Q1 2022 Outbrain Inc Earnings Call
[music].
Greetings and welcome to our grain Inc. Fourth quarter 2022 earnings Conference call.
At this time all participants are in a listen only mode.
A question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
As a reminder, the conference is being recorded.
I would now like to turn the conference over to your host Jason caveat.
Thank you and over to you.
Good morning, and thank you for joining us on today's conference call to discuss operating first quarter 2022 result.
Joining me on the call today, we have operated co founder and co CEO your own Galore co CEO , David Kaufman CFO at least got volatile.
During this conference call management will make forward looking statements based on current expectations and assumptions. These statements are subject to risks and uncertainties that may cause actual results to differ materially from our forward looking statements.
These risk factors are discussed in detail in our Form 10-K filed for the year ended December 31, 2021, and the subsequent reports filed with Securities and Exchange Commission.
Forward looking statements speak only as of the calls original date, and we do not undertake any duty to update any such statements.
Today's presentation also includes references to non-GAAP financial measures you should refer to the information contained in the company's first quarter earnings release for definitional information and reconciliations of non-GAAP measures to the comparable GAAP financial measures. Our earnings release can be found on our IR website investor that outbreak dot com under news and events.
With that let me turn the call over to David.
Thanks, Jason and thank you all for joining us.
In Q1, we delivered against the guidance we provided at the same time, we are seeing like many companies in our industry softness in demand, especially in Europe , which accounts for around 40% of our business and to a lesser extent in the west with some of our advertisers are impacted by supply chain and <unk>.
Croatia is as a result, we are lowering our guidance for the year.
We continue to be very bullish on our positioning in the market opportunity.
We are continuing to expand that wouldn't be just supply network and gain market share and are thrilled to announce the development of a new initiative to greatly increase strategic value to media owners, while generating an entirely new SaaS like revenue stream for outbreak, it's called Keystone and Iran will be elaborating on this shortly.
Let's turn to Q1 results lapping.
Lapping a very strong Q1 last year, our <unk> gross profit was up 5% or 8% on a constant currency basis to $63 5 million in line with our guidance and our adjusted EBITDA of $11 6 million exceeded the guidance we provided.
On the media on the side Q1 was an exceptionally exciting quarter for us at the end of March one of Europe's largest publishers Accenture Zynga announced the results of the RFP for their recommendations partner across the flagship property built in Belk.
Several other properties, reaching hundreds of millions of unique users.
They chose to return to outbreak after several years of triangle competitive solution, signing a multiyear multi hundred million dollar deal with us.
Continuing along this trend.
Digital one of Japan's largest digital publishers shows the outbreak to exclusively power Commendation on some major new site and sports site we.
We had been working with some K on several of the properties for several years and we were honored to take on the major show of the business again, replacing a competitive solution.
On top of these announcements, we renewed and expanded several of our top 20 partners in the last two quarters and added several hundred new media properties.
This momentum of supply when it comes from our relentless focus on delivering results for our media partners and partnerships that they can count on.
At the end of March we also started benefiting from the shift in the Microsoft Open exchange marketplace.
With Microsoft moving other partners that up to this point had exclusive and preferential access inventory to become real time bidding.
We believe this shift will continue to benefit us relative to other players in view of our multi year experience in Microsoft Open exchange environment, and the strategic nature of our partnership with Microsoft.
On the product front, we continued to deploy smart logical mobile and now also rolling it out to desktop and continued the wins, although a header bidding integrations for in article placements across Tanzania partners, adding even more supply to the expansion of existing partnerships.
Okay.
While these exciting wins tells a story of great momentum this growth in new supply comes combined with slower demand in some blocking of all and on certain war related pages in Europe .
Let me move to the demand side.
Due to a volatile macro environment.
<unk> challenges in the war in Ukraine, we are experiencing headwinds, especially in Europe .
We saw demand softness across the board, but particularly from brand advertisers in Europe , resulting in lower RPM.
