Viant Technology Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 8, 2023

There are 9 speakers on the call.

Operator

Well, hello everyone and welcome to Viant Technologies First Quarter 2023 Earnings Webinar. My name is Kelsey and I will be your operator today. Before I turn the program over to the Viant leadership team, I'd like to go over just a few housekeeping notes for today. As a reminder, today's webinar is being recorded. If you would like to ask a question, please click on the raise hand tab located at the bottom of your screen.

Operator

And please ensure your Zoom name reflects your full name and your firm. We thank you for joining us today and I will now turn the webinar over to Nicole Kuzmin with The Blueshirt Group. Nicole, over to you.

Speaker 1

Thank you, Kelsey. Good afternoon, and welcome to Viant Technology's Q1 2023 financial results conference call. On the call today are Tim Vanderhook, Co Founder and Chief Executive Officer Chris Vanderhook, Co Founder and Chief Operating Officer and Larry Madden, Chief Financial Officer. I'd like to remind you that we will make forward looking statements on our call today, including our guidance for Q2 2023 that are based on assumptions and subject to future events, Risks and uncertainties that could cause actual results to differ materially from those projected. We undertake no obligation to update these statements except as required by law.

Speaker 1

For more information about factors that may cause actual results to differ materially from forward looking statements in our ended March 31, 2023 under the heading Risk Factors and Other Filings with the SEC. During today's call, we will also present both GAAP and non GAAP financial measures. Additional disclosures regarding these non GAAP measures, including a reconciliation of GAAP to non GAAP I would now like to turn the call over to Tim Vanderhook, Chief Executive Officer of BIOM. Tim?

Speaker 2

Thanks, Nicole, and thanks, everyone, for joining us today. I'm pleased to report that we started 2023 with solid financial results in Q1. We exceeded our guidance on contribution ex TAC and adjusted EBITDA and delivered revenue at the high end of our guidance. Our team executed well, Capitalizing on our large market opportunity amid a spending environment showing signs of stabilization. Our primary focus remains on making thoughtful investments in our platform to win market share and drive long term growth and profitability.

Speaker 2

We continue to balance investing for growth with spending discipline, while driving expanded revenue and contribution ex TAC performance. This was primarily led by product adoption in key areas such as household ID, advanced reporting and measurement, and the Viant data platform. One of the most significant industry trends we're capitalizing on is the growing importance of AI and machine learning, which we have previously described as our vision of autonomous advertising. At Viant, we are focused on delivering products that automate the laborious and complex Tasks associated with using programmatic ad platforms. Tasks like creating an ad campaign or ad format, Selecting channel, device, publisher and ultimately bid prices for inventory, all of this can be streamlined and optimized through AI.

Speaker 2

Our AI driven approach is poised to create substantial future revenue growth for Viant. We have already built all the essential infrastructure components to apply AI on behalf of advertisers, and we are ahead of many of our competitors in this area. To succeed in this new era of ad tech, companies need to solve for identity across channels, have deep integrations for ad supply and possess a real time data platform that enables companies to utilize their first party data for closed loop measurement. Viant has all these components in place, including our patented household ID, our Adelphic DSP and the Viant data platform. The Viant data platform is a critical piece of the Adtech stack.

Speaker 2

It centralizes vast amounts of data from various sources, enabling us to quickly develop, train and fine tune AI models for our customers. This comprehensive data foundation is a key differentiator for Viant and one that has taken years to develop and it sets us apart from competitors and positions us for substantial future growth. Throughout 2023, we plan on releasing a suite of new AI driven tools that will help our customers improve the efficiency and effectiveness of their advertising investments. Our extensive infrastructure and data integrations gives us a competitive advantage in training our AI models, while our competitors are still just working on individual components. By leveraging AI, we not only streamline the ad process, but also provide a compelling reason for potential customers looking to optimize their ad spend.

Speaker 2

In addition to AI, we are also capitalizing on the Strength of Connected TV as a key industry channel. Connected TV represents a strong segment of growth in the ad market and we are seeing a reacceleration of growth in Q2. Our supply path optimization initiative, Direct Access, targets the largest CTV publishers, ensuring our advertisers receive the most efficient price for ad inventory. And finally, we are focused on sustainability, which remains a crucial industry challenge where Viant is demonstrating leadership with our recent initiatives. Last quarter, we discussed the launch of Addricity, our customer carbon reduction program, which helps clients meet their corporate sustainability goals.

