Viant Technology Inc (DSP) 2025 Q3 法說會逐字稿

(Operator Instructions) Okay. Hello, everyone, and welcome to Viant Technology's Third Quarter 2025 Earnings Conference Call. My name is Dave, and I will be your operator today.

Before I hand the call off to the Viant leadership team, I'd like to go over just a few housekeeping notes for the program. As a reminder, this call is being recorded. (Operator Instructions) And thank you for your attendance today.

I will now turn the call over to Nick Zangler, VP of Investor Relations for Viant.

Thank you. Good afternoon, and welcome to Viant Technologies Third Quarter 2025 Earnings 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, but not limited to, statements regarding our guidance for Q4 2025 and other future financial results, our strategy, our platform development initiatives, including ViantAI, our pipeline and potential partnership opportunities and industry trends that are based on assumptions and subject to future events, risks and uncertainties that could cause actual results to differ materially from those projected. These forward-looking statements speak only as of today, and we take no -- undertake no obligation to update or revise these statements, except as required by law. For more information about factors that may cause actual results to differ materially from forward-looking statements and our entire safe harbor statement, please refer to the news release issued today as well as the risks and uncertainties described in our quarterly report on Form 10-Q for the quarter ended September 30, 2025, under the heading Risk Factors and in other -- our 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 non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the news release issued today and in our earnings presentation, which have been posted on the Investor Relations page of the company's website and in our filings with the SEC.

I would now like to turn the call over to Tim Vanderhook, Chief Executive Officer of Viant. Tim?

Thanks, Nick, and thank you, all, for joining us today. We delivered a strong third quarter performance, achieving new company records across all key metrics. Revenue increased 7% year-over-year and contribution ex-TAC increased 12% year-over-year, both well above the midpoint of our quarterly guidance range. When excluding temporary items like political advertising, revenue and contribution ex-TAC increased 19% and 22%, respectively, and more accurately reflects the true strength of our business. Growth was driven by new customer wins, accelerating CTV demand, a surge in streaming audio demand, greater adoption of Viant's addressability solutions and the expanded use of the ViantAI product suite.

Adjusted EBITDA increased 9% year-over-year to $16 million for the quarter and surpassed the high end of our guidance range. On our previous earnings call, we discussed an incremental $250 million in potential ad spend opportunities associated with ongoing discussions with major US advertisers, representative of a new addressable market for Viant.

We are thrilled with our recent progress, which includes multiple client wins and is highlighted by a flagship multiyear partnership with Molson Coors, one of the world's largest beverage companies. Viant has been designated as the advertising platform for Molson Coors and will power their programmatic ad campaigns deployed across the open Internet throughout the US beginning in 2026. Viant was selected because of our proprietary intelligence layer, which combines our industry-leading addressability solutions with our autonomous advertising capabilities to uniquely activate first-party data, reach targeted audiences and achieve measurable outcomes at scale. Molson Coors manages a diverse product portfolio, including core power brands, premium brands and value brands, each of which services a distinct customer demographic.

Viant is uniquely capable of finding both existing and potential customers by leveraging our intelligence layer. By integrating their first-party data into our autonomous ad platform, we aim to empower Molson Coors to reach the appropriate legal drinking age audience for each brand while ensuring that every impression delivers measurable value. This is precision marketing at scale made possible through Viant's autonomous ad platform. Molson Coors joins one of many major US brand advertisers who share our vision of achieving outcomes through autonomous advertising.

With multiple wins in place, the broader market is increasingly recognizing Viant as the autonomous advertising platform for the open Internet. And for good reason, our value proposition is unmatched. First and foremost, we are an independent and objective partner, free of the conflicts of interest that exist with our competitors. Remember, many of our peers either sell owned and operated inventory or they monetize certain supply paths, putting their interest at odds with their advertiser clients. Google direct spend to YouTube, Amazon direct spend to Prime Video and the Trade Desk direct spend through OpenPath, all to extract more margin for themselves and ultimately to the detriment of the advertiser.

At Viant, we pride ourselves in directing spend to ad inventory that drives the highest return on ad spend for the advertiser. We own no publisher content, and our incentives are directly aligned with those of our advertiser clients. Viant is also a leader in proliferating secular growth channels, CTV and streaming audio, offering advertisers the ability to purchase ad inventory through our direct access premium publisher program, the industry's most efficient path to purchase premium CTV and streaming audio ad inventory. Through direct access, more ad spend is allocated to working media, which means dollars deployed on Viant's platform go further, generating more ad impressions for advertisers than on many competing platforms. And as referenced a moment ago, at the core of our autonomous ad platform is an intelligence layer that is giving our customers the ability to drive higher returns in open Internet advertising.

Viant is the only platform where advertisers can leverage AI to harness what we believe to be the industry's most powerful audience identifier, Household ID and the industry's most powerful content identifier, IRIS_ID, to cut through the noise and deploy precise hyper-targeted campaigns at scale through the most efficient supply paths.

This value proposition is resonating with brand advertisers more so than ever before. And I am pleased to report that throughout the quarter, we made tremendous progress, further enhancing this value proposition as part of our relentless focus on innovation. On that note, I will provide an update on performance and progress across our key strategic priorities: CTV,; addressability; and ViantAI. CTV was the strongest driver of contribution ex-TAC growth in the quarter, exhibiting an accelerating year-over-year growth rate. Our results consistently demonstrate our leadership position in CTV, and this quarter was no different.

