Hello, everyone, and welcome to Viant Technology Inc.'s fourth quarter 2024 earnings conference call. My name is Crystal, and I will be your operator today. Before I hand the call over to the Viant leadership team, I'd like to go over just a few housekeeping notes. As a reminder, this call is being recorded. After the speakers' remarks, there will be a question and answer session. If you plan to ask a question, please ensure you've set your Zoom name to display your full name and firm. If you would like to ask a question during this call, please use the raise hand function located at the bottom of your screen. Thank you for your attendance today. I will now turn the call over to Nick Zangler, VP of Investor Relations at Viant Technology Inc.

Thank you, Crystal. Good afternoon, and welcome to Viant Technology Inc.'s fourth quarter 2024 earnings conference call. On the call today are Tim Vanderhook, cofounder and chief executive officer, Chris Vanderhook, cofounder 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, our guidance for Q1 2025 and other future financial results, our platform development initiatives, and industry trends. These 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 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 annual report on Form 10-K for the year ended December 31, 2024, under the heading Risk Factors, and in 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 Technology Inc. Tim?

Thanks, Nick. Thank you all for joining us today. We delivered phenomenal fourth quarter results with performance well ahead of our guidance across all key metrics. Q4 set a new record for spend on our platform, with revenue and contribution ex-TAC year-over-year growth rates accelerating to 40% and 28%, respectively. Additionally, Q4 adjusted EBITDA increased 31% year-over-year to $17.1 million, exceeding the high end of our guidance range. I'm proud of our team's consistent execution over the past year, which is clearly demonstrated in our record full-year results. In 2024, we increased revenue by 30% and contribution ex-TAC by 24%, driven by the accelerating adoption of our innovative products and services. Our robust top-line performance and disciplined cost management resulted in expanding our adjusted EBITDA as a percentage of contribution ex-TAC by approximately 500 basis points to 25% in 2024. We accomplished this while continuing to invest in the rollout of Viant AI and while making long-term strategic acquisitions, including Iris TV, a leading global content data platform built for CTV. Today, I am pleased to announce the acquisition of Locker, a data collaboration platform specializing in first-party data activation. Locker further strengthens our leadership position in identity and addressability across the open Internet. I will further expand on Locker in a moment. Through Q4, we have now achieved six consecutive quarters of over 20% year-over-year growth in contribution ex-TAC. While a number of factors are fueling our momentum, I would like to take a moment to highlight the key catalysts driving our recent performance, which we expect to continue into 2025 and beyond. They consist of number one, CTV proliferation; number two, leadership in addressability; and number three, AI innovation. Beginning with CTV proliferation, I want to remind everyone that we remain in the very early innings of Connected…

Thanks, Tim. I'm excited to report strength across all digital channels this quarter, which includes CTV, streaming audio, mobile, desktop, and digital out-of-home. Ad spend in each channel generated double-digit year-over-year growth, indicative of the widespread platform adoption by advertisers and agencies looking to leverage Viant's unique features, including household ID, direct access, and the Viant AI product suite. Looking forward, we expect CTV to continue to deliver outsized growth. There is a clear multiyear tailwind as $60 billion in US ad spend has yet to transition out of linear TV. But focusing near term, we believe 2025 will be a landmark year for live sports monetization across CTV. To provide some perspective, live sports accounted for about 40% of all national TV spending in the fourth quarter of 2024. Over the last several years, publishers have been readying live sports for CTV distribution, and we have now reached the point where live sports are universally available across streaming services. In 2025, these publishers are ready to transact programmatically and are offering greater allocation to real-time bidding transactions. It is worth noting, Viant is one of few enterprise-level DSPs capable of ingesting 40 million real-time bid requests per second, as is often necessary when transacting in a live sports environment. Through partnerships with various live sports providers, including Disney, ESPN, NBCU, Fox Sports, Warner Brothers Discovery, DirecTV, and Fubo, and many others, Viant offers advertisers access to inventory across virtually all major sports leagues, including the NFL, NBA, college football and basketball, the MLB, NHL, NASCAR, the PGA Tour, the US Open, and the Premier League. We are excited to provide our clients with access to the world's most coveted ad inventory in 2025. The migration of live sports from linear to CTV is anticipated to accelerate the shift in…

