Q1 2024 PubMatic Inc Earnings Call

Well Hello, everyone and welcome we will begin momentarily.

And again for those of you not just now joining as we welcome you and as a reminder, we will begin momentarily.

Okay.

Well Hello, everyone and welcome to <unk> first quarter 2024 earnings call. My name is Kelsey and I will be your zoom operator for today. We thank you all for your attendance today and as a reminder, today's webinar is being recorded I will now turn the webinar over to Stacie Clements with the Blue shirt group Stacey over to you.

Good afternoon, everyone and welcome to Telematics earnings call for the first quarter ended March 31 2020.

Please proceed with your comments of English shipment and I'll be your operator today joining.

Joining me on the call and Rajiv go out co founder and CEO and intellect CFO today's prepared remarks have been recorded after which rajeev and Stifel. His slides Q&A. If you plan to ask a question Peyton sure you such as you'll need to display a full name in Berlin and use the Raytheon function located at the bottom of his face.

A copy of our press release can be found on our website at investors dogmatic Dot com.

I would like to remind participants that joined this call management will make forward looking statements, including without limitation statements regarding our future performance market opportunity growth strategy and financial outlook forward.

Forward looking statements are based on our current expectations and assumptions regarding our business the economy and future conditions.

Forward looking statements are subject to inherent risks uncertainties and changes in circumstances that are difficult to predict you can find more information about these risks uncertainties and other factors and our reports filed from time to time at Securities and Exchange Commission, including our most recent Form 10-K and any subsequent filings on Form 10-Q or 8-K.

China file S Securities and Exchange Commission and are available at investors <unk> com.

It's just only and should not be considered a substitute for financial information presented in accordance with GAAP a reconciliation.

Our actual results may differ materially from these contemplated by the forward looking statements. We caution you therefore against relying on any of these forward looking statements. All information is today is as of May seven 2024, and we do not intend and undertake no obligation to update any forward looking statements whether as a result of new information future develop.

Alicia these measures to the most directly comparable GAAP measures is available in our press release and now I will turn the call over to Ashish.

ashish: Thank you Stacey and good afternoon, everyone. We delivered another outstanding quarter, which highlights the growing need for sell side technology for digital advertising, our strong customer relationships and our breadth of solutions, resulting in growth across all formats and channels.

<unk> or otherwise, except as may be required by law.

In addition, today's discussion will include references to certain non-GAAP financial measures, including adjusted EBITDA non-GAAP net income and free cash.

ashish: Revenue and profit significantly exceeded our expectations, marking multiple quarters of accelerating revenue growth.

These non-GAAP measures are presented for supplemental informational purposes, only and should not be considered a substitute for financial information presented in accordance with GAAP.

ashish: Revenue grew 20% over Q.

ashish: One last year, excluding revenue from Yahoo is owned and operated inventory year over year revenue growth was 25% adjusted EBITDA margin was 23% and we generated over $16 million in free cash flow.

Reconciliation of these measures to the most directly comparable GAAP measures is available in our press release and now I will turn the call over to Rajiv.

Thank you Stacey and good afternoon, everyone. We delivered another outstanding quarter, which highlights the growing need for sell side technology for digital advertising, our strong customer relationships and our breadth of solutions, resulting in growth across all formats and channels.

ashish: I'm incredibly proud of the team's hard work and focused execution, which has positioned us well for the growth opportunities that lie ahead, we built an integrated platform that is flexible and efficient. So we can meet the needs of a growing customer base as we expand our total addressable market. We see continued momentum in the business evidenced by adoption of new solutions and growth in customer count is.

Revenue in market significantly exceeded our expectations, marking multiple quarters of accelerating revenue growth.

ashish: Clients across the ecosystem choose to build their AD businesses on pragmatic technology with these strong results continuing into April we are raising our full year guidance.

Revenue grew 20% over Q1 last year, excluding revenue from Yahoo is owned and operated inventory year over year revenue growth was 25% adjust.

Adjusted EBITDA margin was 23% and we generated over $16 million in free cash flow.

ashish: Adding to our confidence is the increasing importance of being positioned on the sell side as the advertising ecosystem evolves there.

I'm incredibly proud of the team's hard work and focused execution, which has positioned us well for the growth opportunities that lie ahead.

ashish: The need for deep and specialized technology to monetize AD inventory and audiences is increasing at a rapid pace new opportunities, including changing privacy regulations, the onslaught of new AD inventory from CTV and commerce media and the increasing need for buyers to control. How they're had budgets are deployed are best addressed on the sell side with <unk>.

We built an integrated platform that is flexible and efficient. So we can meet the needs of a growing customer base as we expand our total addressable market.

We see continued momentum in the business evidenced by adoption of new solutions and growth in customer count as clients across the ecosystem choose to build their AD businesses on somatic technology.

ashish: Its closest to the consumer.

ashish: <unk> is unique our focus on our owned and operated infrastructure and strengthen organic innovation resulted in robust technology that efficiently connects buyers and sellers.

With these strong results continuing into April we are raising our full year guidance.

Adding to our confidence is the increasing importance of being positioned on the sell side as the advertising ecosystem evolves.

ashish: We spent 17 years building differentiated solutions and our competitive moat continues to widen even as our logo list continues to grow.

The need for deep and specialized technology to monetize AD inventory and audiences is increasing at a rapid pace new opportunities, including changing privacy regulations, the onslaught of new AD inventory from CTV and commerce media and the increasing need for buyers to control how their AD budgets are deployed are best addressed on the sell side.

ashish: These advantages attract both advertisers and publishers to <unk>, adding scale to the platform and fueling continued growth.

Speaker Change: Let me explain.

Speaker Change: Advertisers are looking to gain scaled access to premium inventory audiences and data, which is primarily done three sell side technology, whether they connect directly to us via activate or via a demand side platform.

Which six closest to the consumer.

Nomadic is unique our focus on our owned and operated infrastructure and strengthen organic innovation results and robust technology that efficiently connects buyers and sellers.

Speaker Change: Our owned and operated infrastructure provides an efficient transparent omnichannel global and privacy forward solution, while giving buyers granular capabilities to control how their AD budgets are deployed.

We spent 17 years building differentiated solutions and a competitive moat continues to widen even as our logo list continues to grow.

These advantages attract both advertisers and publishers to <unk>, adding scale to the platform and fueling continued growth.

Speaker Change: At the same time premium publishers and data owners are using pragmatic to gain access to our scaled buyer demand further amplified by supply path optimization and activate.

Let me explain.

Speaker Change: Moreover, our addressable market continues to grow as we attract new entrants to the digital advertising ecosystem like leading streaming providers Commerce media participants and now social media companies. The most recent example.

Others are looking to gain scaled access to premium inventory audiences and data, which is primarily done through sell side technology, whether they connect directly to us via activated or via a demand side platform.

Our owned and operated infrastructure provides an efficient transparent omni channel global and privacy forward solution.

Speaker Change: Well this is roadblocks.

Speaker Change: When the global immersive platform was looking to enable programmatic ads for the first time, they tapped a matter to power this offering.

Giving buyers granular capabilities to control how their AD budgets are deployed.

Speaker Change: Not only can nomadic provide scaled access to premium brand advertising demand through our buy side.

At the same time premium publishers and data owners are using pragmatic to gain access to our scaled buyer demand further amplified by supply path optimization that activate.

Speaker Change: And the needs of content providers across web and app environments as robust as VP of global partnerships, Stephanie Laythan explained.

Moreover, our addressable market continues to grow as we attract new entrants to the digital advertising ecosystem like leading streaming providers.

Speaker Change: Hurting with nomadic and what's the opportunity for more advertisers.

Media participants and now social media companies.

Speaker Change: Through preferred content formats like video, while providing advertiser controls around brand suitability.

Most recent example of this is roadblocks.

When the global immersive platform was looking to enable programmatic ads for the first time, they tapped a matter to power this offer.

Speaker Change: More broadly as cookie deprecation years, and privacy regulations increase around the world the future of digital advertising resides in technology like probiotics that sits closest to the publisher and therefore, the consumer we have a unique opportunity to tap into the myriad of behavioral demographic identity interest based and contextual signals that publishers have <unk>.

Not only can nomadic provide scaled access to premium brand advertising demand through our buy side relationships, but we also understand the needs of content providers across web and app environments as.

As roadblocks as VP of global partnerships, Stephanie weight them explained and I quote partnering with automatic unlocks the opportunity for more advertisers to seamlessly engage with this community through preferred content formats like video, while providing advertiser controls around brand suitability.

Speaker Change: Access to all while enabling media owners to maintain control of their data and access a critical component as they build their AD tech stacks.

Speaker Change: As we crossed the 500% Mark and product management and engineering, we continue to focus on building solutions ahead of the trends that are playing out today, namely buyers spend consolidation via spo growth from connected television and expansion of Commerce media.

More broadly as cookie deprecation nears and privacy regulations increase around the world the future of digital advertising resides in technology like cosmetics that fits closest to the publisher and therefore the consumer.

Speaker Change: I'd like to walk through these growing areas and how we've differentiated ourselves in each.

We have a unique opportunity to tap into the myriad of behavioral demographic identity interest space and contextual signals that publishers have access to.

Speaker Change: Our goal is to maximize content creators access to programmatic advertising budgets, while we work with top DSP on a global basis, we know that advertisers and agencies have tremendous influence over how and where their budgets are spent.

All while enabling media owners to maintain control of their data and access a critical component as they build their AD tech stacks.

Speaker Change: With large AD budgets continuing to shift from linear to programmatic.

As we crossed the 500 person Mark and product management and engineering, we continue to focus on building solutions ahead of the trends that are playing out today, namely buyers spend consolidation via spo growth from connected television and expansion of Commerce media I'd.

Speaker Change: <unk> activate offers AD buyers are highly efficient and fully scaled solution that directly connects buyers with premium video inventory, while reducing operational friction.

Speaker Change: Further our approach focuses on both AD buyers and content creators interests we.

I'd like to walk through these growing areas and how we've differentiated ourselves in each.

Speaker Change: We deliver increased rois that warrants higher CPM.

Speaker Change: Elevates the value of the entire digital advertising ecosystem.

Our goal is to maximize content creators access to programmatic advertising budgets, while we work with top DSP on a global basis, we know that advertisers and agencies have tremendous influence over how and where their budgets are spent.

Speaker Change: I couldnt be more pleased with the success, we are seeing as we continue to expand customer engagement through new products and regions.

Speaker Change: Several of the top global agency holding companies are in the process of ramping up their adoption of activates.

With large AD budgets continuing to shift from linear to programmatic S. P. O via activate offers AD buyers are highly efficient and fully scaled solution that directly connects buyers with premium video inventory, while reducing operational friction.

Speaker Change: We've also recently expanded activate into Latin America.

Speaker Change: Our comprehensive suite of buyer solutions is what makes our spo offerings so compelling.