Total CTV ad spend on our platform reached a new all-time high and represented 46% of total advertiser spend on our platform, also an all-time high. Year-to-date, approximately half of all CTV ad spend on our platform has been directed by our customers to run through our direct access publisher program, which offers an efficient, targetable and measurable way to purchase CTV inventory. The vast majority of leading streaming services have joined the Direct Access program, including Disney+, Paramount+, NBCU, Tubi, Samsung and many more. Increasing adoption of our addressability solutions, Household ID and IRIS_ID, both of which are purpose-built for CTV, further propel demand for CTV on our platform, leading to outsized growth relative to our peers. Viant Household ID, our patented audience targeting and measurement solution, continues to see strong utilization amongst advertisers and was a meaningful contributor to top line growth in the quarter.

Household ID delivers superior addressability for advertisers looking to leverage their first-party data to reach specific audiences and measure campaign performance. Household ID identifies approximately 95% of US households and is available across roughly 80% of all biddable ad inventory, 4 times the coverage of key competing identifiers, which reach only about 20% of biddable ad inventory.

Our content targeting and measurement solution, IRIS_ID, continues to ramp across publishers, enticing a growing number of advertisers to deploy contextually targeted campaigns on our platform. We recently added Tubi, a leading fast streaming service with over 100 million monthly active users to our pool of IRIS-enabled publishers, joining the likes of Paramount+, AMC Networks, Wurl, Lionsgate, CNN, LG, VIZIO and many more. In just one year since acquisition, we have more than tripled the presence of IRIS_ID across the CTV bid stream, and we believe we have a clear path to achieve 50% of the CTV bid stream penetration in the next few months.

IRIS_ID is a powerful performance solution, enabling advertisers to achieve unprecedented levels of precision by targeting CTV ad inventory at the video level, which includes scene-level targeting. Consider for a moment the possibilities of scene level targeting where brands align with a seemingly infinite assortment of themes. Imagine brands like Tide laundry detergent targeting stains, Bounty paper towels targeting spills and Coca-Cola targeting Happiness. The possibilities are limitless.

And most importantly, IRIS_ID works. When utilized on our platform, advertisers are seeing, on average, a 48% increase in conversion rates versus control groups. Given the effectiveness of contextual targeting strategies deployed with Viant, advertisers are buying in. In fact, in Q3, revenue attached to the IRIS_ID more than doubled sequentially versus the prior quarter. Last quarter, we announced a partnership with IPG Acxiom, where IRIS_ID is powering their content targeting offering.

IPG is requiring all content owners with upfront commitments to carry IRIS_ID, and we believe this partnership will help further drive IRIS_ID into the CTV ecosystem. Moving on to ViantAI. Our autonomous ad platform is powered by the ViantAI product suite. We have successfully rolled out three of the four phases comprising the ViantAI product suite. ViantAI consists of AI Bidding, AI Planning, Measurement and Analysis and AI Decisioning.

I'll provide a brief update on all four phases. AI Bidding continues to automate approximately 85% of the ad spend on our platform. With AI Bidding, advertisers enable Viant's algorithms to find and buy optimal ad placements across the open Internet, aiming for the lowest cost while meeting their desired KPIs, which often include reach, frequency and other targeting requirements. With surging use, contribution ex-TAC generated from AI Bidding more than doubled year-over-year in the quarter and growth accelerated for the fourth straight quarter. We recently launched AI Bidding 3.0 ahead of schedule, which is expected to deliver even greater media cost reductions to our clients.

AI Planning most clearly showcases our intelligence layer at work and represents the future of ad campaign creation and execution at Viant. AI Planning enables any advertiser from an SMB to an enterprise marketer to create a brand or product-specific ad campaign in seconds. We replaced the complex DSP UI with a single prompt that requires just four inputs: the advertiser, the budget, the time frame and the goal. Within seconds of submission, an ad campaign designed to maximize return on ad spend is fully constructed and ready for deployment. Our intelligence layer identifies the ideal audience segment for any brand, product or service, then utilizes advertiser first-party data together with our addressability solutions, historical campaign performance data and bidding algorithms to most efficiently allocate the budget across various digital channels, publishers, geographies, audiences, video level content, time of day and more, to execute campaigns capable of delivering the most optimal outcomes.

In preparation of our launch of AI Decisioning, AI Planning has been significantly enhanced, now capable of building and executing campaigns for niche performance advertisers and even individual products or services. For example, AI Planning can now build and execute a campaign for every single pair of shoes on Nike's website, each uniquely tailored to address a specifically defined audience through calculated digital channel allocations and use of specific audience and contextual targeting segments. With this new enhanced level of precision, enterprises and mid-market advertisers can reconfigure marketing strategies for increased efficiency and performance advertisers, including SMBs and direct-to-consumer e-commerce companies. They can readily engage the most highly effective digital channels like CTV. Of course, powering this enhanced level of precision are our proprietary addressability solutions, Household ID and IRIS_ID, both of which are now fully incorporated into our intelligence layer.

