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spk10: Well, hello, everyone, and welcome to Viant Technology's first quarter 2023 earnings webinar. My name is Kelsey, and I will be your operator today. Before I turn the program over to the Viant leadership team, I'd like to go over just a few housekeeping notes for today. As a reminder, today's webinar is being recorded. Attendees are on a view and listen only mode, but following the speaker's remarks, there will be a Q&A session. If you would like to ask a question, please click on the Raise Hand tab located at the bottom of your screen, and please ensure your Zoom name reflects your full name and your firm. We thank you for joining us today, and I will now turn the webinar over to Nicole Kuzman with the Blue Shirt Group. Nicole, over to you.
spk03: Thank you, Kelsey. Good afternoon, and welcome to Viant Technologies' first quarter 2023 financial results conference call. On the call today are Tim Vanderhoek, co-founder and chief executive officer of Chris Vanderhoek, 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 our guidance for Q2 2023 that are based on assumptions and subject to future events, risks, and uncertainties that could cause actual results to differ materially from those projected. We undertake no obligation to update these statements except as required by law. For more information about factors that may cause actual results to differ materially from forward-looking statements, in 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 March 31st, 2023 under the heading Risk Factors and 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 GAAP to non-GAAP measures are included in the news release we issued today, which has 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 Vanderhoek, Chief Executive Officer of Buy-In. Tim?
spk06: Thanks, Nicole, and thanks, everyone, for joining us today. I'm pleased to report that we started 2023 with solid financial results in Q1. We exceeded our guidance on contribution extract and adjusted EBITDA and delivered revenue at the high end of our guidance. Our team executed well, capitalizing on our large market opportunity amid a spending environment showing signs of stabilization. Our primary focus remains on making thoughtful investments in our platform to win market share and drive long-term growth and profitability. We continue to balance investing for growth with spending discipline while driving expanded revenue and contribution extract performance. This was primarily led by product adoption in key areas such as household ID, advanced reporting and measurement, and the buy-in data platform. One of the most significant industry trends we're capitalizing on is the growing importance of AI and machine learning. which we have previously described as our vision of autonomous advertising. At Viant, we are focused on delivering products that automate the laborious and complex tasks associated with using programmatic ad platforms. Tasks like creating an ad campaign or ad format, selecting channel, device, publisher, and ultimately bid prices for inventory, all of this can be streamlined and optimized through AI. Our AI-driven approach is poised to create substantial future revenue growth for buy-in. We have already built all the essential infrastructure components to apply AI on behalf of advertisers, and we are ahead of many of our competitors in this area. To succeed in this new era of ad tech, companies need to solve for identity across channels, have deep integrations for ad supply, and possess a real-time data platform that enables companies to utilize their first-party data for closed-loop measurement. Viant has all these components in place, including our patented household ID, our Adelphic DSP, and the Viant data platform. The Viant data platform is a critical piece of the ad tech stack. It centralizes vast amounts of data from various sources, enabling us to quickly develop, train, and fine-tune AI models for our customers. This comprehensive data foundation is a key differentiator for Vyant and one that has taken years to develop, and it sets us apart from competitors and positions us for substantial future growth. Throughout 2023, we plan on releasing a suite of new AI-driven tools that will help our customers improve the efficiency and effectiveness of their advertising investments. Our extensive infrastructure and data integrations gives us a competitive advantage in training our AI model, while our competitors are still just working on individual components. By leveraging AI, we not only streamline the ad process, but also provide a compelling reason for potential customers looking to optimize their ad spend. In addition to AI, we are also capitalizing on the strength of connected TV as a key industry channel. Connected TV represents a strong segment of growth in the ad market, and we are seeing a re-acceleration of growth in Q2. Our supply path optimization initiative, Direct Access, targets the largest CTV publishers, ensuring our advertisers receive the most efficient price for ad inventory. And finally, we are focused on sustainability, which remains a crucial industry challenge where Viant is demonstrating leadership with our recent initiatives. Last quarter, we discussed the launch of Adstricity, our customer carbon reduction program, which helps clients meet their corporate sustainability goals. This program has gained early traction, and we are partnering with Scope 3 to measure campaign emissions of our customers to curb the carbon impact of running their digital ad campaigns. At the same time, we are working on reducing our own carbon emissions with the goal of being carbon neutral by the end of 2023 and plan on releasing our sustainability report later this year. In conclusion, our progress with AI and machine learning initiatives, the Viant data platform, and a stabilizing advertising environment gives us strong momentum going into the second half of 2023. Our business is poised for substantial future revenue growth, And our extensive data-driven omnichannel platform makes us a compelling choice for advertisers and their agencies. Now