Q2 2022 Outbrain Inc Earnings Call
Good morning, and welcome to outbreak, Inc. Second quarter 2022 earnings conference call.
At this time, all participants are in listen only mode.
A question and answer session will follow the formal presentation.
As a reminder, this conference is being recorded.
Now I'd like to turn the conference over to your host Anthony roughness, Thank you and over to yourself.
Good morning, and thank you for joining us on today's conference call to discuss our brands' second quarter 2022 results. Joining me on the call Tonight, We have our brands co founder and co CEO Your uncle I co CEO , David Kaufman and CFO Susan <unk>.
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 statement.
These risk factors are discussed in detail in our Form 10-K filed for the year ended December 31, 2021 as updated in our Form 10-Q for the quarter ended March 31, 2022 and in our subsequent reports filed with the Securities and Exchange Commission.
Forward looking statements speak only as of the calls original date, and we do not undertake any duty to update such statements.
Today's presentation also includes references to non-GAAP financial measures.
You should refer to the information contained in the company's second 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 investors dot outbreak dotcom under.
Under the news and events section with that let me turn the call over to David.
Hi, and good morning.
We are pleased to report that despite continuing macroeconomic headwinds we delivered on the guidance. We provided for Q2 with extra gross profit of $59 3 million and adjusted EBITDA of $5 9 million.
We also grew revenue by 2% or 6% on a constant currency basis.
At a high level on.
On the one hand, we are gaining significant market share with media on them.
We are growing go a number of active advertisers and we are growing our number of engagement with users. So overall positive metrics.
At the same time.
The worsening macroeconomic environment and declines in the advertising market.
People are impacting our financial results.
Therefore operationally we are focused on making the long term investments that will position us to be stronger coming out of this downturn.
And also at the same time deepening our cost reduction efforts to drive efficiency.
Let's move to our business and start with the supply side.
We have continued to win significant market share with new large multiyear publisher deal.
These will greatly increase our supply footprint and set the company up well much like the growth when advertising demand recovered in.
Q2.
We launched our partnership with several new large probably shows which we have previously announced touches like the Springer and we also launched a direct to Dubai partnership, which you owe me on the platform side.
We renewed long term deals with many publishers, including Meredith rocks scripts and others.
We're expanding on existing publisher pages by leveraging our acquisitions to grow our footprint in one of our core expansion areas high quality grants a big replacement.
Programmatic channel.
<unk> many years of experience with that would be the technology.
We have implemented our quality rating with several large publishers and are getting positive feedback to the impact on quality and now P. M.
Both so post quarter, we extended our global momentum of premium publisher.
And in August we signed a multiyear exclusive agreement and launched on the top U S publisher.
By adding this publisher right now the exclusive content recommendation partner well.
Four of the top five editorial news publishers in the U S by the way the fifth he's doing an in house solution.
So if there is a must buy open wet feed for advertisers in the U S outgrowing it.
We expect to announce additional major wins in the near term.
A few words about the short term impact of this tremendous supply growth.
These are typically.
Two year deal and we model and analyze them looking at the totality of the potential length of the partnership.
We are choosing to gain as much small market share locked under long term contracts. However, the initial rollout and getting to full optimization can take time and combining this with the softness on the advertising side is negatively impacting our short term results as you will see from our guidance.
On the technology and I'll go front.
Smart logic adoption on our core network continues to grow comprising over 80% of mobile and over 50% of desktop partner integration.
We're continuously improving the performance of smart logic and believe this is one of the key differentiators in our publisher win and that this platform will continue to support our growth.
Now, let me turn to the demand side.
We continue to see demand softness at the industry and significantly drive down pricing compared to last year, we've seen high double digit year over year declines in CPC is also impacted by foreign exchange.
But our advertiser base has expanded our core engagement metrics have grown year over year, delivering ROI to our performance market.
We are seeing great progress in our direct business with enterprise brands, which grew by double digits in Q2.
As we mentioned in previous calls we are focused on expanding our brand business, our quality focus its helping us land brand budgets and when premium publishers, who are looking to improve the user experience and limit certain categories of performance advertisers.
