Q3 2022 Magnite Inc Earnings Call
Good afternoon, and welcome to the magnate Q3 conference call all participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero after.
Today's presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw from the question queue. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Nick <unk> head of Investor Relations. Please go ahead.
Thank you operator, and good afternoon, everyone welcome to <unk> third quarter 2022 earnings Conference call. As a reminder, this conference call is being recorded joining me on the call today are Michael Barrett CEO and David Day, our CFO .
Like to point out that we have posted financial highlights slides on our Investor Relations website to accompany today's presentation before we get started I'll remind you that our prepared remarks and answers to questions will include information that might be considered to be forward looking statements, including but not limited to statements concerning our anticipated financial performance and strategic objectives, including the potential impact.
With macroeconomic factors on our business. These statements are not guarantees of future performance. They reflect our current views with respect to future events and are based on assumptions and estimates and subject to known and unknown risks uncertainties and other factors that may cause our actual results performance or achievements to be materially different from expectations or results projected or implied by forward looking statements.
A discussion of these and other risks uncertainties and assumptions is set forth in the company's periodic reports filed with the SEC, including our third quarter 2022 quarterly report on Form 10-Q, and our 10-K, we undertake no obligation to update forward looking statements or relevant risks. Our commentary today will include non-GAAP financial measures, including revenue ex Tac or less.
Traffic acquisition costs, adjusted EBITDA, and non-GAAP income per share reconciliations between GAAP and non-GAAP metrics for our reported results can be found in our earnings press release and in the financial highlights deck that is posted on our Investor Relations website at times in response to your questions. Let me offer incremental metrics to provide greater insights into the dynamics of our business.
Please be advised that this additional detail maybe onetime in nature, and we may or may not provide an update on the future of these metrics I encourage you to visit our Investor Relations website to access our press release financial highlights deck periodic SEC reports and the webcast replay of today's call to learn more about mcknight.
I'll now turn the call over to Michael. Please go ahead Michael.
Thank you Nick.
We are very pleased with our Q3 performance that surpassed our guidance as well as our continued ability to grow even with a tougher macro and more challenging ad spend environment.
Our growth in revenue ex Tac exceeded our expectations across the entire business and in CTV specifically.
And adjusted EBITDA margin also came in strong at 35%.
These results were encouraging and David will provide greater detail on Q3 results in Q4 outlook.
Our CTV business continuing to be a growth driver in the quarter as revenue ex Tac grew 29% year over year.
Trend improvement from the first half of the year, driven by new and ramping magnate partnerships.
We grew and deepened our relationships with industry leaders in streaming we want to highlight three key client wins in the quarter with Fox Vizio, and Kroger and give ongoing commentary to three partnerships that continue to grow with time and engagement LG Disney and group them.
All of these partnerships serve as future drivers of our CTV business and I want to touch on each individually.
First.
We recently announced the partnership with Fox, where we will serve as the S. S. P launch partner to power programmatic campaigns for one Fox video inventory across the company's leading entertainment sports screaming and news portfolio.
Together Fox and magnate will build custom technology solutions that further streamline the buying process and enable advertisers to create one simple and unified plan to deliver their private marketplace and programmatic guaranteed campaigns across the entire Fox portfolio Vin.
<unk> inventory.
Spring serve our CTV AD server is becoming an increasingly important component of many of our wins and represents a true differentiator for magnate.
As we have highlighted on previous calls the integration between our AD server and SSP is incredibly powerful.
It reduces complexity improves inventory management between multiple parties enhances functionality and most importantly drives yield for customers that have both a direct sales force and programmatic sales channel in.
In fact.
Bart win with Vizio was driven by the unique relationship between our CTV AD server and SSP.
<unk> used this spring serve to manage their entire video AD serving business, while also relying on our SSP to power their programmatic channel in the quarter.
We announced that Vizio would also be using our newly released CTV tiles product.
Its entire footprint.
