MNTN Inc (MNTN) 2025 Q4 法說會逐字稿

Hello, and welcome to the MNTN fourth-quarter and full-year 2025 results conference call. (Operator Instructions) I will now hand the conference over to Brinlea Johnson. Please go ahead.

Good afternoon. Thank you for joining us for MNTN's fourth-quarter and full-year 2025 earnings call. With me today is Mark Douglas, CEO; and Patrick Pohlen, CFO.

Just to remind everyone, today's call includes forward-looking statements that are subject to risks and uncertainties, and actual results could materially differ from those anticipated in these forward-looking statements. For the risks and uncertainties that may affect future results, please see our most recently filed periodic report, which is also available on our website.

We will also discuss non-GAAP financial measures on today's call. Reconciliations of these measures are available in our earnings material on our website. With that, I'll turn the call over to Mark. Please go ahead.

Thank you for joining us today. We reported strong financial results, delivering fourth quarter revenue growth of 36% year on year and 36% for the full year. We also reported very solid adjusted EBITDA growth as well as record positive net income.

Before we get into the numbers, I want to take a step back and talk about MNTN's unique value proposition and why we're well positioned for a long runway of durable growth. I founded MNTN with the mission to democratize television advertising. For decades, the TV industry was dominated by large global brands with big budgets, big ad agencies, and campaigns built to drive brand awareness.

That's not our market. We don't operate in the open web or retail media. MNTN is a true pure-play Connected TV company. Our customers are emerging e-commerce companies and category leaders. They have efficient marketing teams who deploy their budgets wisely while expanding into Connected TV on their journey and winning new customers. And the reason for them to expand into Connected TV is it expands their revenue by marketing with the most exciting content in the world.

Everything from the best reality shows on Bravo, dramas on HBO Max to live sports. They're interested exclusively in using their ads to drive incremental revenue by reaching specific consumers. This is the true definition of performance marketing applied to the largest storytelling platform, streaming television. While performance is a new concept for television, it's not new to advertising. Performance advertising helped build the e-commerce industry, giving companies the ability to target users and run ads that convert into traffic, making it possible for emerging brands to compete with established giants. That's exactly what MNTN is bringing in streaming TV.

Our technology enables advertisers to target users with the same types of signals that the big search and social companies use to target their users. Only we enable our clients to launch ad campaigns on hundreds of premium streaming TV networks, like Paramount+, Disney, and ESPN. This is a monumental shift for television advertising, transforming TV from a branding medium to a true performance channel.

MNTN created a completely new market that we're uniquely positioned to dominate. The intersection of streaming television and performance marketing is huge and growing every day as more consumers move to streaming TV, and as a result, more brands follow them there. MNTN campaigns generated over $18 billion in revenue for our customers in 2025, and every aspect of our platform is built to expand the reach and revenue of our customers efficiently and with measurable results.

Ease of use is core to our strategy. From cost-efficient customer acquisition to our easy sign-up and measurable results, our platform is built exclusively for small and mid-sized businesses. MNTN advertisers can launch, manage, and optimize campaigns entirely on their own in our self-service platform.

While they can also use an agency, they don't have to. And the agencies they do use are nimble performance marketing agencies that are experts at search and social marketing and are now also experts at Performance TV advertising. Everything is automated from targeting to optimization, bringing digital marketing precision and accountability to streaming TV.

As part of that automation, AI plays an ever-expanding role. MNTN was the first company to provide AI consumer targeting for CTV when we launched MNTN Matched. We were the first because half of MNTN's team is engineers, and small and mid-sized customers need precision targeting with the best technology to identify their next customer. We were the first company in CTV to take on the challenge of creating TV commercials because more than 95% of our customers don't have one when launching their first campaign. And now, we have creative AI tools with QuickFrame AI. Stay tuned as we continue to launch exciting new AI tools through 2026.

We're leveraging AI tech to make every aspect of our product and business the best it can be for our customers and drive even more compelling results in helping them grow their revenue. Being everything the SMB market needs is our mission. We aren't taking an enterprise-grade product and simplifying it for SMB users. That never works.

