Viant Technology Inc. (DSP) Q3 2026 Earnings Report, Transcript and Summary

[ Abrupt Start] ....Viant Technology's Third Quarter 2026 Earnings Conference Call. My name is James, and I will be your operator today. Before I turn the call over to your Viant leadership team, I would like to review a few housekeeping items. As a reminder, this call is being recorded. [Operator Instructions]. Thank you for joining us today. I will now turn the call over to Nick Zangler, SVP of Investor Relations for Viant.

Thank you. Good afternoon, and welcome to Viant Technologies Third Quarter 2026 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 2026, the implied full year 2026 outlook, our outlook for 2027 and other future financial results, our strategy, our growth opportunities, performance and benefits of our products, our platform development initiatives, including Viant AI, expected benefits of our acquisitions of TVision and Waymark, our pipeline and potential partnership opportunities, our share repurchase program, potential tailwinds 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 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, 2026, under the heading Risk Factors and in 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 exceptional third quarter performance, achieving new company Q3 records across all key metrics. Revenue increased 29% year-over-year and exceeded the midpoint of our guidance range, while contribution ex-TAC increased 27% year-over-year and exceeded the high end of our guidance range. Growth was broad-based across most verticals, driven by strong CTV demand, increased utilization of our proprietary intelligence and the expanded use of Viant AI. Most notably, CTV advertiser spend increased by nearly 40% year-over-year in the quarter, attributable to the unique advantages we deliver for advertisers within this secular growth channel. And finally, adjusted EBITDA increased 24% year-over-year to $19.8 million for the quarter, also exceeding the high end of our guidance range. We experienced ongoing momentum in the quarter with year-over-year contribution ex-TAC growth accelerating for the third consecutive quarter. This success can be directly attributed to our recent evolution into a comprehensive advertising intelligence company. Today, Viant is more differentiated than ever before, equipped to empower advertisers of all sizes through proprietary data, independent measurement, efficient supply paths and advanced AI solutions that work in concert to optimize campaign execution. As our third quarter results indicate, Viant is winning new advertisers while simultaneously capturing incremental budget from existing customers. Our performance is reflective of the strength of our go-to-market offering, which is unlike anything else in the industry. We equip our advertiser clients to win across their respective verticals through a unique arsenal of cutting-edge technologies. When advertisers choose to power their ad spend with Viant, they leverage our intelligence layer, which synthesizes proprietary signals across audience identity, content and attention into real-time actionable insights that optimize ad targeting. They leverage our AI-powered decisioning architecture, Lattice Brain, which operationalizes these insights to dynamically refine and continuously optimize advertising performance. And they leverage our direct access supply path, which connects brands directly to premium publishers, lowering costs and eliminating resellers to maximize working media spend. These innovative solutions represent a vastly differentiated offering, and it is our commitment to innovation that has firmly established Viant as an essential partner for today's outcome-oriented advertisers. Building on that commitment, today, I am excited to announce that we recently closed on our acquisition of Waymark, a generative AI video creative production technology platform built specifically for connected TV. Waymark adds professional-grade creative production capabilities to Viant's expanding suite of services and officially ushers in the era of generative ad creative for CTV. We believe no other buying platform is better equipped to deliver upon this promise. By combining Waymark's generative AI engine with our proprietary intelligence spanning audience, content and attention signals, we plan to empower advertisers of every size to unlock CTV's full potential through audience-tailored, contextually relevant, attention-optimized, creatives produced in minutes and at a small fraction of traditional costs. Waymark's generative AI effortlessly converts brand inputs into complete video ads featuring custom scripts, visuals and voiceovers, enabling Viant to deliver upon the promise of generative ad creative optimization, where endless creative variations are generated to meet any target audience. Together, Viant and Waymark plan to democratize CTV for advertisers of all sizes. Waymark's ability to produce professional-grade CTV-ready creatives in minutes not only accelerates time to market, but virtually eliminates production overhead, removing barriers to entry into the CTV channel and enabling the sheer number of CTV advertisers to scale from thousands to millions. Leveraging Viant's proprietary intelligence, we will empower these advertisers to seamlessly align creative messaging with the target audiences and contextually relevant content to best capture viewer attention. Going a step further, we are uniquely positioned to equip advertisers with a valuable feedback loop where audience engagement and attention metrics are directly utilized to iteratively refine and optimize creatives in an effort to drive maximum performance efficiency. The paradigm is shifting. TV is no longer reserved