Tiles are our proprietary native AD unit that are presented on the home screen of connected Tvs and represent an exciting area of growth for us as a new ad format.
Oems can use tiles to highlight content recommendations.
Personalized experiences and simplified the search and discovery process for millions of users.
As the retail media network space has gained momentum recently, we are very pleased to have been selected as one of the inaugural CTV platforms to support Kroger's retail media advertising business Kroger precision marketing this.
This partnership will allow advertisers regardless of what DSP. They work with to packaged progress proprietary first party data with magnates premium omnichannel inventory with an emphasis on CTV, but spanning all formats, including display and online video.
Last quarter, we announced a multiyear partnership with LG AD solutions, which in addition to serving as the preferred SSP an AD server provides us access to their automate automatic content recognition or ACR.
Data for planning activation and measurement and advanced analytics.
This data can be leveraged across our entire streaming publisher footprint to deliver more personalized AD campaigns at scale there.
We are very encouraged by the early progress with this initiative with a number of brands and agencies already utilizing this data to help optimize spend.
Okay.
Our preferred partnership with group <unk> is continuing to scale gaining momentum as we move into 2023 and the new season of our friends. We are starting to see new advertiser demand across OTT as a result of the partnership and expect it to be one step in our supply path optimization.
Or spo strategy as we work with agencies and brands to consolidate spend a magnet.
And lastly, a quick update on Disney we continue to be a strategic programmatic technology partner with Disney Division at the forefront of their advertising stack.
We are excited to partner with Disney and their industry, leading efforts to shift more streaming inventory into our biddable programmatic environment.
Our relationship is continually growing in scope as we work across the AD formats on their properties globally.
Our CTV platform integration is also moving forward very nicely and we are on track to have our next generation platform substantially complete by year end and ready for client transition starting in Q1.
We are excited about the industry, leading features and functionality and intend to share more details after the launch.
On the Divi plus side, we have begun implementing some key initiatives that have returned the business to growth this quarter with growth acceleration expected in ensuing quarters. This quarter TV plus grew 1% year over year. Although we estimate this would have been closer to 5% when considering the effect of the strengthening dollar in the quarter.
Stepping back our broader perspective remains very positive heading into 2023, despite macro concerns.
In challenging environments publishers tend to have greater difficulty selling ads directly to agencies and marketers and therefore rely more heavily upon partners like magnate to monetize this inventory through programmatic channels.
We have already seen a record number of AD impressions this quarter and expect this trend to continue into 2023.
And specifically in CTV.
We are seeing the launch of more <unk> services and consumers switching from higher prices descriptions to AD supported tiers, which will result in additional ad inventory.
Okay.
As we look to 2023, we expect to grow our topline and generate very healthy free cash flow.
As we judiciously manage expenses and balanced investments in the business.
With that I'll turn the call over to David.
Thanks, Michael.
Our team at magnetic performed well during the third quarter and we are very pleased with results that surpassed our guidance.
Total revenue for Q3 was $146 million revenue ex Tac was $128 million up 12% from Q3 2021.
Ex Tac attributable to CTV was $56 million.
From $43 million or 29% from last year.
Plus revenue ex Tac was $72 million, an increase of 1% compared to Q3 last year.
On a sequential basis Q3 total revenue ex Tac grew 4% over Q2, CTV grew 7% and TV plus grew 1%.
Political spend represented less than 2% of our revenue ex Tac for the quarter.
Our revenue ex Tac mix for Q3 was 44% CTV, 35% mobile and 21% desktop.
Total operating expenses, which includes cost of revenue for the third quarter increased 7% to $167 million compared to $156 million million dollars in the same period a year ago.
Adjusted EBITDA operating expense was $83 million up.
Up 2% sequentially from Q2 and up from $74 million from the third quarter last year.
Costs for the third quarter were lower than expected, primarily due to a reduction in the pace of hiring lower office and facilities costs, lower technology, and cloud costs and deferral of marketing costs into Q4.
Net loss was $24 million for the quarter the same as our net loss for the third quarter of 2021.