You can see it in any market. The company that builds for the SMB market segment always wins, Shopify being one of the prime examples. Even our marketing is specifically designed for SMBs, which is why we're able to get LTV CAC ratios that are handily in the double digits on the majority of our mid-market customers.

There are other companies that enable Connected TV advertising, and some of them are huge companies, but those companies are focused on a different area of the Connected TV world than we are. Their tech stacks were designed to maximize what their brand-focused customers need, and that's reach and frequency. Remember, the biggest TV advertisers in the world, the one that our competitors have focused on, are brand advertisers.

They're looking to maximize eyeballs, views, and impressions, and they want to get those views at the lowest cost. This is very different from what MNTN does, because our customers want performance. They want incremental sales and a high return on their advertising spend. They're actually willing and interested to pay a higher price for an ad slot if it means that ad will convert to incremental sales.

Instead of seeking to maximize the number of impressions at the lowest cost, MNTN surgically targets the right audience to drive conversions. I'd like to say that MNTN customers aren't buying ads. They're buying incremental revenue.

Think about huge companies like Verizon and Coca-Cola want to drive impressions, so you know who they are and remember them when you go to purchase. They want to reach every American over and over again, so they're buying ad slots in bulk and want the lowest price per impression.

On the other hand, a snowboard brand that wants to drive more revenue isn't interested in reaching every consumer at the lowest cost. They're interested in reaching the right consumers, the ones who are most likely to buy their product today. That brand is willing to spend to acquire these customers as long as the incremental revenue outweighs the cost of the ads.

They're looking for a return on their ad spend and MNTN is uniquely built to deliver on CTV. That's also why the over 200 networks we work with love us. We're bringing them companies that have never advertised on TV before.

More than 95% of MNTN customers launched their first TV commercial on our platform. We aren't just moving brand dollars from one network to another. We're actually increasing the pie. The bottom line is that the market for Connected TV advertising is huge. And there will be a place for both brand advertisers and performance advertisers and for large advertisers and for small. MNTN is the leader in the SMB market and will remain the leader because we wrap our entire solution into an easy-to-use package. Everything from our marketing to our tech stack is purpose-built for these smaller companies, and we're leading the way with continued innovation.

Wrapping up, we're executing against a massive opportunity, transforming TV into a measurable, performance-driven advertising channel. We've got many exciting vectors for growth from moving further down market to integrating AI to even more premium content and many more, all while continuing to sharpen our platform and our measurement tools to be exceptionally easy for anyone to use.

Remember, MNTN enables marketers of any size to press the easy button to get their ads on TV quickly to drive incremental revenue. With strong customer growth, expanding margins, and continued innovation across our platform, MNTN is well positioned for sustained profitable growth. We're successfully building the next generation of performance marketing on streaming TV.

Now, I'll turn it over to Patrick to discuss fourth quarter and full-year 2025 results in more detail.

Thank you, Mark. We reported strong fourth quarter results, exceeding our prior revenue and adjusted EBITDA guidance. We closed out a very strong 2025. Our solid performance reflects continued customer adoption of Performance TV, particularly by small and mid-sized companies that had not previously advertised on television.

Our fourth quarter revenue increased to $87.1 million, up 36% year on year after adjusting for the divestiture of Maximum Effort on April 1, 2025. To note, we again included a table in our press release and also in our investor presentation that breaks out our revenue growth and gross margin over the past several quarters, both including and excluding the prior year's contribution from Maximum Effort.

On a 2025 full-year basis, revenue increased to $290.1 million. When adjusting for the divestiture of Maximum Effort, revenue growth was 36%.

Fourth quarter gross margins improved to 82%, up 520 basis points. Our core PTV business improved over 300 basis points, with the balance coming from the impact of the Maximum Effort divestiture. For the full year, our reported gross margins increased to 77%, up 560 basis points year on year, with our core PTV business improving over 300 basis points and the balance coming from the impact of the Maximum Effort divestiture.

