Q2 2022 Liveramp Holdings Inc Earnings Call
Yeah.
Good afternoon, ladies and gentlemen, and welcome to <unk> fiscal 2022 second quarter earnings call.
After the speaker's presentation, there will be a Q&A session, if you'd like to ask a question at that time. Please press star and then the number one on your telephone keypad.
As a reminder, this conference is being recorded I would now like to turn the call over to your host Lauren Dillard Senior Vice President of Finance and Investor Relations.
Thank you operator, good afternoon and welcome. Thank you for joining us to discuss our fiscal 2022 second quarter result.
With me today are Scott Howe, our CEO, Warren Jenson, President and CFO and David Pan our new Chief product Officer.
Today's press release and 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 factors section of our public filings and the press release, a copy of our press release and financial schedules, including any reconciliation to non-GAAP financial measures is available at my ramp Dot com.
Also during the call today will be referring to the slide deck posted on our website at this time I'll turn the call over to Scott.
Thank you Lauren and thanks to all of you for joining us today.
We delivered an outstanding second quarter highlighted by accelerating top line growth.
Near record net new E R R and record margins.
The market trends, we discussed last quarter continue to play out and momentum is building across all areas of the business.
I'll begin today by sharing some highlights from the quarter and then talk about the opportunity we see to drive sustained high growth and profitability in FY 'twenty three and beyond.
Second quarter performance.
It almost any measure Q2 was another exceptional quarter total revenue grew 22% and subscription revenue was up 23%.
Normalizing for the wholesale contraction.
Total revenue grew 32% and subscription revenue was up 35%.
Nice acceleration from last quarter.
Bookings in the quarter again were strong and total gross bookings were up more than 30% in Q2 and up more than 40% on a trailing 12 month basis.
From a margin standpoint, our gross margin expanded to 77% and we remain profitable with operating margin in the double digits. This performance is a reflection of the leverage in our model and demonstrates our continued ability to drive profitable growth at scale.
In fact, as a leadership team one of the key metrics, we measure our progress against is the rule of 40, the combined percentage of revenue growth and operating margin.
And here I feel really good about both our recent progress we were at 36% in Q2 and the opportunity to drive this metric much higher over time, which perhaps is a nice segue to our longer term outlook.
Our opportunity.
My confidence in our future has truly never been greater and I would like to highlight three key investment themes fueling my optimism.
First.
We are operating from a strong strategic position.
Library of <unk> vision is to make it safe and easy for companies to use data.
And as we shared last call.
It feels like our vision matches the moment we are in.
The secular trends propelling our business are only getting stronger and represent a significant market opportunity for live ramp.
Digital transformation remains a top priority for many and core to these efforts is establishing a strong customer data infrastructure.
Enterprise leaders across every industry recognized a competitive advantage in today's data driven marketplace requires a safe and efficient way to access connect and collaborate with data.
Not only across their own silos and environments, but across partners there.
They also need a simple solution to activate that data to power the thousands and thousands of applications that working seamlessly together create more holistic omni channel customer experiences.
Addressable. He also continues to be an important theme driving recent customer wins.
Enabling the addressable city across the entire digital ecosystem is the linchpin to delivering efficient personalized and measurable engagement with consumers.
And the breadth and global scale of our identity capabilities is an important differentiator and a key reason companies choose life ramp.
And finally use case expansion remains a meaningful opportunity for our business.
We believe that marketing and advertising is only the first application for our technology and medium term represents a springboard into the broader data ecosystem, including greater support for other enterprise functions, such as commerce customer service and support.
Next we have multiple levers for strong sustained revenue growth.
The positive business trends from recent quarters continued in Q2 demand signals for our products remains strong and we are executing against the multi product land and expand strategy that Diego outlined on our last call.
Which we believe gives us multiple growth levers to pull over the medium to long term.
Land as I mentioned bookings in the quarter were again strong and we are making steady progress, adding new customers.
We added 15 net new customers in Q2 and ended the quarter with 870 direct subscription customers.
A few years ago data activation was the tip of the spear with respect to new logo pursuits. Today, we have multiple product beachheads, which can be sold stand alone or packaged as part of a more comprehensive solution.
Library of Safe Haven are data collaboration platform is a great a great example of this.
Given the strong network effects and the traction we are seeing in retail and CPG.
Safe Haven continues to be a growing source of new customer wins for live ramp.
As a result, we are adding larger more sophisticated enterprise customers.
We want to both control and collaborate with data.
This is reflected in the average ACB of new brand deals, which in the quarter expanded 23% compared to a year ago.
During the quarter, we had a multi million dollar new customer win with a global beverage company.
As part of its digital transformation this customer in the house their media buying measurement and data capabilities.