Adjusted EBITDA was $44 million, an increase of 11% versus $40 million for the same period last year.
Adjusted EBITDA margin was 35% consistent with a 35% reported for the third quarter of 2021.
Note that we calculate our adjusted EBITDA margin as a percentage of revenue ex Tac.
GAAP loss per basic and diluted share was <unk> 18 for the third quarter of 2022, consistent with a loss of <unk> 18 per share in 2021.
non-GAAP earnings per share in the third quarter of 2022 was 18.
Which was up compared to <unk> 14 per share in 2021.
There were 133 million weighted average basic and diluted shares outstanding for the third quarter of 2022.
Fully diluted weighted average shares utilized for non-GAAP earnings per share or $542 million for the third quarter.
Capital expenditures, including both purchases of property and equipment and capitalized internal use software development costs were $16 million for the quarter in line with our expectations.
Operating cash flow, which we define as adjusted EBITDA less capex was $29 million.
Our net interest expense for the quarter was $7 million.
At the end of Q3, we had $254 million in cash on the balance sheet.
Regarding debt, we continued to reduce our net leverage ratio, which was approximately $2 six X at the end of Q3 as compared to $2 eight X at the end of Q2.
This demonstrates further progress towards our ultimate target of two <unk> or less.
We did not repurchase any shares under our share buyback program during Q3 and $28 million remain in the program, which was extended through December 2023.
During the quarter, we continued to utilize the withhold to cover method to cover employee taxes for our regular RSC vesting.
We withheld 257000 shares for approximately $2 million.
We started the year with a balanced goal between share buybacks and reducing debt leverage as previously discussed our current plan is cash accumulation to maximize flexibility with the goal of continuing to reduce our net leverage ratio that being said, we will continue to evaluate share repurchase.
This is part of our capital allocation strategy as we believe repurchases at our current share price would represent a very attractive use of capital to buy our shares at a discount to intrinsic value.
Yeah.
Moving onto guidance I will now share our expectations for the fourth quarter and a very high level view into 2023.
Our approach to guidance continues to be concern conservative and assumes a continued challenged economic environment.
For the fourth quarter, we expect revenue ex Tac to be in the range of $151 million to $157 million.
We expect revenue ex Tac attributable to CTV to be in the range of $63 million to $65 million.
Now that election day is over we can provide an update on our political spend based on what we've seen we expect political dollars to roughly double from Q3 to Q4, four 3% of revenue ex Tac.
We expect adjusted EBITDA operating expenses to be $88 million to $90 million, implying an adjusted EBITDA margin of approximately 42% at the midpoint.
We anticipate capex to be approximately $9 million for the quarter.
With our 2022 expectations.
For the full year, we expect revenue ex Tac to be over $510 million and that we will generate over $105 million and free cash flow.
As for 2023, we expect to grow revenue, even with more challenging market conditions and recession risks.
It should come as no surprise that we are increasing our focus on managing costs.
We do expect some slight margin compression with the higher tech stack costs in the first half of the year as we complete our CTV platform client migration.
However, we believe that the impact will subside over the second half as the migration is completed.
And longer term, we expect to achieve adjusted EBITDA margins in the 35% to 40% range.
We also expect that our capex will be similar or potentially lower than in 2022.
We are encouraged by the progress made during the quarter. We're also optimistic regarding our strong position both from a financial and operational perspective, as we close out 2022 and move into 2023.
With that let's open the line for Q&A.
We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad. If you are using a speakerphone. Please pick up your handset before pressing the keys to withdraw from the question queue. Please press Star then two my first question is from Sean to tell US. That's go ahead. Please go ahead.
Hey, guys good job on the quarter had a couple of questions.
Michael.
Just curious with Netflix Avon.
And I'm, just wondering what kind of impact you've seen.
And the industry.
In terms of inventory and in CPM as I know, it's early and you know do you expect Disney plus the Avon option launch there to be a catalyst.
And then I had a follow up.
