MNTN, Inc. (MNTN) 2026 Q2 法說會逐字稿

Hello and welcome to the Mountain second-quarter 2026 results webcast. (Operator Instructions)

I will now hand the conference over to Brinlea Johnson. Please go ahead.

Good afternoon. Thank you for joining us for Mountain's second-quarter 2026 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 materials on our website.

With that, I'll turn the call over to Mark. Please go ahead.

Thank you for joining us today. Mountain delivered a strong second quarter with revenue of $82.5 million, representing 21% year-over-year growth and adjusted EBITDA of $21.5 million, representing 48% year-over-year growth.

Both of these metrics finished at the high end of our guidance. We're pleased with the quarter and are reiterating our 2026 full year outlook. Before I get into the details, I want to talk about our strategy. Performance TV is about giving businesses that historically haven't had access to television a way to reach specific consumers across premium streaming inventory and measure whether that advertising is driving revenue. Mountain created this category, and now we're seeing Performance TV move from an early adopt-to-market toward a mainstream part of the market mix.

To capture that move, Mountain began expanding our sales organization in Q4 2025, strengthening our leadership in sales and increasing our investment in marketing. For the next stage of growth, Mountain is focused on three main priorities: expanding our products and continuing to invest in AI; broadening access to premium television; and strengthening our go-to-market organization.

This isn't a change in strategy or news story for Mountain; it's the same opportunity we've been building towards over the past year now with products and go-to-market structure ready to execute at greater scale.

Turning to our product suite, I've said many times that half of the company's headcount is in engineering, and they've been building products. We released new versions of Mountain's Performance TV platform that create distinct versions for small business, mid-market, and upper mid-market. We found that different sized businesses need different levels of features and complexity, so we've divided the platform into three main tiers: Express, Pro, and Premium.

Mount Express was launched on April 1. Express is specifically built for small business distinct from mid-size advertisers. Brands can get live in minutes and do so from any device. We've had over 7,000 signups for Express in the first 120 days since we launched.

Importantly, hundreds of those signups have become paying customers and momentum continues. The revenue contribution from Express is small today in comparison to Mountain's overall business, but it's growing quickly and I believe will be a meaningful contributor to growth as we enter 2027.

For our mid-sized customers, we've added significant agentic AI technology into the platform that gives our customers even more automation and more performance. We surround them with AI tech to give our customers control of the daily decision making.

We're leveraging AI across the organization, especially within engineering where we're AI native, using AI to build faster while embedding AI throughout our product suite. We've talked about QuickFrame AI a number of times and its importance for enabling the SMB opportunity in Connected TV. QuickFrame AI is doing exactly what we plan: lowering creative barriers, increasing launch rates, and making it easier for businesses to create television-ready advertising.

We've had over 37,000 QuickFrame AI signups in Q2, bringing us to over 73,000 signups year-to-date. Seeing an incredibly diverse set of businesses across retail, financial services, healthcare, technology, education, and many other industries successfully leverage the technology to create their ads. There's broad interest in AI creative, and it's critical for Performance TV.

We've always believed that Mountain customers should have access to and the ability to specify ad placement alongside the same premium television inventory as the world's largest brands. In January this year, we doubled down on premium inventory as part of our platform.

Today, our customers have the ability to insert their ads alongside nearly every major sports league in addition to the premium streaming shows on our network of partners. As a result of that focus on super premium content, we have many customers who advertise during the FIFA World Cup games, March Madness, and on MLB, NBA, NHL, and soon the NFL.

For the time any sized business can consistently get guaranteed access to television's biggest moments and make that part of their ad strategy. To fuel the growth of new customers, we are strengthening our go-to-market organization.

The first half of this year has been focused on construction with additional leadership add in sales, marketing and business development. We built vertical teams that understand the economics, objectives, creative needs, and customer acquisition dynamics of specific industries. That knowledge makes our sales process and the customer experience more effective.

In summary, we expect the benefits of our strategic investments to contribute to stronger growth in the second-half of the year and meaningfully in 2027 as the core business accelerates, complemented by new revenue streams from Express and Premium. Our focus remains simple: help more businesses advertise on television than ever before while continuing to grow efficiently, profitably, and strengthen the category we created.

Now I'll turn it over to Patrick.

Thank you, Mark. We reported strong second quarter results, exceeding the midpoint of both our revenue and adjusted EBITDA guidance. Our solid performance reflect this continued customer adoption of Performance TV, particularly by companies that had not previously advertised on television.

Our second quarter revenue increased to $82.5 million, up 21% year over year. Second quarter gross margins improved to 80%, up 350 basis points over the prior year period. As you can see from the table in our earnings release, at the end of the second quarter, we had 4,225 active PTV customers when measured over the trailing 12 months.

