Q4 2024 Viant Technology Inc Earnings Call
<unk> and industry, leading contextual targeting and measurement solution both reside within buy it and therefore, we feel we are well positioned to power addressable and measurement across all channels of the open internet.
Addressable 80 is the future of advertising and our acquisition of locker is expected to accelerate its arrival across the programmatic ecosystem.
Locker is a data collaboration platform built to enable content owners to collect enrich and activate first party data.
In partnering with locker publishers are able to integrate their first party data one time with Walker and automatically enable all of the other alternative partners and the programmatic ecosystem.
On a one for one basis each integration requires extensive engineering resources or deployment of software code and ongoing maintenance, but with locker managing the integrations publishers can integrate with locker just onetime and then seamlessly turn on lockers partner.
<unk> at will with no additional integrations necessary.
With locker publishers cut down on the time and resources required to do these cumbersome integrations, which will help them accelerate their advertising business by leveraging their first party data and advertising.
Locker enables the application of first party data as a signal in the midstream propagating the addressable 80 of AD campaigns, while complying with applicable privacy laws.
The acquisition is expected to accelerate industry adoption of both volumes household IV and Iris I'd, while at the same time, helping publishers offer addressable AD solutions and our collective fight against the walled gardens and.
And similar to the Iris I'd, we plan to make the locker proposition open to the entire ecosystem, including other alternative identifiers as we are committed to helping the entire open internet succeed not just ourselves.
Speaker Change: We are excited to welcome the locker team <unk>, the company's founder Keith Petrie is a well known leader in the AD Tech industry, having spent 15 years dedicated to the space and we are excited to have them join the buying team Keith will continue to head locker as the CEO following the transaction.
Speaker Change: Another area, we have out innovated our peers is with the rollout of <unk> AI.
Speaker Change: We have completed the first two phases of our <unk> AI rollout and we expect to complete the next two phases. This year.
Speaker Change: Collectively these four phases consists of AI bidding AI planning AI measurement and analysis and AI Decisioning I'll touch on all four.
Speaker Change: Just 18 months after launch AI bidding is utilized to power, 80% of AD spend on our platform advertisers.
Speaker Change: Advertisers, who opt into AI bidding empowered <unk> algorithms to search the open internet for attractive AD inventory and transact at the lowest possible clearing price.
Ensuring advertiser Kpis are achieved.
Speaker Change: We launched AI planning in Q3, 2024, and our team has been showcasing its capabilities ever since.
Speaker Change: We have been meeting with marketers and their agencies all over the country, who immediately saw the benefits and requested a live demonstration.
Speaker Change: Simply put it's a game changer for the AD tech industry.
Speaker Change: AI planning builds an enterprise level AD campaign for advertisers and mere seconds and with a level of efficiency and comprehensiveness humans can't replicate.
Better yet it's easy to use with an incredibly intuitive interface.
Speaker Change: With violence AI planning if you can chat you can build an enterprise level AD campaign in minutes.
Speaker Change: What does this mean for our Advertiser and agency clients number one a drastic improvement in workflow.
Speaker Change: Early agency adopters are doubling the amount of new business pitches, they can engage and providing greater opportunity to win incremental new business.
Speaker Change: Number two operating structure efficiencies with via an AI doing the heavy lifting agencies can redeploy their personnel to focus on more strategic initiatives.
Speaker Change: Number three return on AD spend improvement.
Speaker Change: There are literally trillions of ways, an AD campaign can be constructed and executed <unk>.
Speaker Change: <unk> by an AI advertisers can build and execute campaigns that truly optimize return on AD spend considering numerous variables.
Speaker Change: Brands and agencies are eager to reap the benefits of AI planning and they have begun scaling their ad budgets with buying resulting in market share gains as exemplified by our industry leading growth rates.
By an AI also expands our total addressable market for those millions of small and midsized businesses performance advertisers and direct to consumer E. Commerce companies that have so heavily relied on search and social AD channels to fuel their growth.
Speaker Change: There is a better alternative that unlocks premium content available in the open internet.
Speaker Change: By an AI in unison with the household in Iris Ids enable advertisers of all sizes to target and measure across the open Internet, which includes the most premium and sought after AD inventory and connected TV.
Speaker Change: With the launch of AI planning, we expect to further attract AD budgets once reserved for search and social channels into <unk> ad buying platforms.
Speaker Change: AI measurement and analysis is expected to launch in early Q2, providing advertisers with incremental workflow enhancement through vastly superior reporting capabilities. The days of sifting through 50 pages of AD campaign reports are over.
Speaker Change: AI measurement in this analysis provides advertisers with on demand insights clients need only ask for the insight. They are looking for and <unk> AI will deliver.
Speaker Change: For example for a given campaign and advertiser might ask by an AI show me the best performing markets or show me, the reach and frequency by channel, which AD creative have the highest conversion rate or how should I optime optimize my campaign and by an AI responses.