Thanks, Chris. Before I begin, I would like to remind everyone that we have posted a presentation on our company website for today's call. We concluded 2024 with a strong fourth quarter, marking another year of accelerating growth for Viant Technology Inc. Before diving into our detailed fourth quarter results, I'll provide a high-level summary of our full-year performance. For the full year 2024, revenue totaled $289.2 million, an increase of 30% over 2023. Contribution ex-TAC grew by 24% year-over-year, reaching $177.4 million. Non-GAAP operating expenses for 2024 totaled $132.9 million, a 16% increase over the prior year. Adjusted EBITDA rose to $44.4 million, up 53% year-over-year, with approximately a 500 basis point expansion in adjusted EBITDA margin to 25% in 2024. Non-GAAP net income totaled $34.7 million for 2024, representing a year-over-year increase of 59%. Notably, contribution ex-TAC has maintained strong momentum, consistently growing by over 20% for the sixth consecutive quarter. We concluded the year on a high note, achieving 28% growth in contribution ex-TAC in Q4, a noteworthy achievement given the challenging year-over-year comparison of 28% growth in the same period last year. Similarly, adjusted EBITDA increased by more than 30% for the eighth consecutive quarter, underscoring our sustained financial performance and momentum. Our exceptional growth in today's advertising environment is fueled by market-leading innovations available exclusively at Viant Technology Inc., including household ID, direct access, and Viant AI. I'll now move on to our results for the fourth quarter. Revenue for the quarter was $90.1 million, representing a 40% increase over the prior year period and exceeding the high end of our guidance range by 6%. Sequentially, revenue increased 13% from Q3. Contribution ex-TAC for Q4 totaled $54.4 million, up 28% year-over-year and 3% above the high end of our guidance range. On a sequential basis,…

We remain committed to empowering our advertiser and agency clients with unparalleled

service, precision, and advanced AI technology. Exciting innovations are on the horizon in 2025, with the anticipated launches of AI measurement and analysis, followed by AI decisioning. Our long-standing vision of autonomous advertising is well on its way to becoming a reality in 2025. With that, I will now turn it back over to the operator to open the call for questions. Operator?

Thank you, Larry. Again, we will now move to taking your questions. As a reminder, click the raise hand tab located at the bottom of your screen to ask a question. Due to time constraints, please limit yourself to one question. Looks like we have a question from Laura Martin at Needham.

Hi, guys. Great numbers. I wanted to start with Locker because I don't really think I understand the logic. So if I've never heard of it before, so I'm just going on what you said. It sounds like you're going to publishers and getting their data with the promise that you can get them higher cost per thousand because they'll have more data and of their data and the bid stream and doing integrations. But I think that one of the main reasons we've seen connected television so much to add to the decisioning bucket is because they don't trust DSPs. They think you guys are in a race to the bottom because your client is to get the best the lowest price. So why would a publisher ever share their first-party data with you?

Hey, Laura. Thanks for the question. Thanks for the comments on the quarter. We were equally as excited with the numbers and the performance in the quarter. Okay. So Locker, there's a lot of friction in matching up household ID with publisher identity as well. So think logged in on Disney, everyone that's part of direct access. It takes a long time with lots of engineering resources and maintenance. Locker really cleans that up for our publisher partners inside of Direct Access. Reduces the time to integrate with Viant, and then there's this big long queue. Publishers don't just want to work with Viant. There's, of course, other competitors in the marketplace. And Locker, with a single integration from the publisher, will unlock all alt IDs that are a part of Locker, which most are out there today. So we think it's a big benefit to the sell side and helping remove a lot of the friction in getting identity linked up together and making that faster and smoother. Got it. Laura, typically, what happens is the sales team, let's say, a publisher goes out, gets a marketer interested to buy, and the marketer wants the publisher to bring data to bear. Really, their first-party data. And what happens is the sales team then goes back to management. They then get into an engineering queue to integrate whatever ID it is or whatever data company or let's say it's even sending data to a having to integrate with a clean room. Publishers, we see their engineering teams are taxed. They typically aren't carrying the weight of engineering that an ad tech company would. And so it's a long queue. And so if a publisher wants to use their first-party data in advertising to generate new demand, they have to get…

That's super helpful. I really appreciate it. Can I ask Larry one?

Sure. Sure.

Great. So, Larry, you guys did a nice job of saying that of the $1.8 million cost, that was above cost, about a million of that was Iris TV acquisition in the fourth quarter. Can you tell us how much revenue Iris contributed in the quarter?