only for the world's largest brands. We are democratizing CTV as a powerful channel for advertisers of all sizes by removing traditional barriers to entry and equipping advertisers with advanced targeting and measurement capabilities. Looking longer term, Viant is positioning for the future of Connected TV. The era of broadcasting a single static ad to broad audiences is giving way to hyper-relevant targeting, where each creative is tailored to the viewer and the content and is dynamically optimized to maximize attention. With Waymark, Viant empowers advertisers to scale this strategy, delivering not one static ad, but rather hundreds, thousands, potentially even millions of individualized creative variations across audiences to drive peak user engagement and campaign performance. Chris will dive deeper into our technological innovations, including our plans for Waymark, our latest integrations with Frontier models and the launch of the TVision mobile meter. But first, I will provide a brief update on our recent performance and progress across our 3 key strategic priorities: Viant's proprietary intelligence layer, Viant AI and CTV. Beginning with our intelligence layer, Viant empowers advertisers to deploy sophisticated ad strategies through 3 core pillars of proprietary intelligence, spanning identity, content and attention. Using our proprietary data signals, advertisers can identify the specific impressions that will drive performance. Leveraging our intelligence layer, advertisers can precisely target their desired audiences within contextually relevant high attention environments and capture value by acquiring inventory where the intrinsic value exceeds the market price. I will briefly touch on utilization trends across our intelligence layer. Viant's Identity intelligence is powered by Household ID, our patented audience targeting solution that delivers superior addressability for advertisers, activating first-party data. By enabling precise audience targeting at scale, coupled with customized campaign measurement, Household ID continues to set the industry standard for identity resolution. Household ID utilization increased once again in the quarter, driven by favorable secular tailwinds, including the growing need for advertisers to justify ad spend through targetable, measurable campaign strategies, particularly across the proliferating CTV channel. Contribution ex-TAC generated from Household ID utilization reached its highest level ever for a third quarter period, fueled by growing adoption among advertisers looking to deploy the industry's most sophisticated audience targeting strategies. Viant's content intelligence is powered by IRIS Content ID, which delivers show-level content targeting precision and vastly differentiates Viant from competitors limited to app-level visibility. Through direct publisher integrations, we unlock scene-level contextual intelligence, enabling advertisers to align their creative with specific programs, themes and emotional tones, achieving a degree of contextual micro targeting that drives superior campaign results. With a growing number of major CTV publishers becoming IRIS-enabled, advertisers can now fully leverage our contextual targeting solution at scale. And this was evident in our results as surging advertiser utilization drove a 41% year-over-year increase in IRIS-enabled ad spend in the quarter. Viant's attention intelligence is powered by TVision and its nationally representative panel of U.S. households, each of which is equipped with TVision's computer vision and automatic content recognition technology. TVision's attention data provides advertisers with 4 unique signals of attentive insight: in-room presence, co-viewership, second-by-second eyes-on-screen attention and associated viewer demographics. These signals quantify viewer attention across the entire media landscape, including linear TV, connected TV and even walled garden platforms like YouTube and Prime Video. Viant is uniquely capable of leveraging this attention data as a pre-bid signal, empowering advertisers to target inventory based on its attentive value. By comparing the real-time intrinsic value of any impression as determined by its attention score to the prevailing market price, Viant can identify when an impression is mispriced and act accordingly, capturing undervalued impressions for clients while avoiding overvalued impressions. Looking ahead, we expect rapidly growing advertiser utilization of both IRIS Content ID and TVision's attention data to be a significant top line growth driver through 2027 and beyond. Household ID, IRIS Content ID and TVision's attention signal provide advertisers with performance capabilities that distinguish Viant from competitors. To maximize the effectiveness of these proprietary solutions, we feed these insights directly into Viant AI's Lattice Brain decisioning architecture. This takes me to Viant AI and Outcomes, our fully autonomous do-it-for-me ad product designed to capture performance budgets deployed across the open internet. Outcomes rivals walled garden solutions like Google's PMax and Meta's Advantage+ while offering the unique advantage of leveraging Viant's proprietary intelligence across the entire open internet, built to optimize campaign execution around specific advertiser goals. Outcomes now powers performance budgets for over 10% of Viant's advertiser base. Adoption has been particularly strong amongst our largest clients. In fact, every single one of Viant's top 10 advertisers is utilizing Outcomes, allocating on average, 26% of their on-platform ad spend to our performance solution. When looking specifically at the 10 largest users of Outcomes, 37% of their collect -- [ Technical Difficulty]