AI Measurement and Analysis launched earlier this year and replaces traditional reporting with on-demand insights. Historically, campaign performance data has been spread across multiple dashboards, buried in spreadsheets and has required the expertise of specialized data scientists to interpret results and identify actionable insights. AI Measurement and Analysis surfaces actionable insights and optimization opportunities in an instant via an intuitive chat-based interface. Think of Measurement and Analysis as a trusted copilot, providing on-demand answers and recommendations to all campaign performance-related queries, an essential feature necessary to properly support performance advertisers. AI Decisioning set to launch at year-end will truly usher in the outcomes era of programmatic advertising at Viant by combining AI Bidding, AI Planning and Measurement and Analysis with the added capability of dynamic spend deployment.

AI Decisioning proactively reacts to fluid market conditions and adjust campaigns in real time to deliver optimal campaign results. AI Decisioning is expected to enable Viant to expand our addressable market to include performance advertisers who are in need of a do-it-for-me solution that can service them across the open Internet. Our autonomous advertising platform will compete with Google's PMax and demand gen solutions as well as Meta's Advantage+ solution, but will direct spend to demand generation channels like CTV and streaming audio, that drive incremental lift, as opposed to demand capture channels like search and social, where ad spend is directed to audiences that often would have converted anyway.

To summarize, we delivered impressive results attributable to strong underlying performance, particularly in CTV, where we are continuously expanding our leadership position. We believe our partnership with Molson Coors underscores our platform's unique advantages over our much larger competitors. And we strengthened our value proposition through improvements in our CTV offering, addressability solutions and the ViantAI product suite. With headwinds easing, underlying performance strengthening and a marquee client win established, we are poised to meaningfully accelerate growth going forward.

With that, I'll pass it over to Chris.

Thanks, Tim. I will provide an update on our customer go-to-market strategy. We intend to maintain our dominant position within the mid-market. With the success of ViantAI, we will opportunistically expand upmarket with major US advertisers like Molson Coors, who share in our vision of achieving measurable outcomes through the use of autonomous advertising and expand down market to enable the millions of performance advertisers, including SMBs and direct-to-consumer e-commerce companies, to participate in the open Internet, just like they currently do in search and social.

Touching first on the mid-market. We continue to execute across our core customer cohort as demonstrated by the acceleration in demand we generated in the quarter, which can be seen in our underlying performance. After accounting for political ad spend in the prior year and the departure of a seasonal advertiser due to a corporate merger, contribution ex-TAC increased by 22% in the quarter. Mid-market advertisers are increasingly relying on our intelligence layer and embedded solutions like Household ID, IRIS_ID and AI Bidding to successfully navigate today's complex digital landscape. As a result, Viant is becoming more deeply integrated into the fabric of our clients' marketing efforts, opening up more opportunities for collaboration.

For example, we recently expanded upon an existing partnership with a leading grocery chain to power their retail media network. By leveraging their extensive first-party data set, along with our industry-leading addressability solutions, we are enabling this grocer's numerous vendors to target relevant audiences with highly effective off-site ads. Beyond this existing partnership, we are in active dialogue with a number of additional major retailers exploring opportunities to utilize their first-party data set in combination with our addressability solutions to better enable their vendors to market products more effectively across the open Internet and ultimately drive sales growth across these retailers. Across major US advertisers, we have been actively pursuing over $250 million in potential ad spend, all of which would be incremental to our mid-market growth opportunity.

As Tim mentioned earlier, major US brands are increasingly looking to partner with Viant due to our independence, our leadership in CTV and to leverage our intelligence layer that is core to our autonomous advertising platform in ViantAI. Our multiyear partnership with Molson Coors not only demonstrates our ability to win amongst major US advertisers, but we believe this win is indicative of a growing preference amongst large brands to deploy data-driven campaigns at scale. Historically, the world's largest advertisers have executed ad campaigns built for reach and frequency with minimal emphasis on addressability and the need to tie all media to outcomes.

We see a changing landscape where even the largest brands in the world seek to advertise with precision, measure and drive return on ad spend and improve the overall effectiveness of their marketing budget. This is exactly what Molson Coors is striving to achieve, and we expect they will rely on our intelligence layer within our autonomous advertising platform to build and execute sophisticated campaigns designed to achieve maximum efficiency. Together, we can connect their brands to the right audiences in the right moments to deliver measurable outcomes while reinforcing Molson Coors's legacy of brand building. At the end of the year, we plan to launch the fourth phase of our ViantAI product suite, AI Decisioning, enabling Viant to better serve performance-based advertisers via a self-service do-it-for-me solution. The opportunity across performance advertisers, including SMBs and direct-to-consumer e-commerce companies, is substantial, representing 10 million advertisers and over half of the $240 billion currently allocated to search and social digital channels.

Performance advertisers prioritize targeting and measurement, a capability that has emerged within CTV through the use of our addressability solutions. Performance advertisers tend to be overinvested in search and social platforms and stand to benefit from shifting spend to CTV, where they can drive and measure incremental sales and improve their return on ad spend. To date, we believe there is no true self-service solution in the marketplace capable of addressing this customer segment for the open Internet. DSPs as they currently exist are far too complex to attract the performance advertisers and mass until now. AI Decisioning is the component of our autonomous advertising platform designed to enable any size advertiser to deploy ad spend across highly effective digital channels, including CTV, streaming audio and more.