As you can see from the table in our earnings release, at the end of Q4, we had 3,632 active PTV customers when measured over the trailing 12 months. On a year-on-year basis, this represents growth of 63% Recently, we've made inroads moving down market into the SMB market opportunity, which we believe is a testament to the strength of our platform and to its applicability across companies of all sizes with performance marketing budgets.

It's worth noting that the number of active PTV customers we bring into the platform is entirely within our control and is predominantly a function of how firmly we step on the accelerator to move down market. Our intent is to regularly evaluate and adjust our efforts to ensure that we are onboarding clients that have strong product market fit and a likelihood of success on our platform.

Our expansion rate, which measures the spend of our current customers as compared to that same customer spend a year earlier is quite healthy and remains well north of 115%, demonstrating that when our customers achieve their desired returns on advertising spend, they continue to increase their budgets with us.

Total operating expenses for the fourth quarter were $50.9 million and were $200 million on a full-year basis. During the fourth quarter, we added a number of people in sales and marketing, and their expense is factored into our fiscal year 2026 guidance.

For the fourth quarter, we achieved positive net income of $34.5 million for a GAAP EPS of $0.47. On a full-year basis, we reported a net loss of $6.4 million, or GAAP loss per share of $0.13, primarily due to a one-time charge of $23 million as a result of our initial public offering and settlement of our convertible notes in the first half of the year.

Adjusted EBITDA increased to $28.1 million, up from $20.7 million in Q4 of '24, an increase of 36%. The company's adjusted EBITDA margin grew to 32.3% compared to 29.6% in Q4 of 2024. For the full year, adjusted EBITDA was $68 million, up from $38.8 million in fiscal year 2024. The full-year adjusted EBITDA margin grew to 23.4% compared to 17.2% in 2024.

The improvement was driven by increased revenue and gross margin expansion, and demonstrates the leverage inherent in our model. As you saw with our investments during Q4, we will continue to invest strategically in sales and marketing, as well as technology and development to support future revenue growth while remaining focused on delivering operating leverage.

Our balance sheet remains strong, and we ended the quarter with $210 million in cash and cash equivalents with no borrowings outstanding. We ended the quarter with 73.9 million shares outstanding. And looking ahead, we remain confident in our momentum and the underlying health of our business.

For Q1 2026, which is typically a seasonally slower quarter for us, we expect revenue in the range of $71.3 million and $73.3 million, representing 22.3% year on year growth at the midpoint of $72.3 million when normalizing for the effect of the divestiture of Maximum Effort. We expect adjusted EBITDA to be between $13 million and $14 million, reflecting continued leverage as we scale the business while continuing to remain disciplined in our investments and adding sales resources, as I previously noted.

For the full-year 2026, we expect revenue in the range of $345 million and $355 million, representing 22.9% year on year growth at the midpoint of $350 million when normalizing for the effect of the divestiture of Maximum Effort. We expect adjusted EBITDA to be between $94.6 million and $99.6 million.

To wrap up, we delivered another strong quarter and believe MNTN will continue to gain market share in the massive performance television market. We are confident that our future growth initiatives and the strength of our operating model will position MNTN to drive continued growth and profitability.

And with that, we'll open the line for questions.

(Operator Instructions) Shyam Patil, Susquehanna.

Hey, guys. Great quarter, great year. I just had one question. Very strong growth at 36% year on year, ex-Max Effort. Mark, can you just talk a little bit about how you plan to continue to drive this type of growth and just the opportunities that you're the most excited about going forward?

Absolutely. Thanks for the question. So, I think the first thing is the market we're in Performance TV, the market we created, that continues to be the primary focus of the company is growing into that opportunity with continued focus on sales, marketing, product initiatives that drive performance. And so that's the core of what we're focused on.

But with that, we have a number of other initiatives that we've initiated. The continued move down market towards smaller businesses is something that's very important to us. The AI initiatives, in particular, what we did with QuickFrame AI in order to enable customers to get live faster, within the first month of releasing that, we already have 5,000 people on product and more have followed. And so that enables customers to basically get live a lot faster, because the majority of the time it took them was actually developing the TV commercials do so at a lower cost and have more creative.

