joel.
The biggest things that ramp is looking for that can make winning in TV.
Thank you.
Rick within that.
Order.
Like the connected TV, we need connected TV.
Yes, I think the biggest obstacles to us in scaling the business are really first and foremost our own capacity this scale.
What I mean by that is if you think about the person. The single person is probably log the most frequent flyer miles in the last quarter, It's John Hoctor, who runs our data plus mat business virtually every every television advertiser wants to talk tool.
And so we need to duplicate his ability to evangelize the story with subject matter experts and we teach our entire organization.
Hello.
I would tell the story to clients and how to get campaign, but the ground.
We are connected TV business was up 400% in Q2.
So our issue here isn't about.
The obstacles to growth, it's really about how do we accelerate that growth is off a small base, there's a lot of excitement.
You know there hasn't really been a whole lot going on in television or 20. Some years in terms of innovation, but all of sudden we can go in to help clients by with much more granular data than they could with just ERP using GRP and on outcome based measurement.
So it's we think it's a big opportunity real big opportunity for us.
Great. Thank you.
This question is on the line of David Gearhart with first analysis.
Hi, Good afternoon. Thank you for taking my questions I just have to really quick ones can you give us the organic revenue growth rate year over year for the quarter and also just looking at the platform net retention rate.
I think the guide was for 110 to 115 for Q3 Q4 seems to be a more noticeable step down relative to be a subscription retention rate. So just wondering if there's something material is coming out of there something that we should should be aware of thank you.
Now happy to do it at inner we had a million dollars of acquisition benefit from data plus math in the quarter and just to reiterate for everybody on the call what our guidance was.
First of all data plus math is now completely integrated into our TV business. So we don't operated as a separate subsidiary it's integrated into our operations that said when we made the acquisition, we said that there would be about 5 million.
Are we county on $5 million of benefit from the acquisition in this fiscal year and about a million of that falls within the quarter. We just reported and then figure to into for the remainder remainder of the year. So TV was up 75% for the.
The quarter, it would've been up 50%, but for but for that million dollars.
Going to the platform net retention, it's really all about the forecast growth rate for marketplace. So just to the.
The question at James talked about a little bit earlier, we're not comfortable sporting those big growth rates in Q3 in Q4. So it's just solely a reflection of a more moderate growth outlook for marketplace still strong mine too, but a more moderate growth rate in Q3 in Q4.
All right that's it for me thank you.
Thank you.
And this concludes that Q1 day session I will now turn the call back over to Lauren Canson for closing remarks.
Well. Thank you again for joining US today. This was truly another great quarter for life Graham.
Most importantly, we are really cloud that were part of an ecosystem where were building really lasting solutions that embraced privacy consent transparency and great customer experiences.
We do believe the world needs a neutral safe Haven, and we believe we are that company our trend lines are clear.
We build products, our customers want and need.
This isn't flexion point, we're now through transition spending and GCP migration, we have a path to profitability ample liquidity and we remain incredibly optimistic about our long term opportunity again on behalf of all my colleagues at life ramp at all like rappers. Thanks again for joining us today.
This concludes today's conference call you may now disconnect.