Speaker Change: As a result AD buying activity from Spo continues to drive growth across the <unk> platform.

Further our approach focuses on both AD buyers and content creators interests.

Speaker Change: Our multi year partnership with Groupon is just one example of how we are meeting the growing needs of buyers.

We deliver increased rois that warrants higher CPM, which elevates the value of the entire digital advertising ecosystem.

Speaker Change: We initially engage with group them for Spo in 2019.

Speaker Change: Overtime, we expanded the relationship from desktop display mobile online video and ultimately connected TV.

I couldnt be more pleased with the success, we are seeing as we continue to expand customer engagement through new products and regions.

Speaker Change: We've.

Several of the top global agency holding companies are in the process of ramping up their adoption of activation.

Speaker Change: Further partner to power their premium marketplace across Europe, and Asia, and most recently in the U S.

We've also recently expanded activate into Latin America.

Our comprehensive suite of buyer solutions is what makes our spo offerings so compelling.

Speaker Change: In 2023, we launched a comprehensive private marketplace steel library across multiple group of agencies, which consolidates media buying onto approved inventory packages that meet their performance and quality standards.

As a result AD buying activity from Spo continues to drive growth across the <unk> platform.

Our multiyear partnership with group <unk> is just one example of how we are meeting the growing needs of buyers.

Speaker Change: And just this past month, we announced a first of its kind solution to deliver AI generated cohort based audience models customized for each group and advertiser clients.

We initially engage with group M for Spo in 2019.

Over time, we expanded the relationship from desktop display to mobile online video and ultimately connected TV.

Speaker Change: What's most interesting about this journey is that it can only be done with technology like cosmetics that sits on the sell side.

We further partner to power their premium marketplace across Europe, and Asia and most recently in the U S.

Speaker Change: At the end of the first quarter <unk> activity increased to 50% up four percentage points from the end of Q4.

In 2023, we launched a comprehensive private marketplace steel library across multiple group M agencies, which consolidates media buying onto approved inventory packages that meet their performance and quality standards and.

Speaker Change: Our spo activity is creating a growing market.

Speaker Change: We ought to attract new publishers, who want access to the unique demand only available on payback.

And just this past month, we announced a first of its kind solution to deliver AI generated cohort based audience models customized for each group and advertiser clients.

Speaker Change: I anticipate that.

Speaker Change: There is potential for SCO activity to be 75% of our total buyer activity driving this confidence.

What's most interesting about this journey is that it can only be done with technology like cosmetics that sits on the sell side.

Speaker Change: One the nature of our land and expand strategy, our net spend retention rate from AD buyers with at least three years of spend reached 125%, which gives us high visibility into impression and revenue growth.

At the end of the first quarter as few activity increased to 50% up four percentage points from the end of Q4.

Speaker Change: Two we are adding 50% more buyer focused salespeople. This year. So that we can bring the same efficiencies and high rois to mid tier agencies and large advertisers as they to embark on SPM initiatives.

Our spo activity is creating a growing mode and flywheel to attract new publishers, who want access to the unique demand only available on pragmatic.

I anticipate that over the next several years there is potential for spo activity to be 75% of our total buyer activity.

Speaker Change: And three total global digital AD spend is estimated to grow by 32% over the next four years to nearly 850 billion, we will disproportionately benefit as the industry continues to consolidate.

Driving this confidence are a few things one.

The nature of our land and expand strategy, our net spend retention rate from AD buyers with at least three years of spend reached 125%, which gives us high visibility into impression and revenue growth.

Speaker Change: The capital outlay needed global scale requirements and ongoing pace of innovation make it challenging for other platforms to compete and even harder for new entrants to emerge.

Speaker Change: At the same time publishers are also mandated to find increased efficiencies and greater monetization.

Two we are adding 50% more buyer focused salespeople. This year. So that we can bring the same efficiencies and I rois to mid tier agencies and large advertisers as they to embark on SPM initiatives.

Speaker Change: Both of these objectives can be solved by shifting from in house software to <unk> solutions, which allows publishers to focus on their core competencies, creating content and connecting with consumers while leaning on trusted experts like pragmatic to power more of their tech stack.

And three total global digital AD spend is estimated to grow by 32% over the next four years to nearly 850 billion.

Speaker Change: For example, open ramp our header bidding wrapper solution across CTV mobile App and web environments drive increased yield for publishers and streamlines, our engineering in that operations published.

We will disproportionately benefit as the industry continues to consolidate.

The capital outlay needed global scale requirements and ongoing pace of innovation make it challenging for other platforms to compete and even harder for new entrants to emerge.

Speaker Change: Publishers like realtor Dot Com Internet brands Sports App live score and NPR are increasingly realizing the benefits of open ramp as we have more than doubled the number of paying customers year over year.

At the same time publishers are also mandated to find increased efficiencies and greater monetization.

Both of these objectives can be solved by shifting from in house software to <unk> solutions, which allows publishers to focus on their core competencies grading content and connecting with consumers while leaning on trusted experts like nomadic to power more of their tech stack.

Speaker Change: The same mandate to find increased efficiencies and greater monetization holds true for screams, even the biggest names in CTV are opening up their inventory and data to access a greater proportion of AD budgets in order to drive growth.

For example, open ramp our header bidding wrapper solution across CTV mobile App and web environments drive increased yield for publishers and streamlines, our engineering in that operations.

Speaker Change: In fact, as an increasing share of CTV AD budgets move to programmatic transactions top streamers are increasingly adopting pragmatic to support direct transactions with buyers via private marketplace for programmatic guaranteed options.

Publishers like realtor Dot Com Internet brands Sports App live score and NPR are increasingly realizing the benefits of open wrap as we have more than doubled the number of paying customers year over year.

Speaker Change: Beyond the one to one direct access our technology enabled streamers to optimize yield across multiple bidders and improve impression level data available to buyers that can drive higher yields.

The same mandate to find increased efficiencies and greater monetization holds true for streams in the biggest names in CTV are opening up their inventory and data to access a greater proportion of AD budgets in order to drive growth.

Speaker Change: Our strategy to penetrate CTV budgets is multi pronged.

Speaker Change: First our growth in Spo and activate provides publishers with unique demand on the <unk> platform not available elsewhere.

Speaker Change: This creates a catalyst for growth, allowing us to rapidly expand our CTV publisher base, which increased 15% year over year in Q1.

In fact, as an increasing share of CTV AD budgets move to programmatic transactions top streamers are increasingly adopting pragmatic to support direct transactions with buyers via private marketplace for programmatic guaranteed options.

Speaker Change: Further as publishers derive value from our platform. They are increasingly choosing to move more of their direct sold deals to <unk>, which is a significant portion of our CTV and online video is sold today.

Beyond the one to one direct access our technology enabled streamers to optimize yield across multiple bidders and improve impression level data available to buyers that can drive higher yields.

Speaker Change: The results of our strategy are clear.

Speaker Change: Last quarter, we added dish media in vivo to our platform and we most recently on boarded Virgin media one of the Uk's Premier Entertainment and communications companies.

Our strategy to penetrate CTV budgets is multi pronged.

First our growth in Spo and activate provides publishers with unique demand on the telematics platform not available elsewhere.

Speaker Change: Virgin Media selected <unk> as one of only a few sell side technology companies, helping to power their free AD supported TV or faxed offering because of our strength in spo and private marketplaces.

This creates a catalyst for growth, allowing us to rapidly expand our CTV publisher base, which increased 15% year over year in Q1.

Speaker Change: We believe we are at the early stages of this new CTV and online video flywheel for growth, particularly as activate begins to ramp.

Further as publishers derive value from our platform. They are increasingly choosing to move more of their direct sold deals to automatic which is a significant portion of our CTV and online video is sold today.

Speaker Change: Convert our commerce media platform also benefits from the scale of premium inventory on our platform.

The result of our strategy are clear.

Speaker Change: This supply coupled with the richness of our data capabilities allows us to attract.

Last quarter, we added dish media in vivo to our platform and we most recently on boarded Virgin media one of the Uk's Premier Entertainment and communications companies.

Speaker Change: Retail media budgets programmatic retail media expands our Tam by $10 billion in the fastest growing part of the market where AD buyers use retailers unique datasets to deliver relevant high performance AD campaigns. Further this is a nascent market today with plenty of Greenfield opportunity.

Virgin Media selected <unk> as one of only a few sell side technology companies, helping to power their free AD supported TV or faxed offering because of our strength in spo and private marketplaces.

We believe we are at the early stages of this new CTV and online video flywheel for growth, particularly as activate begins to ramp.

Speaker Change: In addition, commerce media sites with their trove of first party data signals stand to benefit the most as a third party cookies eliminated.

Convert our commerce media platform also benefits from the scale of premium inventory on our platform.

Speaker Change: Okay.

Speaker Change: This transition unfolds and adoption of alternative signals increases are more resilient supply chain will emerge delivering more relevant ads for our consumers better performance for advertisers and superior monetization for <unk>.

This supply coupled with the richness of our data capabilities allows us to attract retail media budgets.

Programmatic retail media expands our Tam by $10 billion in the fastest growing part of the market where AD buyers use retailers unique datasets to deliver relevant high performance ad campaigns.

Speaker Change: We integrate directly with retailers and their data positioning us well for growth in retail media.

Speaker Change: We are already seeing strong interest and convert from some of the largest commerce media platforms.

Further this is a nascent market today with plenty of Greenfield opportunity.

In addition, commerce media sites with their trove of first party data signals stand to benefit the most as a third party cookies eliminated.

Speaker Change: We announced a partnership with <unk>, allowing buyers to leverage into the cards first party retail media data to <unk>.

As this transition unfolds and adoption of alternative signals increases are more resilient supply chain will emerge delivering more relevant ads for our consumers better performance for advertisers and superior monetization for content owners.

Speaker Change: And so inventory equally important because we set primarily on the sell side of the ecosystem with direct access to scaled omnichannel inventory. We are in a unique position to deliver offsite audience targeted campaigns in a privacy compliant way.

We integrate directly with retailers and their data positioning us well for growth in retail media.

Speaker Change: As these large content creators embraceor advertising potential. They are also choosing somatic to power their onsite inventory barna the globe.

We are already seeing strong interest and convert from some of the largest commerce media platforms. Just a few weeks ago, we announced a partnership with instant allow.

Speaker Change: Hello payments company that boasts the world's fastest growing community of shoppers recently partnered with <unk> to monetize the native inventory on their and they chose <unk> because of the scale. We provide so that any advertiser regardless of their DSP can reach foreigners highly engaged audience at the point of purchase for better campaign performance.

Allowing buyers to leverage instant card first party retail media data to reach audiences across our expansive inventory.

Equally important because we sit primarily on the sell side of the ecosystem with direct access to scaled omnichannel inventory. We are in a unique position to deliver offsite audience targeted campaigns in a privacy compliant way.