Speaker 2

This program has gained early traction and we are partnering with Scope 3 to measure campaign emissions of our customers to curb the carbon impact of running their digital ad campaigns. At the same time, we are working on reducing our own carbon emissions with a goal of being carbon neutral by the end of 2023 and plan on releasing our sustainability report later this year. In conclusion, our progress with AI and machine learning initiatives, the Viant data platform and a stabilizing advertising environment gives us strong momentum going into the second half of twenty twenty three. Our business is poised for substantial future revenue growth and our extensive data driven omni channel platform makes us a compelling choice for advertisers and their agencies. Now, I will hand the call over to Chris to discuss more around the business.

Speaker 2

Thanks, Tim. Q1 was a very strong quarter for Viant as we continue to win with mid market agencies and clients. Our sole focus is on the buy side, meaning we represent the marketer and their agency and market by delivering on the following value propositions. 1st, procuring the lowest CPM costs in the market Through direct relationships with content owners, providing an efficient supply chain and leveraging AI based bid algorithms to defend against supply side price 2nd, improving campaign performance with automated platform capabilities that deliver superior return on ad spend. 3rd, enabling our customers to quantify the return on ad spend through our advanced reporting and measurement offerings And finally, providing exceptional customer service that is second to none.

Speaker 2

These areas of focus are helping us win new customers and drive incremental revenue as customers see more value in our platform, expertise and independent buy side only representation. Last quarter, I set up 3 key business priorities for 2023, and I'd like to provide some progress updates. As Tim mentioned in his remarks, We are seeing growth and adoption with our new and improved Viant data platform. We have leveraged big data for over a decade and this has always been a differentiator for us. Our focus and investment in expanding our data platform is already beginning to pay dividends in terms of customer adoption and revenue expansion.

Speaker 2

Data management is a core capability our clients are asking for as they want to be able to use their first party data in conjunction with their advertising campaigns. This need is nearly universal across all clients, but we don't believe that existing solutions solve for marketers' needs, which is why we are so confident in our ability to scale adoption of this product. Tim also mentioned the importance of investing in AI and machine learning as part of our journey towards Now is the time to actively implement AI and ML to drive step function improvements in programmatic advertising. The number of applications is truly uncapped, and we have a number of initiatives in the works, several of which will launch in the second half of twenty twenty three. Finally, I want to pick up on our supply path optimization program I announced last quarter called Direct Access.

Speaker 2

Direct Access is a program that creates the most efficient supply path for our customers. By creating with premium content owners to merchandise their content to our clients directly. This program will drive a more efficient supply chain, Provide bids on ad impressions directly to publishers and eliminate duplicative ad requests that result from reselling. Our focus here is to deliver the lowest cost of media while helping drive the highest return on ad spend for our customers. In closing, I'm happy to report that since Q4, we've grown our product and tech teams by 20%, ushering strong talent into the company while maintaining cost discipline across the board.

Speaker 2

This is core to delivering on our key initiatives as we invest and drive long term growth and profitability. Thank you, and I'll now turn it over to Larry to provide more details on our financial performance.

Speaker 3

Thanks, Chris. Before I begin, I'd like to remind everyone that we have posted a presentation to our Investor Relations website that includes supplemental financial information to accompany today's presentation. As Tim mentioned, we are pleased to report that in Q1, We outperformed our guidance for contribution ex TAC and adjusted EBITDA and achieved the high end of our guidance for revenue. Revenue for the quarter was $41,700,000 a decrease of 2% versus the prior year period and at the high end of our guidance of 42,000,000 Contribution ex TAC for the quarter was $28,000,000 an increase of 2% versus the prior year period and 2% above the high end of our guidance. I would like to draw your attention to several noteworthy points relative to our Q1 top line performance.

Speaker 3

We are especially encouraged by the improving trends we saw as we move through the quarter, with February stronger than January and March stronger than February. As a reminder, in the second half of twenty twenty two, we saw the exact opposite as customers were pulling back budgets as each quarter progressed due to macroeconomic uncertainty. We also did not see as big of a seasonal step down in spend from Q4 to Q1 as we normally see. While overall growth rates have not yet returned to what we were seeing prior to the current market pullback, The trends we saw in Q1 indicate that the market is stabilizing. I would also point out that advertiser spend in Q1 2022 grew 44%, which was well above industry growth rates, making for a challenging year over year comparison this quarter.