With these new integrations, Viant can operate as a headless platform, making our powerful capabilities accessible to advertisers without ever requiring them to log into our traditional user interface. Historically, demand-side platforms have benefited from advertiser stickiness driven by user familiarity with their platform interface. For Viant, this familiarity served as a barrier, making it challenging to migrate advertisers away from incumbent platforms, even when Viant could offer superior spend efficiency and stronger performance. We began breaking down that barrier with the launch of Viant AI planning and Outcomes, which transform complex platform workflows into simple natural language prompts. Today, we are taking that transformation a step further by enabling Frontier models to communicate directly and securely with Viant's platform. Through simple conversational prompts with these models, advertisers can now manage the entire campaign life cycle outside of our traditional user interface from media planning and campaign construction to real-time reporting and optimization. With this integration, we are meeting advertisers where they want to be, whether that is within our traditional DSP, through Viant AI and Outcomes or through the various Frontier models, positioning Viant as an ubiquitous AI-enabled partner available wherever advertisers prefer to work. We also believe this integration will allow Viant to more effectively capture platform-agnostic budgets, specifically those that are heat seeking for optimal campaign performance. As AI models direct ad spend towards platforms equipped with the most granular signals and unique data, the depth of Viant's proprietary intelligence layer positions us to win. Today, Viant's Frontier model integrations are accessible via major AI platforms and Frontier model interfaces, including Claude, ChatGPT and Cursor with more to come. Moving on to innovation at TVision. We are thrilled to formally launch the TVision mobile meter, extending TVision's powerful attention analytics beyond the TV screen by connecting linear TV and CTV viewership with real-world consumer actions on the mobile devices within the same panelist household. Across TVision's demographically balanced nationally representative panel, we plan to passively monitor both TV and mobile device activity. This provides Viant with a unified view of the complete consumer journey, bridging ad exposure on linear TV and CTV with actions taken on mobile devices. Inclusive of searches on Google and LLMs, website visits, social media interactions and ultimately, e-commerce purchases across the web and popular apps like Amazon, Walmart, Target and more, delivering a much clearer understanding of how TV advertising drives real outcomes. TVision's mobile meter finally answers the foundational question advertisers have asked since the dawn of television. What happens after a viewer sees an ad? To illustrate how this works in practice, consider a potential scenario involving one of our major clients. Imagine a consumer watching a connected TV spot for WHOOP, a leading wearable technology company. Beyond TVision's attentive insights, the TVision mobile meter will enable Viant to track whether the CTV ad elicited a response on the viewer's mobile device and trace the consumer's digital journey, observing their actions as they search for WHOOP on Google, navigate directly to WHOOP's website, engage with WHOOP's social media ads, browse WHOOP products across various online retailers and ultimately complete a purchase. By mapping this complete multi-device path to conversion, advertisers can appropriately credit the ad exposures that drove the sale and optimize against those winning strategies in future campaigns. This functionality has rolled out across much of TVision's existing TV panel footprint and will continue to expand as the panel grows. Over the course of the next year, we aim to triple TVision's reach to approximately 15,000 households and 50,000 individuals spanning the vast majority of U.S. DMAs. This expansion would allow us to achieve statistical significance for both TVision's attention insights and associated mobile device activity, not just nationally, but within each of these individual markets, giving advertisers the granular, highly reliable data needed to evaluate viewer engagement and optimize ad spend at a regional DMA level. Finally, I want to expand on the game-changing opportunity we are creating through our strategic acquisition of Waymark. To understand why this acquisition is so attractive, it is important to look at the revenue synergies these 2 platforms create together. Waymark brings a proven generative AI creative engine capable of producing professional-grade TV-ready video ads in minutes and has amassed deep media partner relationships across leading groups, including Spectrum Reach, Nexstar, Sinclair, Comcast, NBCU, Fox, Scripps, Gray, Hearst, TEGNA, and Cox Media Group. These partners already rely on Waymark to produce linear TV and CTV creative for advertisers allocating spend across their properties. Viant brings a proprietary intelligence layer spanning Household ID for precise audience targeting, Iris content ID for scene-level contextual alignment and TVision for second-by-second attention measurement. The unique capability unlocked by combining Viant and Waymark is the transformation of creative from a fixed asset into a dynamic asset, with every variation tailored to the audience and to the