Speaker Change: While still early days for convert in our Commerce media business I'm excited about the breadth of opportunities ahead of us our strong agency and advertiser relationships driven by Spo inactivate, coupled with our strong portfolio of audience solutions are gaining traction with commerce media companies.

As these large content creators embraceor advertising potential there are also choosing nomadic to power their onsite inventory.

Barna, the global payments company that boasts the world's fastest growing community of shoppers recently partnered with <unk> to monetize the native inventory on their own.

Speaker Change: Collectively the driving forces of innovation and growth in our industry are creating a wealth of opportunity for the open internet buyers.

Speaker Change: Buyers are looking to engage their audiences alongside brand safe professionally curated content, which the walled gardens do not provide.

They chose <unk> because of the scale, we provide so that any advertiser regardless of their DSP can reach foreign is highly engaged audience at the point of purchase for better campaign performance.

Speaker Change: I've had numerous conversations with key advertisers and media buyers at global AD agencies about how they are actively looking to move media buys out of walled gardens, but need the performance and ROI that they are accustomed to.

While still early days for convert in our Commerce media business I'm excited about the breadth of opportunities ahead of us.

Our strong agency and advertiser relationships driven by Spo inactivate, coupled with our strong portfolio of audience solutions are gaining traction with commerce media companies.

Speaker Change: I believe that the open internet has the potential to deliver performance consistent with walled gardens, especially after third party cookies are deprecated and first party data from CTV Publishers and Commerce media partners continues to scale.

Collectively the driving forces of innovation and growth in our industry are creating a wealth of opportunity for the open internet.

Speaker Change: In summary, we delivered an outstanding start to the year with continued momentum into April.

Buyers are looking to engage their audiences alongside brand safe professionally curated content, which the walled gardens do not provide.

Speaker Change: We've added new clients and establish deeper relationships with content creators and buyers and we are investing in the highest return areas of the business like activate for spo and expert data and convert for Commerce media.

I've had numerous conversations with key advertisers and media buyers that global AD agencies that how they are actively looking to move media buys out of walled gardens, but need the performance and ROI that they are accustomed to.

Speaker Change: As a result, we expect revenue growth to accelerate in 2024.

I believe that the open internet has the potential to deliver performance consistent with walled gardens, especially after third party cookies are deprecated and first party data from CTV Publishers and Commerce media partners continues to scale.

Speaker Change: Okay.

Speaker Change: Our competitive moat is widening as is the need for sell side technology.

Speaker Change: Those that are looking to build their advertising businesses need three things.

Speaker Change: Technology that carries them into the future and insurance contract.

In summary, we delivered an outstanding start to the year with continued momentum into April.

Speaker Change: Preferences.

We've added new clients and establish deeper relationships with content creators of items and we are investing in the highest return areas of the business like activate <unk> CEO.

Speaker Change: Access to premium inventory and buyer demand.

Speaker Change: And an efficient.

Speaker Change: After execute direct programmatic transactions.

Speaker Change: At <unk>, we have global Omnichannel scale, a rich innovative product roadmap and the resources for ongoing investments, we have tremendous opportunity in front of us as we expand our addressable market and deliver real value to content creators buyers and data partners.

Expert data and convert for Commerce media.

As a result, we expect revenue growth to accelerate in 2024.

Our competitive moat is widening as is the need for sell side technology.

Those that are looking to build their advertising businesses need three things.

Speaker Change: I will now hand, it over to Steve for the financial details.

Technology that carries them into the future and ensures control of inventory data and buyer preferences.

Steve: Thank you Rajiv and welcome everyone.

Steve: We once again exceeded guidance on the top and bottom line led by strong execution and continued momentum in our business.

Access to premium inventory and buyer demand.

And an efficient transparent path to execute direct programmatic transactions.

Steve: Several factors drove accelerated year over year revenue growth of 20%.

At <unk>, we have global Omnichannel scale.

Steve: Monetize impressions increased for every format and channel in aggregate by 17%.

Rich innovative product roadmap and the resources for ongoing investment.

Steve: Cpm's were stable across formats and channels and.

We have tremendous opportunity in front of us as we expand our addressable market and deliver real value to content creators buyers and data partners.

Steve: And emerging revenue streams comprised of new products data partnerships and enterprise software integrations contributed approximately two percentage points of growth in the quarter on track to double their contribution by the end of the year.

I will now hand, it over to Steve for the financial details.

Thank you Rajiv and welcome everyone.

Steve: This strong outperformance also drove incremental margin expansion with adjusted EBIT margins of 23%.

We once again exceeded guidance on the top and bottom line led by strong execution and continued momentum in our business.

Steve: Once again, demonstrating the strength of our business model, which is built on owned and operated infrastructure innovation investments to deliver differentiated products and operational excellence.

Several factors drove accelerated year over year revenue growth of 20%.

Monetize impressions increased for every format and channel in aggregate by 17%.

Steve: Compared to Q1 last year, we doubled our adjusted EBITDA and tripled our free cash flow.

C P EMS were stable across formats and channels.

And emerging revenue streams comprised of new products data partnerships and enterprise software integrations contributed approximately two percentage points of growth in the quarter on track to double their contribution by the end of the year.

Steve: Breaking Q1 down by format and channel, which includes Yahoo, unless otherwise called out.

Steve: Omnichannel video revenue from CTV mobile and desktop devices grew 33% over Q1 last year.

This strong outperformance also drove incremental margin expansion with adjusted EBITDA margins of 23%.

Steve: Driven by an increase of monetize impressions by more than 50%.

Steve: As we continue to expanding our roster of new customers and growing our share of wallet with existing customers, we see a long runway of opportunity in this high value channel.

Once again, demonstrating the strength of our business model, which is built on owned and operated infrastructure innovation investments to deliver differentiated products and operational excellence.

Steve: We also saw continued strength in display most of which was via the mobile channel.

Compared to Q1 last year, we doubled our adjusted EBITDA and tripled our free cash flow.

Steve: Display revenue grew 10% over Q1 last year led by double digit percentage increase in monetizing impressions.

Breaking Q1 down by format and channel, which includes Yahoo, unless otherwise called out.

Steve: Okay.

Steve: Okay.

Omnichannel video revenue from CTV mobile and desktop devices grew 33% over Q1 last year.

Steve: Okay.

Steve: Yeah.

Steve: Yeah.

Steve: Yeah.

Driven by an increase of monetize impressions by more than 50%.

Steve: Okay.

Steve: Thank you.

As we continue expanding our roster of new customers and growing our share of wallet with existing customers, we see a long runway of opportunity in this high value channel.

Steve: Okay.

Steve: Okay.

Steve: Yeah.

Steve: Thanks.

Steve: Hi.

Steve: Yes.

We also saw continued strength in display most of which was via the mobile channel.

Steve: Okay.

Steve: Yeah.

Display revenue grew 10% over Q1 last year led by double digit percentage increase in monetizing impressions.

Steve: Yes.

Steve: Yes.

Steve: Yes.

Steve: Yeah.

Steve: Okay.

Excluding Yahoo owned and operated inventory display revenue grew 17% year over year.

Steve: Thanks.

Steve: Yes.

Steve: Yes.

Steve: Yes.

Steve: Yeah.

On a global basis every region grew double digit percentages in the first quarter.

Steve: Okay.

Steve: Okay.

Steve: Okay.

Steve: Okay.

As mentioned in prior earnings calls our results include the revenue headwind in our business from Yahoo.

Steve: Okay.

Excluding revenue from Yahoo is owned and operated inventory revenue grew significantly by 25% over Q1 last year.

Steve: Sure.

We anticipate this headwind diminishing in the second half.

Steve: Right.

Steve: Yes.

Steve: Yes.

We also added 99 publishers on a year over year basis, including premium CTV and transactional commerce brands.

Steve: Okay.

Steve: Okay.

Steve: Yes.

Steve: Yeah.

Steve: Okay.

Steve: Okay.

And we grew our existing publisher revenues on a trailing 12 month basis with net dollar based retention at 106%.

Steve: Yes.

Steve: Okay.

Steve: Yes.

Steve: Okay.

Steve: Okay.

Steve: Okay.

Excluding Yahoo net dollar based retention was 114%.

Steve: Okay.

Steve: Yes.

Looking at growth in AD spend the top tender verticals combined increased by 20% compared to Q1 last year.

Steve: Yeah.

Within this group the majority of AD verticals grew nearly 30% year over year.

Steve: Alright.

Steve: Okay.

Steve: Yeah.

Our relationships with buyers continue to expand as activity from SPL climbed to 50% of all activity on our platform.

Steve: Okay.

Steve: Consistent.

Steve: Okay.

Steve: Yeah.

Underscoring the long term strategic value and stickiness of these relationships. The trailing 12 months net spend retention rate from SPL partners with at least three years of spending on our platform was 125%.

Steve: Hi.

Steve: Okay.

Steve: Yes.

Steve: Okay.

Steve: Yes.

Steve: Yeah.

Steve: Yes.

As a share of SPL to toll activity increases, we anticipate revenue visibility further improving and the proportion of high margin revenue growing.

Steve: Okay.

Steve: Our local Austin create incremental data monetization opportunities for <unk> as we generate both publisher revenue and data fees from our connect transactions.

In February I outlined our key operating priorities for delivering accelerated year over year revenue growth and incremental margin expansion.

Steve: Prior investments in this area have led to increased value creation for clients, resulting in the number of connect customers more than doubling over the last 12 months.

Consistent with our long term track record, we remain focused on investing in high impact high return projects.

Steve: These investments are also focused on expanding our alternative data signals.

Steve: Similarly increased sales and engineering investments in open rep have broadened our value propositions and capabilities that we deliver.

While driving further efficiencies across the business.

First.

We are executing our plan of adding over 150 net new team members this year to accelerate product innovation and go to market expansion.

Steve: Our wrapper solution generates revenue be our core SSP revenue stream as well as software base fee from our publisher revenue flowing through the Robert.

We are adding engineers to create incremental data monetization opportunities for <unk> as we generate both publisher revenue and data fees from our connect transactions.

Steve: We've also expanded our buyer focused sales team by nearly 20% year over year to accelerate growth in spo and activate.

Prior investments in this area have led to increased value creation for clients, resulting in the number of connect customers more than doubling over the last 12 months.

Steve: We expect this broader team will enable us to further penetrate large agencies and advertisers as well as bring on mid tier buyers, we're starting to embark on SPL initiatives.

These investments are also focused on expanding our alternative data signals.

Steve: You'll recall that in February I shared that our plan was to increase the SPL focus team by 50% over the course of 2024.

Similarly increased sales and engineering investments in open rep have broadened our value propositions and capabilities that we deliver.

Steve: Second we continue to make prudent investments in capex with a focus on finding new products and officially increasing capacity on the platform.