Speaker 3

Despite the modest decline in revenue in Q1, contribution ex TAC grew 2% in the quarter. As we have stated in the past, as the mix shift towards percentage of spend becomes less impactful and as fixed price becomes a smaller percentage of total advertiser We expect contribution ex TAC to grow faster than revenue. As Tim and Chris highlighted earlier, The growing customer adoption of our newer products, such as advanced reporting and the Viant data platform, also drove incremental revenue and Contribution ex TAC in the quarter. This is a clear indication of the growing recognition of the unique benefits of our platform and the value that we bring to our customers. We expect further expansion and customer adoption of these offerings as we move forward.

Speaker 3

Our team has also been hard at work developing cutting edge AI and ML based products that we anticipate will unlock Even more revenue and contribution ex TAC in the coming quarters. We are confident that these new products will not only be highly innovative, but also highly valuable to our customers as they will be able to leverage the power of AI and ML to enhance their advertising strategies and drive even greater results. We look forward to sharing more details on these exciting new developments as they become available. In terms of customer verticals in the quarter, while we did see weakness across some of our customer verticals, such as business and financial services, Retail and CPG, we saw continued strength across our travel, online gambling, healthcare and automotive verticals. In terms of channels, CTV and mobile each represented more than 1 third of the total spend in the quarter.

Speaker 3

From a format perspective, video, which includes CTV and mobile video, represented over 60% of total spend in the quarter. Streaming audio also continued to perform exceptionally well in the quarter, growing 40% and representing 6% of total advertiser spend. Our commitment to delivering innovative and effective advertising solutions across all channels and formats has been a key factor in our success, and we are dedicated to building on this momentum in the future. Advertisers' spend per active customer increased 6% on a year over year basis, and our percentage of spent customers spent on average nearly 3 times more than fixed price customers on an LTM basis. We ended the quarter with 327 active customers, flat with the prior year period and up 1 net new customer from Q4.

Speaker 3

On a year over year basis, the number of percentage of spent customers continued to increase, offset by a decline in fixed price customers, which tend to be less resilient during challenging macroeconomic periods. As we mentioned last quarter, In line with our commitment to continuously improving our platform, we took a close look at our customer base and setting our priorities for 2023. As we analyze the growth trajectory of our customer base, we found that the large majority of our existing customers demonstrate a consistent an upward trend in scaling their advertising spend on the platform. We also identified a subset of customers that were too small and do not have the capacity to scale their spending like the others. As a result, we are cycling through some lower spending customers and there will be some negative impact on customer count as we move through 2023, although we anticipate negligible impact on overall revenue and contribution Moving now to operating expenses.

Speaker 3

Non GAAP operating expenses totaled $28,400,000 in the quarter, representing a year over year decrease of 10% and a quarter over quarter decrease of 8%. This is the result of the cost reduction actions We took in Q4 and our continued focus on driving operational efficiency. Our streamlined cost structure enables us For the Q1, we exceeded our adjusted EBITDA guidance by a significant margin with adjusted EBITDA of negative 389 This exceeded the high end of our guidance by $2,100,000 and outperformed the prior year period by $3,500,000 Our focus on streamlining operations and improving operational efficiency, coupled with better than expected contribution ex TAC, were key factors that contributed to these strong results. Regarding liquidity, we ended the quarter with $202,000,000 in cash, which translates to a noteworthy $3.25 per share outstanding. We also had $223,000,000 of positive working capital and no debt.

Speaker 3

To further strengthen our financial position, in early April, we also upsized our existing credit facility from $40,000,000 to $75,000,000 while also extending the term for 5 years. The solid financial foundation positions us extremely well to fully capitalize on the substantial market opportunity ahead of us. In terms of share count, we ended the quarter with 62,100,000 Class A and Class B common shares outstanding. As we look ahead to Q2 and beyond, we recognize the ongoing uncertainty in the macroeconomic environment and its potential impact on customer demand. Despite this, we remain optimistic about our future growth prospects.