It was relatively modest. I would say it's probably about 1% of the total.

Okay. Right.

Okay. That's super helpful. Thanks, guys. Great numbers.

Thank you, Laura. Our next question is from Maria Ripps at Concourse.

Great. Thanks so much for taking my question. I just wanted to follow up on, excuse me, on the Locker acquisition. Can you maybe help us understand the strategic fit here a little bit better? I guess, is there an opportunity to monetize Locker directly with publishers, or should we think about this mainly as a tool to sort of further accelerate the adoption of the household ID and Iris ID?

Yeah. I think you could look at it in kind of this order. It is to accelerate adoption of household ID as well as Iris ID. Certainly, we are going to leverage our relationships within Direct Access. We are going to do that. But I really think overall, in the end, for something like this to be successful, we have to create Locker as a utility for the open Internet to be able to increase addressability by helping publishers use their first-party data. That was kind of the order that I would put it in there. But, again, I do think the third part needs to play out in order for the whole open Internet to actually succeed against the walled gardens. The first-party data by publishers helping them use that in advertising is key.

Got it. Thank you.

Thank you.

Thank you. Our next question comes from Nat Schindler from Scotiabank.

Hey, Nat. How are you?

Sorry. I had to unmute. Hey, guys. Been a while. Thanks for taking my call and great quarter. Wanted to I had some technical difficulties with your Zoom at the beginning, so I want to make sure you didn't cover this at the beginning. If you did, I'm sorry. But the rest of AdTech went into with some interesting exclusions. Said that there was a direct follow-up in brand spend, and it went across all DSPs, particularly some of the SSPs said this. Post-election and that rebounded in January. Can you do some Just tell us what's been going on with the market as you see it. I know you guys are small enough that could have idiosyncratic movements that wouldn't be affected.

Yep. Yeah. Thanks, Nat.

Yeah. Look, I think that there's some, you know, it's certainly a mixed bag with some of the different company's results, but if I could just distill it down for you. If you take a look at companies that have significant exposure to display advertising, which is dominated by last-touch attribution, that's where you need to look. There's the weakness. Yes. That is the weakness of the market. You can go down the line. It was largely stated there's some other, you know, there's some little bit differences between platforms, but if you have significant exposure to display advertising, that is heavily, heavily linked to last-touch attribution and cookies, that is what you saw really get punished in a lot of the fourth quarter results and maybe in Q1 guidance. I can't comment on every individual company, but I think that you'll see that come through.

Yeah. But in general, in the fourth quarter, we saw strength all the way through the quarter. December was a strong quarter. So there was nothing that we saw from our results. Like you mentioned, we are on the smaller side of public companies, so there could be some idiosyncrasies. But I think in general, what Chris touched on is probably the theme from our perspective.

And to clarify a little bit more, how would a large DSP get impacted not by the market, but by unforced errors? How does that even make sense?

I don't know. I think in tennis, it's when you hit it into the net. I don't, you know, I don't know. I can't really I don't know what the read-through on that was, but from my perspective, though, there's certainly more competition today than there has ever been on the DSP side. In terms of enterprise-grade substantial options for agencies and advertisers to choose from. And I think competition is probably one driver of some of those results. Certainly, internal mistakes can happen. They've happened to us over our more than two decades of experience. They can happen intra-quarter, but yeah, it seems like that would be tough to not know about mid-quarter for sure.

Okay. And just final question just to go broader market. I know you have strong guidance on particularly, on revenue. You do tend to have one queue per sales and marketing expenses. Correct? Impacts EBITDA pretty severely in the first quarter. Is that correct?

That is correct. Seasonality low in terms of ad spend in that's in the first quarter. And we do have a larger amount of sales marketing expenses in the first quarter due to things like our all-company conference that we have CES. CES, things like that. So that's always sitting there in Q1, but I was particularly thinking of CES, so that has a pretty big impact.

Okay. On the small number on the smaller quarterly number. But just to go into that revenue number, which is pretty strong, the overall market, are you seeing any real change in advertiser behavior between fourth quarter and first quarter, or is it just as for your company, it's pretty steady as she goes?

No. We think it's really strong. I can say just, you know, the way we feel about the market as well as our own prospects as a company is very high. We have a ton of opportunity that's happening right now as well as in front of us, so we feel really good about it.

Great. Thanks, guys.

Thanks, Nat.

Thank you. Our next question comes from Jason Kreyer.