Through our partnership with a major systems integrator live ramp was brought on to help build a safe Haven data environment powered by identity that will be used for audience creation.
Data activation measurement and critical business insights.
Expand.
The breadth of our product capabilities and our ability to deepen current client relationships was also reflected this quarter.
The strength of existing client bookings.
Approximately 70% of gross bookings this quarter came from expand deals.
We continue to see usage increase and our product attach efforts are paying off in the form of cross sell to new channels and product modules like data collaboration and measurement.
This strong enterprise expansion motion was a key driver of our net retention performance.
And the big uptick in customer deals representing $1 million or more.
Subscription net retention was 108% and we added 10 1 million dollar customers in Q2.
Bringing our $1 million plus customer count to 80.
One example of this is an expansion deal we signed with a financial services company.
That was a new customer to live ramp last quarter highlighted on our last call.
Initially this customer was leveraging our TV measurement product to apply more data to their T V media and brand awareness efforts.
Seeking to accelerate their performance marketing function.
This customer is now using live ramp to integrate customer data across their entire media plan as.
As well as leveraging library to power measurement and analytics within their cloud environment.
In a matter of two quarters. This customer became a million dollar client for life ramp.
Another notable expansion deal was with a top five global food and beverage company that has been using multiple live ramp products for the last two quarters.
Partnering closely with their cloud provider G. C. P. We cross sold our identity module to enable the enterprise wide consolidation and resolution of their customer data.
These recent wins and several that weren't mentioned highlight an early but emerging trend I am very excited about.
The growing momentum of our channel partner strategy.
This includes ecosystem partners systems integrators, and increasingly cloud providers were a better together approach has taken hold.
We help our customers unlock value from their data.
<unk> ever wherever it lips and as more customer data migrates to the cloud live ramp is ensuring that our customers achieve faster returns on their investments.
Reduce fragmentation and can take advantage of the flexibility and simplicity of using identity in the cloud.
Lastly.
We are seeing our investment in international begin to pay off.
And believe we have a long runway for growth here.
International gross bookings were up 110% on a trailing 12 month basis.
Our global car for deployment is well underway and we have more than 100 safe Haven tenants globally.
To summarize our land and expand model is working and our new products are winning globally.
The third and final theme I'll touch on.
As our continued operating strength.
Warren will discuss our operating performance in more detail, but the strength of our model is evident and gives me a lot of confidence in our ability to drive durable profitable growth, while continuing to invest for the future.
As part of our long term model, we have an operating margin target of 25%.
While we remain committed to this target we also intend to step up our rate of innovation and development velocity.
Because at the end of the day for live ramp strong results and outcomes come from one source.
And that's innovation.
You will hear from David Pan, our new Chief product officer in a moment, but I am very encouraged by the initial progress he and the team have made.
We're bringing in world class senior level talent.
Our operating strength affords us the opportunity to drive continued margin improvement, while also reinvesting for future growth.
So with that.
Thank you again for joining us today and as special Thanks to work steps and all customers partners and all live ramp or so across the globe.
For their ongoing hard work and support.
Fueled by them.
We delivered another great quarter in Q2.
We look forward to updating you on our continued progress in the quarters ahead.
With that I'll now turn the call over to David Pan.
Thanks, Scott, it's great to be on the call I'm, David Tan, the new Chief product Officer Library.
I joined at the beginning of September after spending over 11 years working with Microsoft in the Microsoft advertising business.
Over those 11 plus years I had the opportunity to work with an incredible team to grow the Microsoft advertising into a highly profitable global business.
And Microsoft I was deeply involved in shaping our global product offerings I had direct responsibility as a vice president of the global business advertising team over all of our marketing function business and product strategy, the marketplace product management technology partnerships, and our advertiser analytics across our search native and disc.
Planed businesses.
My experience is that Microsoft Yahoo, and companies like net IQ Netscape and giving me the opportunity to build large businesses at global scale by listening carefully to our clients to deliver solutions to real problems, they have or will have in the future.
I do like ramp for the same reason many people do first the library umpteen second life ramps unique position and third the market opportunity I've known members of the library team for over a decade and as they got to know the exact T. My new leadership team I realized I could learn from this team.
I could teach this team and I could see myself working with them to scale live ramps.
I also felt library was uniquely positioned in the market to help clients succeed in an unbiased manner with a product portfolio that was being designed and built for where the industry needs to go give me brands more control over how their data is used to grow their business to reach customers in a trusted and permission way.
That built deeper brand affinity and to create networks and collaboration within companies across companies and across countries.
What I've seen since joining like ramp has only made me more excited about the opportunities for our clients partners and employees Library has the people in core assets to have a bigger impact across industries.