Speaker Change: AI measurement and analysis streamlines productivity and provides advertisers with the insights they need to continuously improve campaign performance.
Speaker Change: Finally, we continue to expect to launch AI Decisioning in the second half of 2025 with this launch advertisers can grant by an AI full autonomy to build and execute media plans by NII is expected to dynamically adjust campaigns to account for fluid market.
Speaker Change: <unk> in the effort of driving the most efficient outcomes.
Speaker Change: For instance, if by an AI identified as an opportunity to shift AD spend more aggressively towards CTV to enhance return on AD spend during a campaign it will do so.
Speaker Change: And unlike black box Decisioning products available from search and social walled gardens via an AI is fully transparent.
Speaker Change: Advertisers will continue to have access to all campaign data, including details on where their AD spend is allocated clearing prices return on AD spend metrics and so much more.
Speaker Change: To sum up my remarks, I believe we have made it clear <unk> is a leading DSP for addressable city, which we anticipate will define the future of nearly all digital ad buying and.
Speaker Change: And with our investments in buying AI, we are at the forefront of technological innovation in our industry.
Speaker Change: In my 25 years in AD Tech I have never seen a greater opportunity than that which is presented by advancing AI technology and <unk> is poised to seize this moment.
Chris: With that I'll turn it over to Chris.
Chris: Thanks, Tim.
Chris: I am excited to report strength across all digital channels. This quarter, which includes CTV streaming audio mobile desktop and digital out of home.
Chris: AD spend in each channel generated double digit year over year growth.
Chris: Indicative of widespread platform adoption by advertisers and agencies looking to leverage <unk> unique features including household IV direct access.
Chris: And the AI product suites.
Chris: Looking forward, we expect CTV to continue to deliver outsized growth.
Chris: There is a clear multiyear tailwind of $60 billion in U S AD spend has yet to transition out of linear TV.
Chris: Focusing near term, we believe 2025 will be a landmark year for live sports monetization across CTV.
Chris: To provide some perspective live sports accounted for about 40% of all national TV spending in the fourth quarter of 2024.
Chris: Over the last several several years publishers have been reading lives sports for CTV distributions and we have now reached the point, where live sports are universally available across streaming services and.
Chris: In 2025. These publishers are ready to transact programmatically and are offering greater allocation to real time bidding transactions. It is worth noting volume is one of few enterprise level dsp's capable of ingesting 40 million real time bid request per second as is often necessary when transacting in <unk>.
Chris: Live sports environment.
Chris: Through partnerships with various live sports providers, including Disney ESPN NBC, you Fox Sports, One brothers discovery, Directv and <unk> and many others via offers advertisers access to inventory across virtually all major sports leagues, including the NFL.
Chris: NBA College football and basketball the MLB NHL NASCAR, the PGA tour, the us open and the Premier League.
Chris: We're excited to provide our clients with access to the world's most covenant AD inventory in 2025.
The migration of live sports from linear to CTV is anticipated to accelerate the shift in outstanding towards the CTV channel full conversion implies a CTV total addressable market of $90 billion.
Chris: Up from $30 billion today How's.
Chris: However, we believe the CTV Tam opportunity is even larger.
Chris: In the coming years, we expect portions of search and social AD budgets to divert to CTV, pushing the Tam well above 90 billion.
Chris: There are over 10 million Smbs performance advertisers and direct to consumer e-commerce companies allocating spend across search and social channels.
Chris: They utilize these channels for customer acquisition and for the ease with which AD campaigns can be executed.
Chris: These same attributes now exists within the CTV channel, which delivers a more premium and impactful consumer experience.
Chris: CTV is targeted bolt it is measurable and with VI NII, we have made it easier to execute a CTV campaign than a search and social campaign.
Chris: E marketer estimate search and social collectively to account for over $200 billion in U S. AD spend we believe smbs performance advertisers and direct to consumer ecommerce companies account for well over 50% of this total and we expect to take share going forward.
Chris: Within CTV and unique to <unk> as our direct access program.
Chris: Which provides advertisers with access to the world's most premium content, eliminating non value add middleman.
Chris: Advertisers choose direct access for transparency and cost savings, which naturally drives return on ad spend.
Chris: For the full year 2024, direct access CTV AD spend increased nearly 70% and accounted for over 50% of total CTV AD spend on the platform.
Chris: We are positioned to win in CTV and believe the DSP that wins, the CTV channel will win across the open internet.
Chris: Particularly as industry consolidation accelerates.
Chris: We're also very bullish on the prospects for streaming audio growth.
Chris: In many ways streaming audio is similar to premium CTV.
Chris: Audiences are authenticated, which enables addressable witty and attention levels are hot.
Chris: Users listen to their favorite podcasts on their way to work in the gym, where they can remain highly attentive enhancing the value of streaming audio inventory.