I will hand the call over to Chris to discuss more around the business. Thanks, Tim. Q1 was a very strong quarter for Viant as we continue to win with mid-market agencies and clients. Our sole focus is on the buy side, meaning we represent the marketer and their agency and market by delivering on the following value propositions. First, procuring the lowest CPM cost in the market through direct relationships with content owners, providing an efficient supply chain, and leveraging AI-based bid algorithms to defend against supply-side price inflation. Second, improving campaign performance with automated platform capabilities that deliver superior return on ad spend. Third, enabling our customers to quantify their return on ad spend through our advanced reporting and measurement offerings. And finally, providing exceptional customer service that is second to none. These areas of focus are helping us win new customers and drive incremental revenue as customers see more value in our platform, expertise, and independent buy-side-only representation. Last quarter, I set up three key business priorities for 2023, and I'd like to provide some progress updates. As Tim mentioned in his remarks, We are seeing growth and adoption with our new and improved buy-in data platform. We have leveraged big data for over a decade, and this has always been a differentiator for us. Our focus and investment in expanding our data platform is already beginning to pay dividends in terms of customer adoption and revenue expansion. Data management is a core capability our clients are asking for, as they want to be able to use their first-party data in conjunction with their advertising campaigns. This need is nearly universal across all clients, but we don't believe that existing solutions solve for marketers' needs, which is why we are so confident in our ability to scale adoption of this product. Tim also mentioned the importance of investing in AI and machine learning as part of our journey towards autonomous advertising. Now is the time to actively implement AI and ML to drive step function improvements in programmatic advertising. The number of applications is truly uncapped. and we have a number of initiatives in the works, several of which will launch in the second half of 2023. Finally, I want to pick up on a supply path optimization program I announced last quarter called Direct Access. Direct Access is a program that creates the most efficient supply path for our customers by creating partnerships with premium content owners to merchandise their content to our clients directly. This program will drive a more efficient supply chain, provide bids on ad impressions directly to publishers, and eliminate duplicative ad requests that result from reselling. Our focus here is to deliver the lowest cost of media while helping drive the highest return on ad spend for our customers. In closing, I'm happy to report that since Q4, we've grown our product and tech teams by 20%, ushering strong talent into the company while maintaining cost discipline across the board. This is core to delivering on our key initiatives as we invest in our platform and drive long-term growth and profitability. Thank you, and I'll now turn it over to Larry to provide more details on our financial performance.
spk08: Thanks, Chris. Before I begin, I'd like to remind everyone that we have posted a presentation to our investor relations website that includes supplemental financial information to accompany today's presentation. As Tim mentioned, we are pleased to report that in Q1, we outperformed our guidance for contribution ex-tac and adjusted EBITDA and achieved the high end of our guidance for revenue. Revenue for the quarter was 41.7 million, a decrease of 2% versus the prior year period, and at the high end of our guidance of 42 million. Contribution ex-tac for the quarter was 28 million, an increase of 2% versus the prior year period, and 2% above the high end of our guidance. I would like to draw your attention to several noteworthy points relative to our Q1 top-line performance. We are especially encouraged by the improving trends we saw as we moved through the quarter, with February stronger than January and March stronger than February. As a reminder, in the second half of 2022, we saw the exact opposite, as customers were pulling back budgets as each quarter progressed due to macroeconomic uncertainty. We also did not see as big of a seasonal step down in spend from Q4 to Q1 as we normally see. While overall growth rates have not yet returned to what we were seeing prior to the current market pullback, the trends we saw in Q1 indicate that the market is stabilizing. I would also point out that advertiser spend in Q1 2022 grew 44%, which was well above industry growth rates, making for a challenging year-over-year comparison this quarter. Despite the modest decline in revenue in Q1, contribution XTAC grew 2% in the quarter. As we have stated in the past, as the mixed shift towards percentage of spend becomes less impactful and as fixed price becomes a smaller percentage of total advertiser spend, we expect contribution XTAC to grow faster than revenue. As Tim and Chris highlighted earlier, the growing customer adoption of our newer products, such as advanced reporting and the Viant data platform, also drove incremental revenue and contribution XTAC in the quarter. This is a clear indication of the growing recognition of the unique benefits of our platform and the value that we bring to our customers. We expect further expansion and customer adoption of these offerings as we move forward. Our team has also been hard at work developing cutting-edge AI and ML-based products that we anticipate will unlock even more revenue and contribution extract in the coming quarters. We are confident that these new products will not only be highly innovative, but also highly valuable to our customers, as they will be able to leverage the power of AI and ML to enhance their advertising strategies and drive even greater results. We look forward to sharing more details on these exciting new developments as they become