On a year-over-year basis, this represents growth of approximately 40%. As a reminder, the number of active PTV customers we add to the platform is largely within our control and is primarily driven by how aggressively we choose to invest in sales and marketing. We continually assess and calibrate that approach to ensure that we are onboarding customers with a strong product market fit and a high probability of succeeding on our platform.

As we adjust the pace of that expansion over time, the number of customers added is expected to fluctuate from quarter to quarter. Our expansion rate, which measures the spend of our current customers as compared to those same customers spent a year ago, remains quite healthy and is still well north of 115%, further 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 second quarter were $59.2 million. For the second quarter, we achieved positive net income of $6.7 million for a GAAP EPS of $0.09. Adjusted EBITDA for the quarter increased to $21.5 million, up from $14.5 million in Q2 of 2025, an increase of 48%.

The company's adjusted EBITDA margin grew 26.1%, up 490 basis points compared to 21.2% in Q2 of 2025. The improvement reflects the combination of higher revenue and expanding gross margins, further underscoring the operating leverage built into our business model.

While we remain focused on steadily improving profitability over time, our top priority continues to be investing behind growth rather than optimizing near-term adjusted EBITDA margins. To capitalize on the significant opportunity in this early-stage market, we plan on continuing to make disciplined but aggressive investments in sales and marketing to drive broader customer adoption.

Our balance sheet remained strong, and we ended the quarter with $237 million in cash and cash equivalents with no borrowings outstanding. We ended the quarter with 74.2 million shares outstanding.

As of August 3, 2026, Mountain's Board of Directors has authorized a stock repurchase program of up to $100 million worth of its Class A common stock through August 5, 2027. We think the stock represents a compelling value, and we believe this action signals our confidence in the company's long-term trajectory and further solidifies our commitment to providing value to our shareholders.

Looking ahead, we remain confident in our momentum and the underlying health of our business as we progress through 2026 and beyond. For Q3 2026, we expect revenue to be between $86 million and $89 million, representing 25% year-over-year growth at the midpoint of $87.5 million.

We expect adjusted EBITDA to be between $22 million and $25 million, reflecting continued leverage as we scale the business while continuing to remain disciplined in our investments.

For the full year 2026, we are reiterating our revenue guidance range of $347 million to $357 million, representing over 24% year-over-year growth at the midpoint of $352 million, excluding the impact of the maximum effort divestiture. We also continue to expect adjusted EBITDA to be between $96 million and $101 million.

To wrap up, we delivered another solid quarter and believe Mountain 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 Mountain to drive continued growth and profitability.

With that, we'll open the line for questions.

Shyam Patil, Susquehanna.

Hey, guys. Nice job on the quarter. I had a couple of questions for you, Mark. In your prepared remarks, you talked about the go-to-market investments, and you talked about Express and Premium and the impact that you expect to see. Wondering if you could just talk a little bit more about this and just how you think about the impact of revenue growth over the course of this year and next year.

And then second question, there's been some consolidation in the industry recently. Was wondering if you could just talk about this and perhaps what impact it could be having on the PTV opportunity and just any opportunities that it may be creating for you guys? Thank you.

Thanks, Shyam. I'll take both of those questions. So I think the first one is about Express and Premium and the impact this year and next year. So as I said in the opening remarks, we really felt that we needed to create versions of our product that would just like we were purpose-built for the overall SMB market, were purpose-built for the different segments or the different tiers.

So and that each tier, meaning small business, midsize and larger, they had unique similar needs and the overall need for performance television, but unique needs in terms of usability. So we are really confident and really happy with where we've delivered on that, especially with small business. That's something we've been focused on for a while, and we're happy to see the adoption.

In terms of the impact this year and next year, they're definitely contributing. I think for next year, we see a really big opportunity because they're small now, but growing very quickly. And so I think you should look to 2027 to really start to see the larger impact coming from these two segments of the overall SMB opportunity.

In terms of your question about the consolidation in the industry impact on the CTV opportunity, obviously we're seeing that, too. We're purpose-built for the SMB portion of that market. We believe we're very differentiated. We can essentially establish that, created the concept of Performance TV and using streaming for small, mid-sized business. So the validation that it's providing us, we think that some of the consolidation you're seeing providing we think is really validated the opportunity.

In terms of specific impact for us, it's just making the market even more aware of the opportunity here and I think creating even more green space for Mountain to execute. So we're pretty pleased with essentially the consolidation is occurring and the larger opportunity and the greater green space that creates for the company.

Thanks, Mark.

Sure.

Andrew Boone, Citizens.

Thanks.

Andrew, we can't hear you. You might be muted.

All right, let's try that again. Can you guys hear me?

Sure. Now we can. Yeah.