Speaker 3

For the Q2 of 2023, we expect revenue in the range of $52,000,000 to $55,000,000 representing a year over year increase of 4% and a quarter over quarter increase of 28% at the midpoint. We expect contribution ex TAC in the range of $32,000,000 to $34,000,000 a year over year increase of 4% and a quarter over quarter increase of 18% at the midpoint. Non GAAP operating expenses are expected to be $30,000,000 to $31,000,000 representing a year over year decline of 12% and a quarter over quarter increase of 7% at the midpoint. Finally, we expect adjusted EBITDA to be in the range of $2,000,000 to $3,000,000 which represents a year over year increase of $5,600,000 and a quarter over quarter increase of $2,900,000 at the midpoint. Amidst our anticipation for a dynamic market landscape in the coming months, I'd like to emphasize some essential considerations regarding our Q2 guidance and our overall outlook for the year.

Speaker 3

In Q2 of last year, we had 32% growth in spend across the platform, making it a challenging comparison for this quarter. As we progress through 2023, we expect to see improving revenue and contribution ex TAC growth rates. We also expect adjusted EBITDA to increase each quarter in 2023, driven by the cost reduction initiatives we undertook in Q4 of 2022 and sequential growth in contribution ex TAC as we move through the year. We will continue to closely manage expenses in 2023, while making targeted strategic investments with the objective of scaling ad spend on our platform while generating meaningful positive EBITDA in 2023. In closing, we are pleased with the continued adoption of our platform despite the current challenging market conditions.

Speaker 3

We are confident that our unique points of differentiation will allow us to fully take advantage of the growing market opportunity. Through our strong balance sheet, Strategic technology investments, innovative new product launches and disciplined cost management, we believe that we are optimally positioned deliver significant top line and EBITDA growth. We remain committed to our strategic priorities and focused on delivering long term value to our customers and shareholders. That concludes our prepared remarks today. And with that, I will now turn it back over to the operator to open the video to questions.

Speaker 3

Operator?

Operator

Thank you so much, Larry. And again, we will now move into taking your questions. And we will hear first from Maria Ripps with Canaccord.

Speaker 4

Great. Thanks so much for taking my questions. So it seems like the broader ad trends Stabilizing here. Can you maybe talk about what you're hearing in your conversations with advertisers, kind of their level of commitment to 2023 budgets at this point? And I guess what's the level of visibility as we look into the second half of this year?

Speaker 2

Yes, I'll take that. Thanks, Maria, for the question. I think that Definitely, in January, there was a lot of uncertainty. Clients themselves, the marketers, A lot of them still didn't have their budgets, really for the first half of the year. And I think by February, that materialized Down to the agencies and then we started to see some spending start to increase.

Speaker 2

I would say, we still don't have great visibility For the full year, but certainly what we see is increased spending all throughout the Q1 and we're seeing that trend continue into the 2nd quarter.

Speaker 4

Got it. That's very helpful. And then can you maybe talk about the structure of your sales team at this point? And what are your thoughts there as The environment is kind of starting to stabilize here.

Speaker 2

Structure of our sales team is geographically based. We're in all the major markets. I think we're in about a dozen or so markets across the country. But really, it's a 2 pronged approach that We're always making sure that we're talking with our agency partners as well as the clients in partnership with them. One that helps us on visibility and transparency, but it really helps enforce our value propositions to both agencies and customers, The clients directly themselves, just so they're aware of our services.

Speaker 2

And we see that doing really well right now. I expect that we have some new initiatives that we rolled out at the back half of last year, training programs with our sales team. So, I expect that our operational efficiency to improve this year as well on the sales side.

Speaker 4

Got it. Thanks so much for the call.

Operator

And Laura Martin with Needham has the next question.

Speaker 5

Okay. Can you guys hear me okay?

Speaker 2

Yes. Are you

Speaker 5

excited about $100,000,000 I will ask 2 because that is your instruction. Start with AI. So I do notice that your tech and dev Costs are up double digits even though revenue was up by 2%. Is that the impact of this new AI that you're talking about today. And are you using these large language models AI?

Speaker 5

Because I would have guessed you've been using the old kind of ML and AI for many years like your competitors. But can you talk about what you're doing with AI that's different? And how much is it going to cost us in 2023 to do these new things with AI, please?