Our rapid solution generates revenue be our core SSP revenue stream as well as software base fee from our publisher revenue flowing through the Robert.

Steve: As previously communicated we anticipate full year capex to be marginally higher than last year's level.

We've also expanded our buyer focused sales team by nearly 20% year over year to accelerate growth and SPL inactivate.

Steve: And third our team is building on cost saving efforts from last year, and optimizing via software and AI to deliver incremental efficiencies across our owned and operated infrastructure.

We expect this broader team will enable us to further penetrate large agencies and advertisers as well as bring on mid tier buyers, we're starting to embark on SPL initiatives.

Steve: For the trailing 12 months these efforts reduced our cost of revenue per million impressions processed by 10% compared to the comparable prior 12 month period.

You'll recall that in February I shared that our plan was to increase the SPL focused team by 50% over the course of 2024.

Steve: Moving down the P&L GAAP.

Second we continue to make prudent investments in capex with a focus on finding new products and efficiently increasing capacity on the platform.

Steve: GAAP operating expenses in Q1 were in line with expectations at $46 8 million, an 11% increase over the prior year, reflecting that.

As previously communicated we anticipate full year capex to be modestly higher than last year's level.

Steve: Okay.

Steve: Sure.

And third our team is building a cost saving efforts from last year, and optimizing via software and AI to deliver incremental efficiencies across our owned and operated infrastructure.

Steve: Okay.

Steve: Yes.

Steve: Okay.

Steve: Okay.

Steve: Okay.

Steve: Okay.

Steve: Yes.

For the trailing 12 months these efforts reduced our cost of revenue per million impressions processed by 10% compared to the comparable prior 12 month period.

Steve: Okay.

Steve: That's great.

Steve: Scott.

Moving down the P&L.

Steve: [noise] downtown.

GAAP operating expenses in Q1 were in line with expectations at $46 8 million, an 11% increase over the prior year, reflecting targeted investments across the business.

Steve: Okay.

Steve: [noise].

Steve: Yeah.

Steve: Okay.

Q1, GAAP net loss was $2 5 million or five net loss per diluted share.

Steve: Okay.

Steve: Couple of portion of our repurchase program in February 2023, we have repurchased a total of $5 1 million shares for $79 4 million.

non-GAAP net income, which adjust for stock based compensation expense and related adjustments for income tax.

Steve: We have $95 $6 million remaining in our repurchase program authorized through December 31, 2025.

It was $4.8 million or approximately <unk> <unk> per diluted share.

We have a strong balance sheet that supports our long term capital allocation strategy.

Steve: We generated 24 million in net cash provided by operating activities and delivered $16 million of free cash flow, which was more than three times of free cash flow, we generated in Q1 of last year.

We ended the quarter with 174 million of cash and marketable securities and zero debt.

Year to date through April 32024, we repurchased one 1 million shares of class a common stock for $20 1 million in cash.

Steve: Now turning to our outlook in.

Steve: In Q1, we saw terrific growth across our business in this way.

Steve: Paul.

Since the inception of our repurchase program in February 2023, we have repurchased a total of $5 1 million shares for $79 $4 million.

Steve: Okay.

Steve: Yes.

Steve: Thanks.

Steve: Okay.

Steve: Okay.

Steve: Yeah.

We have $95 $6 million remaining in our repurchase program authorized through December 31, 2025.

Steve: Yeah.

Steve: Yes.

Steve: Okay.

We generated 24 million in net cash provided by operating activities.

Steve: Yes.

Steve: Okay.

Steve: Yes.

And delivered $16 million of free cash flow, which was more than three times of free cash flow, we generated in Q1 of last year.

Steve: Okay.

Steve: Okay.

Steve: Okay.

Steve: Yes.

Steve: Okay.

Now turning to our outlook.

In Q1, we saw a terrific growth across our business and this momentum continued through April with revenues up double digit percentages over last year.

Steve: Okay.

Steve: Okay.

Steve: Yeah.

Steve: Okay.

Steve: Yes.

Both our internal video and display revenues in April increased over last year and the majority of our top 10, <unk> grew over 20% year over year.

Steve: <unk>.

Steve: This change had been made by other DSP has over the past several years.

Steve: Nearly 100% of impressions on our platform will now be transacted via similar bidding approach.

We are also making steady progress on our 2024 operating priorities in terms of hiring for continued innovation.

Steve: Based on prior experience from similar DSP changes, we expect lower bid prices from this specific buyer to be partially offset by real time competitive reactions by other DSP.

And go to market expansion.

That we believe will help accelerate year over year revenue growth.

These data points give us confidence in our underlying growth strategy and the effectiveness of the growth investments we are making.

Steve: Further we anticipate that our strong underlying growth across AD formats channels and regions as well as growth of our emerging revenue streams will help us offset this headwind throughout the year.

Our Q2 and full year outlook also reflects an anticipated headwind as one of our top Dsp's has informed us it is modifying its bidding methodologies in Q2.

Steve: For Q2 revenue, we're projecting $69 million to $71 million or approximately 11% year over year growth at the midpoint.

This change had been made by other DSP has over the past several years.

Nearly 100% of impressions on our platform will now be transacted via similar bidding approach.

Steve: For the full year, we expect revenue between 296 and $304 million or 12% year over year growth at the midpoint.

Based on prior experience from similar DSP changes, we expect lower bid prices from this specific buyer to be partially offset by real time competitive reactions by other DSP.

Steve: In terms of cost.

Steve: We expect GAAP cost of revenue to increase sequentially each quarter in the low single digit percentage range.

Steve: We also expect Q2 GAAP opex in subsequent quarters to increase sequentially in the low single digit percentages as we continue to invest for long term growth.

Further we anticipate that our strong underlying growth across AD formats channels and regions as.

As well as growth of our emerging revenue streams will help us offset this headwind throughout the year.

Steve: With our revenue guidance and expected cost structure, which is largely fixed in the near term by design.

For Q2 revenue, we're projecting $69 million to $71 million or approximately 11% year over year growth at the midpoint.

Steve: We expect Q2, adjusted EBITDA between 17 and $19 million approximately 26% margin.

For the full year, we expect revenue between 296 and $304 million or 12% year over year growth at the midpoint.

Steve: Yeah.

Steve: Yeah.

Steve: Okay.

Steve: Okay.

Steve: Approximately.

Steve: Okay.

In terms of cost.

We expect GAAP cost of revenue to increase sequentially each quarter in the low single digit percentage range.

Steve: Okay.

Steve: Yeah.

We also expect Q2 GAAP opex in subsequent quarters to increase sequentially in the low single digit percentages as we continue to invest for long term growth.

Steve: In summary, we had a very strong start to the year, which continued into April.

Steve: Spo relationships now account for 50% of activity on our platform.

With our revenue guidance and expected cost structure, which is largely fixed in the near term by design.

Steve: We added significant new customers.

Steve: All regions grew double digit percentages and new products all contributed to growth.

We expect Q2, adjusted EBITDA of between 17, and 19 million or approximately 26% margin at the midpoint.

Steve: Our results highlight the profitability and the durability of our model as we focus on sustained innovation.

Okay.

Steve: Go to market expansion and operational excellence.

For the full year, we expect adjusted EBITDA between 90, and 94 million or approximately 31% margin at the midpoint.

Steve: As one of the largest independent sell side technology providers I'm very excited about our long term growth opportunities and the trajectory. We're on for sustained double digit revenue growth this year and beyond.

We expect capex between $16 million to $18 million for the full year.

In summary, we had a very strong start to the year, which continued into April.

Steve: With that I will turn the call over to Stacy for questions.

S. P O relationships now account for 50% of activity on our platform.

Steve: Okay.

Stacy: As a reminder, you can ask your question.

We added significant new customers.

Stacy: My point on the dashboard.

All regions grew double digit percentages and new products are contributing to growth.

Stacy: Thanks Stan.

Stacy: Our first question.

Stacy: Okay.

Our results highlight the profitability and the durability of our model as we focus on sustained innovation.

Stacy: Okay.

Stacy: Yeah.

Go to market expansion and operational excellence.

Stacy: So my question.

As one of the largest independent sell side technology providers I'm very excited about our long term growth opportunities and the trajectory. We're on for sustained double digit revenue growth this year and beyond.

Stacy: Right.

Stacy: Right.

Stacy: Okay.

Stacy: As new formats like Commerce media in CTV continued to gain scale could you just talk a little bit about customers' focus I'm able to get these things back to a single pane of glass right as they get bigger and more part of their AD buying process and then I guess the importance of the work that youre doing it problematic to kind of redefine yourself for this expanded definition.

With that I'll turn the call over to Stacy for questions.

Thank you.

As a reminder, you can ask your question I mean, my point on the dashboard on your phone.

Sure.

Nine.

Stacy: Omnichannel.

Our first question comes from Matt firm kind of RBC. Please go ahead ma'am.

Speaker Change: Sure Yeah, Hey, Matt. Thank you so I can take that.

Speaker Change: So absolutely I think what we see is that complexity for the AD buyer right, so whether thats an advertiser.

Yeah, Thank you and congratulations on the quarter.

Speaker Change: Or it's an agency that complexity is growing right and you've got privacy regulations, you've got core classes of new media impressions and data coming online.

This might be a little bit of an ask question, but I kind of want to appraise it differently and go back to an idea we used to always talk about which is omnichannel. So as new formats like commerce media in CTV continued to gain scale could you just talk a little bit about customers focus on being able to get these things back to a single pane of glass right as they get bigger.

Speaker Change: Like <unk>.

Speaker Change: CTV and Commerce media that you mentioned and.

Speaker Change: Buyers are increasingly trying to assert their control over the buying process right, meaning how do they buy what inventory what signals are they using what are the performance of brand kpis of those campaigns and doing that across multiple platforms is very challenging for the brands right. It creates a lot of operational complexity their teams have to learn.

<unk> and more part of their AD buying process and then I guess the importance of the work that youre doing it problematic to kind of redefine yourself for this expanded definition of Omnichannel.

Sure Yeah, Hey, Matt. Thank you so I can take that.

Speaker Change: A lot of different user interfaces.

Absolutely I think what we see is that complexity for the AD buyer rates, whether that's an advertiser or.

Stacy: Forcing something like a frequency cap when you have siloed.

Stacy: Our systems that Youre working in its difficult workflow data aggregation performance measurement all of these things are much harder and.

Or it's an agency that complexity is growing right and you've got privacy regulations, you've got core classes of new media impressions and data coming online.

Stacy: And so we're finding great benefit as evidenced by the spo metric.

Like see.

CTV and Commerce media that you mentioned and.

Stacy: At 50%, we're finding great benefits for buyers and being able to consolidate lean into fewer partners manage the workflow manage the data management.

Buyers are increasingly trying to assert their control over the buying process right, meaning how do they buy what inventory what signals are they using what are the performance of brand kpis of those campaigns and doing that across multiple platforms is very challenging for the brands right. It creates a lot of operational complexity their teams have to learn.