All right, great. Well, thank you for taking the question. I wanted to also ask on SMB. If we think about the go-to-market strategy for SMB and the difference of that versus a mid-market customer, is there any change that we should expect for sales and marketing or any other aspects of the organization strategy or cost structure that we should be thinking about with this change?

And then, Mark, just a big picture question, you mentioned sports in your prepared remarks. Can you just talk about the benefit of the World Cup? What did that bring to you guys in the quarter? And then talk about the sports opportunity more largely. Understood that's always been a draw, but how it changed the conversation? Thank you.

Sure. Happy to answer those. So in terms of go-to-market for SMB, we've been very focused since we talked about in Q4 of last year, the expansion of the sales team.

And I think last quarter, we talked about continued investment in marketing. And I talked today about those things. And so we think the opportunity here, the key thing is that we created an early adopter market. That market is now becoming mainstream.

I mean, by that more and more companies who previously had no access to television as a medium, and remember, television is the biggest entertainment medium in the world, meaning more people watch TV a day than use social media, than essentially do any other activity, and that was entirely cut off from the SMB market.

And so as we're seeing more companies know that they can be on TV and almost start to expect to be on TV, we wanted to invest more in sales and marketing in order to make sure we capture more of that opportunity.

We did that by strengthening our leadership, by investing more in marketing, and in terms of our own marketing, we traditionally you leverage the Mountain platform for a lot of our marketing, meaning we stream TV ads in the homes of our future customers.

We also use social media. And so there's an interesting dynamic in performance marketing that everyone uses each other's platforms so they can uncover customers wherever they are. And so we're doing the same.

For Express customers, meaning our smallest customers, we again lean on our own platform, we lean on social. For mid-market, it's pretty much the same. The investment is a little different, but the techniques are the same. And so we're really pleased with how that's going and we expect to continue to expand our investment there.

In terms of sports, the reason sports -- and it's not just sports, it's like reality television, it's Home Improvement. We want to give our customers -- when you think of sports, the advertisers have to -- like for something like the World Cup, they have to be named and approved by the World Cup.

So to start to be able to get small, mid-sized businesses into those level, that level of sporting events took a lot of partnership conversations with some of the biggest media companies in the world who get the sports rights for these leagues and for these major events and we were able to do that.

The benefits to our customers is that inventory performs really well. There's often more than one person in front of the TV. There could be many people watching like a World Cup game or an NFL game or something like that. So you have an interesting dynamic in terms of performance.

And I also think it validates Mountain as a market leader in this space that we're not just -- we're not putting our customers on remnant inventory. They're going on the best content in television to get the best performance in performance television. And so that's why it's so important to us. I think our customers are seeing as a differentiator, and we're really pleased with that.

Thank you.

Sure.

Robert Coolbrith, Evercore ISI.

Great. Thanks for taking my question. Can you hear me all right?

Yeah.

Great, thank you. So just wanted to ask on a QuickFrame, we formally thought about it as just enabling technology, but just given the very strong early traction that you're seeing, I wanted to ask you on a couple or three topics related to that.

Number one, if you could talk about, are you thinking about this now as a standalone opportunity? We've certainly seen some other entrants in the space grow very large businesses very quickly, really just within the past few months, is that part of the ambition here, given what you're seeing early?

And secondly, I wanted to ask a little bit about the gross margin profile of that product, anything you could tell us there. And then third, maybe also the funnel that QuickFrame AI can create for the core PTV business, given the amount of signups that you're coming in, are you seeing an ability to cross-sell or attach PTV once people have their creatives up and running? Thank you very much.

Sure. So I'll take those on one at a time. So in terms of standalone opportunity. It was always my belief that we had to create, build QuickFrame AI, not just to be a feature of the Mountain Performance TV platform, but to be successful in its own right. The importance of that is unless you do that, at some point, you wouldn't be keeping up in terms of feature functionality if we didn't build it so that people saw value in it, separate from Performance TV.

So the QuickFrame product supports Mountain Performance TV. It supports YouTube ads, it supports social ads, all of those. So it's certainly a stand-alone opportunity in terms of usage of the product, in terms of monetization of the product, we're looking at that.

There's obviously some opportunity there, but at this moment, we're making available, at no charge. But we are closely looking at usage and essentially engagement on a product to make sure people are really actively using it and essentially getting value from it. So stay tuned on that.

In terms of gross margin, there are some gross margin costs, but the overall effect to the business is pretty neutral because we're able to continue to get basically gross margin improved efficiency in our overall hosting environment in particular, which makes room for our use of all of the AI models that QuickFrame AI orchestrates in the order to create TV quality and YouTube quality and social quality ads. So it's essentially gross margin neutral.