available. In terms of customer verticals in the quarter, while we did see weakness across some of our customer verticals, such as business and financial services, retail and CPG, we saw continued strength across our travel, online gambling, healthcare and automotive verticals. In terms of channels, CTV and mobile each represented more than one-third of the total spend in the quarter. From a format perspective, video, which includes CTV and mobile video, represented over 60% of total spend in the quarter. Streaming audio also continued to perform exceptionally well in the quarter, growing 40% and representing 6% of total advertiser spend. Our commitment to delivering innovative and effective advertising solutions across all channels and formats has been a key factor in our success, and we are dedicated to building on this momentum in the future. Advertisers' spend per active customer increased 6% on a year-over-year basis, and our percentage of spent customers spent on average nearly three times more than fixed-price customers on an LTM basis. We ended the quarter with 327 active customers, flat with the prior year period and up one net new customer from Q4. On a year-over-year basis, the number of percentages spent customers continue to increase, offset by a decline in fixed-price customers, which tend to be less resilient during challenging macroeconomic periods. As we mentioned last quarter, in line with our commitment to continuously improving our platform, we took a close look at our customer base and setting our priorities for 2023. As we analyzed the growth trajectory of our customer base, we found that the large majority of our existing customers demonstrated consistent and upward trend in scaling their advertising spend on the platform. We also identified a subset of customers that were too small and did not have the capacity to scale their spending like the others. As a result, we are cycling through some lower spending customers And there will be some negative impact on customer count as we move through 2023, although we anticipate negligible impact on overall revenue and contribution . Moving now to operating expenses. Non-GAAP operating expenses total 28.4 million in the quarter, representing a year-over-year decrease of 10% and a quarter-over-quarter decrease of 8%. This is the result of the cost reduction actions we took in Q4 and our continued focus on driving operational efficiency. Our streamlined cost structure enables us to continue investing in our top priorities while positioning us for meaningful operating leverage and EBITDA generation. For the first quarter, we exceeded our adjusted EBITDA guidance by a significant margin, with adjusted EBITDA of negative $389,000. This exceeded the high end of our guidance by $2.1 million, and outperformed the prior year period by $3.5 million. Our focus on streamlining operations and approving operational efficiency coupled with better than expected contribution XTAC were key factors that contributed to these strong results. Regarding liquidity, we ended the quarter with $202 million in cash, which translates to a noteworthy $3.25 per share outstanding. We also had $223 million of positive working capital and no debt. To further strengthen our financial position, in early April, we also upsized our existing credit facility from $40 million to $75 million, while also extending the term for five years. The Solid Financial Foundation positions us extremely well to fully capitalize on the substantial market opportunity ahead of us. In terms of share count, we ended the quarter with 62.1 million Class A and Class B common shares outstanding. As we look ahead to Q2 and beyond, we recognize the ongoing uncertainty in the macroeconomic environment and its potential impact on customer demand. Despite this, we remain optimistic about our future growth prospects. For the second quarter of 2023, we expect revenue in the range of 52 to 55 million, representing a year-over-year increase of 4% and a quarter-over-quarter increase of 28% at the midpoint. We expect contribution to stack in the range of 32 million to 34 million, a year-over-year increase of 4%, and a quarter-over-quarter increase of 18% at the midpoint. Non-GAAP operating expenses are expected to be 30 to 31 million, representing a year-over-year decline of 12% and a quarter-over-quarter increase of 7% at the midpoint. Finally, we expect adjusted EBITDA to be in the range of $2 to $3 million, which represents a year-over-year increase of $5.6 million and a quarter-over-quarter increase of $2.9 million at the midpoint. Amidst our anticipation for a dynamic market landscape in the coming months, I'd like to emphasize some essential considerations regarding our Q2 guidance and our overall outlook for the year. In Q2 of last year, we had 32% growth in spend across the platform, making it a challenging comparison for this quarter. As we progress through 2023, we expect to see improving revenue and contribution tax growth rates. We also expect adjusted EBITDA to increase each quarter in 2023, Driven by the cost reduction initiatives we undertook in Q4 of 2022 and sequential growth in Contribution X-TAC as we move through the year. We will continue to closely manage expenses in 2023 while making targeted strategic investments with the objective of scaling ad spend on our platform while generating meaningful positive EBITDA in 2023. In closing, We are pleased with the continued adoption of our platform despite the current challenging market conditions. We are confident that our unique points of differentiation will allow us to fully take advantage of the growing market opportunity. Through our strong balance sheet, strategic technology investments, innovative new product launches, and disciplined cost management, we believe that we are optimally positioned to deliver significant top-line and EBITDA growth. We remain committed to our strategic priorities and focused on delivering long-term value to our customers and shareholders. That concludes our prepared marks today. And with that, I will now turn it back over to the operator to open the video to questions. Operator?