We have seen with connected television and with Safe Haven is a clear demonstration of the unique position library with us in to help enterprises partner and collaborate across companies as we focus more on our people processes and products. It will accelerate the speed of collaboration within the company.
Our clients and partners. This will also increase the speed of innovation and time to market at a global scale.
The next few quarters, we are going to work to integrate our product offerings make them easier to use and leverage the data assets in a marketplace and put a focus on bringing more solutions to our global customers I'm excited about the future for our clients partners and employees with that thanks for the opportunity to introduce myself I'll now turn the.
<unk> over to Juan.
Thanks, David and welcome to live ramp in the short time that you've been here your leadership and partnership have been outstanding and it's great having you on the team.
As I sat down to prepare my script I thought about the messages you'd hear from me.
If you listened to my remarks, hopefully a few themes will ring loudly.
Our ability and resilience.
Performance, we again and have consistently delivered.
Relevance and finally competitive advantage.
With that in mind today I'll focus my remarks on three areas first share a few highlights from Q2 next discuss our global progress with Safe Haven, and finally provide updated and raised guidance for Q3 and FY 'twenty two.
Q2 highlights please turn to slide four.
First our growth continues to accelerate revenue of $127 million was up 22% international up 17 subscription.
<unk> revenue up 23%, while our our increased 15.
Q2 was a near record for net new a R. R. R. Net new customer count increased by 15, this quarter and our brand ACB was up a stunning 23% year over year.
Our $1 million customer count is now 80 up 10 sequentially and up 29% year over year.
Net retention was one oh wait and platform net retention one O nine.
C. R. P O was up 23% and finally marketplace was up 16% in line with our expectations.
As expected our results continued to be negatively impacted by the wholesale contraction as is outlined on slide 16.
We continue to expect this impact to be $30 million for the year and it was $8 million for the quarter if.
If you exclude this impact consider the following.
Total revenue increased 32% and international up thirty-three subscription revenue was up 35% and they are up 27.
And net retention would have been 118% and platform net retention 117.
In short, while we don't discount the impact of the wholesale contraction the numbers do speak for themselves.
Our momentum continues while there will always be ups and downs the strength of our bookings are unmistakable.
On a trailing 12 month basis overall gross bookings were up over 40% international up 110% Safe Haven bookings up more than 150% and T V bookings up approximately 80%.
Add it all up there is one word that comes to mind durability.
While our industry has gone through seismic change there is one constant we have delivered.
Life ramps importance has never been greater our growth foundations are strong.
Third our model has consistently shown its strength and ability to scale. Our Q2 results are no exception.
Most margin was a record 77% up 500 basis points.
For the sixth consecutive quarter, we were profitable in fact, our operating margin was 14% and adjusted EBITDA margin 15%.
What's even more interesting is to look at our results on a trailing 12 month basis here are some stats.
Revenue increased by 18% and $73 million on an absolute dollar basis.
Our operating income was $38 million up from a loss of 19 million for the comparable 12 month period, an increase of $57 million.
Added all up on a $73 million increase in revenue $57 million fell through to the bottom line a fall through rate of 78%.
Again, we performed.
And finally, we are supporting our shareholders in Q2, we repurchased $15 million of stock fiscal year to date, we have repurchased $44 million.
Just like a year ago, we took advantage of the market opportunity in front end loaded our repurchase activity.
In summary, accelerating growth sustained topline performance through industry change massive margin improvement share repurchases and increased relevance.
The importance of life ramp and strength of our performance unmistakable.
Now a quick update on our safe Haven global expansion.
Our opportunity just keeps getting bigger.
And quite frankly, our biggest challenge is keeping up with demand.
The market is embracing our platform.
Please turn to slide 20.
So why are we setting the pace in collaboration when it seems there are countless clean room technologies and market.
The answer is pretty simple our safe Haven platform brings together things others cant or they are simply just learning about.
Leadership in global privacy and privacy enhancing technologies.
The sophistication and importance of our data fleets acquisition cannot be overstated.
Identity Federation and activation our approach and the scale of our integrations are a hallmark of life for them.
A T S. We're helping global brands future proof their approach to identity and allowing them to do this consistently across all geographies.
Neutrality, we don't buy or sell media, we are cross cloud and enable our safe haven clients to collaborate with anyone regardless of their data infrastructure.
And finally, we are setting the pace with permission based collaboration technology.
Remember, we created the category and have been building and testing our safe Haven platform for more than five years.
Taken together, our new category unique capabilities and a platform the world needs.
Its relevance.
And the numbers back it up this quarter, we hit our first $10 million bookings quarter and over half of our deals came from outside of the U S. This is truly a global offering.