The team is hard at work preparing for the launch of AI Decisioning by the end of the year. And because we have embraced a product-led go-to-market strategy, we see an opportunity to deliver faster growth and higher margins than that exhibited by early entrants currently targeting the space through their numerous sales reps and rented technology. We believe our in-house do-it-for-me autonomous advertising platform limits the need for extensive personnel investment to support new client acquisition and expansion. Clearly, Viant is executing across a wide range of market opportunities.

In the mid-market, where we have traditionally dominated, we continue to exhibit strong growth as demonstrated by our results. Amongst major US advertisers, a new addressable market for us, we have been in active pursuit of over $250 million in incremental ad spend with multiple wins in place. And to address the emerging opportunity amongst performance advertisers, we are launching the industry's first autonomous advertising platform built for the open Internet.

With that, I'll turn it over to Larry to provide more detail on our financial performance. Larry?

Thanks, Chris. Before I begin, I would like to remind everyone that we have posted a presentation on our Investor Relations website that includes supplemental financial information to accompany today's call. In terms of our results for the third quarter, revenue for the quarter was $85.6 million, representing a 7% increase year-over-year and 10% increase quarter-over-quarter and was above the midpoint of our guidance range. Contribution ex-TAC totaled $53 million in Q3, up 12% compared to the prior year period and up 10% sequentially, reaching the high end of our guidance range. Both revenue and contribution ex-TAC represent record results for the 3Q period.

It is important to note our underlying business is performing far stronger than our reported results indicate. When excluding political ad spend contribution from the prior year election cycle, which weighed on revenue growth by approximately 600 basis points and contribution ex-TAC growth by approximately 400 basis points as well as the departure of a seasonal advertiser due to a corporate merger, which weighed on revenue and contribution ex-TAC growth by approximately 600 basis points, Q3 revenue increased 19% year-over-year and contribution ex-TAC increased 22% year-over-year on a pro forma basis. We believe this underlying performance more accurately reflects the true health of our business and adjusts for material factors outside of our control. During the quarter, we also continued to see meaningful expansion in the number of customers generating significant levels of contribution ex-TAC. On a trailing 12-month basis through Q3, we saw a 39% increase in the number of percentage spend customers generating over $1 million in contribution ex-TAC.

Additionally, contribution ex-TAC across our top 100 customers grew by 18% year-over-year on a TTM basis. New customer momentum also remains strong, as evidenced by the recent announcement of a newly formed multiyear partnership with Molson Coors, one of the largest beverage companies in the US. We are encouraged by our performance and demonstrated ability to bring major US brand spend onto the Viant ad platform. We believe these trends fueled by growth from both existing and new customers, reinforce our strong competitive positioning and support our ability to continue outperforming the broader programmatic market over the long- term.

We delivered strong performance across most customer verticals in Q3 with ad spend across our top 6 verticals, which include health care, retail, consumer goods, public services, business services and automotive leading the way. CTV remained a core growth driver in Q3, accounting for a record high of 46% of total platform spend, with nearly half running through direct access premium publishers. In addition, CTV spend reached an all-time high in the quarter, reflecting continued momentum as advertisers increasingly prioritize premium addressable video to drive performance. Spend across all emerging digital channels, which includes CTV, streaming audio and digital out-of-home, collectively represented approximately 56% of total platform spend in Q3, also a new record and up from 50%, in 2024 and 43% in 2023, highlighting the accelerating adoption of next-generation media formats and underscoring our position as a leading partner for advertisers moving beyond traditional display. Video, inclusive of CTV, reached a record high 62% of total platform spend in the quarter, reflecting the continued shift towards high-impact measurable formats.

Non-GAAP operating expenses totaled $37 million in the third quarter, representing a slight sequential decline and a 13% year-over-year increase. Notably, operating expenses include strategic investments related to the acquisitions of IRIS TV, which closed in November 2024 and Lockr, which closed in February 2025, both of which expand our long-term product capabilities and are intended to support long-term growth. Excluding these acquisitions, organic non-GAAP operating expenses increased a modest 7% year-over-year and decreased 1% sequentially, reflecting continued operating leverage and disciplined expense management. Importantly, we remain focused on scaling efficiently. Even as we continue to invest in innovation across ViantAI and our broader technology stack, we are delivering measurable gains in productivity, increasing contribution ex-TAC per employee by over 7% year-over-year, a clear signal of improved operational efficiency.

Adjusted EBITDA for Q3 was $16 million, exceeding the high point of our guidance by 7% and growing 9% year-over-year and 42% sequentially. Adjusted EBITDA as a percentage of contribution ex-TAC was 30% for the quarter, well above our prior guidance, which called for 28% adjusted EBITDA margin at the midpoint. We are -- We were able to deliver strong margins despite temporary pressures impacting our top line and while absorbing elevated year-over-year operating expense growth stemming from the integration of the recent acquisitions, both of which represent critical investments that have materially strengthened our competitive positioning. Non-GAAP net income, which excludes stock-based comp and other adjustments, totaled $11.2 million for the quarter, down 9% from $12.3 million in the prior year. Non-GAAP basic earnings per Class A share outstanding was $0.12 in the third quarter compared to $0.15 in the prior year.