And then we have other AI initiatives that are all primarily geared towards driving greater performance and giving our customers even more visibility into how our platform operates and the controls that they want. So, all of those combined is what our focus is for 2026, and we're very excited about the year.

Mark Mahaney, Evercore ISI.

Okay, thanks. Two questions, please. Could you provide some color on the new customers coming in? How they -- are they similar to the customers you had before in terms of size, vertical? Is there something -- is it more of the same? Or is there any sort of differentiation?

And secondly, Mark, you talked about investing and rolling out new AI tools during the course of this year. Could you give us a general sense of what those tools would be focused on? Thank you very much.

Sure. In terms of the first question, we continue to focus on the SMB opportunity, so small- to mid-sized businesses, predominantly in e-commerce and travel. We also have B2B customers added to that. And so the shape of that customer base remains largely the same, although the small business segment, we think is continuing to open up and we're really excited about the growth in that arena.

We also have added in that we announced last year, we had a lot of growth with performance agencies. So basically, the types of agencies that previously focused on search and social and them becoming a big part or a bigger part of our mix. So, I think all these things just signal what was an early adopter market is starting to go mainstream, and we've led the way on that.

In terms of AI technology, we have media planning, AI tech, basically, meaning, technology that makes an even better choice as to where to place our customers' ads. And that's important because that's another way to drive increased performance in addition to MNTN Matched, which was about targeting which are the users. And you can essentially assume that we're doing that kind of tech across every aspect of our customers' campaigns.

And so we have tech there. And then there are some unannounced price. Half the company is engineering. So, there's always -- in addition to our core business, there's always extensions to the business that we're working on that we haven't yet announced. But the upcoming one is AI media planning, which I'm pretty excited about.

Thank you, Mark.

Ron Josey, Citi.

Great. Thanks for taking quesitons. Can you hear me okay?

Yeah.

Yeah.

I want to ask about more details, Mark, on just QuickFrame AI. With the adoption ramping here, I think I heard 5,000 users. Would love to hear any insights you have on improvements to the business as a result of it in terms of time-to-market perhaps maybe post-sales cycle? And then anything on the improvements on time-to-market on sales cycle, but then also just the creative itself, just given how many new-to-TV customers are on MNTN to begin with?

And then, Patrick, if you could just talk to us about -- we definitely saw the customer acquisition, PTV customer growth of 63%. Just talk to us about the benefits from adding more sales force from that and plans on outreach going forward. Thank you.

So in terms of QuickFrame AI, it's been released less than three months. So, what we've been doing is doing a series of product releases. We announced Version 1 and Version 2 within 60 days of each other. And we're taking our own ambition, our own, essentially, focus. And we're also adding an input from creators and also from our customers. And we're iterating on the product to just make it, be able to produce any type of video they can imagine.

I think early on, everyone is really pleased with the results. We're seeing a pretty high percentage of our new customers and our existing customers adopt it and a fairly high percentage of very well deep into the double-digits percentage that are publishing creative into MNTN's platform.

In terms of user adoption numbers, we continue to see them be strong and we'll be providing more information on that in the future.

Ron, in terms of your question, I think you were asking about the additional headcount in sales and marketing. Is that correct?

That's exactly right.

Yeah. So, we hired 53 people. We did that largely in November. We expect them to be productive at the end of Q1 into Q2 and drive future revenue opportunities. It breaks down -- I think you've heard us talk in the past about SDRs. And so, 34 of the 53 are quoted on demos. So, it's really filling the top of the funnel, both mid-sized and small businesses.

We have 15 that are 10 salespeople and 5 customer success, which in our model, generates additional revenue from existing customers. Those 15 carry a sales quota and the remaining four are support. So, we expect that to drive future revenue in '26 and beyond.

Great, thank you.

Andrew Boone, Citizens.

Great. I wanted to ask on CDNs, one of kind of the new generative text to video models that's out there. Mark, can you just talk about the inflection point that we seem to be at in terms of technology and the enablement of AI for video? What does that either mean from a competitive context? Or what does it mean in terms of internal capabilities that are now being unlocked?