This type of Brent budget, particularly in Europe , where brand and agency budgets account for more than 60% of our demand are more impacted in the short term by the softness in the market.
But we believe this is the right long term direction proud brain is the premium quality player in the market.
To further support this effort, we launched an initiative called brand studio.
And dedicated team and resource hub designed to enable these major brands to quickly get up and running with successful campaign, well now brings black home for maximum engagement and memorable interactions.
Currently we are working with a globally recognized food and beverage brands along with the premium Orca, Brian for this new offering according to our internal data.
Actual results for the premium auto branch, so more than three times higher engagement than benchmark for comparable four months in the auto category and 18% will dwell time across the publisher page compared to industry benchmark.
Let me sum up.
We ended another corridor target.
And in a building and investing in the future that said, we remain very cautious about our ability to accurately predict the future of my quick impact on the business conditions.
Conditions have deteriorated globally, but we are particularly impacted by our large presence in Europe , and Japan, which account for 40% of our revenues and will result in further negatively impacted by exchange rate. Therefore, you will hear from Jason.
We are revising our outlook downward at this time.
Personally disappointed to be in such a position, but these are difficult times in terms of the high level of uncertainty as to the outlook.
We've gone through cycles. These times of uncertainty and challenges provides a real opportunity to recalibrate and mix. She makes sure reacting a fiscally responsible manner.
I believe that we will come to dispute is a stronger and more disciplined organization.
We've made adjustments to our cost base.
Funding to this environment will Jason which Jason will elaborate on.
And we continue to monitor the trend.
We're focused on controlling the things we can control and we're focused on making the long term investments that will position us to be stronger coming out of this downturn.
From a strategic perspective.
<unk> and H, one and our competitive position in major markets is a great Testament to the strength of our technology.
One accusation and engagement capabilities and the quality of our trusted partnerships. While the current macroeconomic situation is challenging we also see it as a drive over opportunity to lock up gains in supply.
We expect it will pay off for our shareholders when economic conditions stabilize and we see stronger demand.
We believe that the secular trends driving our industry.
Just the shift of marketing budgets to digital the importance of more measurable results for advertisers and the deprecation of third party cookies provided outbreak with tremendous opportunity.
We believe that continuing to focus on our core business.
To premium publishers and expansion of quality brand and agency advertising is the right going forward shareholder.
So despite the headwinds we will remain focused on investing you know talk both areas.
We have a strong balance sheet with over 150 million of net cash to support our growth strategy. We believe our long term investment thesis is compelling and we have great conviction in the opportunity in front of us.
With that I will turn it over to you Roy.
Thanks, David.
Before I update about Keystone I want to explain some of our framework for managing the two sided marketplace that David mentioned.
It's especially important to understand how our marketplace operates at times of macro demand uncertainties.
We'd like to think of our two sided marketplace using the bedding blankets metaphor.
It did symbolizes our supplier partnerships, while the blanket symbolizes the advertising budgets, we bring in to cover the bed.
In quote unquote normal times to blanket, the better well matched resulting in strong yields for us and for our partners.
We typically grow our better and bigger and longer term step changes by signing new partnerships.
Overtime, and large blanket by adding more advertisers and overtime extending their budgets.
The macro headwinds right now are making a blanket tried harder than usual to predict.
But we're still bullish on our ability to grow our advertiser plant gets into the future when those headwinds seats.
The indicator we look at internally is our AD coverage, which historically, we got right about a 100%.
That is also currently the case, we cover our entire bed with blanket, albeit right now with softer pricing.
Typical demand supply and balance.
The indicators at the core of how we are intentionally building our bedding blankets for growth.
We view this period as a great opportunity to play offense on the bed building side by locking more long term partnerships at an accelerated pace.
You can see that in our growth in new business, which was at roughly 10% in the first and second quarters.
Higher than the roughly 7% growth of new business that we've seen for quite a few of the preceding quarters.
To summarize this I'll focus on our land and expand approach, we're confident in our ability to expand our partnerships overtime as macro conditions stabilize and advertising demand rebounds.