We anticipate these external factors to continue to have a negative impact on advertising budgets.
Shifting our focus away from segments, such as automotive and CPG two segments less impacted or that are recovering such as health financial and entertainment.
Leveraging the nature of our diversified advertiser big.
I wanted to take a moment to focus on the key aspect of our business.
Our brain is a two sided marketplace and like all two sided marketplaces for example, Uber Google Airbnb.
Paramount to constantly balance supply and demand.
In our business with supply usually ends up in step changes when we add big new partner and then overtime the advertisers to add incremental budget.
It's a dynamic we know very well from a decade plus of running our marketplace and it tends to behave this way in the past sometimes faster sometimes slower.
Our growth on the supply side the stomach.
The demand side, however, especially in the U S. B grew a lot of supply is being impacted by the macro environment, causing the demand to not grow in regulus sync with the size of a growing supply.
This dynamic is impacting our yield in the short term as the demand is being stretched over these expanded supply, but do you think.
Turning to a strong growth driver when more demand will be unlocked. For example, recently we observed similar dynamics that contributed to growth in the second half of 'twenty post COVID-19.
Turning to the acquisition of be doing intelligent <unk>.
We closed the acquisition of <unk> in January and in Q1, we were mainly focused on integration and started introducing the contextual video solution to outbreaks publishes.
Since the acquisition closed we brought the <unk> solution to more than 15 I'll bring publishers.
I'm extremely proud of the team's working faces tough challenges and some of the behind canoeing team is based in Keith I'm happy to update it.
Whole team is safe and engaged mostly working from remote locations and very appreciative of the outpouring of support from their colleagues.
We wish our colleagues aluminum conclusion to the fight Inc.
I would like to refer to the revised guidance at least we'll be providing.
We are taking a cautious approach in view of the uncertainty in the market and the negative short term trends, we are experiencing which are impacting run rate driving our models.
Therefore, we are reducing all extra guidance by around 15%.
These are volatile times, but we view them as temporary phenomena and Netflix.
Tactically navigated through such turmoil before.
We're investing in our key growth drivers and winning market share.
We believe that our algorithmic improvement the growth of supply one in Q1, and the rollout of smart logic will be key drivers of future growth. We believe in the long term growth of the category in general, especially in the more privacy conscious and regulated environment that faith with native and Kantar.
External advertising solution such as ours.
We remain committed to profitable growth.
Significant investments in people for example, we grew our product and engineering team by more than 25% year over year.
We've taken some efficiency measures once we identified the weakness towards the end of Q1, and we'll continue to monitor the progress of the year to decide on how to best balance high confidence investment with profitability.
As you will see NIM Ron's comments, we also strategically broadening our solutions for me Joe on this and are very excited about the new platform and business model, we've been investing in.
We believe this investment combined with smart management of our strong balance sheet will serve our shareholders as well.
Iran.
Thank you David.
In the founders' letter for our IPO, we shared our approach towards innovation.
To quote where risk takers when it comes to innovation, we'd like to manage our business conservatively and humbly to ensure that the operating business is sustainable for many years to come.
But when it comes to product and technology, we are happy to be the risk taking innovators.
We put we believe that in a dynamic industry such as ours, it's impossible to sustain our leadership position without being bolt when it comes to innovation.
We now clearly see a path for fundamental innovation on some of the core aspects of our industry.
During the past 20, or so years the primary business model for online publishing has been advertising.
As such our brands core products have been intensely focused on AD monetization and to date, 100% of our revenue is coming from advertising.
Over the past couple of years, we've seen a growing trend amongst media owners of revenue diversification with a growing focus on subscription or reader revenue E.
Commerce event newsletters anymore.
We believe that this trend of diversification from pure AD revenue will accelerate in coming years.
This investment media owners are making to diversify revenue streams offers us incredible opportunities to help them realize the future through technology.
To deepen our partnership by becoming their total business optimization platform.
So today, we're excited to be our vision for the future by adding a new pillar to our business.
No.