context and designed to capture attention. Instead of relying on a single static ad, we can now generate multiple tailored variations and distribute them to the most ideal destinations. Let's walk through what this makes possible using a major college or university as the advertiser client. Viant performs exceptionally well with higher education clients because they rely on our platform for sophisticated targeting, looking to reach prospects within specific demographics and within curated geographical footprints. Rather than attack the market with one static ad creative, with Waymark, we can now easily generate tailored creative variations matched to specific audience segments. When targeting sports enthusiasts, we can serve ads highlighting the university's athletics. For academically driven prospects, we can focus on the university's academic prestige. For prospective students interested in campus life, we can highlight the vibrant social environment. A university represents many different things to many different people. Instead of broadcasting a single static ad to the masses, we can distribute tailored creative variations designed to resonate with each specific audience. And this audience targeting capability is, of course, powered by Viant's Household ID. The same principle applies to contextual relevance. When viewers are watching sports content, we can serve creative focused on athletics. When they are tuning into history or documentary programming, we can deliver the academic message. And across general entertainment, we can feature campus life. The contextual targeting capability is powered by Viant's IRIS Content ID. We can utilize TVision's attention data for pre-bid targeting to place these tailored ads in front of highly attentive audiences where engagement is the strongest. And leveraging TVision's attention measurement and Mobile Meter, we can continuously iterate and optimize creative variations in near real time to drive peak performance. Transforming creative into a dynamic controllable variable unlocks an entirely new layer of performance optimization for our advertisers. With Waymark, we believe Viant becomes the only platform capable of seamlessly generating ad creative, activating it against targeted audiences, measuring real-time attention and continuously iterating for maximum efficiency. Together, Viant and Waymark will usher in the era of generative ad creative for CTV, delivering yet another industry-leading performance-enhancing solution for advertisers. We are thrilled to welcome the Waymark team to Viant, and we look forward to shaping the future of the industry together. And 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 with supplemental financial information to accompany today's call. In terms of our results for the third quarter, revenue for the quarter was $110.4 million, up 29% year-over-year and 6% sequentially, above the midpoint of our guidance range. Contribution ex-TAC totaled $67.2 million in Q3, up 27% year-over-year and 12% sequentially, exceeding the high end of our guidance. Year-over-year growth continued to accelerate in the quarter with Q3 growth approximately 10 percentage points higher than Q1 2026, primarily a reflection of ramping ad spend associated with recent enterprise wins. The quarter's performance was primarily driven by organic growth with minimal contribution from political and TVision. In the quarter, we delivered strong performance across most customer verticals, led by health care and public services. Our top 5 verticals accounted for more than 65% of platform spend and collectively grew approximately 30% year-over-year. CTV spending by our customers remained a core driver in the quarter. CTV spend on the platform increased nearly 40% year-over-year, reached another quarterly record and represented more than 50% of total platform spend. Video, including CTV, accounted for nearly 70% of total platform spend in the quarter, also a record. CTV streaming audio and digital out-of-home collectively represented more than 60% of customer-directed spend in the quarter compared with 54% for the full year 2025. These trends reflect the massive opportunities to support advertisers as they expand beyond search and social into emerging digital channels. Turning to our expenses. Non-GAAP operating expenses totaled $47.4 million for the quarter, up 28% year-over-year and 3% sequentially. The increase reflected continued investment in the business and the inclusion of a full quarter of TVision, which we acquired on May 1. Excluding acquisitions, non-GAAP operating expenses increased 19% year-over-year and 1% sequentially. We remain focused on scaling efficiently while investing in Viant AI and our broader technology capabilities, including TVision and Waymark. This focus on efficiency is reflected in our productivity gains with trailing 12-month contribution ex-TAC per employee increasing 8% year-over-year, marking 13 consecutive quarterly increases. Adjusted EBITDA for the quarter was $19.8 million, up 24% year-over-year and 40% sequentially, exceeding the high end of our guidance. Adjusted EBITDA as a percentage of contribution ex-TAC was 29% for the quarter, approximately 40 basis points above the high end of our guidance. Non-GAAP net income totaled $13.4 million for the quarter, up 20% from $11.2 million in the prior year period. Non-GAAP basic earnings per Class A share increased 17% to $0.14 from $0.12 in the prior year quarter. We ended the quarter with 66.5 million