David in terms of your commentary for next year I know you didn't comment on the top line per se, but should we be looking at the fourth quarter kind of year over year growth rate guide is kind of a starting point as we look at next year and then on the margin.
You made up about a little bit of pressure in the first half with the siding in the second half.
Will that lead to overall pressure for the year or or or are you, suggesting that the second half would offset the pressure on the first off thank you.
Yeah.
Great, Yes, so I'll jump on the Netflix and Disney plus.
You know as you.
<unk> stated it is early and.
Most of those campaigns all the campaigns and Netflix were kind of sold direct.
To a handful of advertisers.
And so we're not seeing much of a ramification and the market certainly it wasn't cannibalistic for other <unk> services at stream. It didn't come from budgets that were allocated for <unk> for instance.
More than likely came from a linear AD dollars, which I think is a good sign for the whole industry. So our kind of belief on that is that.
It's a rising boat.
At the industry more dollars will be focused on streaming a ride and that's that's a good thing.
And from a CPM standpoint.
These are the premium CPM is out there obviously Disney is premium CPM.
HBO Max is premium CPM so.
The CPM as if they were able to achieve in the market.
Pretty much mirror, maybe on the north side pretty much mirror what is it premium services are getting in the market today.
And as it relates to Disney plus as being a driver for our business.
Disney plus as part of the Disney portfolio and as we said were alluded to continue to work with them strategically and obviously as they get into more AD supported tears long term, it's meaningful for our business.
Alright.
And on that from a 2020 revenue perspective first a couple of general thoughts I will talk about DB, plus and CTV business.
And divi plus entering 2023.
Nearly where we want to be we are seeing some growing momentum and we think we can continue to gain share and so we have some real positive.
Developments in the D V plus area heading into next year.
In CTV, we also have growing momentum and even.
Even in the case of recession, we think that we have some or we would expect some counter cyclical support that could be beneficial in particular.
Potential acceleration in cord cutting.
And growth of Eva Avon as households, perhaps move down from the higher tiers on the streaming subscriptions and so stepping back from that where we're confident that even in a more recessionary environment, we expect to grow.
From a margin perspective, yeah.
Yeah.
So we have two dynamics going on we've gotten for the first half of the year will be running two separate CTV platforms.
As we.
As we transition our clients into our new streaming platform.
So as we hit the middle of the year Youll see a reduction in those costs.
Also the new platform.
We will have some cloud leverage and we will have optimization just on our usage of the cloud as we go through the year. So we have a couple of drivers that will reduce those costs over the course of the year.
We could get close to compensating back to current margins by the end of the year, although that will depend on top line, obviously on any recession impacts, but at a minimum we'll be exiting the year.
In a position going forward to achieve the margin targets that we that we've set up the 35% to 40%.
Yeah.
Great. Thank you guys.
The next question is from Jason Crier, Craig Hallum. Please go ahead.
Hey, Thanks, guys.
Nice quarter, and any kind of different than where we've seen elsewhere and I'm. Just wondering if you can maybe talk a little bit about where you've seen a little bit more resilience in your business or where you think maybe youre outperforming.
We're hoping you could do that first Jason.
[laughter].
Yeah, you know I think that.
It's really hard to get read throughs right in this market in terms of everyone every company reporting in some having macro challenges some having just an inherent business challenges.
Well, we have seen is certainly a market share gains that.
You know the story of Mag named this independent largest omnichannel CTV first focused player with AD serving capabilities is starting to reap benefits and as you kind of saw the examples that we shared in the call.
Certainly we don't have D V put us anywhere near where we want it to be from a growth standpoint, but getting it back to growth is kind of what we signaled that we'd been working on all along and more to come on that and certainly in a stronger environment. It would have been even more impressive.
But I do think that our exposure.
To CTV.
Really sets us apart.
Our meaningful exposure to CTV.
Revenue sets us apart I think from our peer set and the SSP world.
That being able to anchor on that growth rate in that Tam.
I think.
Drove was what drove it is a great magnet and.