Speaker 2

Yes. I'll take the first part. Chris can add anything I forget. I think it starts with the vision of what we're trying to build, what we deem an autonomous advertising platform that takes No humans to operate. That is the overall goal is that programmatic trading can happen without actual human involvement from The campaign being created to optimize to insights driven post close of the campaign.

Speaker 2

So that's the long term vision. We've added you are correct. We've added to our product and engineering teams, certainly around the skill set related to advancing our products. We have been using machine learning for many years and I think now it's about putting true deep learning artificial intelligence on top The data that we actually have. In my remarks, I talked a lot about the infrastructure components necessary.

Speaker 2

When you get into the world of AI, it's all about training the model on a very stable dataset. Our household ID gives us that Stable data set, we're able to train these models not just on bidding and buying, which is an important area, but on closed loop Measurement as well and being able to attribute appropriately which ad drove the sale for that advertiser. So long term vision is a fully As we go throughout the year, different areas of the programmatic process like bidding and buying, using machine learning and artificial intelligence will be applied. Regarding the new large language models, we're certainly looking at OpenAI, Bard from Google, all of them and looking at how we apply those, those are future products that are starting to work their way into our product pipeline. But certainly, our own AI driven products that we've been working on for years should be coming to Roost in the second half.

Speaker 2

And just to add a little bit to that, if you think of putting them in AI and ML, just a few comments, Large language models, you'll see us predominantly use externally to customers. Anything in kind of UI or UX, Both, if you think in terms of buying, you can kind of prompt and it can execute something for you as opposed to you making selections, which Can take time. And also reporting. So that's a large focus with our customers who work with us, reporting and measurement, where they can ask a question And get an answer back versus running reports. This saves time.

Speaker 2

So that's where predominantly you will see large language models used. And then ML is typically in things around campaign performance, making associations between creative and maybe a Particular household or formats, devices, publishers. Right. Anything like Auto optimization, a lot of those things we have been doing for years, but we've really stepped up our investment here and we're seeing just some really great results in Champion Performance, so we're excited about some of the things that we're working on. And just regards around what's this going to cost us, Larry, can you Talk about product and engineering costs for the rest of the year?

Speaker 3

Yes. I mean, we do if you look at the P and L on the earnings release, I think it was up Something like 18%. We will continue to add resources to the product and engineering side this year. That being said, as you can see from our overhead numbers, certainly relative to last year and even last quarter, we are controlling the overall expenses very tightly. We're being very strategic about where we're putting new money, and we will continue to grow that team throughout the year.

Speaker 5

Okay. That's super helpful. Thank you, guys. It's all new stuff. The second one I will do is your Supply path optimization.

Speaker 5

So is this like trade desks Where you don't disintermediate the SSP with your direct access product? Or is it more like what Group M is doing with Magnite where they are disintermediating the DSP, which one is yours for this supply side optimization?

Speaker 2

Well, I don't look at it that it's disintermediating somebody. However, very directly, what it's about is making direct And the whole goal is that just so we're clear, we represent as a DSP, We represent the buy side only. We do not represent publishers. I can't represent the buy side if I also am representing the publisher is our point of view. Anybody representing the publisher on the supply side, they're looking to get the highest possible price.

Speaker 2

What we're doing is making connections directly with content owners. They can merchandise their inventory or their add inventory to our customers and we're aiming to procure the lowest possible price. That's what a buy side representative would do in serving the clients. That is that value proposition rings so true today, especially In this type of market. So in some in that instance, if they're using an SSP, then for mediation or Anything of the sort, they'll continue to use them.

Speaker 2

But really what we're doing is creating transparency for our clients directly to the content owners and it's really all about price. There is an added benefit that comes with this, which is better signal. When you're connected directly with the content items, you end up getting better signal. That may be Again, it's not really

Speaker 3

a we

Speaker 2

don't really care about what people are trying to

Speaker 6

we're just making sure they see their doctors as possible

Speaker 2

And really focused on selling, getting rid of certain matters

Speaker 3

In a bad recession, there would

Speaker 2

be a lot of layoffs.

Speaker 3

So it's more like trade offs.

Speaker 5

Sounds great. Thank you very much,

Speaker 3

you guys. Really excellent margins

Operator

this quarter. So congratulations.

Speaker 2

That is what we've Thank you.

Speaker 3

In the past

Speaker 7

now, I understand

Speaker 3

we've never been in a You guys have a successful care act in place.