The year-over-year declines in both non-GAAP net income and earnings per share are primarily attributable to lower interest income and higher income tax expense in the current period. Non-GAAP net income before interest and taxes increased 4% year-over-year in Q3. In terms of share count, we ended the quarter with 62.4 million shares outstanding, consisting of 16.6 million Class A shares and 45.8 million Class B shares. We ended the quarter with a strong balance sheet, including $161 million in cash and cash equivalents, $194 million of positive working capital, no debt and full access to our $75 million credit facility. We also remain disciplined in our capital allocation.

Since launching our share repurchase program in May 2024, we've returned $59.6 million to shareholders, including $10 million in Q3 and $37.9 million year-to-date through November 7. In total, since inception, we've repurchased 4.8 million shares at an average price of $12.42, signaling our confidence in our long-term value. As of November 7, approximately $40.4 million remains available under our current authorization. We intend to continue executing this program opportunistically with a focus on maximizing value for long-term shareholders, particularly during periods when our stock is undervalued. We believe our strong financial foundation, combined with consistent execution and a balanced capital allocation strategy positions us well to capture growth opportunities and drive shareholder value in the quarters ahead.

Turning now to our Q4 outlook. As a reminder, our Q4 performance is being measured against a difficult comparison largely due to last year's high political ad spend contribution. This headwind is expected to pressure revenue growth by 600 basis points and contribution ex-TAC growth by 500 basis points in Q4. This is fully reflected in our guidance for the fourth quarter of 2025, which is as follows.:

Revenue of $101.5 million to $104.5 million, up 14% year-over-year and 20% sequentially at the midpoint. Excluding the impact from political, revenue is expected to be up 20% year-over-year at the midpoint on a pro forma basis. Contribution ex-TAC of $62 million to $64 million, reflecting 16% year-over-year growth and 19% sequentially at the midpoint. Excluding the impact from political, contribution ex-TAC is expected to be up 21% year-over-year at the midpoint on a pro forma basis. Non-GAAP operating expenses of $39.5 million to $40.5 million, up 7% year-over-year and 8% sequentially at the midpoint.

Excluding the impact from the IRIS and Lockr acquisitions, organic non-GAAP operating expenses are expected to increase a modest 5% year-over-year and 9% sequentially at the midpoint, reflecting continued operating leverage and disciplined expense management. Adjusted EBITDA of $22.5 million to $23.5 million, representing a 35% year-over-year increase and a 44% increase sequentially at the midpoint. And finally, we expect an adjusted EBITDA margin as a percentage of contribution ex-TAC of 37% at the midpoint, representing over 500 basis points of improvement over the prior year period. Despite these temporary political headwinds, the midpoint of our guide assumes record Q4 performance across revenue, contribution ex-TAC and adjusted EBITDA. Based on the midpoint of our guide, we now expect full year 2025 revenue and contribution ex-TAC growth of 17%, adjusted EBITDA growth of 25% and adjusted EBITDA margins of 27%, an improvement of nearly 200 basis points year-over-year.

Notably, excluding the temporary headwinds we discussed, our Q4 guide at the midpoint implies full year 2025 revenue and contribution ex-TAC growth of 22% on a pro forma basis, indicative of strong underlying performance. As a reminder, the political ad spend headwind will no longer be a factor starting in the first quarter of 2026. A few other considerations worth noting for 2026 modeling. We anticipate accelerating year-over-year growth in revenue and contribution ex-TAC throughout 2026, driven by new client onboarding. Additionally, while we expect to start servicing Molson Coors in Q1, more significant spending is expected to commence in Q2 and beyond.

In terms of non-GAAP operating expenses, beginning in 2026, we will have lapped nearly all of the OpEx contributions associated with the recent acquisitions, and therefore, we expect to grow non-GAAP operating expenses at a lower rate in 2026 than in 2025. Given these assumptions, we expect to deliver significant EBITDA margin expansion in 2026. In closing, we delivered another record quarter, executing against our strategic priorities, advancing innovation across our platform and returning capital to shareholders through opportunistic share repurchases at compelling valuations. Our growth pipeline has never been stronger and is supported by over $250 million in potential annualized ad spend opportunities associated with major US advertisers, a new addressable market for Viant.

We are clearly executing against this opportunity as evidenced by the flagship partnership with Molson Coors, among other sizable wins. We believe we are well positioned for sustainable long-term growth given our strategic alignment with secular growth trends, including CTV, addressability and ViantAI.

And with that, I'll turn the call back over to the operator for questions. Operator?

(Operator Instructions) Laura Martin, Needham.

Great numbers, guys. I have two. One is you guys have always had a self-serve platform and you have had two like products out of the three AI. So what is it about the third AI product that you're delivering in the fourth quarter that opens a new SMB TAM? Is it content creation? Or why wouldn't -- what was -- why is it different from what has been possible to date?

And then, Larry, just on your guidance, your same-store guidance has a 600-basis-point headwind for a merger client that took spending. That isn't onetime, right? That's going to be a 600-basis-point headwind for four quarters in a row. Do I have that right? Or if not, tell me.

Larry, do you want to take the first one?

I'll go first. So no, this was -- this particular client was a very seasonal client, spent the majority of their budget in Q3 and relatively modest amounts in other quarters. So that -- it will be very modest in terms of the headwind on that one. We're not even calling it out, but it's really the Q3 quarter that was the big hit for that particular.