And then, Patrick, if I look at the '26 EBITDA guide, it's another year of solid margin expansion. Is there any help you can provide to understand the sales and marketing investments? Or am I misinterpreting that if I think about where expenses are going to be for '26?

So, I'll address the question about QuickFrame and kind of models. So, we're integrated with a number of different generative AI models for both video and audio. So, that includes some of the obvious ones, like Gemini from Google, Sora 2 from OpenAI, but there are numerous -- Nano Banana, also from Google. But there are numerous models and each of them tends to be better at something different.

So if our customers want like a video that emphasizes product, the tool automatically will select a different model for that scene of the video with the product in it or people talking or voiceover. So depending on the use cases for the commercial itself that's being generated, we pick automatically. We orchestrate the models to use. And honestly, there are new releases of models.

It feels like every week. sometimes, it feels like every day. And we have a team on QuickFrame dedicated to integrating those models and then updating the orchestration software, which itself is an AI model in order to pick what to use for each various scene or even multiple models in a different scene.

Our competitive advantage here, we're focused on a professional use case. So, you can use Sora 2 to remix a video, put on your social account. That's not what we're focused on. We're focused on full 30-second professionally create, built creative with workflows, use cases, approval cycles, and all the things you'd have for human creative video, but now for AI video. So, I think that gives us a pretty strong reason for having the tool, as well as a pretty strong staked out area in terms of how it succeeds in the segment of the market that we're going after.

And ultimately, again, this is all so our customers can get live faster with the most professional creative they can build. And we ourselves, MNTN, we are now using those tools and putting out at least one AI video a week for our own advertising this week to -- I think last week two, this week three. So, we're using these tools ourselves in our own marketing.

Andrew, to the question you asked me, we are going to continue to invest strategically in sales and marketing and technology and development to drive more revenue growth. As you know, we have a very strong financial model, so more revenue growth leads to higher gross margin. Gross margin, keeping more of that and having a higher gross margin allows us to continue to invest in sales and marketing and technology and development and still be profitable on the bottom line.

Thank you.

Andrew Marok, Raymond James.

Thanks for taking my question. And I think this is a question that we've asked before, and it's kind of recurring. But around the industry, we hear more and more from other companies about adding performance characteristics to TV advertising, creating entry points to targeting smaller businesses.

So, I guess, some of these offerings have spent a little bit more time in the market and presumably have some level of sales or awareness building efforts behind them. Have you seen them affect the way that your customers are behaving at all or some of the pitches that you're having to make to them?

Well -- so one, we respect all competition, and we take it very seriously and both larger companies, as well as smaller companies. Generally, the space we're in is very large. I don't think a lot of companies are running into each other at this point. What we're focused on is providing the most complete platform that is easiest for our customers to adopt and use. And we have a long lead, like a big lead on doing that, and we feel very confident and comfortable where we sit in terms of our customers adopting.

Also, what's very important is the literal performance that's delivered out of our platform. That relies on a history of data, initially machine learning models, now AI models. And so the actual performance, that investment in that technology is why half the company is -- half a MNTN is engineers is because it's not just about having a user interface to address SMB. It's about having the core technology that allows you to pinpoint, almost sharpshoot those specific consumers for a brand.

And I've talked in the past about a brand like Onewheel, where it's extreme sports, very specific type of consumer, how do you identify them. So, it's technology and data enable us to do that. And then campaign management, AI tools, so you can build a lot of creative, which also contributes to performance and of course, all the measurement attribution. So, we think we have a very complete platform, first-to-market, most feature complete and we believe the best performance in the industry.

Got it. And if I could maybe sneak one more in on the Magnite partnership. How impactful for that -- how impactful for you do you think that can be here in the near term or maybe over the longer term? And can you dig a little bit deeper into the new inventory you'll have access to, like maybe on which platforms or which segments of Magnite you're specifically accessing? Thank you.