What's going on and why would it be the.
The wind behind our sails if you will.
That's helpful.
You highlighted a number of wins like Fox Vizio things like that in the quarter just as as the economic climate has changed are you seeing any.
Any slowdown in those conversations.
Final interactions with customers either in their initial engagements are moving them through the cycle or have those continued to persist at the same pace.
Yeah, I think that same pace or perhaps slightly accelerated.
Kind of talked about in the script that.
Historically and for good and for bad <unk> been at this for a while on the SSP side and in other dips when it becomes more difficult in the AD environment to sell your inventory directly.
Publishers lean very heavily on their programmatic partner and so in this case with magnate.
We're seeing record impressions record inventory.
And even in a depressed buyer market.
We're never sold out obviously and.
Theres always essentially a buyer even if the price is lower but you know we can sell 10 units.
At a depressed price versus unfortunately, some publishers has run out of inventory to be able to do it and so so I think that that is.
Really accelerating talks, particularly in with publishers or platforms that were almost exclusively direct sold.
Their interest in seeing how programmatic can help their bottom lines.
Is actually something that is a good guy in this.
Tough economic cycle for us.
Perfect. Thank you Michael.
The next question is from Laura Martin Needham. Please go ahead.
Hello, It's you kind of need it tomorrow.
What is thank you for telling me.
So Michael I look at it.
Speaking at a Google event and onstage Disney said that they only had two apple piece I believe you're one of them.
Yes. My question is as they rollout this AD driven tier should we expect that to help drive your revenue next year.
Yeah.
Yeah, Hey, Laura.
Most definitely but.
Let's put this in perspective, I think we've been pretty clear in the past about our.
Concentration or lack thereof of accounts and so in other words.
I don't think a read through should be Disney represents 20% of our CTV business and it will go from there.
We don't really have a material CTV client.
Financial definition.
And as we've talked about Lora in the past.
Several buckets and take rates differ associated with which bucket and so if you're dealing with a publisher and theyre doing all the heavy lifting of selling and they are creating the packages.
And they're just using you as the plumber.
That is dramatically different take rate are much more along the lines of AD serving than it would be if we pipe and the demand. So as we've talked about I think there is this evolution, that's occurring where as a company and an industry. We're at the lower end of our take rates just given the prevalence of the bigger platforms to want it.
Sell direct and being control and we believe over time that they'll rely upon magnetic more for demand stimulation, which carried a higher take rate, which would have a bigger bump to the revenue line.
Very helpful. And then my follow on is leverage these leverage numbers are excellent.
Do you have a leverage target you're moving towards we're at two six times, how much lower do you Wanna go before you're ready to start making acquisitions again or doing something like buying in shares with the cash instead of repaying debt.
Yeah, our current target, we want to get that leverage ratio below two <unk>. So that's our number one priority right now.
And we're.
We're making good progress so when we get there then yeah, we'll we'll be rethink.
Are we thinking other priorities.
Thanks, guys.
Thank you.
Yeah.
The next question is from Matt Thornton Truest. Please go ahead.
Hey, good afternoon, guys congrats.
Congrats on the quarter and I think I really say that.
I'd say that the read throughs from peers are somewhat somewhat useless.
Yeah Michael.
Lee you put up a good quarter or you're guiding critical conservatively here for <unk>, Despite a tough macro and you're guiding for growth next year. Despite a.
A tough macro and so you've touched on a little bit of this already but my question is.
What has you most confident about that path. There's a lot of initiatives here that we've talked about I guess what has you most confident in kind of underpins that outlook and then Conversely, where do you think maybe your most conservative and could get some some upside surprise.
That's my first question and then one for David.
Yes, David if we fast forward to second half of next year and into <unk> into 'twenty four and on a like for like basis as you rollout C. T platform two point no.
Would there be a step change in in margin there again like for like revenue like for like macro would there be a step change in margin there. Thanks guys.
Yeah Man.
Hit the first step and then David will jump in.