We now have over 100 tenants or global end points, and we expect that number to be over 150 by the end of Q3.
In summary, Safe Haven has created a category is a powerful global solution and one where we are playing with competitive advantage and we're only getting started.
Now onto guidance.
The headline we're raising our outlook. Please turn to slides 13, and 14 for Q3, we expect revenue of approximately $139 million an increase of 16%.
And non-GAAP operating income of roughly $10 million.
For the full year, we are increasing our guidance on both the top and the bottom line. We now expect revenue of approximately $525 million, a roughly 19% growth and non-GAAP operating income of approximately $40 million.
A few other call outs for Q3 and the full year.
For Q3, we expect subscription net retention to be roughly flat to Q2 give or take.
As we mentioned last quarter wholesale contraction is negatively impacting this metric by approximately 10 points.
And we expect our gross margin to be roughly 75%.
For the full year, we expect revenue to increase approximately 19% to roughly $525 million.
Absent the 30 million dollar impact from wholesale contraction, we expect total revenue to increase by more than 25% and subscription revenue to increase roughly 30%.
Gross margin to be approximately 75%, we anticipate added investment in customer experience services, and security, which will bring margin down a bit from our Q2 performance.
We continue to expect to be profitable in every quarter.
Although we anticipate higher spending in the second half as we open and expand new regions stemming from our global Safe Haven and Ats rollout. In addition, we expect TNT to normalize as we move into the second half.
And lastly, we expect to be cash flow positive for the year.
Before concluding I'd like to make an announcement about which we are very proud.
As you know Lauren Dillard has been leading communications and Investor relations here at life ramp well she's been promoted.
She is now taking on a much larger set of responsibilities inside of our finance organization and will have responsibility for F. P&A and operations Finance in addition to Investor Relations.
Please join me in congratulating Lauren.
Now, let me conclude with a few final thoughts.
First it's great being part of a great company and working with a great team that is doing big things.
We have the right products at the right time, our technology is core to our customers' data management transformation and digital strategies.
Our ability resilience and global relevance our numbers speak for themselves. Our foundations are strong and momentum continues to build and finally rest assured we are only just getting started.
On behalf of all my life ramp colleagues, thanks to our customers and to you our shareowners.
Operator, we will now open the call to questions.
Ladies and gentlemen.
If you'd like to ask a question. Please press star and then the number one on your telephone keypad.
Your first question comes from the line of Shyam Patel with F E.
Yeah.
Hey, guys, great quarter, especially in such a choppy macro and congrats Lauren.
Thanks, Sean.
Hate it.
We're really kind of had a couple of.
Yeah, It sounds exciting.
I had a couple of questions.
If we look at.
Or are you know for several quarters in a row, it's been very strong you know 25% growth in fiscal <unk>, 27% growth.
This past quarter.
How do you guys just thinking about when revenue growth should more closely mirror.
Growth and.
And then second question.
In terms of the supply chain issues that we're all seeing or that we expect to see in the fourth quarter.
Some advertising companies have called out global supply chain disruptions are impacting our advertising budget potentially in the fourth quarter.
Just wondering if those issues do materialize, how would that show up for for you guys. If at all thank you.
Let me go ahead and take the first part and then maybe Scott can comment on the supply chain I think would pretty much argue you're already seeing it.
And I'm using.
Some numbers, excluding the impact of wholesale.
A R. R. As you mentioned of 27% in Q2 revenue of subscription revenue up 35.
For the full year, we talked about subscription revenue again, excluding the impact of wholesale being up 30%, which we're obviously very proud of.
Similarly, unexpected <unk> to be up about 30% so by and large it's it's really tracking already.
Yeah and show them on your second question.
You'll never hear us claimed to be recession proof, but you know I'll just point to I think the numbers, we shared earlier that 83% of our revenue last quarter was subscription driven.
In recessions as a result, we don't necessarily feel the impact that others, who have variable media busy.
Businesses Wood.
And in fact, we've often benefited.
During any kind of slowdown it's even more important for advertisers to focus their tactics on things that have proven ROI and address ability.
If we were to see anything and we're not seeing it in your numbers right now you'd see it in two places one would be the usage component of our subscriptions.
We looked at that number actually even earlier, that's really remained constant over the last few months and indeed last few weeks and then the second place where you potentially see it would be in our marketplace business, which tends to be more variable.
And as we have in the past this was where we'd probably injected a little bit more conservatism into our numbers, we think appropriately so.
Given given.
Given the market.
The fact that we don't have as good a line of sight into that variable component as we do into subscription.
Great. Thank you guys.
Thank you.
Your next question comes from the line of Robert.
With Wells Fargo Securities.
Hi, good afternoon, thanks for taking the questions.