Chris: We have seen tremendous growth in streaming audio demand and we expect the channel to represent a much larger percentage of our mix over time.
Chris: Touching on recent enhancements within our targeting and measurement suite.
Chris: Household IV was already one of the industry's most comprehensive audience targeting and measurement solutions.
Chris: But we are enhancing the offering by expanding our existing partnership with Transunion, a provider of global information and insights.
Chris: Household is now on risk with trans unions true audience identity data, which encompasses online offline public and proprietary consumer information.
Chris: This new integration expense household household these match rate to 95% of U S. Adults over the age of 18.
Chris: For advertisers this not only improves audience targeting and measurement capabilities, but allows for the deployment of addressable campaigns at greater scale.
Chris: To help illustrate industry demand trends, we are seeing around addressable witty and more specifically our household Ids solution.
Chris: Revenue and contribution ex Tac generated by household IV has increased more than eight times over the last two years.
Chris: In November we acquired Iris TV, and we believe that acquisition will cement <unk> status as the best DSP for CTV ad buying.
Tim: As Tim mentioned, the industries pop audience and contextual identifiers via its household Eddie and the Iris I'd now reside under one roof.
Tim: Iris maintains existing partnerships with premium content owners and platforms, which include the likes of Warner Brothers Discovery, Fox, Univision, Samsung LG and Vizio among many more.
Tim: By leveraging <unk> existing relationships with premium publishers, we expect to Iris enable many more premium content owners in the coming months.
Tim: The Iris team has been actively co marketing along with client recently participating in a full slate of meetings at CES, where Iris announced the addition of Tcl towards growing list of Iris enabled partners.
And today, we are pleased to announce Paramount has also signed on to carry the Iris I E.
Speaker Change: Tim laid out the timeline for our four phase VI it rolled out.
Speaker Change: I would like to focus on the reaction we received from advertisers and agencies. Following our launch of AI planning in September and how we are capitalizing on this momentum.
Speaker Change: After releasing a 12 minute launch video across a number of different social media channels. We immediately began engaging with brands and agencies looking to utilize by an AI.
Speaker Change: Since the launch we have provided a by AI demo to every major agency holding company and hundreds of independent brands and agencies.
Speaker Change: CES alone our team conducted over 130, <unk> AI demos, providing over 300 attendees with a hands on experience of AI planning and AI measurement and analysis.
Speaker Change: As a direct result of participating in our demos.
Speaker Change: Many major brands and agencies have expressed interest in obtaining their own custom versions of via AI.
Speaker Change: This calls for a deep level of integration between our AI infrastructure and brand and agency data platforms, such a connection enables by an AI to most effectively merchandise first party data to plan and execute highly sophisticated AD campaigns capable of achieving heightened levels of precision.
Speaker Change: Yeah.
Speaker Change: This new and innovative concept is likely to Ford's tightly bound long lasting partnerships between <unk> and our brand and agency clients.
Speaker Change: We are redefining what it means to collaborate with brand and agency partners by embedding our technology and with theirs.
Speaker Change: Agency see how the buying AI infrastructure combined with their own first party data can help showcase their unique solutions to their current clients and helped to win more new business.
Speaker Change: We are encouraged by the size of the existing pipeline of clients looking to deploy their own customized versions of via AI.
Speaker Change: As you can see we are extremely excited by our progress and we look forward to providing incremental updates on buying AI in the near future.
Larry: With that I'll turn it over to Larry to provide more detail on our financial performance Larry.
Larry: Thanks, Chris before I begin I would like to remind everyone that we've posted a presentation on our Investor Relations website that includes supplemental financial information to accompany today's call.
Larry: We concluded 2024 with a strong fourth quarter, marking another year of accelerating growth for volumes.
Larry: Before diving into our detailed fourth quarter results I'll provide a high level summary of our full year performance.
Larry: For the full year 2024 revenue totaled $289 $2 million, an increase of 30% over 2023 call.
Larry: Contribution ex Tac grew by 24% year over year, reaching $177 4 million non-GAAP operating expenses for 2024 totaled $132 9, million% to 16% increase over the prior year adjusted.
Larry: Adjusted EBITDA rose to $44 4 million up 53% year over year within approximately 500 basis point expansion in adjusted EBITDA margin to 25% in 2024.
Larry: And non-GAAP net income totaled $34 7 million for 2024, representing a year over year increase of 59%.
Larry: Notably contribution ex Tac has maintained strong momentum consistently growing by over 20% for the sixth consecutive quarter. We concluded the year on a high note achieving 28% growth in contribution ex Tac in Q4, a noteworthy achievement given the challenging year over year comparison of 28% growth in the same period.
Larry: Last year.
Larry: Adjusted EBITDA increased by more than 30% for the eighth consecutive quarter underscoring our sustained financial performance and momentum.