Yes, so listen confidence.
With a small C not a capital C but.
Listen, we're pretty deep into the quarter and so we have some sightlines into Q4.
And you know, we're always in the marketplace and talking to our clients and of course, there is concern about a worsening economy.
And a.
Tightening ad market.
But.
There are some bright spots some break verticals that had been dormant for a while.
Throughout the pandemic that are kind of kicking back in so.
Again, I think largely.
We have seen historically and we are seeing today that folks really start to lean in on their programmatic sales channel.
And if your choices are serving a pager.
Serving an AD during a streaming show or serving one that's slightly less CPM and served by us.
Publishers, who are going to take the ladder.
And so we think that would.
With the record inventory that we're processing that will just give us more at bats, and again enable us to generate more revenue and yield for for our clients and in the CTV in particular.
There is a.
Quite a few AD supported tiers that are coming to line next year. So we think theres just going to be more inventory opportunity for programmatic.
Capabilities, and so that kind of gives us confidence and I guess I would assume that the upside surprise for us would be similar to everyone's in that is it is a tougher macro climate it isn't going to be a deep long lasting recession and GC a quicker rebound in terms of consumer spend in advertising.
Spend commensurate with it.
Yeah.
Yeah.
Yeah on the margin front with the combination of our platform's launch of our new platform I don't think there'll be a step function change in our margin profile I think what youll see is the initially higher costs will be substantially compensated for by the end of the year right. What I think it does is it sets us up.
To grow at an even more effective.
Cost basis going forward and so I think it sets.
Tough nicely for continued.
Growth and momentum in our margins in 2024.
And Dave maybe one follow up if I could would you expect the new platform to have more impact.
From a revenue perspective or more impact from a cost perspective or.
Not much either I guess.
Any thoughts there.
Yeah.
Well initially.
I think it'll have much of a revenue upside I think.
And the initial phase the first six months, it's a little bit more of just the cost impact because youre running the two platforms you've got.
Some elements that are going to be a little heavier indexed from a cloud perspective.
But as you go forward certainly having unified interface.
Ease of use the new functionality obviously.
Into 2024, I think youll have really.
Really interesting.
Revenue uplift potential and same on the cost side.
Great very helpful. Thanks, guys.
Thanks.
The next question is from Matt Swanson of RBC capital markets. Please go ahead.
Yeah. Thanks for taking my question I'll add my congratulations on the quarter.
Something we've touched on a bunch of the answers to this question kind of had me thinking, but we're talking about maybe going into a year about some suppressed demand environment and we've talked a lot about the influx of premium supply coming into a Bob.
With regard to environment, right, where that equilibrium of supply demand starting to shift in people wanting to move faster to affordable or.
Hey.
Programmatic bidding environment can you just kind of talk us through how fast a publisher can turn out all right.
Netflix decided to go 100% Biddable tomorrow is that even feasible or is this month that takes weeks he was talking about logic.
Yes, no it's literally tomorrow.
Tomorrow I can't speak for Netflix, obviously, but.
Talking about the clients that we have but.
Demand pipes are installed they're hooked in and.
Did just in the case, where it's open auction.
Yeah.
Very rarely use that capabilities.
The types of guys you just talked about and so.
That demand could be instantly brought in because the.
Demand is there and he said if you put the inventory on the platform.
It could it could ramp up.
Italy, I caveat that by saying each publisher has their own way of handling it and Theres creative review issues and that kind of stuff and so that could delay it but thats not a technical thing that just more of a business go to market practice. So.
Yeah open auction could be enabled very quickly.
Invite only auction a little bit slower because by nature. It's an invite so you're lining up folks and then lastly, if youre doing a pnp RPG. Some of those are always on but that requires a little bit of a back and forth between buyer and seller, but open auction biddable. It could be went up very quickly.
And then I'll keep my streak alive by asking a BB plus question I mean could you just talk a little bit about where you guys have been seeing the most improvement obviously the macros are still in.