Speaker 7

And then I'd like to ask about the cash balance.

Speaker 3

The way we're looking at it is that Kind

Speaker 7

of since you guys are seeing something with the cash balance. Just on the

Speaker 2

side, if you could remind us coming out

Speaker 7

of it, we will

Speaker 6

be expecting $1,000,000 to $1,000,000 to $1,000,000

Speaker 3

to $1,000,000 to see the Retail

Speaker 2

And really there were a great sales side. And really there were a great sales side. And we're hoping that customers Year over year over year, this

Speaker 3

is a very good question.

Speaker 6

And really, we went to a lot

Speaker 2

of those customers and said, look, As you look at maybe

Speaker 6

the dividend more so obviously in the

Speaker 2

retail side of active customers, but it's a de minimis amount We have to expect some relative peers or

Speaker 6

some of the new losses and I'll be running out as you add some more.

Speaker 2

Second question, Larry, can you just add that?

Speaker 6

I have some features

Speaker 3

In terms of liquidity, yes, I mean, clearly, we

Speaker 2

haven't received that at this point

Speaker 3

in time. Since a lot of you, we Certainly consider and a part of our strategy and we will continue to manage. I think the market has generally started to reset in terms of valuations We'll be opportunistic. We're looking at things. We certainly haven't done anything yet

Speaker 2

as you know.

Speaker 3

We expect at the end of the year. We'll continue to do that. Our receivable balance is more than enough to upsize the facility. It did not cost that much to upsize it and to manage it. So we thought it was a smart move especially given the capital raising market and credit markets.

Speaker 3

Customers with a newness now. We're being conservative

Operator

And our next question will come from Andrew Marks.

Speaker 3

So that we're able to handle Well, thanks for taking my questions. We're going to buy CTV every demographic that might want to buy.

Speaker 6

We'll give a little granularity

Speaker 2

CTV was slow in Q1, but we have seen that stabilize into Q2. So, the brand advertising getting pulled back, we talked about focus Some challenging tactics by marketers moving into performance driven campaigns. We did see a pullback in CTV, but we have seen that stabilized into Q2. Larry, can you provide any other color?

Speaker 3

Yes. I mean, it's quarter to date, it's up very nicely in Q2. The other thing I would say is, If you recall, we were really growing quickly last year. So the comps on CTV are a bit challenging relative to Q1 and Q2. But again, as Tim said, we were a bit soft in Q1, low single digit decline, But certainly, we are seeing that turnaround in Q2 and certainly, I think it is partly at least due to Brand dollars coming back into the platform, which is another sign of stability that we look at.

Speaker 6

Great, really helpful. And then my second on direct access and SPO in general, I think you guys are With those lines between supply and demand potentially becoming blurrier, I guess, how does that impact your thinking on the state of the ad tech market and like The traditional definitions or roles that companies have taken in the space.

Speaker 2

Yes, that's a good question. I really don't think the definitions and the roles are going to change much. Like our focus just remains we're Going to represent the buy side, we're going to represent the marketer and their agency, and we're going to go out and do what's best for them. We're going to go out and get them the lowest possible price. We're going to focus around campaign performance.

Speaker 2

We're going to show them what they get for their money and our measurement offering. And that's at the end of the day what we're going to continue to do. I think a lot of these announcements that are continuing to come out, maybe some of them are me too, they're copycat. I think maybe some companies feel like they need to do those things. I really don't believe they're going to have a material impact because at the end of the day, I still we still believe that One group's got to represent the marketer, the other needs to represent the content owner.

Speaker 2

And when you do both, you can't really serve both parties optimally.

Speaker 6

Great. Thank you very much.

Operator

We will now hear from Jason Kreyer with Craig Hallum.

Speaker 7

Thank you. So 2 for me. First on Chris, just you talked about the data cloud and the uniqueness of the market. We've heard several different solutions that talk about just being able to bring in your own first party data to the platform. So I wanted to see if you can just expand on the uniqueness that you're talking about there.

Speaker 7

Second one would be for Larry. Just on the metrics you gave on the 2 revenue models, it seems like you're seeing a more pronounced movement over to percent of spend. Is that like an acceleration for customers or are you just onboarding fewer at fixed fee?