We gave them confidence by the fact that we're at roughly 100% at coverage, albeit it's softer pricing rates right now.
And therefore, we're using this macro environment focus on celebrating the land part.
This approach is somewhat contrarian, it would probably be easier to slow down the growth of new supply makes a blanket feels thicker ore yield higher.
But we believe leveraging periods like this as opportunities will serve to operating shareholders well into the long term.
This enhanced investment in our publisher side is a good segue to our next topic I'm excited to update you on our progress with Keystone, which you may recall, we introduced on our last earnings call.
As a reminder, Keystone as a platform for maximizing media owners overall diverse business outcomes, while optimizing the user journey and experience.
Keystone introducing their new business model for outbreak and will be delivered as software as a service solution.
We will be formally launching the product later this quarter.
We initially rolled it out with too early design partners, including a very large U S news publisher.
The technology puts outbreak higher up on a publisher's value chain expanding it way beyond the advertising layer.
I'm now excited to update that we doubled to afford design partners, including our first one in Europe , a premium financial publisher.
We're continuing to work with these early design partners to develop it and to the best user journey optimization platform for media owners.
Keystone is an investment in extending the strategic value, we bring to the media owners, who we work with.
Now as many of them seek to diversify with new sources of revenue such as subscription that e-commerce or Keystone technology will be well positioned to perform the same best in class optimization as it has been doing for editorial content and ads for many years.
With that I'll hand, it over to Jason Kim our CFO to discuss the financials this quarter.
Thank you Ron.
As David mentioned, we achieved our Q2 guidance for both ex Tech gross profit and adjusted EBITDA. Despite seeing further deterioration of demand beyond the levels. We shared on our last call in May.
Revenue increased 2% year over year to approximately 251 billion and increased 6% on a constant currency basis.
This growth was the result of growing our supply as well as improvements to our technology that drive engagement.
Being largely offset by the material demand headwinds seen across our industry.
Adding new media partners in the quarter contributed 10 percentage points of revenue growth year over year, and our net revenue retention was 91%, reflecting the impact of the demand environment, reducing monetization levels on our platform. The 91% net revenue retention rate for Q2 reflected a few opposing factors.
First and consistent with what David shared it reflects healthy growth of our supply or AD impression that was more than offset by reduction in yields on our platform yields on our platform were driven down by overall pricing pressure from the lower advertising demand.
While revenue increased.
Gross profit decreased 11% year over year to approximately $59 million decreased 8% year over year on a constant currency basis, driven by a few factors.
One with unfavorable mix of revenue as we said in the past, we typically see our margin fluctuate by one to two percentage points up or down to the mix.
Two lower yields year over year, and lower performance of certain media partners driven in part by the lower yield.
In addition, the onboarding of certain new supply, it's typically an investment period, but we have seen it in the past the soft demand environment, particularly in Europe , where we added meaningful supply has put more pressure on both the new deals and existing relationships. During the period, we expect to grow out of this headwind in the coming quarters.
Moving to expenses.
Other cost of revenue increased approximately $3 million year over year, driven by our investment to increase serving capacity to facilitate you'll grow through our algorithmic and optimization improvement effort.
Operating expenses increased approximately $10 million year over year, approximately 7 million was from higher personnel related costs, reflecting increased head count year over year, including from our P. I acquisition in January .
As noted in the prior quarter, we also have higher costs associated with being public and are seeing higher marketing teeny and facility expenses as activity impacted by Covid comes back to more normal operations.
As mentioned last quarter, we were implementing a series of cost reduction efforts to adjust to current business headwinds.
You have since increased our efforts in recent months and management expects the benefit of these actions to reduce costs by an additional estimated $12 million in the second half of 2022 as compared with our prior guidance issued in May.
More than half of these savings are personnel related with an emphasis on process improvement and efficiencies.
In total we took her annual cash cost down by more than 18% versus our original 2022 plant.
Adjusted EBITDA was $5 9 million in Q2 on a constant currency basis, adjusted EBITDA was $5 2 million.