Keystone is a platform for maximizing media owners overall business outcome, while optimizing the user journey and experience.
Keystone introduces a new business model for outbreak and will be delivered as a software as a service solution.
Yeah.
For media owner trying to diversify revenue one of the biggest challenges is to balance the competing business kpis as well as the user's experience with editorial content.
Today. This incredibly complicated equation is managed mostly naturally.
Little to no personalization for optimization.
Multiple teams the ads team subscriptions team toiled e-commerce events et cetera are all competing for that same scarce user attention. There is no business engine supporting them with the personalization and optimization of the user journey.
We believe publishers and media owners will be excited by Keystone for two main reasons.
First we expect it will enable media owners to expand their revenue opportunities and diversification across kpis by utilizing best in class technology.
Second it better aligns the media owner with their users.
Envision Keystone as being the platform for lighting all of the media owners, because it's desperation with those the beach user.
We expect that those using Keystone will see a very noticeable flight to quality and a better user experience.
Yeah.
Keystone Leverages, a decade plus of experience we have in building some of the world's best technology understanding the interest of each user and for optimizing for business outcomes.
It Leverages the tremendous amount of first party data that we have to power the business logic.
We've been working on Keystone platform for about a year now and announcing today as part of our planned launch.
Keystone technologies live with a major U S news publisher, which is not a current outbreak lead partner.
So the potential for Keystone to expand our scope and Tam via new partnerships.
With the launch partner, we are on pace to generate in the ballpark of a couple of million dollars in revenue this year.
We expect to go live with a couple more launch partners in coming months ahead of a more formal product launch planned for Q3.
We're excited for Keystone for a few reasons first.
Keystone is expected to expand our Tam beyond advertising on the open web to be able to capture a portion of the fast growing e-commerce and subscription markets.
Second it is expected to deepen our media owner partnerships.
During the entirety of the publishers business outcomes is akin to the relationship with Salesforce has with sales team worth at Adobe and Oracle marketing teams.
A much deeper partnership.
Third it is expected to provide us with the SaaS revenue stream.
We loved the AD business that has enabled us to put more than $4 billion in partners pockets, but we're also excited to complement that with a growing SaaS business that will offer us overtime, a higher margin and better revenue predictability.
<unk> pioneered the space of publisher recommendation engines about 15 years ago, and let it to become a multibillion dollar space today.
Today, we're pioneering the future generation that will define the space in the next decade.
With that I'll hand, it over to Lisa.
Thanks Joanne.
Banco macro challenges.
That's what impacted the latter half of Q1, we met our gross profit guidance and exceeded our adjusted EBITDA guidance for the quarter.
In Q1 revenue grew 11% or $26 million year over year to 254 million.
On a constant currency basis revenue increased 14%.
Our growth in the period was driven primarily by the addition of new supply partners compared to Q1 'twenty one.
Consistent with the last several quarters. This has been a steady source of revenue growth.
Also contributing to new is the revenue from <unk>, which is being treated as a 100% new business finished reporting purpose, that's compared to 2021.
Now for gross profit in Q1, which is the revenue we keep after paying traffic acquisition cost or media partners, we've reported an increase of $3 million or 5% year over year to $53 5 million.
On a constant currency basis, gross profit increased $5 million or 8% year over year.
Gross profit grew somewhat lower than gross revenue, primarily due to revenue mix and lower performance on certain deals in the period.
Moving to operating expenses, we saw an increase of $15 million to $54 million in the first quarter.
Approximately $8 million of the increase was from higher personnel related costs, reflecting continued investment in our global team, where we added over 200 net since July of last year.
<unk> 16 from the <unk> acquisition in January .
And consistent with past June 'twenty one.
We have higher costs associated with being public and are seeing higher marketing G&A and facility expenses as activity impacted by Covid comes back to more normal operations.
Even with these increases operating expenses were lower than typical due to some offsets.
First we had $1 million of lower bad debt expense that is largely non recurring in the period.