Stacy: Yes.

Stacy: Okay.

Stacy: Yeah.

Stacy: Yeah.

Stacy: Uh huh.

Stacy: Yeah.

Lot of different user interfaces.

Stacy: Okay.

Forcing something like a frequency cap when you have siloed.

Stacy: Okay.

Our systems that Youre working in its difficult workflow data aggregation performance measurement all of these things are much harder.

Stacy: [noise].

And so we're finding great benefit as evidenced by the spo metric at 50%, we're finding great benefit for buyers and being able to consolidate lean into fewer partners manage the workflow manage the data manage the targeting and that's exactly where we are focused and I think what we're continuing to see which we've been seeing over the last couple of years.

Stacy: Yes.

Stacy: Yes.

Stacy: Okay.

Stacy: Right.

Stacy: Okay.

Although we're going to continue to see as a consolidation.

Stacy: Okay.

Stacy: Uh huh.

Of.

Stacy: Yes.

Of the ecosystem towards fewer bigger platforms that can provide the control that can provide the data that can provide the workflow capabilities and I think a particular note, which we're calling out here in the earnings comments earlier is that that the.

Stacy: Okay.

Stacy: [noise] [noise].

Capability to deliver on the needs of buyers is shifting to the south side of the ecosystem and we talked already about what are some of the drivers of that but privacy regulation that certainly one of them where data is more and more.

Encapsulated on the sell side of the ecosystem and of course.

Merely as an SSP, but now of course doing more and more with buyers the spo and activate we're able to bridge from the buyer into the sell side of the ecosystem very deeply.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Sure.

Stacy: Yes.

Stacy: Yes.

Stacy: Yeah.

That's really helpful. Maybe picking up right on spo, obviously impressive to get to 50% of those quickly.

Stacy: Hi.

Stacy: Okay.

Stacy: Yes.

Stacy: Okay.

Stacy: Yes.

But also thinking about that long term view of 75% could you just kind of talk about one is that expansion going to imply you know moving.

Stacy: Okay.

Stacy: I'm sorry.

Stacy: Okay.

Stacy: Yes.

Stacy: Okay.

Stacy: Okay.

Not down market, but do you like smaller enterprises or is it just even more spend from our largest enterprises and then I guess, how does that kind of dictate how youre thinking about maybe R&D and where your costs are going if it is more of an emphasis on those largest customers.

Stacy: Okay.

Stacy: [noise].

Stacy: Yeah.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Oh.

Sure Yeah. So there's I think two key ingredients one is further share.

Stacy: Wow.

Stacy: Yes.

Stacy: Okay.

AD budgets within buyers that were already penetrated into and then the second is of course going after entirely new new buyers and so on the first.

Stacy: Oh.

Stacy: Okay.

Stacy: Okay.

Stacy: Yeah.

Stacy: Yes.

So we've been doing S. P O now for I think maybe about six years.

Stacy: Yeah.

Grown as he said that that metric quite a bad we were and I think the thirty's percentage a year ago up to 50% now, but there's still plenty of runway inside of the large agencies and advertisers that were already penetrated into.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Uh huh.

And so when we look at share by AD format by Geo by type of publisher.

Stacy: Okay.

Stacy: Okay.

There's still plenty of runway inside of those existing customers and then the second piece.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Which is a key area of investment for US is expanding our sales team that is covering S. P O opportunities.

Stacy: Alright.

Stacy: Yeah.

Stacy: Yes.

Is too.

Stacy: Okay.

As to go after independent agencies, and a bigger roster of brands.

Stacy: Yeah.

Stacy: Okay.

Stacy: Awesome.

Stacy: Yeah.

The bigger roster of brands is still very much large brands I think where our sales team was historically, we didn't have enough bandwidth to cover as many branches as we wanted to one of the key things that the IND.

Speaker Change: Two quick questions first one I know the Q2 guide implies a material D cell to 12% year over year growth at the high end.

Stacy: And softer than historical seasonality. Despite the continued into comps can you help us unpack. This Steve I know you called out the potential impact from the DSP changes have you size the potential impact, Missouri any other puts and takes embedded in your Q.

Industry report I think was the Anh Association of National Advertisers report last fall highlighted is that only about 30% of large brands have engaged in supply path optimization, so that speaks to the opportunity.

That for US is underpenetrated in wood that remains in net new brand acquisition for us.

Stacy: Q2 guide that we should be aware of and secondly.

Stacy: For the raise for your guide can you help us unpack your conference back half of the year.

Thank you.

Thank you. Our next question comes from Ian Peterson.

Stacy: Perfect.

Stacy: Okay.

Stacy: Okay.

Please go ahead.

Stacy: Perfect.

Two quick questions first one I know the Q2 guide implies a material D cell to 12% year over year growth at the high end.

Stacy: Okay.

Stacy: Sure.

Stacy: Sure.

Stacy: Okay.

And softer than historical seasonality. Despite the continued into comps can you help us unpack. This Steve I know you called out the potential impact from the DSP changes have you size this potential impact, Missouri any other puts and takes embedded in your.

Stacy: Yes.

Stacy: Okay.

Stacy: [noise].

Q2 guide that we should be aware of and secondly.

For the raise for your guide can you help us unpack your confidence in the back half of the year. Besides the timeline for cookie deprecation getting pushed out or are there other factors that could be more confidence maybe from emerging products.

Stacy: Oh lifetime.

Stacy: First of all Q1.

Stacy: Could you get into April.

Sure. Thanks for the question. So when we put together our Q2 guide we as we typically do we focus on providing an objectively.

Stacy: And we try to balance it out with the authorities.

Stacy: For the year and so the Q2 reflects a partial quarter impact from that.

We took a look at the balance yield opportunities and challenges.

Stacy: Any methodology change and then a full quarter effect.

You point out I called out a headwind that we anticipate emerging latter part of the second quarter related to.

Stacy: Third quarter and fourth quarter.

Speaker Change: But what I'd call out is that in the background you have strong growth across every format and channel and so we anticipate being able to offset that over the balance of the year and so some of the things that we're very confident about.

A single DSP, making bidding.

With the methodology change and so that obviously does factor into our adjusted guidance.

Stacy: Okay.

Say the way to think about it is our underlying growth has been very strong.

Stacy: Yeah.

Stacy: Okay.

Stacy: Okay.

First of all Q1.

Stacy: Yeah.

That continued into April.

Stacy: Yeah.

Stacy: Uh huh.

And we try to balance it out.

Stacy: Got it.

Stacy: Yeah.

The year and so the Q2 reflects a partial quarter impact from that is deepening methodology change and then a full quarter effect.

Stacy: Okay.

Stacy: Yes.

Stacy: Yeah.

Stacy: Alright.

Stacy: Yeah.

Third quarter and fourth quarter.

But what I will call out is that in the background you have strong growth across every format and channel and so we anticipate being able to offset that over the balance of the year and so some of the things that we're very confident about the second half is the.

Stacy: Uh huh.

Stacy: Got it.

Stacy: Well, we anticipate activity too.

Stacy: Developed in the second half.

Stacy: You've seen some of the very important deals that we signed recently are in CCAR cleanup.

The SPL momentum.

Stacy: We anticipate those deals will add to the top line later in the year and then of course.

Of course, that's not no.

Long term growth driver for us.

We are expanding our team as Rajeev just called out to go after incremental opportunities both within Asia.

Stacy: As the presidential election comes into focus six months away.

Stacy: Key political spend starting to firm up so when we put together our full year outlook, we saw stronger than a lot of growth.

Agencies and large brands, but also new STR buyers we were.

We're seeing really positive progress in our emerging revenue opportunities with commented on it.

Stacy: The offset.

Stacy: This headwind, but overall.

Our prepared comments open wrap connect in.

Stacy: Balance.

Stacy: Goodbye.

In the quarter that added a couple of percentage points of growth, we anticipate that continued to.

Stacy: Okay.

Stacy: Okay.

Developed in the second half.

Stacy: Yeah.

You've seen some of the very important deals that we've signed recently are.

Stacy: Okay.

Stacy: Okay.

In CCAR Corinna.

Stacy: Okay.

<unk>, we anticipate those deals will add to the top line later in the year and then of course.

Stacy: Okay.

Stacy: Uh huh.

Stacy: Okay.

Stacy: Okay.

As the presidential election comes into focus six months away our started key political spend starting to firm up so when we put together our full year outlook and we saw strong underlying growth.

Stacy: Hi.

Stacy: Great.

Stacy: Okay.

Stacy: All right.

Stacy: Thank you.

And offset.

Stacy: Okay.

This headwind, but overall on balance we are raising our full year guide to a 12% midpoint.

Stacy: Alright.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Thanks.

Thank you Steve.

Stacy: Yes.

Stacy: Okay.

Stacy: Okay.

Our next question comes from Justin Patterson with Keybanc.

Stacy: Okay.

Tom.

Stacy Janssen has disconnected.

Stacy: Thank you.

Stacy: Okay.

Stacy: Okay.

Thank you Catherine.

Stacy: Okay.

Moving on well take our next question from James Moore capital.

Stacy: Okay.

Stacy: Yeah.

Stacy: Okay.

Stacy: Yeah.

Great. Thanks for taking my question.

Stacy: Yes.

Can you just walk through just what the CSP bidding change really is I just don't fully understand.

Stacy: Yes.

Stacy: Okay.

Stacy: Right.

Stacy: Okay.

Daniel level, how it impacts the business, so if theres any more detail.

Stacy: Okay.

Stacy: Yeah.

You can provide on that that would be super helpful. Thanks.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Yeah, Hey, James I can take that happy to so the DSP and question there converting all of their options to first price auctions and historically they've used a combination of first price and second price auction.

Stacy: Okay.

Stacy: Thank you.

Stacy: Anthony.

Stacy: Yes.

Stacy: Okay.

Stacy: Yeah.

Stacy: Okay.

Stacy: Okay.

And and these changes will make their methodology consistent with what the rest of the industry does and.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

And the rest of the industry has made this transition really over the last several years.

Stacy: Got it.

Stacy: Okay.

So after this change from this DSP nearly 100% of auctions on our platform will be first price auctions using a consistent methodology.

Stacy: Okay.

Stacy: Yes.

Stacy: Yes.

Stacy: Okay.

Stacy: Yeah.

Stacy: Yes.

Now as Steve called out you know, we operate a real time auction.

Stacy: Yes.

Stacy: Great.

Stacy: Okay.

And so based on our experience in managing this kind of a transition with other DSP has in the past we anticipate that the bid prices from this particular DSP will be lower given their changes, but those lower bid prices will be partially offset by other DSP.

Stacy: Okay.

Stacy: Yes.

Stacy: Yeah.

Stacy: Okay.

Stacy: Right.

Stacy: Okay.