Next moving to liquidity.
Free cash flow, which we define as cash provided from operating activities less capex and capitalized software costs with a net use of cash in the period of approximately $9 million.
The use of cash was due to lower profitability and timing of server purchases.
For the full year 2022, we expect a total of 17 million to 20 million of capital expenditures.
We ended the quarter with $391 million of cash and cash equivalents on the balance sheet and 236 million of long term convertible debt.
Lastly, we announced previously done on February 28, our board authorized a $30 million share repurchase program.
Ally 31, we have repurchased approximately two 3 million shares for a total of $12 $6 million, including commission with remaining availability under the program of $17 5 billion.
Now turning to our outlook.
David discussed we have seen a volatile each one of 2022 that started off generally on target for our growth plan before seeing increasing demand headwinds over the course of the year Pat.
Patterns, we've seen this year and continue to see into Q3 produce continued uncertainty for age two.
As we look forward, we expect Q3 to be a low point in view of the ramp up of our new publisher deals seasonality, particularly in Europe combined with the overall advertising softness.
In our guidance, we assume moderate sequential growth from Q4.
With that context, we have provided the following guidance for.
For Q3, we expect X that gross profit of $48 million to $52 million and we expect adjusted EBITDA of breakeven to negative $4 million for full year 'twenty 'twenty. Two we expect that gross profit and adjusted EBITDA of at least $228 million and $18 million respectively.
This guidance assumes no further material changes in macro conditions.
Now I'll turn it back to the operator for Q&A.
Thank you, Sir ladies and gentlemen at this stage, we will be conducting a question and answer session.
I would like to pause if he would like to ask a question. Please press Star then one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
Press Star and then two if you would like to remove your question from it.
All participants using speaker equipment.
It may be necessary to pick up your handset before pressing the stocks.
Again, if you would like to ask a question. Please press star and then one.
The first question we have is from Ross.
The first question is from Ross Sandler from Barclays.
Hey, guys can you hear me.
Yeah, Hey, Rob.
Hey, guys, Okay, just making sure I'm David so.
I noticed your services up on Fox as website. So is that one of the new large publisher wins in the U S that you're talking about if so what kind of minimum guarantee a did you guys do on that one or is this.
Our standard Rev share agreements and then second one I guess for David or adjacent to the <unk> Guide assumes about a 20% decline ex FX.
Not surprising given what we've seen kind of broadly in the digital AD landscape, but any additional color on the linearity are what you're seeing right now and in which categories or geographies or are dropping off are the most on a constant FX basis. Thanks a lot.
Yeah.
Yeah, Hey, Ross I'll take the first one so you have you mentioned, we won the big one that we need to see how some Fox here Young Fox F O X.
We mentioned on the call we've been using box. So that's my accident. It's V O eggs, but the new big deal is its Fox so that puts us as I mentioned being the partner for full the top five so with CNN Fox.
Washington, Post's, new opposed so no no political affiliation. So we're very happy we're happy with that position and we don't go into specifics of deal, but I would say that.
The Fox deal is not part of the bowl guarantee portfolio.
And it worked with different competitors its a longer term.
Where we aligned interests with the publisher.
I'm excited about that's one and second question.
Jason.
Sure can you hear me.
Yeah Okay.
Okay, great. Yeah. So you know Q3, we've seen demand deteriorate over the course of this year or even even down further from when we gave our guidance and are in early may a few months ago.
We see that Q3, we expect it to be the low point of the year part of that is because as you know we're we're pretty heavy in Europe . It's about 40% of our business is there are any.
And you know Q3 is generally just the low seasonal points for us, especially in Europe anyway, one more point on Europe , you know, we tend to see higher brand and agency business, there about 60% or more of our business is as brands and agencies in those segments have been particularly agencies have been had been pulling back spend you know faster than.
Other advertisers as we've seen and we do expect Q4 to to recover a bit you know, where we're cautiously optimistic on seasonality and spend patterns, but you know between elections, the World Cup and the holiday season, we do expect some seasonal uplift there as well as the ramp up on the optimization.