Super helpful.

Laura, and on the first one, when we launch AI Decisioning, that will complete the cycle of the four phases of ViantAI. And what that will do is effectively make it full self-driving. Right now, we would classify ViantAI as still human in the loop, approving everything, needing to add extra information or optimizing the campaign based off the results. But with AI Decisioning, it will take over the complete campaign from start to completion, hopefully hitting the customer goals that the advertiser is looking for.

And Laura, just to remind everybody, DSPs traditionally are very complex we liken them to like a Bloomberg terminal in finance. And with these smaller direct-to-consumer e-commerce companies or SMBs, they need a more simplified user experience, and they really want the platforms. They want to give you limited information. They want the platform to hit their goals. And we liken it also to -- it's like the self-driving car. That's kind of what we're doing with AI Decisioning that it is -- they're going to give us some basic information, their goals and then the platform is going to just deliver them the results.

Matthew, JMP.

My first one is just on the Amazon DSP. It seems like they're offering 0% DSP fees that's been out there in some of the articles. Just have you guys seen any increased competitive intensity here over the past quarter or so?

I would say no on increased competition. Certainly, the Amazon DSP marketing team deserves a trophy for how much coverage they've been able to get over the past couple of months. But I would say, no, the competitive side of Amazon's ads business has been pretty consistently there. Most of their revenue is sponsored listings. The DSP, I would guess, is a very small portion. And we don't see them in the competitive bake-off processes at the finish line.

Got it. And then my second one is just on -- as you launch the AI Decisioning product and expand into the SMB performance market, just how do you grow awareness with that type of advertiser? Is there different investments in sales and marketing that you need to make? Or how do you think about that go-to-market strategy?

Yes. There's a lot of channel partnerships that you end up doing. There's a whole ecosystem of direct-to-consumer agencies, also measurement firms that we may look to partner with as well. But that SMB and direct-to-consumer e-commerce market is really dominated by Meta and Google. And there's a lot of interest out of those marketers to get into the open Internet, to get into CTV.

But I would say that the thing that you have to produce is true performance. And I think that's really what we're showing with a lot of our current customers today, whether mid-market or the larger advertiser segment. And we know that we're able to show the results there. And we're really confident once we launch AI Decisioning, we're going to be able to attack that -- the lower end of the market as well.

But Matt, just to put, I guess, a finer answer on that. We view electronically reaching advertisers that are out there in this segment, direct-to-consumer e-com. So we see a self-service sign-up flow and hopefully, no humans having to interact with them to use the platform. That's the goal.

Wyatt Swanson, D.A. Davidson.

I'm on for Wyatt, Tom White. I got a question on the client win you announced last week with Molson Coors. Can you talk about the incremental spend you expect to see from that? And maybe how that impacts the pipeline of $250 million incremental spend that you talked about last quarter? Is there still a lot of remaining incremental spend you believe you could capture for 2026?

Yes. I would say there definitely is a lot of incremental spend. I can't talk about any client-specific spend given the proprietary nature of that information. But Molson Coors is a huge win. Obviously, we're very proud of it.

We've got Coors Lights on our desk right now for the earnings call. So we're pretty excited about that partnership. But I will say that that should continue to scale. Look for that to start coming on board in the second quarter as that client onboards, and that should continue to scale for many years. It's a multiyear partnership, so that should get bigger and bigger each year.

I will point out, though, that Molson Coors was not the largest advertiser in that spend amount that we talked about last quarter. We've won some other customers in there already that we weren't allowed to announce their names. So some of those are rolling forward into 2026, but there's still even bigger companies that are in there that we can win for next year. So we're excited about what's ahead, and we're excited about the partnerships that we've struck heading into the future.

Got it. That's really helpful. And then kind of a follow-up to the elevated competition recently in the DSP space. From your guys' perspective, how do you see the competitive environment evolving as companies like Google and Amazon sort of try to evolve their DSPs?

Yes. Why don't I start and then -- I mean, I view the competitive space is getting smaller and smaller. Trade Desk has made specific moves around OpenPath and charging for what used to be SSP territory. So we made in our prepared comments, Google wants to sell you YouTube, Amazon wants to sell you Prime Video and Trade Desk wants to redirect your spends through OpenPath, their own SSP, where they're making incremental margins.

Viant takes a different approach from that. And so we see less competition when you look at truly objective buy-side-only platforms. Historically, there was the Trade Desk and ourselves. And I think with some of the Trade Desk recent moves that puts them more in the, I guess, no longer independent or objective when it comes to the pathways. What would you add?

Yes. And I'd just add on to objectivity. We see a real opening in the market, and as evidenced by the Molson Coors win and some of these other wins that we've already achieved, objectivity is a big piece. We think that we can be kind of the inside man for marketers that this industry is so complex in programmatic advertising and digital overall. We talked a lot about our intelligence layer.

This is really required. Marketers need someone who's going to go out and defend their interest in market and get them their returns. Most -- historically, most of the largest players in advertising are on both sides of the transaction. They're looking to sell you their own inventory. They consistently, -- and this has been proven, they rig the results to show that their content or their own inventory is driving the best results.