In addition, we had lower compensation and lower marketing expenses versus plan.
As a result, adjusted EBITDA, our primary measure of profitability totaled $11 6 million in Q1.
On a constant currency basis, adjusted EBITDA was $13 2 million or one 6 million higher than reported.
Even with taking into consideration the impact of certain lower operating expenses I just noted.
Still exceeded our EBITDA guidance into one.
Moving to liquidity.
Cash flow, which we define as cash provided from operating activities less capex and cap software was a net.
Use of cash in the period of approximately $9 million.
The use of cash was due to lower profitability in Q1, as well as higher capital expenditures.
We ended the first quarter with $411 million of cash and cash equivalents on the balance sheet and $236 million of long term convertible debt.
We had announced last quarter that on February 28, our board authorized a $30 million share repurchase program.
We did not repurchase any shares in Q1 due to our limited buying window, but we plan to start executing buybacks as soon as possible.
Now turning to our outlook.
As you have heard from us today and more broadly in the market, it's been a fairly unpredictable start to the year.
Since we last spoke we have seen increasing softness in demand across our network that triggered on the heels of the war in Ukraine.
This comes together with increasing supply chain constraints and broader macroeconomic concerns all becoming truly.
Uncertain.
For clarity, we did not have any direct exposure of note in Russia or Ukraine.
However, what we have seen in response to this situation is first requirements for many advertisers to not have their ads appear on war news pages.
Second more broadly across our advertiser base, we're seeing budget deferrals and reductions in planned, particularly with brands and particularly in Europe .
These ongoing conditions produced uncertainty for the balance of the year.
Despite these headwinds we do believe that the long term fundamentals of our growth drivers remain sound and thus we will continue to invest in our product and technology plan, both short term and long term such as Keystone to continue to position us for growth.
So with that context, we provided the following guidance.
For the second quarter, we expect gross profit of $59 million to $62 million.
On a constant currency basis ex Tac gross profit would be 61% to $64 million.
For adjusted EBITDA, we expect $4 million to $6 million.
This outlook reflects our supply growth being offset by declines in yields given the factors we've discussed today.
For the full year 2002, our updated guidance is ex Tac gross profit of $270 million to $290 million.
And adjusted EBITDA of $50 million to $60 million.
Our adjusted EBITDA guidance implies $225 million of cash card, which is.
Significantly less than we originally budgeted based on savings plans, we initiated at the end of Q1.
As David shared we will continue to monitor market conditions to manage invest balance profitability and growth.
Last our guidance assumes that macro conditions do not deteriorate significantly from where they are today.
Now I will turn the call back over to the operator for Q&A.
Thank you.
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One moment, please while we poll for questions.
Yes.
The first question comes from the line of Andrew Boone with JMP Securities. Please go ahead.
Hi, guys. Thanks for taking my question.
Just going to the guide I want to understand shifts and make sure that we understand the dynamics of additional supply coming on and how we think about that impacting the overall guide clearly we saw take rates kind of come down in <unk> and I guess the question focuses on how do we see that start to bounce back to the levels that we saw last year.
And how do we think about just the pacing of the recovery there.
Okay, Hi, Andrew Lee Thanks for the question.
So so first I think it's important to understand some of the key assumptions in our guidance, we do have a wider range for the fiscal year.
To reflect the uncertainty of the environment.
And then the baseline assumptions as I said in my closing remarks, there that macro conditions don't deteriorate significantly from where we are.
And then from there we have.
Forecast builds which is typical for us that bill time to seasonal trends.
On monetization and spend pattern continued excellent execution on the planned growth lever. So many of the things David referred today supply expansion from new partner wins.
Continued expansion on RBI acquisition and of course, the test the tech driven improvement.
There is there is some margin pressure that youre seeing in the Q1 numbers and I think as you think about the year, it's important to remember that we do.
In any given quarter, we can be plus or minus a point on margin for sure.