total shares outstanding, consisting of 21.2 million Class A shares and 45.3 million Class B shares. We ended the quarter with $183.2 million in cash and cash equivalents, $198.3 million in positive working capital, no debt and access to a $75 million undrawn credit facility. Our solid performance is also enabling meaningful positive cash flow generation. For the 9 months ended September 30, cash flows from operating activities totaled $35.7 million, up 83% year-over-year, and free cash flow totaled $20.8 million, up 238% year-over-year. During the quarter, we deployed $5.5 million for share repurchases under our share repurchase program. Separately, we repurchased $4.6 million of shares in connection with the net settlement of vested equity awards in the quarter. From quarter end through November 6, we deployed an additional $13.1 million under the share repurchase program, bringing the cumulative program purchases to $79.2 million. And today, we announced a Board-approved $50 million increase in our share repurchase authorization, bringing the total authorization since inception to $150 million, with $70.8 million remaining available to be deployed opportunistically going forward. These actions reflect our view that Viant shares are undervalued relative to our financial performance and long-term growth opportunity. At the midpoint of our Q4 guidance, full year 2026 contribution ex-TAC would more than double since 2022, representing compound annual growth of over 20%. Over that same period, adjusted EBITDA would improve from a loss of approximately $6 million in 2022 to more than $75 million of adjusted EBITDA in 2025 -- 2026, excuse me, based on the midpoint of our Q4 guide. We will continue to evaluate share repurchases alongside organic investment and acquisitions based on expected returns and balance sheet flexibility. Turning to our acquisition of Waymark. We acquired Waymark for $20 million in base cash consideration subject to customary adjustments and holdbacks. We expect Waymark's contribution to our Q4 financial results to be immaterial. And in 2027, we expect its stand-alone top line contribution to remain modest. Turning now to Q4. We are carrying our strong third quarter momentum into Q4. At the midpoint of our guide, our outlook calls for year-over-year growth in contribution ex-TAC and adjusted EBITDA of 26% and 27%, respectively. And we expect adjusted EBITDA margins to expand on a year-over-year basis to approximately 39% in the quarter. This strong outlook is driven primarily by strength across our core business. We expect contributions to revenue and contribution ex-TAC from TVision and Waymark to be immaterial in Q4, and we anticipate political advertising to be a minimal contributor in the quarter. I would also like to emphasize that our recent acquisitions have added unique talent, proprietary data and technology that strengthen our platform and expand the value we deliver to advertisers. Their operating expenses are reflected in our Q4 outlook ahead of the full revenue benefits we expect as advertisers adopt these capabilities. Turning now to the guidance ranges. For the fourth quarter of 2026, we expect the following with growth rates and margins measured at the midpoint of the guidance ranges. Revenue of $130.5 million to $133.5 million, up 20% year-over-year and 20% sequentially. Contribution ex-TAC of $80.5 million to $82.5 million, up 26% year-over-year and 21% sequentially. Non-GAAP operating expenses of $49.5 million to $50.5 million, up 25% year-over-year and 5% sequentially. Excluding acquisitions, non-GAAP operating expenses are expected to increase 14% year-over-year and 3% sequentially. Adjusted EBITDA of $31 million to $32 million, up 27% year-over-year and 59% sequentially. And finally, we expect an adjusted EBITDA margin as a percentage of contribution ex-TAC of 39%, up approximately 40 basis points year-over-year. Our Q3 results and Q4 outlook position us to deliver another year of strong top line growth and adjusted EBITDA margin expansion. At the midpoint of our Q4 guidance, this implies a full year 2026 outlook of revenue of approximately $435 million, up 26% year-over-year, contribution ex-TAC of approximately $259 million, up 24% year-over-year, non-GAAP operating expenses of approximately $184 million, up 22% year-over-year. And excluding acquisitions, non-GAAP operating expenses are expected to increase 15% year-over-year. Adjusted EBITDA of approximately $75 million, up 31% year-over-year and adjusted EBITDA margin as a percentage of contribution ex-TAC of 29%, up approximately 150 basis points year-over-year for 2026. Looking to 2027, we expect growth from existing advertisers and the continued ramp of enterprise clients won during 2026. We also have a growing pipeline of prospective enterprise customers, including a number currently testing our platform. We expect successful conversions from that pipeline to provide additional growth opportunities in 2027. Together, these opportunities support our expectation for 20% or more annual growth in contribution ex-TAC and meaningful adjusted EBITDA margin expansion in 2027. In closing, we delivered a record third quarter, expanded our enterprise relationships and strengthened our platform. We believe our proprietary data, AI capabilities and CTV offering position us to capture additional advertiser budgets and deliver sustainable, profitable growth. And with that, I will turn the call back to the operator for questions. Operator?