Some of this new supply integrating onto our platforms that includes.
You pointed out Fox and Axel Springer and beefing up last quarter as well as the benefit from the cost saving actions taken that we mentioned on the call.
Thank you.
The next question, we have is from Andrew Poon from JMP Securities.
Hi, guys. Good morning, Thanks for taking my questions to <unk>.
First of all can we talk about kind of going back to the bad and the blanket analogy how long does it take you guys to hold the blanket a little bit wider.
And recover some of that demand more broadly as you guys have seen it in the past.
When you guys at a major publisher how do we think about the timing of when you guys can start to pull it back in a more normalized environment understood. You know macros Nishu today, and then secondly, going back to kind of one of <unk> questions, but can you talk about any industries that may have been weaker where there any advertisers that may have been pulled back for context here I think some.
People are worried that crypto and gambling kind of pull back you guys have any exposure there or is there anything you want to highlight thanks so much.
Maybe Ron do you want to take the first I'll take the second.
Sure sure.
Thanks, Ken.
So in terms of a deep and Blake.
But the step change we added new partners like the ones. We just discussed and that is a big step change in that.
<unk>.
[noise] covering blanket takes.
Takes a it takes more time these are individual decisions by advertisers set up there.
They see the return on that spend and extender.
It's overtime.
Again.
Airports in normal times theirs.
Most of the time, it's pretty predictable, we don't have a ramp up as we as we make those step changes like that.
And that does have to ramp up.
Just didn't know how long that's going to take it.
In this macro environment is taking longer than usual still happening again as I said, we're seeing a 100% coverage. So that's that's what's giving us comfort I think more and more demand for C U E.
Yeah, the toxins that are seeing positive trends foreign.
Foreign Smartcards and it keeps but they keep spending so we cover the entire pet, but I'd say kind of interpreting that.
That is going to take longer it's hard it's really hard to predict with Oh things.
Things happening.
Macro environment exactly how long it's going to happen.
And then where we're still saying huh.
Yep.
And that's why we're playing offense on Abbvie.
Water distribution or supply partnerships like the ones, we mentioned quite often done properly.
Andrew Hi, it's David that I went through that I mean, we were very confident in the deals I mean, they take some time because of the weakness they may take a little bit more time. These are multi year deals three to six year deals some of them. So we know how to model them, we've been hitting the pause button and it is.
Overall, Australia, Jimmy Brock.
Trying to get as much of exclusive access to sort of feed inventory at attractive terms.
We then leverage that feed presence into other thoughts to sort of expand sort of one off strategy as to who who page monetization and we leverage the feed the feed data that we have the presence there but that would be the technology in order to be sort of a bigger partner, who the published shows another placement meet all could go.
And talk about the coastal so the fetus couldn't you could also and the bidding technology for that and on the demand side, we're very focused on two brands and in higher premium. So we keep the eye acquisition is part of that so that helps us on on those placements on the Mi don't take hold to monetize them in a much better way the growth we see.
On the brands and agencies, which I'll touch upon in a second the weakness too but in terms of the strategy.
Maybe being able to offer to those brands and agencies that sort of the food page to feed the Eaton optical big deal and investigate events to do which I mentioned, so that's just overall the strategy and getting into these views and securing exclusive access to that inventory is part of it then you know we.
We're very confident in the model.
In terms of the demand impact are we seeing more negative impact generally on Brian mentioned, our presence in Europe , Japan.
Lounge, it's almost half of the company, it's in sort of mid 40%. So we can do any weakness weakness there so more weakness in Europe .
More weakness generally on on brand and performance.
And in specific verticals I mean, we got a pretty diversified, but automotive which is a significant one relative because we still have 100% fill rate, but we see declines in automotive we saw some declines in tech and we don't have any particular exposure to crypto Dolby and an end to gambling.
And also there's no exposure there.
Thank you.
Thank you ladies and gentlemen, just a reminder, if you would like to ask a question. He used to stall and then wanted to know.
The next question, we have is from churches touch area.