But what we're seeing is the convergence of the slower demand, which puts pressure on the monetization of the platform together with what remains a competitive environment right. It has been and it continues to be but I think the convergence of those two is.
Causing us to see more pressure because we've been successful in driving supply into the platform.
Which is great.
But it seems that some of this weakness, but I think the important thing to remember is as we grow supply we have a very strong history of land and expand.
Across the recent years and we believe as some of this demand relief.
<unk> comes to fruition, we'll be able to deliver more trajectory on the recovery that we've seen we've seen the numbers and the actual do that before.
I'll do the first that we are driving lift in click through rates and general performance. It's just currently being diluted by the demand.
Yeah.
And then secondly, just on Keystone.
As we think about that rolling through the model.
Help us understood understood. That's a small contribution as we kind of relate to this year, but what other investments are necessary to get that going it feels like a different go to market motion that is there anything else to call out there. Thanks, so much.
The SER one so Keystone is.
And it's early days of a separate again, we've been working on this stuff for free.
For about a year there is a small dedicated business unit focused on.
Keystone for that year, but were also leveraging a bunch of our capabilities.
Kathy.
The core business empathy.
The publisher side of our product and technology and the advertiser side of it.
So we're not in that.
Breaking out numbers at this point again this is an early effort, especially in the <unk>.
On the market.
Make sure that we have one major U S.
Launch partner.
But again early days and so I think we'll share more as well.
So of course, there's buildup.
So for yourself.
And then I would just add just more broadly on just general main investment areas for us and remember we've grown our team, particularly in the R&D organization roughly 30% over the last.
Six six to nine months, and so where we see the investment in the core and the existing beyond this Keystone opportunity is in the core growth drivers of technology right. The optimization the products and the algorithms and the infrastructure to really support the increased header bidding and better technology advancements that we have.
And we've been making.
And then of course these investments are also supporting <unk>.
Video and the <unk> acquisition, and how we scale that over our platform over the coming quarters.
Thank you.
Thank you.
Next question comes from the line of <unk> with Arco jewelry with Evercore ISI. Please.
Please go ahead.
Okay. Thank you let me try two please.
The guidance Elyse, what is the embedded assumptions that you talked to the qualitatively, but how should we frame the impact of FX headwinds versus lower demand and the magnitude of it for full year Guide and then the second question your own on Keystone.
How are you pricing the product.
Whats the subscription price and then who else are you competing with on this product. Thanks a lot.
Okay. Thanks, Ross I'll take the first one on FX.
So our forecast for Q2 and the balance of the year assumes current rates, which are essentially April rates for us and you might recall for most currencies, we have long positions. So we sell in multiple currencies.
And we do have some offset in operating expenses, what we're seeing now is a headwind on the ex Tac a gross profit of roughly $3 to 4%, which is fairly consistent with Q1, which isn't necessarily intuitive because the dollar has continued to strengthen but a lot of that is based on mix on our platform and the.
The fact that much of our much of our revenue remains dollar based so ex Tac thinking at current forecast of roughly 3% to 4%. If you extrapolate to the year Youre talking about a 10 million dollar headwind on ex Tac on a year over year guidance.
No on EBITDA in the quarter. It was a headwind in Q1, however, based on April rates and the way that the shekel has now a weakened the dollar we expect a more neutral impact on EBITDA for Q2.
Okay.
That's correct.
So about the Keystone question. So first of all in terms of the business model Keystone is a usage based SaaS platform.
Shares are paying us for the technology in terms of the competitive set I would say would it competes with most is the.
The manual labor manual decisions that publishers and media owners make as it relates to.
The variety of <unk>.
<unk> of business objectives. So those are usually siloed teams each one trying to achieve its subscription goals it's add goals.
e-commerce goals and each one is making their own decisions and then usually there is a kind of a manual layer.
<unk> product officer, Chief Digital officer that is is.
Making those.
I'm, saying with the Airclic optimizations, so that manual decision layer. That's happening today I think is the biggest sort of competitive set for <unk>.