Stacy: Yeah.

Stacy: Okay Alright.

Stacy: Okay.

Stacy: Okay.

Stacy: Yeah.

You should see an increase in impressions wins, because theyre already had already moved to this methodology.

Stacy: Okay.

Stacy: Yeah.

Stacy: Okay.

Stacy: Got it.

And then further we anticipate that given the strong underlying growth across AD formats channels and regions as well as the growth of our emerging revenue streams that we will offset.

Stacy: Uh huh.

Stacy: Uh huh.

Stacy: Okay.

Stacy: Okay.

Stacy: Thank you.

This headwind throughout the course of the year.

Stacy: Yes.

Stacy: Okay.

Great.

Stacy: Okay.

That's helpful. Just one more on activate them, we'd love to hear just the momentum youre seeing on that business and I'm also curious like where you feel we are in that transition from you know.

Stacy: Yes.

Stacy: Okay.

Stacy: Alright.

Stacy: Okay.

Stacy: Okay.

Stacy: Yes.

Stacy: Okay.

Direct insertion order into Biddable, I'm curious kind of where you see that that journey.

Stacy: Okay.

Stacy: Yes.

Sure Yeah, I'll just briefly comment on that second part and then get get more broadly into activates I think we're still quite early so that journey is definitely underway.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

But I think still a lot of a lot of runway ahead of us.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Yeah.

So in general with activation, we're really excited about the progress that we're making.

Stacy: Yes.

Stacy: Okay.

Stacy: Okay.

So there's a clear progression of steps you know when you rollout a new product like activate we trained our sales team to talk about it at scale. So that's in every region across multiple.

Stacy: Thank you.

Stacy: Yes.

Stacy: No.

Stacy: Thank you.

Stacy: Okay.

Stacy: Yes.

Customer types agencies and advertisers.

Stacy: Yeah.

Stacy: Jim.

We've gotten very strong and positive feedback in terms of our vision and the initial capabilities our.

Stacy: Okay.

Stacy: Okay.

Our vision is definitely resonating with the problems or challenges that buyers at the prospects that are and they do trust us to solve these challenges for them given our track record of success.

Stacy: Alright.

Stacy: Okay.

Stacy: Yeah.

Stacy: Okay.

Stacy: Yes.

Stacy: Awesome.

Stacy: Okay.

Stacy: Okay.

Stacy: All of them use the product.

Success with supply path optimization.

Stacy: And so there are things that we're looking into to try to accelerate that which we are in the process of working through it.

The commercial and contractual process is also resonating.

And as a result, we're signing up advertisers and agencies at a pretty good pace and we completed deals in every region around the world.

Stacy: But at the same time, what I would also add is just that we see business acceleration around spo, even if activate isn't in place and that's because customers know that they can do more with us over time right and so as a result, they tend to pull supply path optimization levers.

Now what we're also learning is that inside of large agencies and large advertisers. So this is very much an enterprise initiative and.

And so who we are pitching.

The value prop of the product into can be different from who are the hands on people on the keyboards that are setting up.

Stacy: To move more business to us and grow the mutual relationship even if theyre not using activate today and they plan to you in the future or if they don't have any current plans to use activate but its something that creates optionality underground.

Deals in managing the actual campaign spend.

And so it takes time to get all of the teams on board fully up to speed fully educated on how to use the product.

Stacy: Okay.

Stacy: Yeah.

Stacy: Yeah.

So there are things that we're looking into to try to accelerate that which we are in the process of working through it.

Stacy: Alright.

Stacy:

Stacy: Yeah.

But at the same time, what I would also add is just that we see business acceleration around spo, even if activate isn't in place and that's because customers know that they can do more with us over time right and so as a result, they tend to pull supply path optimization levers to.

Stacy: Okay.

Stacy: [noise].

To move more business to us and grow the mutual relationship even if theyre not using activate today and they plan to you in the future or if they don't have any current plans to use activate but its something that creates optionality down the road.

Yeah.

Great. Thank you. Thank you.

Our next question comes from Larry Stammen, Yes.

Stacy: Yes.

Stacy: Okay.

Uh huh.

Mauricio if you are on mute. Please go ahead and and you yourself you now have permission to speak.

Stacy: Okay.

Stacy: Okay.

Stacy: Thanks.

Stacy: Yes.

Uh huh.

Stacy: Okay.

Come back to you.

Our next question comes from Mike Hogan at Lake Street.

Stacy: Okay.

Stacy: [noise] [noise] [noise] [noise].

Right.

Mark. Please go ahead with your question.

If you'll go ahead and come off for Us Mark.

Yeah.

Stacy: [noise] [noise] [noise].

Yes.

Yes, again, Oh, sorry about that.

Lot of the stuff I had has already been done.

The address but just wondering if there's any promising verticals that youre seeing whether new or existing the next call. It six months here.

Steve you want to take that from the AD vertical perspective, any surface I'm sure happy to.

Stacy: Sure.

Stacy: Alright.

Let me just sort of a preference to the comments I mean, we've seen a.

Stacy: Yes.

Pretty sizable shift over the last year in terms of just a more constructive environment.

Stacy: Sure.

Stacy: Yes.

Stacy: [noise] [noise].

Saw that in the fourth quarter that has continued into the first quarter in April.

And the good news from our perspective is.

It's across.

The diverse supervisory cost that we have with.

We pumped it on the overall the top 10 in the first quarter grew 20% year over year within that.

Stacy: Awesome.

Stacy: [noise] [noise].

The majority of that group and the group.

Post of 30% so strong recovery across the board.

And the callouts.

From a relative basis year over year shopping continues to perform well.

It was definitely under duress in 'twenty three.

That's a recovered business.

Strongly performing.

Personal finance food a great excitement. So we have a diverse set of AD verticals that help.

Stacy: Okay.

Stacy: Thank you.

Stacy: Okay.

Stacy: Alright.

Help us.

Perl, our our revenue growth.

Stacy: Okay.

Stacy: Okay.

Now another component to think about is as we go into these new areas that rajeev pulled out in terms of roadblocks.

Stacy: Yes.

Stacy: Okay.

Stacy: Okay.

Stacy: Yeah.

The card et cetera, we are exposing ourselves to more and more arbor.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Advertisement types.

Stacy: So nothing on the scale side, specifically expanding the sales efforts. There can you talk about the progress you've made on hiring on that side and when you expect those investments to really start translating into improvements in the P&L.

And that is but it would be very helpful to us in terms of our diversity of our business, but also just the long term tailwind of opening up new markets for us.

Right.

Speaker Change: Sure I'll take first part of that so far we've increased our SPL focus team by 20% on a year over year basis in the first quarter, so absolutely, making headway in terms of bringing on new team members.

Thank you.

As a quick follow up.

Nope Nope I'm all good thanks.

Great.

Our next question comes from Andrew.

Oh.

Speaker Change: It is a process, where we are operating on highly skilled experienced salespeople.

Okay.

Yes, hi, thanks for taking my questions I really appreciate it.

Can you potentially dive a little bit into the investments you're making on the spo side, specifically expanding the sales efforts. There can you talk about the progress you've made on IRA on that side and when you expect those investments to really started translating into improvements in the P&L.

Speaker Change: Okay.

Speaker Change: [noise] [noise] approach.

Sure I'll take first part of that so far we've increased our SPL focus team by 20% on a year over year basis in the first quarter. So absolutely make more headway in terms of bringing on a new team members.

Speaker Change: Okay.

Speaker Change: Oh.

Speaker Change: Okay.

Speaker Change: Okay.

It is a process, where we are operating on highly skilled experienced salespeople. So there's not what I would call a long.

Speaker Change: Yeah.

Speaker Change: Alright.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Okay.

Lead time to get them up and running.

So it reflects the nature of the sale we have.

Speaker Change: Thank you.

Speaker Change: Okay.

A lot of connectivity into the major agencies large brands and so it's really about getting more coverage.

Stacy: Yes.

Stacy: Okay.

And so we have a clear roadmap.

Stacy: Okay.

Stacy: Yeah.

A team focused on it and so we decided to be right on track with our expectations.

Stacy: Understood.

Stacy: Okay.

Stacy: Okay.

When we went into the year, we thought based upon the opportunity and the momentum that.

Stacy: Okay.

Stacy: Okay.

Stacy: Right.

Really wanted to put our foot on the accelerator and so overall our game plan is to increase this to really.

Stacy: Thank you Mike.

Stacy: Okay.

Focus on supply path optimization.

Stacy: Hi, guys.

Stacy: Okay.

By 50%.

Stacy: Alright.

So we're executing that plan.

Stacy: Yes.

Stacy: Right.

And our expectation is that.

Stacy: Okay.

Stacy: Okay.

There'll be a quarter or two of ramp up but we should start to see some of the prepared to benefit from these investments later this year and of course.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

So as.

Stacy: Okay.

The quarters to come 25 with young.

Stacy: Yes.

Stacy: Yes.

Stacy: Uh huh.

Understood and just my one follow up is really around the product development area.

Stacy: Yes.

Stacy: Right.

Stacy: Okay.

Most of the new solutions.

Stacy: Okay.

Stacy: Okay.

Over your history of really been through organic development. So just curious of how you're thinking of allocating.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Ongoing investments into the organic development side versus maybe potentially looking at M&A to further expanded platform.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Yes.

Yeah, I can I can take that and then Steve obviously feel free to chime in so I mean for sure. Our primary focus is on organic innovation and organic growth.

Stacy: Okay.

Stacy: Okay.

Stacy: I'm sorry.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

So we have done.

Stacy: Okay.

You noted a couple of acquisitions, maybe over the last eight to 10 years.

Stacy: Okay.

Stacy: Okay.

But.

While we remain open.

Stacy: Yeah.

Open to the opportunity right in and constantly on the lookout for things that might be a good fit for us.

Stacy: Okay.

Stacy: Yeah.

Stacy: Yeah.

As I mentioned, we're at now 500 people, just crossing that Mark and product management and engineering. So we have really built to focus on.

Stacy: Right.

Stacy: Thanks.

Stacy: Right.

Stacy: Okay.

Understanding from our customers what are the needs and opportunities and then building organically at a very rapid very rapid pace in order to deliver those needs. So I think that's where we'll see the vast majority of the renovations upfront.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Yes.

Stacy: Right.

Stacy: Sure.

Stacy: Okay.

Steve anything Dan.

Stacy: Sure.

I would say that from our perspective, when we think about how we utilize our balance sheet.

We have a very targeted capital allocation strategy to ensure that we have investment dollars for organic growth, but we also have incremental dollars for M&A. If it makes sense. Our typical strategy has been if it can accelerate our roadmap developments, we'll definitely take a hard look at it and then the final tranche of our.

Stacy: Yes.

Stacy: Yeah.

Stacy: Yes.

Stacy:

Stacy: Oh.

Stacy: Okay.