And I'll say congratulations Laurence.
I think last quarter, you gave us a growth rate on safe Haven bookings just wondering if you could maybe give us an update on that with a $10 million milestone.
And then you know it sounds like you're continuing to see a lot of success in core retail and CPG, but you've had some nice wins outside of those like GSK in the past is just wondering if you could talk to.
Maybe what categories fit most naturally with Safeway, even outside of our core retail and CPG and where the value proposition outside of those two it's sort of resonating most strongly today. Thank you.
I'll go ahead and jump in.
And talk a little bit about I guess just.
Our overall reception for safe Haven across multiple different industries, obviously as I mentioned.
The formal part of my script, our bookings remained very very strong up well over 100% year over year and that really continues.
The other thing that I would tell you I just I just got back from literally spending the last three weeks in Europe.
And during that time I met with companies in France, I met with companies in Spain and in Belgium.
The Ceos of the large telcos you know not every but virtually every large publisher and the interesting thing is everybody is really excited about the potential of what safe Haven is bringing to the table and in particular the partnership that we've struck with car for.
We're seeing that kind of interest really now across industries, we're seeing it in financial services, we're seeing it in health care, we're seeing it in retail and other parts of the industry too. So we think the you know the.
Momentum Bottomline is in incredibly strong one other interesting piece Savannah.
Anecdote.
We were talking with particular publisher.
Belgium about safe Haven, and also a T S and integrating and out of that you know not only came a commitment for an integration, but also came pipeline because they becoming quite became incredibly interested in actually adopting this platform further set for yourselves.
And then finally I just wanted to reemphasize.
That we are playing with competitive advantage.
I won't go through the same point that I did in the script, but we bring to the table things that others cannot and that's why we're winning.
We have a lot of work to do we have a lot of opportunity to capture its Greg having David on the team and we look forward to continuing to report our progress in the quarters ahead.
Great. Thank you.
Your next question comes from the line of Dan Salmon with BMO.
Oh, great good afternoon, everyone two.
Two questions.
Supers.
Just curious about your expectations for new client growth now that mobility is increasing again and.
Presumably you can get out and start to meet new prospective customers in person more that was the <unk>.
First thing.
And then second IPG had some comments on their call about a new identity solution that we're rolling out for more can also business.
Could you just remind us where for just the state of your relationship with IPG and possibly remind us what proportion of your revenue comes from the licensing arrangement or a bullet talk with axiom, specifically, yeah, Dan I'll jump in on your first question around the client counts.
You know we.
You had added a net of 15 last quarter.
Realistically I would've liked that to be a little bit higher given.
Given the traction we're getting in the marketplace right now.
Right.
I would say kind of sitting above that is I am really really ecstatic.
With the quality and size of the clients that we've been winning.
And so in my prepared remarks, I talked about the increase in HCV. We are winning if you looked at the list that we won last quarter you would recognize every single one of the brands.
And they're doing more sophisticated things with us safe Haven and television.
We even one I was looking at the list. This morning, one of the largest automotive manufacturer manufacturers in Italy, So it really.
I think starts to embody two things that we've been talking about the sophistication of the world products like Safe Haven and also the position we're in internationally given.
Our unique capabilities and save have you been in Ats to really get the flywheel going overseas.
And then Dan Let me just comment on your last question the size of the licensing portion is about $20 million.
Yeah.
Yeah.
Okay.
And then just maybe sort of any any broader comments on sort of the evolution of your relationship with that did you weren't.
Look we have a great relationship we work with them across many many clients.
And we would expect that relationship to continue for an awfully long time, So I would say our overall relationship is very solid obviously any sunsetting of that licensing agreement Dan is a ways off so that's nothing in the short term but.
But I would also tell you that any potential loss in revenue.
We're more than confident we can offset with upside.
Yeah, Dan it's so interesting.
I feel like I've answered the same question and you can kind of filling the blank.
<unk> been asked about because so many companies are talking about their unique approach to an identity solution.
The one common denominator across all of those companies, though is we're working with them and in fact, Loren and I ran the numbers last week. There are over 400 different identity nodes to which were connected right now.
And we don't look at any of them as competition, rather we view our role in the industry as being the Rosetta stone that ties all those things together you know the.
A real bonus for us is when ever anyone is talking about things like identity or regulation or authentication or clean rooms.
They're actually doing our marketing for us.
Because we're so strong in those areas and our neutrality allows us to park alongside so many other partners and make what they're doing better.
That's great. Thank you both.
Your next question comes from the line of it stands Latzke with Morgan Stanley.
Hi, This is Alex on.
For Stan.