spk10: Thank you so much, Larry. And, again, we will now move into taking your questions. As a reminder to everyone, I just want to let you know that you can ask a question by raising your hand located at the lower part of your screen. And we will hear first from Maria Ripps with Canaccord.
spk09: Great. Thanks so much for taking my question. So it seems like the broader ad trends are stabilizing here. Can you maybe talk about what you're hearing in your conversations with advertisers kind of their level of commitment to 2023 budgets at this point? And I guess what's your level of visibility as you look into the second half of this year?
spk06: Yeah, I'll take that. Thanks, Maria, for the question. I think that definitely in January there was a lot of uncertainty. Clients themselves, the marketers, a lot of them still didn't have their budgets really for the first half of the year. And I think by February, that materialized down to the agencies, and then we started to see some spending start to increase. I would say, you know, we still don't have, you know, great visibility for the full year, but certainly what we see is increased spending all throughout the first quarter, and we're seeing that trend continue into the second quarter.
spk11: Sorry, that's very helpful.
spk09: And then can you maybe talk about the structure of your sales team at this point, and what are your thoughts there as sort of the ad environment is kind of starting to stabilize here?
spk06: Structure of our sales team is geographically based. We're in all the major markets. I think we're in about a dozen or so markets across the country. But really it's a two-pronged approach that we're always making sure that we're talking with our agency partners as well as the clients in partnership with them. You know, one that helps us on visibility and transparency, but it really helps enforce our value propositions to both agencies and customers, the clients directly themselves, just so they're aware of our services. And we see that doing really well right now. I expect that, you know, we have some new initiatives that we rolled out at the back half of last year, training programs on our sales team. So I expect that our operational efficiency to improve this year as well on the sales side.
spk11: Got it. Thanks so much for the call. And Laura Martin with Needham has the next question. Okay. Can you guys hear me okay? Yep. Yep.
spk02: Laura? I will ask, too, because that is your instruction. Start with AI. So I do notice that your tech and dev costs are up double digits, even though revenue was up like 2%. Is that the impact of this new AI that you're talking about today? And are you using these large language models AI? Because I would have guessed you've been using the old kind of ML and AI for many years, like your competitors. But can you talk about what you're doing with AI that's different? And how much is it going to cost us in 2023 to do these new things with AI, please?