Larry: Our exceptional growth in todays advertising environment fueled by market, leading innovations available exclusively at volumes, including household IV direct access and volume to AI.
Larry: I'll now move onto our results for the fourth quarter <unk>.
Larry: Revenue for the quarter was $90 1 million, representing a 40% increase over the prior year period and exceeding the high end of our guidance range by 6%.
Larry: Sequentially revenue increased 13% from Q3.
Larry: Contribution ex Tac for Q4 totaled $54 4 million up 28% year over year, and 3% above the high end of our guidance range.
Larry: On a sequential basis contribution ex Tac increased 15% from Q3.
We also experienced substantial growth in the number of customers generating significant levels of contribution ex Tac.
On a trailing 12 month basis through Q4, we had a 42% increase in the number of percentage of spend customers generating over $1 million in contribution ex Tac and for the full year contribution ex Tac across our top 100 customers grew by 24%.
Larry: Our new customer base also expanded rapidly in 2020 for the top 30, new customers added over the past year each generated on average more than $750000 of contribution ex Tac during the period more than double the contribution ex Tac generated by new customers in 2023 and indicative or.
Larry: Of our success, winning clients with larger ad budgets.
Larry: Trends driven from both new and existing customers position us extremely well to continue outpacing overall market growth.
Larry: We experienced strong performance across most customer verticals in Q4 with AD spend on health care consumer goods public services automotive business services and online gambling, each growing more than 30% year over year.
Larry: Political spending contributed just over 3% of total contribution ex Tac in Q4, consistent with Q3 and in line with our expectations.
Larry: Oh advertising channels saw double digit growth in the quarter as well CTV. Once again drove much of our growth in the quarter, which helped propel CTV growth in AD spend through over 40% for the full year.
Larry: <unk> also remains our largest channel accounting for over 40% of total spend in 2024 in Q4 marked the third consecutive quarter of record high CTV AD spend on our platform.
Larry: Video, which includes CTV comprise just north of 60% of total spend in 2024.
Larry: non-GAAP operating expenses for Q4 totaled $37 3 million, reflecting a 20, 26% increase year over year and a 14% sequential increase.
Larry: Notably these figures include incremental costs associated with our acquisition of Iris TV, which closed in early November.
Larry: The acquisition accounted for approximately 375 basis points of the year over year increase and 350 basis points of the quarter over quarter increase in non-GAAP operating expenses.
Larry: While we remain focused on making strategic investments in technology, and AI to drive long term market share gains and increasing profitability in parallel. We also remain hyper focused on driving internal efficiencies to that end over the past 12 months, we increased contribution ex Tac per employee by 16%.
Larry: In terms of head count in 2024, we increased total head count by 43 or 13%, bringing our total workforce to 376 approximately half of these additions stems from the Iris TV acquisition with the remainder primarily a product and engineering underscoring our commitment to continuously innovate and <unk>.
Further build out our technology and platform capabilities.
Larry: For the fourth quarter, adjusted EBITDA reached $17 1 million, surpassing the high end of our guidance range and representing a 31% year over year increase and a 16% sequential increase from Q3 <unk>.
Larry: Adjusted EBITDA as a percent of contribution ex Tac was 31, 31% for the quarter, improving by approximately 100 basis points year over year, and 50 basis points quarter over quarter.
Larry: Notably we achieved this margin expansion, while continuing to invest in our AI product suite and integrating the Iris TD acquisition.
For the fourth quarter, GAAP net income totaled $7 $7 million, which.
Larry: Theres to GAAP net income of $3 $3 million in the prior year period, representing an increase of 133%.
Larry: GAAP basic earnings per class a share outstanding was 11 cents in the fourth quarter, which compares to GAAP basic earnings per class a share outstanding of four in the prior year period.
Larry: non-GAAP net income, which excludes stock based compensation and other adjustments totaled $13 8 million for the quarter, which compares to non-GAAP net income in the prior year period of $10 $8 million representing.
Larry: Representing an improvement of 28% year over year non.
Larry: non-GAAP basic earnings per class a share outstanding totaled <unk> 17 in the fourth quarter, which compares to <unk> 14 in the prior year period.
Larry: In terms of share count we ended the quarter with $63 1 million shares outstanding consisting of approximately $16 4 million class a shares and $46 8 million class B shares.
Larry: And from a cash flow and liquidity perspective, we ended the quarter with just over $205 million in cash and cash equivalents were $217 million of positive working capital and no debt at quarter end and we continue to have access to a $75 million Undrawn credit facility.
Larry: During the quarter, we generated $16 $5 million of cash flow from operations and $12 2 million of free cash flow and for the full year, we generated $51 8 million of cash flow from operations up 37% year over year and $34 million of free cash flow up over 40% year over year.