Marketers regularly figure that out that in the end, that ended up not being true. And I think just as a lot of these, especially with the larger brands, as now most of the money is in digital, they're now realizing that even though their KPIs in digital may have gotten better, their total sales and total market share don't -- they don't tell the same story. So we're really looking to connect senior marketing leadership with the CEO and the CFO's expectations of revenue growth, market share growth. That's what's unique about Viant. We think we're -- from a competitive standpoint, we're really the only one left on the buy side that has true objectivity to actually serve that role.

Jason Kreyer, Craig-Hallum.

So obviously, that $250 million pipeline delivered some nice wins this quarter. Just curious if you can talk about how the sales teams are backfilling additional opportunities behind that?.

Well, really, the larger advertiser opportunity has really been product-led. We didn't go out and make a huge push, and this is what has really been so exciting for the team. We're getting pulled into that. And it started about one year ago with the launch of ViantAI. A lot of these large marketers are looking to get more efficient, drive better results. Like I said, they got to tie out what the CEO and the CFO are saying in terms of tying outcomes, true outcomes to their actual ad spend. So this is a product-led initiative. We're being pulled into this.

And so, really for the sales team, it hasn't been a massive sales effort to date to go after this market. And I think we're going to continue with being pulled in from a product standpoint. When we launch AI Decisioning as well, that's going to be product-led as well. So we're really excited about that. This hasn't been a heavy drain on our current core sales team. But we think that we're good with the investments that we've made throughout this year to be able to serve this end of the market.

Just a follow-up for Larry. You talked about greater margin -- EBITDA margin expansion in Q4, and I think you alluded to kind of similar trends as we get into 2026. Are there AI efficiencies driving that? Or are there some other elements driving that, that you can call out?

I think a lot of it is just the operating leverage in the model. As we grow spend, it's not linear to growing our overhead. So as we get bigger, we can grow our overhead quite a bit lower than the rate at which contribution ex-TAC grows. Certainly, AI has -- plays a role in that. We have a lot of use cases where we're using it internally that's making things more efficient, making people just easier to research and get tasks done. But it's really -- it's the leverage -- the natural leverage in the model more so than pure AI.

Andrew, Raymond James.

Maybe again on the large advertisers. Within that incremental cohort that you've kind of spoken about and maybe some of the unannounced companies there, what are the characteristics of the clients that have seen -- that have been more promising either as unannounced deals or as prospects, whether that's by vertical or maybe some aspect of the advertiser that makes them a uniquely good fit for you?

When I think of the type of customer that's ideal for Viant, it's someone that's going through a shrinking market. If you think of the beer market in general, it's shrinking in size. Younger generations of Americans are drinking a lot less. And so they need to get more efficient really fast. For businesses that are crushing it, -- I don't think NVIDIA is looking for new ad partners. Their businesses off and running.

And so for us, we're always looking for the challenging environment where the marketer really is looking for the truth on what's driving growth in their business, and they're very open and receptive to the data that we can point to and the case studies that we've been able to show that drive market share growth even in declining markets or grow the overall category as well. So I would say we're looking for advertisers that are somewhat feeling pain that know that what their current setup isn't working and they're looking for a new way forward.

And Andrew, the reason for that is that oftentimes when businesses are challenged, this is when most of the innovation takes place, almost out of necessity. We're not looking -- we have a very specific point of view in the market when we go out and talk to customers. We understand that what -- the way that we talk, some marketers don't want to hear it, and they may not like to face the music that the partners that they've chose and the measurement systems that they use are flawed.

Many of these companies, it's not that they don't want to do the right thing for the end customer or for the brand. But a lot of times, people's incentives are at play, and they themselves may have made that decision in a year or two previously. But when we see the customers, -- it's really the customers that want to know more, that they want to see that someone can save them money in the supply chain. They want customers -- they want a platform to show them what's truly driving incremental sales and new customers, not just the same customers to them. So we really attract customers who think that way. Those are the ones that we want to help service. And we think that the whole market gets here eventually, it will just take some time.

Yes. That's really interesting. And maybe one for Larry. We've heard kind of some mixed reviews on October trends from some of the companies that we've talked to you to date. I guess what are you seeing right now? How are you incorporating the holiday season playing out in your guidance?

I mean you're seeing our guide, which for CXT was 16% before the pro formas, I believe. So we're seeing strength. We're not experiencing weakness. I mean there are some pockets where you do see certain sectors with our customer verticals a little bit weaker than others, but we're seeing strength across the board.

Barton Crockett, Rosenblatt.

So yes, so I was curious when you -- first on just the numbers, just a basic thing. When you talked about an acceleration of the revenue growth rate next year over the quarters, is that inclusive of political? Or is that exclusive of political?

Inclusive. That would be inclusive.

Okay. So ex political, is it more kind of a steady trajectory?

No. We think -- certainly, we're going to benefit from political. It will not be as big, probably not as big as it was two years ago, or last year. But really, the uptick in where we think we feel great about growing the growth rate, really comes from a lot of these new business wins. We think we can -- from that, we can -- we believe we can increase growth rates in the couple of hundred basis points next year from 2025. So a lot of that is coming from the new business wins.