Stacy: Okay.

Stacy: Other questions.

Stacy: All right.

Our capital allocation strategy is to.

Stacy: Yeah.

To share buybacks, which we've been very successful over the last year plus so overall, we feel like we're in a excellent position to make these choices.

Stacy: Okay.

Stacy: Okay.

Stacy: Hey, guys.

Stacy: Yes.

Stacy: Yes.

A very considered data driven way.

Stacy: Perfect.

Stacy: Perfect.

As you called out we've been very successful in organic innovation, certainly leveraging AI in the last year.

Stacy: Could you give us.

Stacy: Yes.

Stacy: Okay.

Stacy: Okay.

Stacy: Next question.

Stacy: Sure.

So we anticipate that becoming the main entry going forward, but we wont necessarily say no to a inappropriate Emma.

Stacy: Uh huh.

Stacy: [noise].

Stacy: Uh huh.

M&A opportunities.

Understood well, thanks for taking my questions and best of luck with the rest of the quarter.

Stacy: Okay.

Stacy: Yeah.

Thank you. Thank you.

Stacy: Okay.

Our next question comes from Jason <unk> Oppenheimer.

Stacy:

Stacy: Okay.

Stacy: Okay.

Stacy: Yeah.

Stacy: Yes.

Hey, guys.

Stacy: Okay.

You came in nicely above the revenues like 8% $5 million or so.

Stacy: Okay.

Stacy: Sure.

Stacy: Yeah.

Keith I missed it did you call out was there a specific catalyst or a broad broad base. That's the first question.

Stacy: Yes.

Stacy: Yeah.

Stacy: Yeah.

Stacy: Okay.

Stacy: Yes.

Sure.

Stacy: Okay.

Hey, Jason.

So I would say when you.

Stacy: Thank you.

Stacy: Okay.

Reflect on Q1 I think the.

Stacy: [noise] [noise].

The thing that jumps out is that it really was across the board our team our business was part of an all cylinders.

All formats all channels all grew nicely.

In terms of.

The Omnichannel video business that grew 33% year over year display, including the Yahoo headwind grew 10%. So overall very pleased with the underlying growth of the business.

Stacy: Okay.

Stacy: Yes.

Stacy: Yeah.

Stacy: Okay.

And of course, we hit a major milestone with SPL at 50% of overall activity.

Stacy: Hi.

Stacy: Okay.

Stacy: Yes.

Stacy: Okay.

And you know into the second quarter that momentum continued double digit growth for April.

Stacy:

Underpinning all of this has been our.

Long term efforts in terms of innovation and building differentiated solution that continues to resonate with.

Stacy: Right.

Stacy: Oh.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Existing and new customers.

Stacy: Alright.

And then just a follow up I guess it was talked about last quarter and I guess intra quarter just.

Stacy: Yeah.

Stacy: Yeah.

Stacy: Okay.

Stacy: Yes.

Some of the investments you're making in head count.

Are we kind of at that rate or are you thinking about kind of still material increases in head count as you move through the year.

Stacy: Okay.

Stacy: Uh huh.

Stacy: Yes.

Stacy: Okay.

Stacy: Yes.

Stacy: Okay.

So for the first quarter, our overall head count was up a little over 10% and our game plan for the full year is to be about 11, 12% so by and large we're on.

Stacy: Okay.

Stacy: Okay.

Stacy: Yes.

Stacy: Yes.

Stacy: Okay.

Stacy: Okay.

Stacy: Yes.

Stacy: Yes.

Track that we had set out to do but I would say just from a timing perspective, you will see some of that investment accelerate Q3 Q4.

Stacy: Gotcha.

Stacy: Okay.

Stacy: Yes.

Stacy: Yeah.

Stacy: Yes.

Stacy: Okay.

Because of the normal cycle of <unk>.

Stacy: Okay.

People on recruiting et cetera.

Stacy: You bet.

Stacy: Okay.

But overall right on track with our goals.

Stacy: Okay.

Stacy: Yes.

But I would expect some acceleration into the second half.

Stacy: Right.

Stacy: Hi.

Yes, maybe I can just add Jason a little bit of context on the head count investments. They are really focused on where the market. The industry is growing the fastest and based on all of the product innovation work that we've been doing over the last couple of years, we see tremendous upside opportunity. So for instance last year, we had two big product launches with activate for.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Alright.

Stacy: Yes.

Stacy: Okay.

Stacy: Yes.

Stacy: Thank you.

P O and convert for Commerce media.

Stacy: Right.

Stacy: Thank you.

Stacy: Hmm.

And so there's a lot of work to be done to now that we've validated those products, we've gotten great feedback.

Stacy: Okay.

<unk>, obviously, you saw corna in an instant card as two examples on the convert from Spo and at 50%.

Multitude of signed activate deals now so what's happening is as we engage more with customers. They are coming up with additional product requirements that they'd like to see and so we're investing behind that opportunity and then we're also investing in the sales team.

Stacy: Alright.

Stacy: [noise] [noise].

To go out and create more opportunities and convert those opportunities into into closed deals.

So we view it as all you know both growth both revenue as well as.

Stacy: Yes.

Stacy: Okay.

Profit accretive over the medium to long term.

Stacy: Yes.

What did I just like to add to his comments because I think it's important for the group.

Stacy: Okay.

We've had some major knee.

Stacy: Hi.

Customers announced in the last couple of months.

It's a card client et cetera in the reason why we're so positive about these is that it helps.

Stacy: [noise] [noise].

Identifies a clear path to do what we've done in the past and that's land and expand bringing these customers in and then you know.

Stacy: Yes.

Stacy: Thank you.

Stacy: Yeah.

Stacy: Yes.

Stacy: Yes.

We will sell down the portfolio there are opportunities products that we have.

Stacy: Hum.

Stacy: Yeah.

And the reason why that's important from a financial perspective is that all of these products are on top of our unified platform.

Stacy: Yeah.

Stacy: Okay.

Stacy: Okay.

So these kinds of deals help us get more utilization of our platform and ultimately will help us expand our market for example in the case of this apart.

Stacy: Sure.

Stacy: Okay.

Stacy: Yeah.

Stacy: Okay.

Stacy: Okay.

Stacy: That's fair.

We earn a data feed as well as our core S. S. P. A.

Stacy: Yes.

Stacy: Got it.

Stacy: Okay.

With <unk>, we anticipate continued acceleration of SPL spend which is further driving utilization so overall.

Stacy: Yes.

Stacy: But that's about right.

Stacy: Yes.

The journey that we're on is to bring on customers that where we can really ah.

Stacy: Okay.

Stacy: Okay.

Stacy: Yeah.

Stacy:

Land and then up sell the portfolio of offers that we have.

Stacy: Gotcha.

Stacy: Okay.

Stacy: Okay.

Right.

Stacy: All right.

Our next question comes from Raytheon linear entertainment.

Stacy: Yeah.

Stacy: That's helpful.

Stacy: Steve.

Bob.

Stacy: Okay.

Stacy: Right.

Yeah can you hear me okay.

Stacy: Okay.

Stacy: Yes.

Yes, Danny.

Stacy: Yes.

Alright. Thank you for taking my question, Yeah, just wanted to go back and.

Stacy: Okay.

Stacy: Thank you.

Stacy: Okay.

The spo results on an objective Rajiv.

Stacy: Yeah.

Stacy: Okay.

Stacy: Okay.

Talk about this on your prepared remarks, but maybe if you could please.

Stacy: Yes.

Stacy: Yeah.

Expand on the drivers of the <unk> upside I'm, particularly interested in contributions and traction from activate this quarter and then maybe one we are on it.

Stacy: Okay.

Stacy: Okay.

Stacy: Yes.

Stacy: Okay.

Stacy: Yeah.

Stacy: Yeah.

Stacy: Yeah.

Speak about the competitive dynamics, we're seeing some dsp's.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Certainly.

Common cleaning.

Stacy: Okay.

On some traction trying to cross these SSP DSP the demarcation line so.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

So if you could provide.

Stacy: Yeah.

Provide some color.

Stacy: Yes.

Color on that that'll be helpful. And then I have a follow up okay. Great. Thanks, Maurice here. So let me try to get to all of that if I leave out any part of your question. Please remind me and I'm happy to add to it. So I think the first thing just from a content perspective is.

Stacy: Yeah.

Stacy: Yeah.

Stacy: Bobby.

Stacy: Okay.

Stacy: Right.

Stacy: Okay.

Stacy: Yes.

Stacy: Yeah.

That.

Stacy: Yeah.

From what we see in engaging with the publishers and buyers the importance of deep technology on the sell side of the ecosystem is going up at a pretty dramatic rate and.

Stacy: Okay.

Stacy: Yes.

Stacy: Great.

Stacy: Yeah.

Stacy: Okay.

Stacy: Okay.

And there's a couple of drivers of that one is certainly whats happening with privacy regulations.

Stacy: Thank you.

Stacy: Yeah.

Stacy: Okay.

Cookie deprecation timeline, obviously with chrome that's just the latest spreads we've seen.

Stacy: Okay.

Stacy: Yes.

Similar moves by other browsers or other operating systems and so data is on the sell side of the ecosystem is now being more and more limited in terms of the ability to transmit it to the buy side of the ecosystem and so so that's one driver we have a lot of the new media coming onboard high value media in CTV.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Yes.

Stacy: Okay.

Stacy: Yes.

Stacy: Yes.

Stacy: Okay.

And Commerce media.

Stacy: Okay.

Where buyers.

Stacy: Alright.

Stacy: Okay.

Buyers want to have a more efficient way to transact when the Cpm's can be 10, 2030, 40, $50 as opposed to one and $2 display ad impressions.

Stacy: Okay.

Stacy: Okay.

Stacy: Yes.

Stacy: Hi.

Stacy: Okay.

And then the third is that buyers are increasingly at <unk>.

Stacy: Okay.

Stacy: Okay.

Asserting themselves in terms of controlling how AD budgets are spent and that can be for reasons of differentiation for performance.

Stacy: Yeah.

Stacy: Okay.

Stacy: Sure.

Stacy: Okay.

I don't want to.

Stacy: Yeah.

A monopoly player in the in the in the industry to control both the sell side and the buy side of the ecosystem and so all of these things are driving up the importance of technology on the sell side and that's exactly the one of the primary opportunities we're going after with supply path optimization and activate and then to your activate question Mauricio.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Yes.

Stacy: Okay.

Stacy: Okay.

Stacy: All right.

Stacy: Yeah.

So what we're seeing there is that.

Stacy: Okay.

Buyers and sellers alike, they want in a more efficient way to transact and the historical paradigm.

Stacy: Thank you.

Stacy: Thank you.

Stacy: Okay.

Stacy: Thanks.

Of DSP and SSP has a lot of great benefits to it but.

Stacy: Sure.

Stacy: Yes.

But there is a lot of operational overhead to that.