Larry: Since launching our share repurchase program in early May 2024 through February 2025, we have purchased a total of 2 million shares of class a common stock at an average price of $13 five.
Larry: Using $25 7 million in cash we have $24 $3 million remaining on our $50 million authorized repurchase program.
Larry: This solid financial foundation positions us extremely well to fully capitalize on the substantial market opportunity ahead of us.
Turning now to out to our outlook for the first quarter of 2025, we expect revenue in the range of $65 million to $68 million, representing a year over year increase of 25% at the midpoint.
Larry: Contribution ex Tac in the range of $45 to $42 $5 million, reflecting year over year growth of 22% at the midpoint, which would mark our seventh consecutive quarter of over 20% growth in contribution ex Tac.
Larry: non-GAAP operating expenses are expected to be between 37, five and 38 5 million representing a year over year increase of 22% at the midpoint and a quarter over quarter increase of 1% at the midpoint.
Larry: Notably our recent acquisitions of Iris TV in November 2024, and locker in February 2025 are expected to contribute approximately 700 basis points to the expected year over year increase in non-GAAP operating expenses at the midpoint and 300 basis points to the quarter over quarter increase at the <unk>.
Midpoint.
Larry: We expect adjusted EBITDA in the range of three five to $4 million to $5 million, which represents a year over year increase of 22% and adjusted EBITDA at the midpoint.
Larry: I would also like to make a couple of general observations about our outlook for 2025 and.
Larry: In 2025, we expect contribution ex Tac to continue outpacing the broader U S programmatic market, which is projected to grow approximately 13% to 14% driving further market share gains. We also expect contribution ex Tac to continue growing faster than non-GAAP operating expenses, leading to an expansion.
Larry: And adjusted EBITDA margins in 2025.
Larry: Finally, the acquisitions of Iris <unk> and locker.
Larry: We expect the acquisitions of Iris Gn locker through contributes approximately 600 basis points of growth to non-GAAP operating expenses in 2025.
As a reminder, the acquisitions of Iris TD and locker represent strategic investments to further enhance our suite of CTV targeting and measurement capabilities as well as our identity and address ability solutions, which we believe will drive meaningful long term growth opportunities.
Larry: And lastly, I'd like to take this opportunity to provide some modeling points for the full year 2025 for.
Larry: We're 25, we expect stock based compensation to total approximately $28 million and depreciation and amortization to a total of approximately $20 million and in terms of share count. We expect to end 25, 2025, with approximately 65 million class, a and class B common shares outstanding.
Larry: In closing Brian is at the forefront of driving advertisers into the future of CTV address ability and AI driven advertising, we remain committed to empowering our advertiser and agency clients with unparalleled service precision and advanced AI technology exciting innovations on the horizon in 2025.
Larry: With the anticipated launches of AI measurement and analysis, followed by AI Decisioning.
Larry: Our long standing vision of autonomous advertising is well on its way to becoming a reality in 2025.
Larry: And with that I will now turn it back over to the operator to open the call for questions operator.
Speaker Change: Thank you Larry again, we will now move to taking your questions. As a reminder, click the raise hand tab located at the bottom of your screen to ask a question.
Speaker Change: Due to time constraints, please limit yourself to one question.
Speaker Change: Since then we have a question from Laura Martin at noon.
Laura Martin: Hi, guys great numbers.
Laura Martin: Wanted to start with local because I don't really think I understand the logic. So.
Speaker Change: I've never heard of it before so I'm just going on what you said it sounds like Youre.
Speaker Change: Going to publishers and getting their data with the promise that you can get them higher cost per thousand because you'll have more data and their data in the midstream in doing integrations, but.
Speaker Change: One of the main reasons, we've seen connected TV, so much to out of the Decisioning.
Speaker Change: It is because they don't trust guests stay. Thank you guys are in a race to the bottom because your client just to get the best lowest price. So why would a publisher ever share their first party data with you.
Speaker Change: Hey, Laurent Thanks for the question and thanks for the comments on the quarter, we were equally as excited with the numbers and the performance in the quarter. Okay. So locker.
Speaker Change: Theres a lot of friction and matching up household.
Speaker Change: With publisher identity as well so think logged in on Disney everyone. That's part of direct access it takes a long time with lots of engineering resources in maintenance locker really cleaned that up for our publisher partners inside of direct access reduces the time to integrate with <unk>.
Speaker Change: And then there's this big long queue publishers don't just want to work with bio Theres of course other competitors in the marketplace and locker with a single integration from the publisher will unlock all <unk> that are a part of blocker, which most are out there today. So we think it's a big benefit to the sell side and helping.
Speaker Change: And remove a lot of the friction and getting identity linked up together in making that faster and smoother.
Laura Martin: Laura typically what happens is the sales team, let's say of a publisher goes out gets a markers than to buy in the market once the publisher to bring data to bear.