Hi, guys. Thank you for taking questions. Appreciate all the detail on Viant AI. Just curious how you're thinking about this scaling over the course of 2025. Just in terms of the ability to onboard new customers, the fees you can charge, or just generally, you know, generating greater wallet share per customer, like, where do you expect to see the biggest benefit to fundamentals?

Yeah. Certainly, it's a big wallet share winner, and one of the big reasons why we focused on the planning process is it's such a cost center for our customers at the mid-market agencies, mentioned in the prepared remarks the benefits that agencies are seeing who are already leaning in the velocity of new business pitches to help grow their own ad agency. One agency exec quipped that they're doubling the velocity AI. And the quality of the media planning is very, very high. So that's really, really big. And I think it's going to be a huge wallet share gain as well as net new customers coming on to Viant and leaving competitive platforms. It's so much easier to plan and then activate a campaign inside of Viant's DSP with Viant AI now, relative to the competition. So to go from an idea all the way to activation might take you thirty minutes inside of Viant. That will take weeks in competitive platforms. So I think as agencies understand it, it's going to take them a little bit of time to trust it. That's the number one concern when Viant AI comes out is, you know, can I trust the AI to produce the right results? And I think that's where everyone's at. And once you get over that trust hump, which is really just about the customers playing with the AI platform and getting a subjective view on what the results are. So we see it speeding net new business wins of advertisers and agencies coming on to Viant. And we also see it as a wallet share gain between ourselves and competitors on the buy.

Just a quick follow-up to that for Larry. Maybe the we continue to see this delta between revenue and contribution. Is that maybe indicative of the pipeline of new customers that you're onboarding today kind of representing a greater growth opportunity over time?

Yeah. It's exactly what it is. What is really happening is we've been onboarding some larger customers over the last several quarters. And they're coming on as percentage of spent customers. They're signing MSAs. They're learning not to use the platform. But initially, because they went straight into percent of spend, initially, we provide a much higher level of service to get them, to get the campaigns going. To be last three, four, or five months. But what it triggers is it triggers gross accounting because we're doing a lot of the heavy lifting. It's temporary. Once they fully get up a hundred percent self-serve, it goes back to net accounting and the delta between the revenue and the CX kind of goes away. So you saw that last quarter. You're seeing that in Q4. We're guiding a little bit to that in Q1, much less than the last two quarters. But it's really a temporary thing that it really specific to a handful of larger customers. But it speaks also to the pipeline of obviously, we're adding quite a few of these bigger customers and have been, and that's part this is falling out from that scenario.

Yep. That's great. Thank you.

Alright. This next question will be our last question of the day, and it is Matt Condon with JPM Citizens.

Hi, guys. Thanks for taking my question. I just wanted to ask on the SMB opportunity. You guys mentioned that multiple times in your prepared remarks. Understood Viant AI is going to help you to break in there and just assist with the ease of use of the platform. But can you talk about it from a go-to-market perspective? Do you think about bringing these budgets onto your platform and aggregating them on your platform?

Yeah. Thanks, Matt. Great question. So I think it's important for people to realize that Viant AI certainly has kind of squarely in the mid-market where we've been the last several years, and we've had a lot of success. It's allowing us to move up market with much larger brands and agencies, but it's also going to attract this is really this is a big open question for the open Internet. Can we attract the walled garden advertisers that, yes, do span the millions and possibly as high as ten million advertisers? These are but is with respect to the go-to-market, why is that important? I don't want to call them less sophisticated, but they are used to buying platforms that are very simple. In the end, they just want to give you a budget, know flight dates, who their audience might be, and what their goal is, like a cost per customer goal. And then they expect the platform to do all the automation, just deliver them customers. That's really what they want. So the downstream going downstream to these smaller advertisers is, I think, paramount for the open Internet and particularly in CTV. The go-to-market of that I know a lot of people look sound that it's so daunting. And I think our first order of business wouldn't be that we're going after ten trying to track ten million advertisers. We believe there's a much smaller group and number of those advertisers that exist across the walled gardens that spend the lion's share of the money. These are these direct-to-consumer e-commerce companies that do have significant budgets, but we typically see that they are single or dual channel only advertisers. They might buy in Google search and meta or maybe they're buying across TikTok. Or maybe they have,…

Very helpful. Thank you so much.

Thanks, Matt, for the question.

This concludes today's webinar. We thank you all for joining. You may now disconnect.