[Operator Instructions] Our first question comes from Laura from Needham.

Okay. Yes, I had 2. One is that we see that open internet traffic is down like 40% year-over-year and Reddit, which has been a long-term champion of the open internet, said on their most recent call, they're going to become a walled garden. So my question is, how do you retain these really best-in-class 27% revenue growth rates through next year when traffic to the open internet is falling at really significant rates? And then secondly, my question is conflict, channel conflict. So Waymark. So when I think about other companies that have content creation assets, it's like Mountain, which is one of your competitors that has 5,000 small and medium businesses. And I think of your sweet spot as medium-sized advertisers and you taking share from competitors in larger advertisers, all of which have ad agencies that it feels like Waymark threatens. So don't you risk new business by having a channel conflict with Waymark in a segment you don't work in, which is really small and medium businesses? Those are my 2 questions.

Laura, thanks for the questions. Just in terms of the open internet dying, so let's talk about what it represents from our business today. It's 10% or less of our business is that. So it's certainly not driving the growth rates we're seeing now, but it's happening now, and that gives me tons of confidence that we'll continue to grow. But if you look at where advertisers are shifting their budgets, it's really to addressable and premium environments, which is really where Viant is positioned. And I think as marketers shift more of their budget away from display advertising on the open web, they're going to reap even more value from Viant's platform today. So I don't think it is affecting us today, and it should only serve as a catalyst as budgets move away from display and online video in the open web towards CTV in these premium addressable environments. So I think it will end up being a catalyst for us next year. Second question?

So on the -- Laura, on the channel conflict of Waymark with ad agencies, we don't see it that way. Today, Waymark is used by many local media sellers that I stated in the prepared remarks. A lot of that is servicing local, midsized businesses and small businesses, giving them creative to air on linear and CTV. That's kind of their current go-to-market. We see high demand for creative generation, definitely in the mid-market. And I think over time, we'll see that even upmarket. I don't see a future where large marketers don't use some form of AI to help generate creatives. Even if they're doing just creative variation, there's a lot of value there. And I think agencies are going to look for those solutions for their clients. But I will say the downmarket opportunity is incredible. Today, you are right, we traditionally have been in the mid-market and getting larger swings at much larger clients. But we believe in the power of the platform. We know it drives results for larger customers, and we know it will drive results for smaller customers as well. So being able to generate creative for those smaller customers, combined with our platform's capabilities, we think we can do really well there.

Last stat I would add to that, Laura. So when we look at the TVision data of what's holding consumers' attention, the most common thread is brand-new creative that consumers have never seen. When we look at advertisers that are running creative for many years out in the space, think personal injury ads that you may have come across, the attention is sub 25%. But when you have a fresh new creative, that attention skyrockets above 80%. And so we think new creative displayed to consumers is what's most important. And we think agencies can use the tools as well.

Our next question comes from Jason from Craig-Hallum.

Congratulations on adding a video to Lattice Brain. That was great to see and great to see Waymark in action. So the last couple of quarters, we've talked about how strong your RFP pipeline is. Can you give any updates on how that pipeline continues to track, what you're hearing for feedback from customers and what the prospects look like from that pipeline turning into new wins over the coming months?

Yes. So as we've talked about, we have a large cohort of RFPs happening for 2027 that we're still in the mix of. We feel great about those. Feedback has been incredibly strong. These brands are truly recognizing how differentiated we are not just as a DSP, but as we morph more into more of an advertising intelligence platform, they recognize how different we are with our Household ID and the scale of that, the power of IRIS ID and knowing what show your ad is showing up in CTV and then, of course, with TVision. And also just from a pure infrastructure standpoint that direct access offers clients, being able to place their buy in CTV with the largest CTV content owners and platforms with no fees attached to it, that's an incredible offering. So we feel great about the prospects for 2027. As far as testing, testing has gone extremely well. Many of these clients really instead of doing a long paper RFP process, decided to do head-to-head tests. We're doing extremely well there. And we did -- there have been clients all throughout the year that we've named, some we haven't. We also stated that we brought on a new prediction markets platform company that we're really excited about. So a lot of really good things happening setting up for 2027.

Great to hear. I'm going to ask a follow-up on the integration with some of these AI models. It seems like it's a no-brainer that marketers want different instances, different UIs to operate within. But maybe you could just put it in your words, what that client demand looks like and kind of where that integration goes from where it is today, like the current integration and how you can build on that over the next several quarters?

Yes. We've enabled, I think, over 41 skills across our DSP to be MCP enabled. And what does that mean? It means ChatGPT or Claude or shortly here Grok as well can access and create a campaign, optimize their campaigns, make every change that they were making previously through our self-service UI. So we are, for the most part, fully MCP enabled. We do want to include Waymark in that as well as we bring that online. So a lot of this is just familiarity. And one of the big things that we face as a challenge in going to market is that everyone knows how to use our competitor Google's platform and DV 360 or The Trade Desk and the bigger customers. And that self-service know-how in the UI, knowing how to use the UI has been a big headwind and point of friction for us winning new customers. So by moving to Claude or ChatGPT, that know-how or that moat that they have around the UI really starts to evaporate and it really becomes about the capabilities and buying in these premium environments that are addressable and really letting Viant's platform shine. So we think it shrinks a moat that our bigger competitors have against us and removes a big friction point in just the knowledge of how to use our platform.