spk06: Yep. I'll take the first part, Chris, and add anything I forget. I think it starts with the vision of what we're trying to build, what we deem an autonomous advertising platform that takes no humans to operate. That is the overall goal is that programmatic trading can happen without actual human involvement from the campaign being created to optimize to insights driven post close of the campaign. So that's the long term vision we've added. You are correct. We've added to our product and engineering teams, certainly around the skill set related to advancing our products. We have been using machine learning for many years, and I think now it's about putting true deep learning artificial intelligence on top of the data that we actually have. In my remarks, I talked a lot about the infrastructure components necessary. You know, when you get into the world of AI, it's all about training the model on a very stable data set. Our household ID gives us that stable data set. We're able to train these models not just on bidding and buying, which is an important area, but on closed-loop measurement as well and being able to attribute appropriately data. which ad drove the sale for that advertiser. So long-term vision is a fully autonomous ad platform. As we go throughout the year, different areas of the programmatic process like bidding and buying, using machine learning and artificial intelligence will be applied. Regarding the new large language models, we're certainly looking at OpenAI, BARD from Google, all of them and looking at how we apply those. Those are future products that are starting to work their way into our product pipeline. But certainly our own AI-driven products that we've been working on for years should be coming to roost in the second half. And just to add a little bit to that, if you think of putting them in, you know, AI and ML, just a few comments, large language models you'll see us predominantly use, you know, externally to customers. Anything in kind of UI or UX, both if you think in terms of buying, you can kind of prompt and it can execute something for you as opposed to you making selections, which can take time. And also reporting. So that's a large focus with our customers who work with us. Reporting and measurement where they can ask a question and get an answer back versus running reports just saves time. So that's where predominantly you will see large language models used. And then ML is typically in things around campaign performance, making associations between creative and, you know, maybe a particular household or format. Devices, publishers. Right. Anything like auto-optimization. A lot of the things we have been doing for years, but we really stepped up our investment here, and we're seeing just some really great results in campaign performance, so we're excited about some of the things that we're working on. In just regards around, you know, what's this going to cost us, Larry, can you talk about product and engineering costs for the rest of the year?
spk08: Yeah, I mean, if you look at the P&L on the earnings release, I think it was up something like 18%. We will continue to add resources to the product and engineering side this year. That being said, as you can see from our overhead numbers, certainly relative to last year and even last quarter, We are controlling the overall expenses very tightly. We're being very strategic about where we're putting new money, and we will continue to grow that team throughout the year.
spk02: Okay, that's super helpful. Thank you, guys. It's all new stuff. The second one I will do is your supply path optimization. So is this like – trade desks where you don't disintermediate the SST with your direct access product, or is it more like what GroupM is doing with Magnite where they are disintermediating the DSP? Which one is yours for this supply-side optimization?
spk06: Well, I don't look at it as disintermediating somebody. However, very directly, what it's about is making direct connections with content owners. And the whole goal is, just so we're clear, we represent, as a DSP, we represent the buy side only. We do not represent publishers. I can't represent the buy side if I also am representing the publisher, is our point of view. Anybody representing the publisher on the supply side, they're looking to get the highest possible price. What we're doing is making connections directly with content owners. They can merchandise their inventory or their ad inventory to our customers, and we're aiming to secure the lowest possible price. That's what a buy-side representative would do in serving a client. That value proposition rings so true today, especially in this type of a market. So in that instance, if they're using an SSP, then for mediation or anything of the sort, they'll continue to use them. But really what we're doing is creating transparency. for our clients directly to the content owners, and it's really all about price. There is an added benefit that comes with this, which is better signal. When you're connected directly with the content owners, you end up getting better signal. That may be as innocuous as, you know, in the case of CTV, it might be an IP address, but it also could be an authenticated first-party data match, let's say, on email or physical address or whatever it may be. So there's a lot of benefits there, but Again, it's not really anded disintermediating any one group. We don't really care who the publisher works with. We're just making the most direct connection possible for price efficiency and for transparency. And really focused on getting rid of resellers in the middle.
spk02: Okay. Super. So it's more like trade desks. Okay. Sounds great. Thank you very much, you guys. Really excellent margins this quarter. So congratulations.
spk08: Thank you. Thank you.
spk11: I'm moving on to Andrew Boone with J&P.
spk01: Hi, guys. Thanks for taking my questions. I wanted to ask a little bit about the client portfolio. It sounds like you guys are proactively talking to certain customers about whether it remains a good idea to stay on. Can you just talk a little bit about that and specifically what's going on there and what should we expect as we think about kind of the rest of 2023? Sure. And then I'd like to ask about the cash balance and the increase in the revolver, right? Kind of suggest to you guys are looking to do something with the cash balance. Can you just philosophically remind us how you guys are thinking about the $200 million that are on the balance sheet? Thank you so much.