Great jumping that that number of customers that are spending over a million an IRR up 80% from 70 in the last two quarters, how should we think about kind of the mix of new logos coming in at larger sizes and kind of existing customers just crossing crossing that threshold with upsell or cross sell any factors to call out driving to pick up.
We will increase.
Yeah.
It's Scott here again, what I would tell you again it is yeah, we'd like to win.
See our number of new client adds.
At an even higher level, but if you look at the client wins that we've had over the last six months to a year and I've talked about this in my prepared remarks, it's been amazing how quickly they've embraced even more sophisticated products and so we can bring them in and you know maybe they cut there.
Teeth on something like activation on major sites, but then very quickly they're embracing.
Safe Haven, or TV and as they layer in more and more of those products there'd be caught we increase our share of wallet.
So that's the Upsells.
Up sell is really driven our growth over the last six months again, though our long term I'd like to see an even greater number of new customers added to the franchise.
And one thing that I would add to what Scott said you should also not think of safe Haven as D and product there is a whole slew of upsell opportunities once the safe Haven platform is in place and as we look at our product roadmap, we're adding more and more capabilities really every quarter.
Great that's super helpful and just I.
As a follow up it looks like the marketplace revenue growth slowed in the quarter.
Curious if IV if they have any impact here or did anything specific to flag for for the slowdown.
You know a little bit of slowing but I, just I guess I would remind everybody that Q1, we had in credit.
We had a pretty easy comp and so we had obviously a huge quarter in Q1.
Overall, our guidance has remained unchanged for marketplace.
And interestingly I'd point to.
Data marketplace in.
Separately.
It was up 27% in the quarter and we're expecting it to be up close to 30% for the year. So.
Overall this performance remains very strong and Elissa. This wasn't your exact question, but let me just riff on what Warren said and really.
Respond to to your point on idea very and you know it's the same.
Same thing is true on Apple iOS 15, and.
Google Cookie Deprecation, you know theres been a lot of news about different things happening in the industry.
You know other than the sunsetting of the wholesale revenue that we talked about last year, we haven't seen any material impact and don't.
Anticipate any material impact from those.
Those kinds of changes.
Our coverage, our our capabilities really spanned multiple touch points. It's programmatic. It's mobile it's in App. It's C T V's social media call centers.
And so within that mix, sometimes we see who the winners and losers are but the mega trend is what we point to in that is that companies want to utilize their data at the places that matter and so to the extent that some are available in others.
Or not it just shifts the money into things that are available we see it and we benefit from it.
Great. Thank you so much.
Thank you.
Your next question comes from the line of Kirk <unk> with Evercore ISI.
Thanks, very much congrats on the quarter and I'll add my congrats to Laurel on her promotion as well.
I guess for you Scott you talked in your comments just about the pipeline you're seeing with your partners I was wondering how confident you are in that meeting, it's sometimes tough to get visibility and when you're working with a partner how do you feel about sort of the quality of the pipeline you are saying you know what the partners that you're working with at this point in time, whether it's that size.
Or DCP et cetera, and then Warren just one for you obviously net retention rate of 118% when you back out the wholesale is really impressive.
Turning to border on sort of best in class for SaaS companies is that sustainable I mean, how should we think about that as things sort of normalize as we go into calendar 'twenty two and in fiscal 'twenty three.
Kirk if I look at the last couple of years and indeed the success. We've had this year alone. So much of that has been around major brands.
Companies that are.
Any of us would recognize them probably in many cases are.
Manufacture products with each of our Skus so direct brands.
But I think you're right in highlighting we see a real opportunity going forward.
Through some of these other channel partners in three areas in particular.
First would be with systems integrators or consultants they have been really key in many of the major safe Haven wins that we've had those have been with recognized brands. Some of the world's biggest companies and so oftentimes using size and consultants to help shape the decision.
Warren and his team have just done a fabulous job at educating those kinds of partners, who we are such that they're recommending us as part of the build.
Second major opportunity for us, which you hit on is cloud.
And James Ara, who ran our sales force and did it just.
Excellently for nearly a decade is leading the charge on that.
And we had really nice win that came through G. C. P last quarter I think that is just a taste of what could come and.
And then a third area for us that we probably don't talk about as much that we have a guy named grant res one of the founders of Blue collar, leading the charge on is in emerging markets and he's focusing on things like contact centers health care. Other use cases, and you know those are.
Boy, a little bit further afield for us, but when you take all three together this should be a driver of long term sustainable growth and to your direct question do we have a lot of visibility in the pipeline.
Well through the conversations yes, but I would also tell you that this is all upside for us so.
So it's a really nice place for us to be a this is.
This is kind of the first couple of years are really the last 24 months, we've really started to put our muscle behind this.
And let me make a few comments on your retention question.