Speaker Change: Really their first party data.
Speaker Change: And what happened is in the sales team then goes back to management. They then get into an engineering team to integrate whatever idea it is or whatever data company or lets say its even sending data to acquaint having to integrate with a clean room.
Publishers, we see their engineering teams or tax.
Speaker Change: They typically are carrying the weight of engineering that an AD Tech company would.
Speaker Change: So it's a long queue and so.
Speaker Change: Publisher wants to use their first party data and advertising to generate new demand.
That they have to get these integrations done. So if you can't get them done quickly and Theres a lot of them. There's a line out the door to do integrations always <unk>.
Speaker Change: <unk> really solves that it's one integration with locker and then they light up the whole ecosystem of not just <unk>.
Speaker Change: Alternate identifiers, but also third party data companies clean rooms measurement providers I think it's a big unlock for for publishers.
Speaker Change: And it's going to be great for the whole open Internet is going to accelerate household IV. It will also accelerate <unk> and the midstream, but it's going to be really big for the whole open internet.
Speaker Change: Our view is is that if the open internet. If we can enable these large content owners with vast amounts of first party data, we need to enable them to use their first party data and advertising at the end of the day, we're at a larger war against the walled gardens, that's really what we're fighting against in the open Internet has a stake its claim has to use its most valuable asset.
Speaker Change: Properly and that's what lockers about and just the final one I don't think publishers are scared of dst's of lowering price dsp's, bringing new demand to those sales teams at these big content owners, specifically volume does we focused in the mid market. We brought advertisers to the Olympics that have never bought.
Speaker Change: And that in the Olympics. So this is all net new demand that I believe <unk> are enabling the majority of the <unk> and the open internet are enabling and I think publishers, what those bids from us so they can analyze and decide to accept it or not they get I guess more control of their future and I think that you need to look.
Speaker Change: At locker as more of an industry utility and that does help publishers, but in the end. It helps the overall health of the open Internet that's the big play here.
Speaker Change: The publisher wants to use their first party data not just the buy it or not just with another DSP, let's say the trade desk, if they want to use it for their own purposes. They want to use that they need somebody to help them. They can do these cumbersome integrations one by one and I'll tell you is a DSP integrations with data companies supply providers measurement companies clean rooms.
Speaker Change: Never ending at.
Speaker Change: And publishers, obviously don't carry the weight of engineers that an AD Tech company like ours would so it's a huge problem and we think that lockers going to solve a big industry issue.
Speaker Change: That's super helpful. I really appreciate it can I ask one sure. So Larry you guys did a nice job of saying that of the $1 8 million cost.
Speaker Change: That was above cost about $1 million of that was Irish television acquisition in the fourth quarter can you tell us how much revenue Irish contributed in the quarter it was relatively modest.
Speaker Change: I would say, it's probably about 1% of the total.
Speaker Change: Okay, great. Okay. That's super helpful. Thanks, guys great numbers. Thank you Laura.
Speaker Change: Our next question is from Maria reps at Concord.
Maria: Great. Thanks, so much for taking my question I just wanted to follow up on that excuse me under local acquisition can you maybe help us understand the strategic fit here a little bit better I guess is there an opportunity to monetize locally directly with publishers or should we think about.
Maria: This is mainly as a tool to sort of further accelerate the adoption of the household 80th Irish ranking.
Maria: Yes.
Okay.
Speaker Change: Thanks, Maria I think you can look at it in kind of disorder. It is to accelerate adoption of household IV as well as Iris I D.
Maria: Certainly.
Maria: We are going to leverage our relationships with indirect access.
Maria: We are going to do that.
Maria: But I really think overall in the end for something like this to be successful we have to create lock.
Maria: <unk> utility for the open internet to be able to increase address ability by helping publishers use their first party data.
Maria: That was kind of the order that I would that I would put it in there.
Maria: But again I do think the third part needs to play out.
Maria: In order for the open internet to actually.
Maria: Succeed against the walled gardens, the first party data by publishers, helping them use that in advertising.
Maria: Got it thank you.
Maria: Thank you.
Speaker Change: Thank you. Our next question comes from Nat Schindler from Scotiabank.
Nat Schindler: Hey, Matt how are you.
Speaker Change: Sorry, I had on mute hey, guys. It's been a while thanks for taking my call and great quarter wanted to right.
Speaker Change: I had some technical difficulties with your zoom at the beginning so we wanted to make sure you didn't cover this at the beginning if you did.
Speaker Change: I'm, sorry, but the.
Speaker Change: The rest of AD Tech went into.
Speaker Change: With some interesting exclusion.
Speaker Change: Said that there was a direct follow up and brand spend and it went across all dsp's, particularly some of the SSP said this post election and that rebounded in January can you do some.
Speaker Change: Just tell us what's been going on with the market as you see it I know you guys are small enough that you could have.