Okay. All right. That's great. And on the new business wins, I was curious if you could give us a sense of how much of this has already played out and how much is to come? So I think you've said Coors is one win and you've gotten some others, and there's still some other deals that could be decided. Of the $250 million, I mean, what portion has been decided? And can you also give us a sense of your win rate on these bids? And I'm also curious just to probe deeper, who are you competing against when you're winning these things?

Yes. So our win rate has actually been really good on the ones that we've already won here. There's still a good amount left.

I would say the minority of the $250 million has been decided with the majority still up for grabs is how I would describe it.

Yes. But the win rate has been good. And like I just said in the earlier -- one of my earlier responses, I think that it's really good because we actually choose on which customers we pursue. There's another very, very large CPG company that we've talked to in years past. We actually haven't pursued an opportunity with them, mainly because we don't actually believe that that's their head space on where they're at, that they're going to be right for us.

We want customers who want out of necessity, feel like they need to do something different, that they can't just run the same playbooks that everyone else runs. They can't just rely on last touch attribution. These companies sell billions and billions worth of consumer goods. And you can't -- we need customers to understand that you can't treat CTV as a last touch vehicle.

We also want them to understand that everything -- just because seven or eight years ago, certain companies in the space will deem that ad fraud is no longer an issue or that direct path inventory isn't important. We need customers to actually assign value here for us to pursue them. And again, when you get a customer who thinks the way that we do, this is typically where we're going to drive the most value for them.

Okay. But just in terms of who are you competing against and who are you winning against,? -- can you give us any color there?

All the players that --

With Molson Coors, Trade Desk, Google, Nexon, I believe, was in there, was Yahoo!. I'm not sure I believe they were in the -- All the majors that you would expect.

Yes. I mean there's, call it, five -- what you would consider that have an enterprise-grade DSP. There's about five companies that exist. And again, we think that we're really truly the only objective player that is specifically on the buy side. No allegiance to any sell side or supply path out there, and we think that it gives us a very unique position.

And just one last comment. It was cited in the press release, this concept of findability, and it's a testament to how advanced Molson Coors is in the space that it's not just about, hey, we have first-party data, we'd like to match to you. Matching is one thing, but actually deploying and getting ads and messages in front of that audience in a real-life environment is a whole another thing. And most DSPs fall down when it goes to actually find those households that are in that customer's first-party data set.

And so where it came to Molson Coors, it wasn't just the scalability of our Household ID that it's 4 times greater than the next best partner. It's also the ability once your data is active in the DSP to actually reach them and deploy real dollars against them. And that's where Viant's DSP far outshines all those enterprise-grade DSPs that we were up against.

Zach Cummins, B. Riley Securities.

Congrats on the strong results here. Tim, I was curious, just in terms of the CTV growth rate, nice to see that become record amounts as a percentage of ad spend as well in the quarter. Can you give us a sense of the durability of that growth rate, especially now that your identifiers are largely integrated into that moving forward from here?

I think that growth rate is going to stay very high for many years. I think when most of us look at a TV becoming a computer, we're just thinking linear TV translating into streaming. But I liken it more to the mobile app ecosystem. When smartphones came out, it was hard to imagine that mobile phones would be such a big opportunity from gaming to health to all types of different apps that are now created on there. And I think you'll see the same thing with smart TVs. It's going to be, yes, one leg of growth from linear TV moving into streaming, but it will be new growth that is created from new apps and gaming and time spent there as well.

And also remember that smart TVs are Internet connected. So you have interactive capabilities that are still coming down the pipe in the future of -- it's two-way. You're allowed to vote during games and things like that. There's going to be all types of fantastic content that comes online. That's going to grow time spent with our connected TVs pretty tremendously. So I see no risk in the growth rate for CTV. I think that thing stays very high for many years.

There's also, Zach, some basics. Every time you see us make an announcement of another large content owner moving into direct access for us, you can expect that growth to grow even faster. IRIS_ID, again, we want to have differentiation within CTV and a lot of our customers recognize that. It's not just the direct supply path that saves them 20%-plus just straight off the top. It's also our AI Bidding capabilities. They love that. That's -- probably the most loved thing we have by our customers is AI Bidding.

And then also the penetration of IRIS_ID. In competing platforms, when marketers log into those platforms and they go to buy CTV, they only can buy at the app level. If you log into Disney, you can only buy Disney. You don't know what show you're buying. If you log into Paramount -- if you log in like Paramount+, you don't know what the content is. IRIS_ID actually unearths what that content is about, so the marketer can show up as being relevant. And as Tim stated in his prepared remarks, we're seeing the performance increases, they're huge. So again, these are just basic things that we want to do around differentiation that drives value for the advertiser.

Understood. And my one follow-up question is, I know you had a 600-basis-point headwind from a lost advertiser in Q3. Is there a chance that client could be won back at some point in the future?

Yes, I think there is. Obviously, that was a little bit different. The customer was acquired, and it was part of a cost synergy that was realized. I did listen to the earnings call, and I will say their revenue was down in the most recent earnings, and the CEO cited that it was due to advertising changes that they made. So hopefully, there's an opportunity there. But with cost synergies being realized via M&A, it's a little bit different path that we'd have to go down. But I think with the way that this year turned out, I think there likely is an opportunity for next year.

At this time, there are no further questions.

Thank you, everyone. We'll see you next quarter.