And then the funnel for core PTV, the answer is yes. The people we're bringing in on QuickFrame that creates an opportunity for them to learn about Performance TV. One thing to keep in mind though is that a lot of the QuickFrame users are creators. They're not necessarily the marketers. So it creates a cross-sell opportunity to make so that if that creator is using QuickFrame and maybe they were creating something for social, they're now aware that, wait, I can create this asset for TV also.

And I think often it's fun for them because they haven't created a TV ad. So there's definitely cross-sell opportunities. So all of that is being closely looked at and pursued as part of the growth of the QuickFrame AI product.

Okay. Great. Thank you.

Sure.

Matt Weber, Canaccord.

Hi. Thanks so much for taking the question. Just one for me. On the strength and measurement and activation ecosystem that now features partnerships with HubSpot, Northbeam, Upwave, could you just update us on that those are premium add-ons that advertisers pay for if they're still part of the core platform? And then how do the economics of those partnerships work? Is there any impact to gross margin or other areas of the P&L as adoption scales? Thanks so much.

Sure. So it depends on the partnership in terms of the answer to your question. So for something like HubSpot or some of our partnerships, I'm not 100% specifically sure on HubSpot, but some of our partnerships we integrate in at no cost to our customers. So we use our buying power in the same way we use our buying power with the networks to secure advantageous pricing for our customers. We do that with some of our partnerships where that partnership is very broadly used across our entire customer base.

And then other partnerships where something like attribution, where the customer is deciding which third-party attribution partner they want to use, then we build partnerships with that company, like Northbeam as an example, and make sure that our customers get the best possible experience in Mountain's platform, but also the best possible data and experience in Northbeam's platform, but the customer has a separate direct relation with Northbeam.

So it depends on the partnership. In all those cases, again, we get so much leverage in our gross margins as we scale our business from our revenue growth that we're able, when it's appropriate, to absorb the cost rather than adding additional costs.

We want our customers to have an experience where there is one cost to using Mountain, which is the cost of media, and they're not getting nickeled and dimed for little charges here and there, which is more of the experience in the enterprise market. But we believe in the SMB market, you should pay one price and get everything you need to be successful.

Very helpful. Thank you.

Sure.

Andrew Marok, Raymond James. .

Hi. Thanks for taking my questions. Maybe two for me, please. Can you talk a bit about what to maybe expect in the second half from the flood of political spend that's coming down the pipe? I mean, not for Mountain specifically directly, but maybe more in terms of effect on the volatility of CPMs in the space and what that leads them into the ROAS calculations for your customers?

And then second, on QuickFrames, with it now in market for a full quarter now in 3.0, how's that feedback then and maybe what features might be on the roadmap as a result of that feedback? Thank you.

Sure. So in terms of second half, political spending, traditionally, remember, Mountain is pre-purpose built for the SMB market. And so, we traditionally have not participated in any significant way in political spending. We see that that is dominated by some big agencies that we consider to be more enterprise clients. And so it doesn't have much of a direct impact on Mountain.

In terms of the volatility on CPMs, that volatility tends to affect what we refer to as the open market. So Mountain, we have direct deals with nearly, if not all media companies in America that are ad supported. And so those deals are executed programmatically, but they have commitments in the form of pre-negotiated pricing for us to continue to spend on that platform.

And so when you get these like Q4 spikes or political spikes, they don't affect our pricing because that has already been negotiated with the network for the continued volume we continue to bring through the SMB market.

But the inventory that's left over might get affected, and that's referred to as open market. And that has more volatility in price and more volatility in margin. So it won't -- neither of those will affect us. They may have some effect on anyone who's much more dependent on the open market, which we are not. I think we're over 99% private marketplace deals, meaning direct deals with the networks.

In terms of QuickFrame 3.0 features, we essentially are doing releases every single week, if not multiple times a week. What you can expect is we have a team dedicated on QuickFrame just to all of the iteration on the AI models themselves. The product orchestrates multiple models scene by scene in order to deliver the creative you get.

We're getting feedback from our customers, watching their usage. We have our own vision. Another thing that we're putting a lot of emphasis on is having really fast use cases. I'll give you an example like you want to essentially get it take an existing ad and you want to reinvent it as a new ad but with the same characters in it or something like that.

Just really fast paths to executing really specific use cases with the product. And we find when someone comes in the product and they have an idea what they want to do and we have something that exactly matches their needs, they're even happier with the use of the product and we see more engagement. So but there's a lot of features coming. There's a pretty decent sized team on QuickFrame and they are iterating literally at AI speed, releases multiple times a week.

Great, thank you.

Sure.

(Operator Instructions) I see no further questions at this time. I'll now turn the call back to management for closing remarks.

I just want to say thanks for everyone's time and we're looking forward to Q3 in the second-half of the year and we'll, I'm sure, talk further before then and on our next earnings call. Thank you.

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