Speaker 2

Got it. Jason, thanks for the question. I'll take the first one. So I

Speaker 7

did talk about the Viant data platform.

Speaker 2

Just so we're clear, we have for a number of years, probably since 2015, 2016 allowed customers to onboard CRM data like email addresses, addresses things like that in our UI itself. But our Via Data platform, really that is taking it another Marketers are now housing that CRM data now, their hands on that in a centralized Today, those existing companies like Snowflake or Amazon. And really what the Viant data Has done has made integrations. Completely our call. No matter where you are posting that data.

Speaker 2

And now we're And I'll tell you, there's many customers that So, in marketer Home Deposit Site Snowflake, we instantly help match their customer with anyone in our ecosystem, Whether it be a publisher I

Speaker 3

think you said it well.

Speaker 2

We create that naturally and allow for easily allow for targeting in an authenticated environment.

Speaker 6

But more

Speaker 2

importantly, it's really around measurement. With device IDs and everything going away, the future is going to be customers using their own data stored in, let's say, the clean room. And they're going to be able to match that with any ad exposure that they have, but they need companies that help represent the market to get the most Automotive for speed. That's really where the buying factor is to get past the 1st 3. And there's a credible set of other features here.

Speaker 2

We're really excited about a lot of the things already in This platform will obviously operate and operate. It's why the adoption of the PFSD growth in San It essentially creates a single data scientist and it gives them

Speaker 6

Thanks for clarifying. The contact centers on net pricing realization and the readjustment there.

Speaker 3

In terms of mix, Jason, so that's it for my question. So that spend in Q1 continued to grow nicely. That now has been for some time the large majority of Which is very positive. As everyone knows, earnings price

Speaker 2

tends to be a bit more discretionary.

Speaker 3

We don't hesitate to reach out to Quarterly dollars. So with macro issues, those dollars tend to get pulled back first, Certainly, as compared to percentage of spend. So, we're starting to see a stability on the fixed price side as well, which is good.

Speaker 7

Perfect. Thank you, guys.

Operator

And we will now hear from Chris Kotarich with UBS.

Speaker 8

Sorry, I was on mute there. I think last quarter guys you had called out that you're starting to see some green shoots in both auto and CPG and I You flagged this quarter that CPG was one of the verticals that was declining. So just curious if that was more of a customer specific dynamic or if this was more broader CPG trend that you were seeing. And then just curious if you can give us an update more specifically around retail spend. You'd nicely laid out the monthly cadence.

Speaker 8

You could just kind of walk through that and how that monthly cadence looked in April and May to date? Thanks.

Speaker 3

Yes, I can take that. So CPG was off a bit in Q1. We are seeing it turn in Q2. It looks like it will be up in Q2. Auto continues to do well after having been down for quite a few quarters going back to the pandemic.

Speaker 3

I think this It's now perhaps the 2nd quarter in a row where it has grown nicely. It's still a relatively small. It's probably 5% or 6% of our total spend, but growing, which is great news. And then on the retail side, We did have some softness in Q1, similar to CTG. That is coming looks to be coming back fairly strongly in Q2.

Speaker 8

Okay. Got it. And maybe if I could just squeeze in one more on the OpEx side of things. I think you're guiding to kind of a mid to high single digit sequential step up in OpEx. Just curious as we're thinking through the back half of the year, if we should be thinking more towards that the higher end or the lower end or even below that for Further step ups as you guys continue to invest in product?

Speaker 3

In terms of the full year, I'll give you this. So 2023 OpEx will be lower than 2022 OpEx, probably mid to high single digit decline. That being said, we do expect, call it, single digit mid to high single digit percentage Increases in Q3 and Q4, quarter over quarter increases. Again, we're very focused on driving operational efficiency, but we are also making investments that we think will have long term play for us in terms of returns that we will get from them. So it will increase in the coming quarters, not significantly, but call it mid single digits.

Speaker 8

Understood. Thank you very much.

Operator

And no further questions at this time. So Chris and Tim, I'll turn it back to you for any closing comments you might have.

Speaker 2

Thank you everyone for joining me today and we'll see you this time next quarter.

Operator

Great. Thank you so much. And again, everyone, that does conclude our webinar for today. Enjoy your summer. We'll see you next time.

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Earnings Conference Call
Viant Technology Q1 2023
00:00 / 00:00