Stacy: Yeah.

Stacy: Okay.

And data.

Stacy: Okay.

Transmitted from the sell side the buy side is also a challenge.

Stacy: Okay.

Stacy: Mike.

So with activate what we are doing is introducing we've introduced a single layer of tech that connects the seller and buyer primarily around the fixed price deals that are transacted and insertion orders for CTV and online video and so that is resonating quite a bit with buyers as I mentioned earlier.

Stacy: You bet.

Stacy: Hi.

Stacy: Okay.

Stacy: Right.

Stacy: Yeah.

Stacy: It's possible.

Stacy: Uh huh.

Stacy: Okay.

Stacy: Yes.

Stacy: [noise].

Stacy: Okay.

They see the efficiency gains they trust us they see the operational overhead gains in.

Stacy: Yes.

Stacy: Okay.

Stacy: Yeah.

Stacy: Please.

And simplifying the tech stack and so we are gaining share.

Stacy: Okay.

Stacy: Gotcha.

As a result.

Stacy: Okay.

Now activate is a different kind of sale for us in that it does require a lot of onboarding and training.

Stacy: Yes.

Stacy: Okay.

Stacy: Okay.

Stacy: Yeah.

Buyer media buying teams. So these are the hands on the keyboard.

Stacy: Yes.

Stacy: Okay.

Stacy: Yeah.

So that is a process and education effort.

Stacy: Yeah.

Stacy: Yes.

So we're learning things about the speed with which we can do that different tactics to accelerate that.

Stacy: Uh huh.

Stacy: Thank you.

So we're applying more energy there too to speed up that process.

Stacy: Yeah.

Stacy: Alright.

Stacy: Yeah.

On the merits of the third part of your question I think it was around.

Stacy: Yes.

DSP competitive dynamics is that right.

Stacy: Okay.

Yeah, Yeah, we've seen some DSP some.

Stacy:

Stacy: Uh huh.

Also talking about gaining some traction on crossing over.

Stacy: Right.

Stacy: Okay.

Stacy: Right.

Yeah, and we've seen that mainly okay. I'll give you the floor yeah, yeah, yeah, absolutely. So so absolutely understand that and you know I think the significant advantage that we have is that we've been building publisher relationships now for 17 years. So if we get one buyer.

Stacy: Bob.

Stacy: Yeah.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Yes.

Stacy: Thank you.

Stacy: Okay.

Stacy: Okay.

To leverage our platform. They can access all of the media all of the inventory you know all of the audiences that we've been building over 17 years I think when you approach this problem from the buy side of the ecosystem.

Stacy: Okay.

Stacy: Yeah.

Stacy: Oh.

Stacy: Okay.

You have many buyers may be using a particular buy side platform, but the breadth of publisher inventory is quite limited and so that.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Stacy: Okay.

Speaker Change: That's that's very helpful and if I can squeeze in one more it looks like you are on full steam to extend from your historical focus on on the top five six agency whole goes and this is related to toys as well perhaps into other smaller independent agencies.

S P or buyer interface day in mid May be been working on plugging in inventory for the last six months 12 months 18 months and.

And so the scope of inventory the scope of audiences, particularly when you think about the variety of AD formats, and a variety of geographies that can be very limited and so what we're seeing that resonates very strongly with buyers as we can go in and say hey, all of the types of media that you might want to buy.

Speaker Change: As well as directly with brands.

Stacy: Thank you articulated the sort of investment required to do that.

Stacy: Mainly in the form of head count additions, but how should we think about the margin profile from revenue contribution from those somewhat smaller agencies and brands as you bring that cohort into the spo fold.

All over the world, we have that available inside of nomadic and inside of activate.

And that's available today, and so I think that's a very compelling value proposition.

That's that's very helpful and if I can squeeze in one more it looks like you're full steam to expand from your historical focus on on the top five six you can see how it goes and this is related to the IPO as well perhaps into other smaller independent agencies.

Speaker Change: Yes, Steve do you want to.

Steve: Yes happy to.

Steve: So from our perspective, we are or we get a significant amount of leverage just given sort of a centralized nature of our GCM organization.

Steve: Okay.

Steve: Uh huh.

On as well as directly with brands I think you articulated the sort of investment required to do that.

Steve: [noise] [noise] [noise].

Mainly in the form of head count additions, but how should we think about the margin profile from revenue contribution from those somewhat smaller agencies and brands as you bring that cohort into the spo fold.

Speaker Change: Got it.

Yes, Steve.

Speaker Change: Okay.

Yes happy to.

Steve: Geez.

So from our perspective, we already get a significant amount of leverage just given sort of the centralized nature of our TTM organizations.

Steve: Yeah.

Steve: Okay.

Steve: Okay.

Steve: Sure.

A few people publicly relatively large swaths of customers and so we're going to apply the same model, we're not going after every sto opportunity, we have our ideal client profile.

Steve: Okay.

Steve: Okay.

Steve: Okay Alright.

Steve: So we see this as a very positive direction for us because ultimately they were not having to Ingram.

On that so we're feeling pretty confident in terms of getting the leverage and appropriate economics from the go to market side now for mom and overall.

Steve: Incremental processing, possibly just a monetize more of what we already process and we're doing that.

Cost of services and <unk>.

Steve: In every major region so.

Rock near to the bottom line.

Steve: We're feeling very good about the strategy.

All of these opportunities ultimately help us fill more of the questions that we process and because we've already incurred the cost to process.

Steve: We're early days in the execution.

Steve: Rajiv has commented on previously.

Steve: Anticipate upside to about 75% of our activity to rescue relationships as we can see coming through they are the financials, how that does benefit us not just from a profitability perspective, but also from a stickiness perspective.

I lost count system. It took us all of your questions.

On a daily basis.

The upside is fairly significant if we can increase that fill rate and so we see this as a very positive direction for us because ultimately they were not having to.

Steve: The sad about 125.

Steve: Net spend retention that's incredibly powerful just in terms of revenue visibility and <unk>.

Incremental processing cost with just a monetize more of what we already process and we're doing that.

Steve: Stickiness with scale over time.

Speaker Change: Very helpful. Thank you.

In every major region so.

Steve: We have time for one more question from Justin Patterson with Keybanc. Please go ahead Jeff.

We're feeling very good about the strategy.

We're early days in the execution.

Justin Tyler Patterson: Alright, Thank you very much and good afternoon I just wanted to go back to the land and expand strategy.

As Rajiv has spoken about previously.

We anticipate.

Upside to about 75% of our activities through SPL relationship can you can see coming through the financials now that does benefit us not just from a profitability perspective, but also from a stickiness perspective.

Justin Tyler Patterson: Yes.

Justin Tyler Patterson: Now, 77% of revenue coming from high value formats and channel. It seems like it provides a nice margin tailwind to the business. So curious how you're thinking about just taking some of that margin and driving more growth with with new customers existing customers versus having that margin dropped through play out. Thanks.

I shared the stat about 125 person.

That's been repeated that's incredibly powerful.

Terms of revenue visibility and.

Stickiness with scale over time.

Speaker Change: Hey, Justin.

Justin Tyler Patterson: Thank you for the question and it's something that we think about every day.

Very helpful. Thank you.

Speaker Change: Given our strong profitability, but also a strong goal imperatives to keep driving the top line to see the results from the last quarter.

We have time for one more question just components.

Carl.

Great. Thank you very much and good afternoon I just wanted to go back to the land and expand strategy with <unk>.

Speaker Change: Our perspective, it's a balance but absolutely.

Speaker Change: This year, we said that we're going to incrementally invest in a couple of key areas. So the areas that we envision to be the fastest growing around video mobile supply path optimization.

Now, 77% of revenue coming from high value formats and channels that seems like it provides a nice margin tailwind to the business. So curious how you're thinking about just now.

Speaker Change: In the Commerce video space so are.

Some of that margin and driving more growth with with new customers existing customers, because I think that margin drop through would play out. Thanks.

Speaker Change: We feel that now is the time to make those investments.

Speaker Change: And we're hopefully manage lows in terms of timing and the magnitude.

Hey, Justin.

Thank you for the question and it's something that we think about every day.

Speaker Change: You can see from our guidance that we still.

Speaker Change: Have a very robust expectation.

Instead of my strong profitability, but also strong goal imperatives to keep driving the top line you see the results from the last quarter from our perspective, it's a balance but absolutely you know going into the year, we said that we're going to incrementally invest in a couple of key areas.

Speaker Change: Forecast for the year at 31% at the midpoint.

Speaker Change: And I would say that for us, it's really about taking advantage of the opportunities that we have and we see them emerging in wheat.

Speaker Change: Proven an ability to.

Areas that will eventually be fastest growing around video mobile.

Speaker Change: Innovate and then capture that opportunity and so we're going to keep doing that and still deliver very robust margins.

Supply path optimization.

In the Commerce media space. So we feel that now is the time to listen baskets are.

Speaker Change: And free.

Speaker Change: Free cash flow.

Speaker Change: Alright, thank you.

And we're probably manage notes in terms of timing and the magnitude.

Speaker Change: Right. Thank you all right just about or actually over the top of the hour.

You can see from our guidance that we still are.

Speaker Change: Go ahead, and turn the call back over to Rajiv.

Have a very robust our expectation.

Rajiv: Thank you Stacy and thank you all for joining US today, we had a strong start to the year with continued momentum into April.

Forecast for the year at 31% at the midpoint.

You know I would say that for us, it's really about taking advantage of the opportunities that we have and we see them emerging in.

Rajiv: This along with the planned investments this year in high return areas gives us confidence to raise our full year guidance.

Rajiv: Content creators AD buyers data partners Commerce media networks are all choosing to build their AD tech stacks on somatic our platform offers efficiency and control across the digital advertising ecosystem, resulting in higher CPM and increased advertiser ROI and our logo list continues to grow fueling greater access to add dollars data in high value.

And we've proven an ability to.

Innovate.

And then capture that opportunity and so we're going to keep doing that.

Still deliver very robust margins.

And.

Free cash flow.

Alright, thank you.

Right.

Thank you all talked about Oh actually over the top of the hour I'm going to go ahead and turn the call back over to Maggie.

Rajiv: Jordan.

Rajiv: We will be out on the road over the next month and we look forward to seeing many of you then thanks and have a great afternoon everyone.

Thank you Stacy and thank you all for joining US today, we had a strong start to year with continued momentum into April.

This along with the planned investments this year in high return areas. It gives us confidence to raise our full year guidance.

Content creators AD buyers state of partners Commerce media networks are all choosing to build their AD tech stacks on somatic our platform offers efficiency and control across the digital advertising ecosystem, resulting in higher CPM and increased advertiser ROI and our logo list continues to grow fueling greater access to add dollars data in high value in.

<unk>.

It will be out on the road over the next month and we look forward to seeing many of you then thanks and have a great afternoon everyone.