Impacting the growth rates and then I guess from an investment standpoint is it just waiting for those investments to play out or are there incremental areas through year end and into next year that you're looking to investing.
Yes, Matt.
Game of tweaking and investing.
Within the budget parameters. This is not like a case, where we are.
Going to drop another $20 million into it too.
From an R&D standpoint.
We pretty much have a working group team on it.
Challenges with it is it's such a massive business in hundreds of billions of AD requests a day that.
It takes a while to tweak those systems and optimize their systems and so.
Well below previous quarters, where we said we're feeling good about our internal progress not good about our external numbers that we report.
Youre starting to see why we are feeling good that you're starting to see those green shoots and so I think as a <unk>.
Constant effort, we'd probably have another 30 projects lined up that you know you'd knock them off each one by one some have more impact than others.
But I think Youre also starting to see it.
Environment like this even greater supply path optimization number one from an efficiency standpoint, you want to save every <unk>.
Our working media dollars, you can and number two.
It's just too distracting to work with more partners that arent, bringing value and so we're just seeing is a continued push.
For even some of the larger platforms that you would say Oh, that's a no brainer.
Publishers are starting to tell.
Folks I'd, rather buy my inventory through magnate because I'm familiar with magnate. So Mr. Publisher, you put it through that instead of coming to me directly. So it's really kind of accelerating in that respect too Matt.
Appreciate it.
The next question is from Chihuahua could urea from Evercore. Please go ahead.
Hi could you hear me.
Yes, right at year end.
Hi, This is Jocelyn Cali question that I have a quick question high level question.
Spending right now.
Several at Technion Tech report it.
So I'm trying to ask and we are hearing basically caution on advertising and so and I know you probably touched a lot of advertisers.
Advertisers I'm wondering like what are you hearing in terms of what could be what could a sentiment that controls.
When Chris Thank you.
Okay.
So I.
I lost you a little bit on that but youre asking kind of market checks from buyers.
<unk> their sentiment going forward is that is that the question was.
Yes.
Yes. So you know obviously we are.
Although we get paid by the publisher to run a marketplace you have to bring demand and so we're very close with the buyers and we're kind of seeing what the macro picture informs that there is.
A lot of caution.
Bye.
Advertisers.
A desire not to get tied into.
Right.
Fixed kind of longer term commitments.
So a lot of spot dollars are out there from a CTV standpoint that were held back from the upfront.
It can be utilized quickly so.
I think the big question that everyone's trying to answer is is this a pause on spend or a cut on spend.
And I wish I could give you a definitive answer but I think we tend to lean towards a little bit more to the pause on spend argument than the cut on spend so we feel as though the spend will come back and will come back faster than perhaps the most pessimistic scenario that's being painted out there if that makes.
Sense.
Okay.
Yeah that makes sense. Thank you.
Again, if you have a question. Please press Star then one.
Okay.
There are no additional questions at this time. This concludes our question and answer session I would like to turn the conference back over to Michael Barrett for closing remarks.
Okay.
Thank you Kate.
We are happy to post a strong Q3 with improved growth rates, we were able to continue to build on our market, leading position and prudently invest in clear areas for growth in CTV, TV, plus and audience and identity.
We also feel very good about the ability to grow next year and for the improving prospects of the broader CTV AD supported market as many of the largest market participants have or are just launching their CTV AD businesses, which will drive growth for many years to come especially for programmatic partners.
Thank you magnate team for delivering this quarter.
And all of our analysts investors for joining us for our Q3 results call.
We look forward to talking to many of you at our upcoming investor events.
<unk>, we will host our post Q3 virtual investor meetings Tomorrow.
We will also be attending the Stephens conference in Nashville on November 15th the RBC Conference in New York on the 16th the Craig Hallum Conference in New York on the 17th a virtual in Macquarie Conference on December eight in New York and Needham in New York on January 10.
We also have a busy road show schedule with truths in Boston on November the 30th and Evercore in San Francisco on December 14th.
Have a great evening and thank you for joining us today.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.