spk06: Thanks, Andrew. Yeah, on customer count, just the background there. So we have a handful of customers that we've had on platform for some time. And really, what we call their spendability year over year over year just isn't there, not keeping pace with other customers. And really, we just went to a lot of those customers and said, look, we either need to increase spending or maybe, you know, this isn't the best fit. And really, they're just too small. And so we expect, you know, if I put a rough approximation, you know, maybe 5%. of active customers, but it's a de minimis amount of spending contribution on us. So we don't see any material impact there at all, but we do expect about that number to cycle off the rest of the year. Second question, Larry, can you take that?
spk08: In terms of liquidity, yes. I mean, clearly we have a great balance sheet at this point in time. You know, since the IPO, we've certainly considered M&A part of our strategy, and we will continue to do that. I think the market has generally started to reset in terms of valuations for private companies especially that are now coming closer, not all the way there, but coming closer to kind of some of the valuations in the public markets. We'll be opportunistic. You know, we're looking at things, and certainly we haven't done anything yet, as you know, but we will continue to do that. We felt it was important at this time in terms of the credit facility. One, it was coming near its end of term. It had about a year left. Our receivables balance is more than enough to upsize the facility. It did not cost that much to upsize it and to manage it. So we thought it was a smart move to make, especially given the overall capital raising market and credit markets.
spk01: Thank you.
spk11: And our next question will come from Andrew Mark with Raymond James.
spk04: Hello. Thank you for taking my questions. Can I start off on CTV? I mean, normally you give a little granularity on CTV growth in the presentation, but didn't see it this time. Anything that you can say in terms of growth in the format, trends you're seeing, or potential bright spots or weaknesses would be really helpful. Thank you. Yep.
spk06: Yeah, CTV was slow in Q1, but we have seen that stabilize into Q2. So with brand advertising getting pulled back, we talked about the focus and change of tactics by marketers moving into performance-driven campaigns. We did see a pullback in CTV, but we have seen that stabilize into Q2. Larry, can you provide any other color?
spk08: Yeah, I mean, it's quarter to date. It's up very nicely in Q2. The other thing I would say is, if you recall, we were really growing quickly last year. So the comps on CTV are a bit challenging relative to Q1 and Q2. But again, as Tim said, we were a bit soft in Q1, low single-digit decline. But certainly, as we're seeing that turnaround in Q2, and, you know, certainly I think it is partly at least due to brand dollars coming back into the platform, which is another sign of stability that we look at.
spk04: Great. Really helpful. And then my second on direct access and SPO in general, I think you guys gave a lot of really helpful color on the functioning of direct access and things like that, but just kind of thinking more generally from a market perspective with those lines between supply and demand potentially becoming blurrier, I guess, how does that impact your thinking on the state of the ad tech market and like the traditional definitions or roles that companies have taken in the space? Yeah, I see a question.
spk06: I really don't think the definitions and the roles are going to change much. Like our focus just remains we're, we're, We're going to represent the buy side. We're going to represent the marketer and their agency. And we're going to go out and do what's best for them. We're going to go out and get them the lowest possible price. We're going to focus around campaign performance. We're going to show them what they get for their money and our measurement offering. And that's, at the end of the day, what we're going to continue to do. I think a lot of these announcements that are continuing to come out, maybe some of them are Me Too, you know, they're copycat. You know, I think maybe some companies feel like they need to do those things. I really don't believe they're going to have a material impact because at the end of the day, we still believe that one group's got to represent the marketer, the other needs to represent the content owner. And when you do both, you can't really serve both parties optimally.
spk11: Great. Thank you very much. We will now hear from Jason Krayer with Craig Howland.
spk05: Thank you. So two for me. First on Chris, you talked about the data cloud and the uniqueness of the market. We've heard several different solutions that talk about just being able to bring in your own first-party data to the platform. So I wanted to see if you can just expand on the uniqueness that you're talking about there. Second one would be for Larry, just on the message. metrics you gave on the two revenue models, it seems like you're seeing a more pronounced movement over to percent of spend. Is that like an acceleration for customers or are you just onboarding fewer at 60?