Like you are very pleased with the performance at 118.
And really when you go through the drivers whether it was up so we had a very strong quarter with variable, which added to our overall net retention rate.
Benefited from lower contraction. So all the drivers were really working in our favor.
Our guide for Q3 is consistent with our Q2 performance so call. It again ex wholesale in the in the neighborhood of 118 could be give or take one site one side or the other.
Obviously, we won't guide beyond that but I think it's important to at least in my mind, just think about the drivers.
And the drivers are the relevance of our products and the innovation that we're bringing to the table and the market reception that were receiving.
And right now the momentum is in our favor so.
I guarantee there'll be ups and downs.
In future quarters, but a lot of things are working in our favor right now.
Super Thank you. Thank you.
Your next question comes from the line of Jason <unk> with Craig Hallum.
Great. Thanks, two for me Scott.
Scott I wanted to piggyback off of an earlier comment you made just on cookie deprecation and curious if you've changed if you've seen any change in user behavior on ats as far as usage rates or our pipeline or anything like that in the handful of months since Google.
Unknowns that delay and then second obviously strong quarter in terms of IRR and in bookings, especially from existing customers. Just curious can you call out specific product areas that are that you saw is kind of the main drivers in the quarter I know we've kind of.
<unk> talked a lot about safe havens, so far just wondering anything else in terms of of CTV or other particular products there. Thanks.
Sure I'll start and on Ats I would tell you I'm really pleased with where we're at the market has really embraced us.
We feel like we've reached critical scale Wanna say by last measure we have 90% reach too.
U S audiences and we are quite frankly, the only solution in many international markets. We have 75% of the Comscore 50 largest publisher signed up 500, plus publishers over overall, an amazing statistic 70 per.
A scent of consumer time spent online.
Sit on top of live ramps solutions, either ats or a direct ramp I D. Integration. So we truly have reached a point of of critical scale.
What's really interesting, though is that the conversation has changed and last week I presented at <unk>.
Digital conference in New York, and I saw there's so many times over that.
A year ago, the conversation was around.
Google or.
Apple and what they're doing and the impact of regulation and readiness.
Now given the number of case studies and the yield improvements that publishers have seen through authentication and the ROI improvements that advertisers have seen through authentication. The conversation has shifted in a really meaningful exciting way.
People are talking about this now because they see it as an enhancement and improvement over what they've been doing for the last 20 plus years.
It's just the case that authentication works better than cookies, and so that is now starting to power the conversation and the adoption, which is I think a much healthier place for the ecosystem to be and bodes well for us as well also.
And then let me talk.
Talk a little bit about bookings.
A couple of interesting stats that go into one level of detail on our various products and I'm going to use look at trailing 12 month trailing six month metrics.
First of all just some added color on Safe Haven, I mentioned on a trailing 12 month basis up over 150% on a trailing six month basis up over 200%.
T V trailing 12 month up over 75% and on a trailing six month basis, well over 50% growth. So both safe Haven in television continue to deliver.
And when you talk about TD are talking about TV, that's that's both linear and.
CTV correct Youre not breaking the two Oh, no its really CTV.
Got it.
Thank you.
Your next question comes from the line of Tim Nolan with Macquarie.
Hi, Thanks, a good timing because my question actually is on CTV.
Spoken in the past about what data plus math has been doing.
You had announced partnership with Comscore, a little while back and I just saw something recently about a partnership with a with innovate. So I wonder if you could just talk a little bit more about your work in CTV and and if that's really tied to to measurement, which is a really hot topic in the C. T. V's here, just the TV space or in the media space I should say broadly these days and in particular.
The clean rooms, I think are becoming more important than playing if you could just give us some color on that would be great. Thanks, well, Tim I think you hit on something we're really excited about and you know overall CTV continues to be a real bright spot for live ramp I think were up about 70% in CTV year over year.
Q2 and.
In Q2, we also announced an enhanced TV platform.
That just makes it easier for our clients to do integrated planning activation and TV measurement.
We have some really cool case studies that it's probably premature for me to share.
But some stuff I'm really excited to talk about that show the impact of TV viewership.
On.
Buying in visitation activity and so a lot of good news there and to your point.
The whole conversation about television is really now one about measurement.
That for too long TV was the one thing that we couldn't measure other than reach and now the same sophistication that advertisers are utilizing across the rest of their marketing and plan theyre starting to apply to television and to your final point, we're starting to see that.
Manifest itself in all kinds of interesting safe Haven opportunities because it's natural if your focus is on measurement.
The next thing is what data do you want to bring to bear to create more personalized advertising.
And we think Theres a lot of interesting collaborations that are possible between advertisers and major TV publishers and we are.
Really in an interesting spot.