Speaker Change: Video synchronic movement, so it wouldn't be affected.
Speaker Change: Yeah, Thanks for that.
Speaker Change: Yes look I think that there are some.
Certainly a mixed bag with some of the different companies' results, but if I could just distill it down for you.
Speaker Change: If you take a look at companies that have significant exposure to display advertising, which is dominated by last touch attribution.
Speaker Change: That's where you need to look at.
Speaker Change: There is the weakness, yes that is the weakness of the market you can go down the line.
Speaker Change: It was largely stated there are some other.
Speaker Change: A little bit differences the same platforms, but if you have significant exposure to display advertising that is heavily heavily linked to last such attribution and cookies.
Speaker Change: That that is what you saw really get punished.
Speaker Change: And a lot of the fourth quarter results.
Speaker Change: And maybe in Q1 guidance I cant comment on every individual company, but I think that you'll see that theme.
Speaker Change: But in general in the fourth quarter, we saw strength all the way through the quarter December was strong quarter. So there was nothing that we saw from our results like you mentioned, we are on the smaller side of public companies. So there could be some idiosyncrasies, there, but I think in general what Chris touched on is probably.
Speaker Change: The theme from our perspective that would be our opinion.
Speaker Change: And.
Speaker Change: To clarify a little bit more.
Speaker Change: Okay.
Speaker Change: Wood.
Speaker Change: Okay.
Speaker Change: A large.
Speaker Change: DSP and get impacted.
Speaker Change: Not by the market, but by unforced errors.
Speaker Change: Even makes sense.
Speaker Change: I don't know I think in Tennessee, when you hit it into the net.
Speaker Change: I don't know I don't know I can't really.
Speaker Change: I don't know what the read through on that was but.
Speaker Change: From my perspective, though there are certainly more competition today than there has ever been on the DSP side in terms of enterprise grade substantial options for agencies and advertisers to choose from and I think competition is probably one driver of some of those results certainly inter.
Speaker Change: Mistakes can happen they've happened to us over our more than two decades of experience they can happen intra quarter, but.
Speaker Change: Yeah, It seems like.
Speaker Change: That would be up to not know about.
Speaker Change: Mid quarter for sure Okay, and just final question just to go broader market I know you have strong guidance, particularly on revenue.
Speaker Change: You do tend to have <unk> per.
Speaker Change: Sales and marketing expenses correct.
Speaker Change: <unk> EBITDA pretty severely in the first quarter is that correct that is correct seasonality low in terms of ad spend.
Speaker Change: The first quarter and we do have.
Speaker Change: A larger amount of <unk>.
Speaker Change: Sales and marketing expenses in the first quarter due to things like our all company conference that we have.
Speaker Change: CES things like that so.
Speaker Change: That's always sitting there in Q1, but I was particularly I think youll see yes. So that is a pretty big impact on a small number on the smaller quarterly number but just to go into that revenue number which is pretty strong.
Speaker Change: On overall market are you seeing any real change in advertiser behavior.
Speaker Change: Between fourth quarter, and first quarter or is it just as for your company is pretty steady as she goes.
Speaker Change: No I think it's I think it's really strong.
Speaker Change: I can say to us.
Speaker Change: The way, we feel about the market as well as our own prospects as a company is very high.
Speaker Change: We have a ton of opportunity thats happening right now as well as in front of us. So we feel really good about it.
Speaker Change: Alright, thanks, guys. Thanks Pat.
Speaker Change: Thank you. Our next question comes from Jason Crying.
Speaker Change: Yeah.
Speaker Change: Hey, guys. Thank you for taking the questions.
Speaker Change: Great all the detail on <unk>, just curious how youre thinking about this scaling over the course of 2025, just in terms of the ability to onboard new customers. The fees you can charge or just generally.
Speaker Change: Generating greater wallet share per customer like where do you expect to see the biggest benefit to fundamentals.
Speaker Change: Yes, certainly it's a big wallet share winner in one of the Big reasons, why we focused on the planning process as it's such a cost center for our customers at the mid market agencies. We mentioned in the prepared remarks, the benefits that that agencies are seeing who are already leaning in the velocity of new business pitches to help grow their.
Speaker Change: Their own AD agency, one agency exact quipped that theyre doubling the velocity of new business pitches leveraging by an AI.
Speaker Change: And and the quality of the media planning is very very high so that's really really big.
Speaker Change: And I think it's going to be a huge wallet share gain as well as net new customers coming on to buying and leading competitive platforms. It's so much easier to plan and then activate a campaign inside of <unk> DSP with by an AI now relative to the competition so to.
Speaker Change: Go from an idea all the way to activation might take you 30 minutes inside of <unk> that will take weeks and competitive platform. So I think as agencies understand it.
Speaker Change: It's going to take them a little bit of time to trusted that's the number one concern when buying AI comes out as you know.