spk06: Got it. Jason, thanks for the question. I'll take the first one. So I did talk about the buying data platform. Just so we're clear, we have for a number of years, probably since 2015, 2016, allowed customers to onboard CRM data like email addresses, physical addresses, things like that in our UI itself. But our Viant Data Platform, really that is taking it another step further. Obviously, since 2000 called 1516, marketers are now housing that CRM data. They now have their hands on that in a centralized place. Back in 2015-16, they really didn't. They didn't have it housed centrally, and it really wasn't at the fingertips of a lot of marketers. Today, those existing clean rooms with companies like Snowflake or Amazon, and really what the Viant Data Platform has done is made integrations really cross-cloud, no matter where you are hosting that data. And I'll tell you, for as many customers that have moved to these clean rooms, they don't really know how to get use out of it. A lot of these clean rooms, have good functionality in general as a database, but they aren't great around the marketing services, so they need companies like us to integrate with them. So a marketer will have, let's say, a snowflake. We instantly help match their customer data with anyone in our ecosystem, whether it be a publisher, a data company. We create that match and then allow for, easily allow for targeting in authenticated environments. But more importantly, it's really around measurement. With device IDs and everything going away, the future is going to be customers using their own data stored in, let's say, their clean room. And they're going to be able to match that with any ad exposures that they have. But they need companies that help represent them in the market to get the most use out of their first-party data. That's really where the buy-in data platform comes in. And there's an incredible set of other features here. We're really excited about a lot of the things that are already in this platform. And it's why the adoptions, we've seen it recently, have been so good. There's a ton of stuff around workflow automation. It essentially creates a single data scientist, and it gives them the power of 10 to 20 more people. It really provides for a lot of workflow efficiencies. We're really excited around this. There's not a lot of companies, a lot of people are talking first-party data, but not a lot of companies matching across clouds, getting their clients a lot of usage of their first-party data, both for, you know, personalized messaging as well as measurement.
spk08: In terms of mix, Jason, so percentage of spend in Q1 continued to grow nicely. That now, and has been for some time, the large majority of total spend on the platform. Fixed price, although it was down moderately in Q1, it has stabilized. Certainly, beginning in Q1, it's starting to stabilize after a rather steep decline in Q4. We see further stabilization in fixed price in Q2, which is very positive. As you may know, fixed price tends to be a bit more discretionary in nature. It's short-term tactics. It's quarterly dollars. So with macro issues, those dollars tend to get pulled back first, certainly as compared to percentage of spend. So we're starting to see a stability on the fixed price side as well, which is good.
spk05: Perfect. Thank you, guys.
spk11: And we will now hear from Chris Kataric with UDS. Hi, Chris.
spk07: Sorry, I was on mute there. I think last quarter, guys, you had called out that you're starting to see some green shoots in both auto and CPG, and I think you flagged this quarter that CPG was one of the verticals that was declining. So just curious if that was more of a customer-specific dynamic or if this was more broader for CPG trend that you were seeing. And then just curious if you can give us an update more specifically around retail spend. You nicely laid out the monthly cadence, if you could just kind of walk through that and and how that monthly cadence looked in April and May today. Thanks.
spk08: Yeah, I can take that. So, CPG was off a bit in Q1. We are seeing it turn in Q2. It looks like it will be up in Q2. Auto continues to do well after having been down for quite a few quarters going back to the pandemic. I think this is now perhaps the second quarter in a row where it has grown nicely. It's still relatively small. It's probably 5% or 6% of our total spend, but growing, which is great news. And then on the retail side, we did have some softness in Q1, similar to CPG. That looks to be coming back fairly strongly in Q2.
spk07: Okay, got it. And maybe if I could just squeeze in one more on the OpEx side of things. I think you're guiding to kind of a mid-to-high single-digit sequential step-up in OpEx. Just curious, as we're thinking through the back half of the year, if we should be thinking more towards the higher end or the lower end or even below that for further step-ups as you guys continue to invest in product.
spk08: In terms of the full year, I'll give you that. Okay. 2023 OpEx will be lower than 2022 OpEx, probably mid to high single digit decline. That being said, we do expect, call it single digit, mid to high single digit percentage increases in Q3 and Q4, quarter over quarter increases. Again, we're very focused on driving operational efficiency, But we are also making investments that we think will have long-term play for us in terms of returns that we will get from them. So it will increase in the coming quarters, not significantly, but call it mid-single digits. Understood. Thank you very much.
spk10: No further questions at this time. So Chris and Tim, we'll turn it back to you for any closing comments you might have.
spk06: Thank you, everyone, for joining today, and we'll see you this time next quarter.
spk10: Thank you so much. And again, everyone, that does conclude our webinar for today. Enjoy your summer. We'll see you next time.
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