And also, just to add on there, I think this headless opportunity that we see is really going to increase the velocity of customers and ad spend into our platform. We have very unique proprietary data that we know drives performance. And as Tim talked about, this friction of switching from one platform to another is real. And we see that, that subsiding and that not being an issue in the future. And again, it also will expand the aperture for us or the total addressable market of which type of customer is actually going to run through our platform. Today, that's mid-market, larger customers. But when you think of the downmarket opportunity, large DTCs, heavily data-driven advertisers that might be buying only in search and social, they're going to be operating headless, and we think that it just increases demand for our platform.

Our next question comes from Barton from Rosenblatt.

Can you hear me now?

Yes. Barton.

You had been speaking like last -- a few quarters ago about $250 million pipeline of RFPs. And I was just wondering if you could give us an update on how you've executed against that opportunity and to what degree is that still kind of left for you guys?

Yes. A lot of the 27 opportunities still aren't decided, but I would point you to, if you look at Q1, just to size it up, CXT was up 17%. If you look at the most recent quarter, it was up 27%. And that goes to the ones we've already won and some new ones coming on. Chris talked about the prediction market customer that we're not allowed to name, but has started testing and using the platform from a brand advertising perspective and is now expanding and testing outcomes from a performance advertising perspective. So certainly, all that pipeline is there, and many of it will be decided between now and by the time we report in Q1.

Okay.

And any customer we're allowed to name, we'll, of course, issue a press release.

Okay. And then one other thing I'm just curious to get your thoughts on if there are any that can be offered, which is AppLovin on their last earnings call was talking about aspirations over time to move deeper into CTV without being very specific, but talking about a full funnel opportunity. Any thoughts because they've been so disruptive in the video game download kind of universe about what they could mean in CTV? And is that imponderable? Any thoughts about what that could mean? I'd be curious.

Yes. I think everyone in the market is looking at CTV because all of the money is flowing there for all intents and purposes. So by expanding the TVision mobile meter, we're going to learn a lot about AppLovin as well on when a consumer sees a CTV ad and downloads that mobile app onto their phone. What was the driver of that? Was it audience targeting? Was it creative, et cetera, et cetera. So we talked about the expansion of TVision with this Mobile Meter product. But really, that gives us insight into every ad exposed inside of our panel on mobile devices, whether it's Instagram, TikTok, Snapchat or an AppLovin mobile app as well. And then also, did the user take the completed action and download that app. So I think when AppLovin comes into CTV, we'll welcome them. There's a whole bunch of money there, and it's a very fast-growing market. So it doesn't surprise me that they're looking here. But when you think of what drives their algorithms, it's primarily content identifiers. And today, Viant owns and operates the IRIS content identifier with about 70% market share. That's exclusive to our DSP. So we feel good about our algorithms driving performance for whether it's mobile app customers, e-commerce customers or anyone else.

Our next question comes from Andrew from Raymond James.

I wanted to touch -- I think you may have touched on this a little bit earlier in one of the answers to your questions. But on Waymark's applicability to some of the -- some of your larger customers because it seems like it does kind of provide the biggest value lift for somebody like a smaller customer who doesn't necessarily have the infrastructure and the ability and the resources to create TV creative, but just kind of how the larger customers can really benefit from this.

Yes. One of the biggest things we see with the largest customers is they don't have enough creative. It's not that the creative is bad. It's that they do a big production shoot. They have that creative in market for 3 to 6 months and users are over-frequenced. And what we see with the attention data that we're capturing from the TVision panel is that after a few repetitive exposures to that creative, the user engagement drops off quite a bit. And so again, what we think the biggest value add for the larger advertisers is making sure that you have enough volume of ad creatives in the market to match the ad spend. And -- but again, we don't think enterprise customers are the first to use the Waymark creative platform. We do think it will be over time. And as they digest more and more of the data that we're seeing, they're going to take their base creative and create new compelling messages. The second area is just the contextual environment that those ads show up in. As Chris highlighted in the prepared remarks, if you're watching sports content, it would make sense for an online university to highlight the athletics of that university to that specific audience given the content. If you're watching fitness type content, it would make sense to adjust that content -- that ad again. And that's where we're seeing maximum human engagement and attention, which ultimately drives bigger downstream outcomes.

Got you. Appreciate that. And then one more, if I could. With the understanding that it's a relatively small part of your business, with the Apple issues that were introduced to ID players on the new iOS, of course, that only had to do with mobile web, but more broadly, how do you feel then about the defensibility of things like Household ID and ID solutions more broadly across channels given that these platforms can kind of make these changes on a dime?