For Keystone I'd say in terms of other companies, we're not seeing anyone that's actually solving this for publishers and media owners, but there are in each one of those domains in each one of those silos. There are companies that are trying to optimize just that silo and.
They're trying to optimize so in some ways.
Part of the competitive set but really it's a it's part of the problem and Thats. The problem that Keystone comes to solve how do we take all of US. The revenue diversification is the overall theme taking all those business objectives pumps for media owner has and optimizing personalizing for the user journey based on that.
Okay. Thank you your own thanks Ali at least.
Thank you.
The next question comes from the line of Laura Martin with Needham. Please go ahead.
Hi, there I have sorry, let's do them one at a time in the U S. When you look at your business.
<unk> been talking about open hall.
Which is a direct onboarding into publishers into their demand their DSP of demand have you seen weakness from that in your U S business competing with you.
Okay.
Hi, Laura.
Just to your own and I still believe we have.
Bypass optimization is generally something that's less relevant.
Thanks.
The vast majority of our business there is no supply path optimization, we're the only.
The only platform between the advertiser and publisher and.
The most direct connectivity to each of you have.
And so we've not had that obviously.
Obviously, we got some of the.
The demand through the.
The trade desk is a small portion of our business is programmatic, but it's all within our platform and what we optimized sport. So those direct connections are outside of the operating world.
Okay great.
That's true.
Pay TV products update you guys caused the CIA acquisition in January we thought that this company your company at $30 million of CTV and industry in revenue.
Can you give us an update on what's happening on the CTV side, specifically in terms of breath.
I'm, sorry, I'm, David is having trouble with his micro Microsoft and I didn't know if you could take that question, while we try to resolve this audio issues.
Sure so yeah.
Hopefully, we'll get the David perspective, when he joined but in terms of CTV. So.
The video intelligence or via acquisition that we made does have a small portion of our CTV the founding team there so substantial.
The world of TV in connected TV.
No it quite well, but it is a small portion of it.
I would call it.
Seed for the future.
It's not a meaningful part of the business, which is mostly <unk>.
<unk> open.
Open web video monetization.
Dr. Neil.
Okay, sorry, guys can you hear me now.
Yes, Okay, finally, sorry about that.
Sure.
Yeah.
Did you want to add anything on an update on the DIR.
And I didn't hear exactly what you want to say that had some problem communication, hey, Laura but.
Integration is progressing as planned we had about 15 partners from the outbreak publisher universe and are getting very good feedback in terms of that helps us both expand.
The business, we have with our current partners and new partners and it's incremental in stream video. So it's positive.
Okay, and then at least I have one for yes, my last one's for you.
We did take revenue guidance for the year down, 15%, but we tuck EBITDA down by 50%. So our margins are estimated margins for the year went from 30% EBITDA margins to 20%, which is well below really the rest of AD tech.
Could you talk about what's happening with with margin.
Is the difference.
Guidance like why Theyre, not coming down in lockstep cost versus revenue.
Sure.
Maybe I'll I'll share some thoughts on that and then I can Kansas zero for brother broader perspective.
And as you said the EBITDA guidance that we gave it implies about $225 million of cash cost.
Which is significantly less than we had originally budget based on savings plans. We've initiated at the end of Q1, so as we saw March progressing well.
We started to take meaning meaningful steps against our plans now these are internal plan.
Which are I would say these reductions are aren't as material obvious on the guided numbers.
But they are underway in the background and much more visible if you compare implied cash cost to say Q4, given that I shared a few reasons why Q1 costs were unusually low.
As David did share will continue to monitor the market conditions to manage and best balance profitability and growth.
Just as a proxy when I refer to Q4, because I'm sure you don't have all the details handy if we annualize the Q4 cash cost and you look at the implied $2 25, it's about a 6% increase year over here and the P. Reminders on step changes in public cost.
The significant hiring that we did do at the end of the second half of 2021 into early this year, including.
V I.
As well as just general infrastructure investments.
So this the annual guide puts us at around 20% of our search at the midpoint.