To be the leader in that.
I don't think that I would add.
Just one line. This is a global opportunity, it's not simply a domestic one.
Sure.
Yeah.
Perfect. Thanks.
Your next question.
Line of Jack Andrews, with Needham and company.
Well good afternoon, and congratulations on the results.
Just given the strength you're seeing in demand around safe Haven I was just wondering how.
How much of an opportunity do you think there might be to develop some sort of self serve capability around this or is there demand to effectively.
<unk> this among a much broader set of customers.
But we're going to turn this one over to David pen.
I think it's great to be on the call. It the team here Jack I think you've hit on a great point, we with the success, we've seen with Safe Haven, and we think that building.
Building in self service automation bit of machine learning and AI, we can actually propelled the deployment of safe Haven, not just in the retail space, but across multiple verticals. So we're super excited about the opportunity that opens us up to the simplification of that gives really it takes a lot of that.
Friction out of the business that our clients are seeing today.
No I appreciate the color, thanks, and maybe David if I could just follow up with another question for you just could you speak to maybe philosophically how do you view.
Sure the build versus buy tradeoff in terms of organic product development versus maybe opportunities to accelerate the product roadmap through through tuck in M&A.
Yeah, Great. Great question I think first you have to say we've done the team that we have.
It is amazing I am more excited today two months into the job than I was when I walked in the door, it's an amazing team.
And what I'm Super excited about also is just the traction we're seeing across not just safe Haven, but all of the product portfolios and the ability to really integrate them, even more so to bring kind of capacity.
And each of the market into our to our teams.
I think you know we will look strategically at places, where we think that an acquisition makes most sense to hedge.
Solve customer problems and we don't think we can do in a timely manner, but that's you know will we will kind of look at that at a strategic way.
There is I think there may be opportunities, but it's more on kind of has a need basis, yeah, Jack judges by our track record over the last 10 years.
In any given year, we probably kicked the tires on 100 different things.
And then in any given year, we'd probably do one at most two small tuck in acquisitions, we are pretty strategic.
We tend to be very collaborative with potential tuck ins. They tend to have a long long runway and by the time, we get certainty.
It is a really smart bet on our part because we know exactly the personality the capabilities and the fit of those businesses. So all this to say is don't expect us to break with our character because we're not going to.
Understood. Thanks for taking my questions.
You have a follow up question from the line of Robert Cool bathroom with Wells Fargo Securities.
Hey, Thanks for fitting me in saying really appreciate it one to ask a quick follow up on iOS.
Our understanding is that there may be a carve out there for things like uploaded marketing lists subletting custom audiences and things like that.
So just wondering if you're if you're seeing any of your clients lean into those types of strategies given that there you know amazing some visibility or targeting challenges using some of the Facebook or the other platforms other products.
And just down just given the shifting practically landscape have you seen your customers really sort of wanted double down and that's more in our gathering is fully permission lists of their customers and things of that nature.
Inside of that would be great. Thank you.
Robert I'm going to talk to our team and circle back to you.
With with some color, but I would tell you that my number one takeaway on this is that council, we are giving to virtually every publisher every app manufacturer and every client is there is no substitute for direct authentication.
Do not allow yourself to be disintermediation do not allow yourself to be you know part of a carve out that could change or you know tried to trick the technology no be transparent with your consumers.
Blaine why you want to collect their data.
And what the value exchange for them will be and if you do that you actually generate a better customer experience now that philosophy is being taken to heart by our advertisers and publishers and that is spurring a lot of the demand that we're seeing for things like safe Haven because.
Our clients and partners what Theyre recognizing is it's really hard for them to go it alone.
They need to collaborate with their partners, but they need to do it.
Privacy compliant secure way.
And so the fact that we're neutral that we're agnostic in that we built this kind of clean room technology, and we've talked about it for well over a decade positions us really well in a world where our first party data is the most valuable data.
Great. Thank you.
And there are no further questions at this time I'd like to turn the call back over to Warren for any closing remarks great.
Great well, thank you operator, and thanks, everybody for joining US let me just conclude with a few final thoughts kind of coming back to the more formal part of our script today.
It is awesome being part of a great company and looking around the table its really great to work with people like Loren and David Pan to go do great things.
We have the right products at the right time.
Our technology is core to our customers' data management transformation and digital strategies.
Durability resilience and global relevance.
And lastly, let me add to that the word competitive advantage. We are playing with competitive advantage. Our foundations are strong our momentum continues to build and finally.
We're just getting started so on behalf of Scott and me and the rest of the team here.
Thanks again for joining us.
Okay.
Yeah.
Ladies and gentlemen, this concludes today's conference call. We thank you for your participation you may now disconnect.
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