Yeah. Absolutely. I mean, we're very bullish on that partnership. We have a really good relationship with Magnite. And specifically, when we announced it, we were talking about paused ads, but there's also live sports and other very premium content that we've introduced both through our direct partnerships with the media companies, all of whom we have direct partnerships with, but also through Magnite.

And so this is all part of often -- another thing that can contribute to performance is the best content. The content that consumers are most engaged in is also the content they're most going to pay attention to. So, we see that as a really strong partnership and a company that we've had a long relationship with, but we've expanded that partnership in this area and we're very excited about where it's leading.

Rob Sanderson, Loop Capital.

Yes, thank you. Thanks, everybody. Good evening. Thanks for taking my questions. I've got one for Mark and one for Patrick.

Maybe, Mark, can we talk about attribution measurement? Like, what makes verified visits the best attribution in CTV? What else are you doing to further strengthen this? And then what are the challenges in educating performance marketers? Like, there seems to be a perception out there that attribution measurement is inherently weak on Connected TV, and I'm sure you'll say otherwise, but how do you educate the industry?

And then I'll follow up with Patrick in a second.

Cool. So addressing attribution, this is something that we took on, I think, first in the CTV industry. That if you want, especially the SMB market to invest in CTV, you have to provide them a way to measure that, target and measure the effectiveness of that. And so with verified visits, we essentially have multiple data integration partnerships in order to have as many signals as possible in order to measure who has responded to which ads and which campaigns.

And so we also have an identity graph that is virtually every household in the United States. And every interaction, every tracking pixel call, every bid request, all of the underlying technology at scale are contributing to identity graph, which then contributes to the attribution.

In regards to like how people feel about it, so in CTV, there is no click on an ad. You can -- even if you're watching on your phone, and let's say, the Disney app, you're not generally allowed to click on the ads. So, we do, what's called, cross-device measurement, meaning, the first device is the device you're watching TV on, which is generally a television in your living room, bedroom, family room and the second, third devices are your phone, tablet, computer.

We connect those dots through our identity graph. And then we report that data to our customers. And then we send that data out to, I think, approximately 11 other attribution platforms. So, our customers, not only get data from MNTN, they get it from third-party mixed modeling tools, from multi-touch attribution tools, from Google Analytics. So, they have a range of sources in order to look at performance for MNTN and also look at it in comparison to wherever else they're spending money, search, social or any other channels that they're engaged with for their marketing.

Okay. Great. Patrick, a couple of cost questions. Gross margin year on year looks like 300 basis points after the consolidation of Max Effort. I know you had some infrastructure alignment projects.

Did these go better than planned? Are there other drivers worth calling out? And you're already above the high end of your long-term target. So, I'm just wondering if we're kind of getting at the top end here? Or do you anticipate there's further room?

And then on the sales and marketing hires, thanks for all the color. That's helpful. But I assume the SDRs are not really focused on the long tail of small advertisers. Maybe that's wrong. But are they more focused on growing the middle, more agencies, more B2B? Can you just sort of maybe give us a little bit of color, if there's a little bit of change of focus because of these hires? It seems like there might be.

So, I'll answer the last one first, Rob, mostly because it's right in my head. And that is the SDRs are focused on the SMB market. So, they're going after both mid-sized customers as well as small customers. And all of -- they're driving demos because demo is the first step to getting a trial and the trial is first step to getting a post-trial customer. So, there's no change in focus by hiring SDRs.

And just what's interesting is, ironically, with the 53 hires, we are flat in headcount in sales and marketing from the end of '24 to the end of '25. So, we were getting a lot of efficiency, but we decided we wanted to drive more revenue growth with these 53 hires. What was the first part?

Gross margin.

Yes. So gross margin -- so it actually ties into the second part of your question, which is we want to drive more revenue. More revenue drives gross margin increases with nothing else. But as you all know, we've done a lot. So the first thing is we spun out Maximum Effort.

That had a very significant impact on gross margin. The second thing is we switched hosting providers. That cutover was at the end of October. So, we haven't really seen the full impact of that reduction in the hosted environment cost. And we have a number of other initiatives.