That's a cool.
Okay. Thank you.
Possible to get a sense of a incremental revenue opportunity from Keystone to you now have four partners I know that maybe.
Maybe a little aggressive to have an expectation from that product coming in are being meaningful, but how should we think about that and oh.
Has anything changed with your go to market strategy for that product as you try and scale that thank you.
Thank you Roger I'll take that.
Sure.
We not only have not shared a knee.
Financial projections on this with having one product that possibly up toward one thing. It later in this quarter.
Quarter.
Do you try to like this take a pick time to.
To build that out and this is a long term debt and investment on our side.
What what's exciting to me.
<unk>.
Expands our Tam.
But there's confusion waste so one way is it.
It looks like outside of the peak, so helping with the troops that are sort of separate but no switches.
Under our bylaws.
Yeah, I think it would be e-commerce and subscriptions. So this is going to play.
And you have to keep it.
And the other control.
Couple of certain loans and chooses to use Keystone.
Once again, that's been increasing and Tami and obviously not just playing in those.
These spaces that are additional to the advertising and subscription E Commerce newsletters.
Are those areas, where publishers are looking for diversified.
The other way this expands our Tam.
Both play with.
Media owners and publishers that are not necessarily using operating expenses.
So.
One example, if you do find partners with season pass someone else for the feed them using a branch work. He's done so that's an additional extension with us.
Okay.
And.
Yeah.
The importance of a Keystone for us is really with better aligning with houses to curve upswing in general is going to look and I think we're hearing this from many different directions, where advertising is obviously one of them.
Most important is not the most important revenue source for sculpsure, but they're all looking at restriction subscription, especially with everything that's happening in the future of our cookies.
e-commerce or retail media and so this really puts us in a good.
Oh I'm sorry.
Yeah.
Okay.
And she said that I would add just one point on that I mean, the whole in sort of kicks on schedule. So it's super helpful. In our so the coffee business I mean every discussion we have with the top level people and published doesn't mean that it comes up and we go public with their bet on us to sort of bet on when companies.
Choose long term partners, who can get technology technology roadmap and vision and this part is very important obviously being gone page and being more entrenched with those published does create a stronger relationship more data. So there's a lot to it and sort of increases the Tam, but also really strengthen the cold conditions.
Okay. Thanks, Dave.
Yeah.
Thank you ladies and gentlemen, just a final reminder, if you would like to ask a question. Please press star and then one no.
The last question this is mark.
From Needham.
Yeah.
Hi, there so maybe a couple of them. The first one is on guarantee so can you remind us how the guarantees work because it seems to mean lowering your yield is bad your take rate went up by 300 basis points. So I don't exactly understand why we're taking softer demand in la.
Allowing your yoga fall when basically you're just paying out a higher that share to everyone by doing that so can you explain and what percent of your Tac with guarantees in that quarter.
Hey, Laura.
Good question, David and guarantees that come to about a.
20% of the overall.
And they know that.
Some of these these are complicated so you'll have different steps step ups you have different mixes that come into play when you exceed certain sudden level. So it's really difficult to pinpoint the very.
Specific number, but they're comfortable at 20% when demand is soft and sort of L.
L. P M than an end coming down because primarily of CPC I mean, it does potentially negatively impact those deals and about 20.
20%.
And it's sort of a natural course of business went to some of them I mentioned whatnot too, which is actually a red shows the different type of corporate arrangements.
Okay. So stay on our strategy point that why would you ever AD supply, which low because you have soft demand, which lowers your average yield, which then steps up by 300 basis points your payout rate, which just hurts you actually.
Okay. So and you know we yes, we would be pulling the quarterly basis, but you would have some vision and strategy. So these deals I mean always even when.
The demand environment was stronger they take time to ramp up means to optimize the site to deployed there and create those optimization takes weeks and months potentially so it's just part of the model.
And we believe very much in the long term. So once once we have that feed I mean these deals are we don't go into deals.
To lose money and so we do make money on on the deals and we look at the models and that's one of them.
We 456 years 16 basis, so they see no great opportunity, we are very committed to growing.