Speaker Change: Can I trust the AI to produce the right results and I think that's where we're everyone's that and once you get over that trust hub, which is really just about the customers playing with the AI platform and getting a subjective view on what the results are so we see it speeding net new business.
Speaker Change: Wins of advertisers and agencies coming onto <unk> and we also see it as a wallet share gain between ourselves and competitors on the buyback.
Speaker Change: Just a quick follow up to that for Larry maybe that we continue to see this delta between revenue and contribution.
Speaker Change: Is that maybe indicative of the pipeline of new customers that you're onboarding today kind of representing a greater growth growth opportunity over time.
Speaker Change: That's exactly what it is what is really happening is we've been onboarding some larger customers over the last several quarters.
Speaker Change: And they are coming on as a percentage of spend customers are signing msas or learning that use the platform.
Speaker Change: But initially because they went straight into percentage of spend initially we provide a much higher level of service to get them to get the campaigns going to be last three four or five months.
Speaker Change: But what are the triggers is it triggers gross accounting because we're doing a lot of the heavy lifting is.
Speaker Change: It's temporary once they fully get up a 100% self serve it goes back to net accounting and the delta between the revenue and the 60 kind of goes away.
Speaker Change: You saw that last quarter, you're seeing that in Q4, we're guiding a little bit to that Q1, much less than the last two quarters.
Speaker Change: But it's really a temporary thing that it really specific to the <unk>.
Speaker Change: Handful of larger customers.
Speaker Change: But it speaks to the pipeline of obviously, we're adding quite a few of these bigger customers and have been and Thats part. This is flowing falling off from that that scenario.
Speaker Change: Yes, that's great. Thank you.
Speaker Change: Alright. This next question will be our last last question of the day.
Speaker Change: Matt Condon with J P M citizens.
Matt Condon: Hi, guys. Thanks for taking my question.
Matt Condon: I just wanted to ask on the SMB opportunity you guys mentioned that multiple times in your prepared remarks understood <unk>.
Speaker Change: Sorry, Brian AI is going to help you.
Matt Condon: To break in there.
Speaker Change: Just with the ease of use of the platform, but could you talk about it from a go to market perspective, how do you think about bringing these budgets onto your platform and aggregating them on your platform.
Matt Condon: Thanks, Matt Great.
Speaker Change: Great question.
Speaker Change: So I think it's important for people to realize that via an AI certainly has application.
Speaker Change: Squarely in the mid market, where we've been for the last several years and we've had a lot of success, that's allowing us to move up market with much larger brands and.
Speaker Change: Agencies, but it's also going to attract and this is really this is a big open question for the open Internet can we attract the walled garden advertisers that yes do span the millions in oscillated highest 10 million advertisers.
Speaker Change: But with respect to the go to market why is that important these are.
Speaker Change: Don't want to call them less sophisticated but they are used to buying buying platforms that are very simple in the end I. Just wanted to give you a budget flight dates with our audience might be and what our goal is like a cost per customer goal and then they expect the platform to do all the automation just deliver them customers, that's really what they want so the downstream.
Speaker Change: Cream going downstream to the smaller advertisers is I think paramount for the open Internet in particular agency and CTV.
Speaker Change: The go to market or that I know a lot of people look sound that it's so daunting.
Speaker Change: Our first order of business wouldn't be that we're going after 10 minutes trying to track 10 million advertisers. We believe there is a much smaller group.
Speaker Change: A number of those advertisers.
Speaker Change: That exists across the walled gardens that spend the lion's share of the money. These are these direct to consumer E. Commerce companies that do have significant budgets, but we typically see that they are single or dual channel only advertisers they might buy a Google search and meta or maybe they are buying across ticked off or maybe they have.
Speaker Change: They're doing a significant amount of sales and Amazon and we typically see in spending really only in those channels.
Speaker Change: And there is there is a lot of interest for how they buy and CTV, but one we have to make the buying platforms dead simple for you to be able to access make CTV more accessible to them and then sue you have to show them, what they're getting for their money and I think that what we've done very uniquely as a company as we show marketers the true value of CTV not just here.
Speaker Change: AD showing up in streaming and you feel good about it but we show how you spend another new dollar in CTV. We show you a another new customer that's very powerful that's what's heating share in other channels and channels that don't care that don't really push.
Speaker Change: Enough weight like display advertising, but it's the same for Google branded search and it's the same for a lot of the walled garden spending those are customers. They were largely going to get any way and when we attract these advertisers and they see the incremental <unk>.
Speaker Change: When they spend in channels like CTV and audio it's very powerful so we have a lot of conviction, we're going to be able to attract those direct to consumer ecommerce companies.
Speaker Change: They're very helpful. Thank you so much thanks, Matt for the question.
Speaker Change: This concludes today's webinar, we thank you all for joining you may now disconnect.