So, I think that for the year, we finished at 77%, and I believe that we will be firmly in that range going forward. The 82% for the quarter is just a -- we aspire to just have it be in the long-term range of 75% to 80%.

Laura Martin, Needham.

Sure. Great. The first one I wanted to follow up on an earlier question, which is what -- you talked about inventory expansion in the letter. How much of that is coming from actually your direct deals with your suppliers, CTV suppliers? And how much is coming from sort of third parties like your Magnite deal? That's my first question.

Yes. So, both are involved. So through our direct deals, we work directly with the networks generally on availability, what type of inventory, pricing and things like that. But the inventory still comes to us through a programmatic auction, which is what we want. We want to be able to pinpoint the specific ad impressions for the specific users we want to buy and that involves running a programmatic auction.

And so the SSP, the Magnites and others, they run those auctions on behalf of that network. So in all cases, we have a direct deal with the publisher, the media company and the streaming TV network. But Magnite or -- and others in the industry are still involved in like the pipes that pipe those impressions to MNTN. We don't have -- and I think a part of your question, Laura, is we're not buying from Magnite. In all cases, we're buying from the network.

Magnite is a technology partner, not a financial partner in that sense.

Okay. Perfect. And then my other one is for Patrick. Looking down the cost structure, when I think about margins, either operating income margins or EBITDA margins, we're projecting now a very nice, given your guidance, increase in margins. My question is peak margins.

When you think about growing revenue over time, where do you think peak margins are, either however you think about it, operating income margins or EBITDA margins for this business at maturity, please?

Sure. Our long-term target, Laura, for gross margin is 75% to 80%, and our long-term target on adjusted EBITDA margin is 35% to 40%.

Okay. Great. So, we still have some ways to go.

Matthew Weber, CG.

Mark, you touched on pause ads earlier. I just wanted to ask about these ad units. How is the performance and cost compared to in-stream ads? And is there a chance for you guys to sort of work with some of your other publisher partners to bring these ad units to those platforms, basically off of Magnite inventory?

Yes. So for pause ads, it's a new ad unit. It's one that the industry and a lot of our customers are very excited about. And for anyone listening, it's when -- what a pause ad is, is when you are watching TV and you pause for any reason, like you have to grab a drink or for whatever reason is, it basically pauses -- it puts an ad up on the screen. During the time, the programming is paused.

And it could sit there for a while. So it's very noticeable. It's full screen on your television on the wall wherever you pause. And so people are pretty excited about it. I think in terms of the performance of it, the jury is still a little bit out.

We've been measuring it for Q4. We introduced it in Q4, and it continues in Q1. We're not yet sure mainly because the volume is still not quite as high as we want to really fully form a judgment, but it's fully what customers want. So, I think in terms of that judgment, companies like it. They intuitively think it looks good and can perform well.

So it's going really well there. And we expect to see a lot more demand for it. And there are a lot of new ad units coming out. I think the TV industry is really -- or the streaming TV industry is really innovating right now in terms of how to capture consumer attention, not just with the 30-second TV commercial, but captured in other ways. And we're really excited about it for that.

And I think this year is really a year of live sports. We're excited about that and just anything that the networks want. I'll finish by saying one thing that's really interesting about MNTN is that our customers trust us to put their brand on television wherever it's going to perform the best.

So, a lot of streaming networks increasingly come to us first because we can place those ad units across thousands of brands essentially literally overnight or even faster and as opposed to them having to go to very large brands and have to negotiate that one brand at a time. So, we're increasingly seeing these ad units kind of the innovation in the industry as early as it becomes available, and we're really excited about that.

It's another value add for our customers that we provide just intuitively as part of working on our platform.

There are no further questions at this time. I will now turn the call back to management for closing remarks.

I'd like to say that we're very excited about 2026. I've talked numerous times in this call about what percentage of the company is engineering. So, we have a lot. We're focused on in terms of product, the continued growth of the CTV market, in particular, the Performance TV segment. And I appreciate everyone's time and listening and participating in this call.

This concludes today's call. Thank you for attending. You may now disconnect.