Our leadership in mostly I mean, if I look at most of the big market today in the U S. As I mentioned, the four to five I think in Germany. We're in a very strong position to Penguin diverse long positions, France, Spain, the major markets, where we really have that I mean that creates a great anchor.
Interest for advertisers, who want to have the access to exclusive inventory that helps us to move up the chain into me don't be cool video out stream and in stream to be doing on the placement. It makes the whole tank at much more attractive co brand and agency advertisers.
That's the strategy.
And we believe it's correct and in the short term.
It's primarily a little bit of the softness two seats, primarily driven again by our mix 40, plus percent Europe and Japan is not great. These days in terms of it makes it also has an FX impact.
And by the way our brand and agency business is about 45.
Overall as a company, but in Europe , it's about 60%. So these are budgets that are more impacted currently.
We're still very focused on this strategy and believe this is the right way to build shareholder value long term and I think focusing on quality premium demand.
All page monetization for publishers stronger molten relationship with Keystone I mean, that's how approach we're very focused on the court sort of people thinks about the area.
Okay, Great could you talk about channel shifts I'm interested in as we think about bidding out which just started all the rage on Wall Street can you talk about what's happening with your video next as part of your total revenue mix.
Thanks.
So big deal generally pretty stable.
It's anywhere around a sort of a high single digits low low low double digits like 10% plus minus.
We are currently we have a very I mean, we don't have a real strong presence on the C. T V. We are working on that I mean, the I the acquisition the integration is going well, we integrate it into the core we see good traction.
With publishers and and you know looking into the future strategically we wanted to play, but I think part of again when you look at the whole universe and you take the macro view.
The companies that are enjoying still better growth rates right. Now are the ones that are enjoying shakes. So budgets from the near to B to C. T V. So its something that if.
The advertising market is.
He is slower but the street's got budgets to see T. V. We are not we're not enjoying that today I hope things are coming to US we'll have a stronger strategy there.
And then my last one sorry on when do you think of congratulations on the four partners on Keystone. It feels like your email planets working what what is your point of view about when we can start to see material revenue from Keystone.
Alright so.
As I mentioned, but that strikes. This question, we have not formally launch the product gets the job design partners are working closely with our we are generating a garden.
In terms of meaningful revenue.
First cousin are in front of us.
Our customers in and see how it goes but also maybe I'll answer both of your questions.
The question is Uh huh.
We've taken a mix at least for our customers.
Graphically and size of our partners.
Partners and we've seen that.
Where do we think the biggest impact is probably good for us.
Larger publishers it definitely can be cheaper.
So I think those are having a lot of opportunity.
Okay, Deckers, our revenue sources and.
I think that's gonna audiences.
So much more.
So where we're at.
Yeah.
A small product in.
Future quarters.
Yes.
Yes.
So the answer is.
Mike.
24 is that it sounds like you're pushing that off to the future. So that's 'twenty 'twenty four is the answer to my question that's all right.
Material revenue.
Okay.
They're getting bigger.
It would be.
Any guidance or any other business.
Dennis.
We'll do.
That's going to be easy.
Usually are embedded into our insurance without being meaningful I guess, we first need to get this.
In our customers' hands and lunch and tea.
Yeah. It goes from there because you have a long term investment.
Yeah.
Okay. Thanks, very much question to a previous question around on the mountain. So we always I mean, we're very focused on PX stock dollars. Obviously, that's all St bucket. It now, but what are you doing right now will position us extremely well when demand rebounds, and you're going to see then hopefully I mean, we expect and believe that will yield back to sort of because I know we can grow.
And we're very confident being in those investments, we're making right now for the future.
Thank you.
Thank you.
Ladies and gentlemen, we have reached the end of our question and answer session I would like to turn the call back to David Kaufman for closing remarks.
Yeah.
Thank you. Thank you all for joining we look forward seeing you on our next call. Thank you.
Thank you.
Ladies and gentlemen that concludes today's conference. Thank you for joining US you may now disconnect your lines.
Okay.
[music].