Yes. I'll start and you can fill in. We made a conscious decision years ago when Apple first rolled out a lot of the changes, I believe that was in 2017. We made a conscious decision that we were not going to be in the -- our ID structure was not going to be in the business of tracking users across sites and apps. We saw that Apple was clearly signaling that was the end. And that was really -- that's all about the display advertising business and retargeting. That's -- and last touch attribution. We're not in that game. As we said, display and largely web is a small part of our business. So the iOS issues do not affect Household ID. I think what they do affect for our customers that are using JavaScript, web-based JavaScript tags on their website to track performance, it's affecting their performance. And I think there needs to be a stronger move in the market towards CAPI or conversion APIs. But outside of that, Household ID, we don't -- we're not in the mix of any of that. Nearly all -- especially in CTV, it's all publisher authenticated that they integrate with our Household ID. And so really, the display advertising, tracking users across sites and apps is not our game.

Yes. And I would just add to that. I think the TVision acquisition looks very prescient to these big changes that Apple had. When it comes to our outcomes product or optimization models that you're running, TVision with the expansion of Mobile Meter gives our algorithms perfect visibility, cross-device, cross-publisher on what's working and what's not from creative to audience targeting to publisher partners themselves. And so no matter what Apple does, our opt-in user panel will continue feeding our algorithms.

Our next question comes from Maria, Canaccord Genuity.

This is Matt on for Maria. Can you guys hear me?

Yes, Matt.

Great. So I think earlier this year, you talked about outcomes being all incremental budget from existing customers. So now with your top 10 advertisers putting roughly 1/4 of their spend through it, is that still mostly new performance budget coming over from other channels? Or are they also moving some spend that they ran on Viant previously on to it?

No, that's nearly all incremental budgets. And really, that is how marketers kind of plan their media. They have sort of their brand-based budgets and have their performance budgets. And as we've seen over the last 7 or 8 years, that those performance dollars are largely been migrated to search and social platforms. And so those are the teams that we're going after in these brands and these agencies to peel a piece of that performance business away, test it on our platform, test Outcomes and see how it performs relative to their other performance channels. So the growth of that is nearly all incremental. But not only that, the bigger takeaway is we're providing better performance than search and social.

Very helpful. And then I just want to follow up on some of the questions on the enterprise pipeline. For the brands you've won so far, are they taking Household ID, IRIS and attention targeting from the start? Or are they starting on the core platform and layering incremental data solutions over time?

Largely, they're looking at the full capabilities of the platform and deciding to test us, but they certainly start in Household ID and IRIS ID. IRIS was up substantially this quarter. So that adoption continues to scale really, really well. TVision is still in the early test and learn phases. So TVision usage was low single-digit percentage in the quarter, providing ample room for growth into 2027 and growing our contribution ex-TAC as another leg there. But I would say Household ID, biggest adoption, IRIS ID scaling as we've scaled the publisher partners that you can take that on and TVision is in the test and learn phase.

And one last one is just direct access. I mentioned it earlier, but them being able to go in, let's say, they're using another platform. They're looking at their CPMs to certain content owners or platforms, whatever it is. And then allocating their spend into direct access and seeing the savings, that's a huge eye opener for customers, especially in the testing phase or when they're first onboarding, and it's just a great validation of a major selling point that we have when customers can realize those savings.

Our next question comes from Ryan from B. Riley.

This is Ryan Powell on for Naved. Two, if I may. On the Waymark acquisition, whether the plan is to include pricing as an add-on fee or bundled into the platform? And then with the opportunity on small advertisers, how you may plan to increase awareness? And then I have a follow-up.

Yes. It really depends on the customer segment. So for smaller customers, it will be just all bundled together. What they care about is simplification, ease of use. For the larger enterprise customers, they like all fees broken out. So for the enterprise customers, it will be an additional add-on if they choose to use it.

And then on the Frontier AI model integrations that you mentioned, how average spend compares with Viant's platform and then whether this is bringing in new advertisers or mainly existing advertisers?

Yes. Again, the goal that we talked about in the future is that it's new advertisers who don't need to come in and learn and certify on our platform and train where all the buttons are to get a campaign live. I would characterize all of the testing that's gone on with current customers that they're looking to access the platform, what we call headless, meaning not having to log into our interface, and they can operate from a single platform across many environments, Meta, YouTube as well as our DSP. So right now, from current customers, it's the same budget. And then we believe that for midsized and smaller customers, it opens up just enormous amounts of abilities to bring them into the platform.

There are currently no more questions at this time.

Thank you, everyone. We'll see you after the start of the next year in the new year for Q1 earnings or Q4 earnings. Thank you.