It's it's fairpoint, what youre, saying it is below where we were.
Where we would say we would like to be but we are responding to the numbers currently and will continue to monitor the progression.
Hum.
Laura.
So I will add I mean, we are looking at continuing to invest in the growth drivers. We are obviously looking at the cost at the same time, but we believe we're making the right sort of balance of decisions that discipline right excited about these growth drivers and I think once demand starts coming back stronger in those areas right now.
Weaker like Europe , I think we will see the fruits of those investments we will we're monitoring it.
Daily and we will make decisions as we progress in sort of late in the year and see the market dynamics, but again, we believe this is the right decision.
We want to I mean, we will continue to be profitable in the 20% EBITDA margin is lower than where we were and hopefully once the sort of top line.
Gross back to our longer term model.
Would be reflected.
Thank you very much thank you.
Thank you.
Again, if you would like to ask a question. Please press star one on your telephone keypad.
The next question comes from the line of Ross Sandler with Barclays. Please go ahead.
Hey, <unk> got one for you.
Assuming we werent in a.
Digital advertising downturn or whatever in here.
And we just isolated.
Supply wins that you guys talked about in the prepared remarks, how much revenue or.
Our Gtx tack do you think that would have added to the system.
This year I guess, we're trying to understand.
If we kind of roll through whatever we're in in terms of a downturn and we look at 'twenty three and beyond.
How much incremental revenue.
Do you see from from all this new supply coming on with the Axel Springer et cetera.
And then your own the second one on Keystone So.
Can you just explain a little bit more about.
What the product does it sounds like it's kind of a smart feed plus some other tools for ranking in managing AD mediation just without the associated.
<unk>.
Add to that you would bring to the table.
So is that right or is there.
Anything else just you can explain about the.
The kind of the product market fit thanks.
Hey, Ross Thanks for the question. So in terms of the new partnerships and generally the growth in supplies. Obviously the returns are very dependent on the RPM I believe the deals we mentioned in the new supplier wins are really sort of where you see the gap between our current guidance and the sort of reduced guidance previously.
Guidance. So some of these deals would contribute and they're contributing but they would have been contributing.
I would say in the tens of millions of dollars more depending on the recovery of the of the RPM.
Hi, Ralph Clearone here, so about the Keystone question, So Keystone goes far beyond the feed the speed upgrades.
Has mastered over the past 10 plus years this goes far beyond to basically any.
Any pixels that a publisher publishes that where you can where you have a user experience.
Or is it affecting you guys.
To see something whether it's a organic recommendation or editorial linker ecommerce or subscription or whatever it might be.
Together with the session of business suggest as a publisher has now the way outside of the operating type feeds the way that publishers generally manage their assets.
Is by carving out space for different teams.
So if they're trying to get their E. Commerce team today is trying to get their offers in front of our users outside.
Theyre basically carving out space.
Really ever user of that publisher is going to see Theres no optimization and no personalization usually in those places it's carving out of areas.
So what were bringing with Keystone is all the knowledge that we have inside the feed together with the experience we have on the advertising side of understanding business objectives understanding rollout.
And taking those technologies and now making them available.
Complete business platform.
The media owner, so that they can take basically every asset that they have inside and outside seed and optimize it for the the.
Diverse variety of subjects.
<unk> what they have.
Sure.
Thank you.
Yes.
Again, if you would like to ask a question. Please press star one on your telephone keypad.
Ladies and gentlemen, we have reached the end of question and answer session and I would like to turn the call back to management for closing remarks. Thank you.
Yeah.
Thanks, operator, and thank you all for joining us today for our Q1 earnings despite the macro environment and we have met or exceeded our guidance for Q1, we had a lot of work ahead of us to keep the stride in a very dynamic world and we're excited to be planting the seeds with Keystone of what we envisioned to be one of the most important.
<unk> innovations evolutions of the safety pioneered 15 years ago. Thank you.
Thank you. This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.
Yes.