Viant Technology Inc.

Hello, everyone, and welcome to Viant Technologies' first quarter 2025 earnings conference call. My name is Emmanuel, and I will be your operator today. Before I hand the call over to the Viant leadership team, I'd like to go over a few housekeeping notes for the program. As a reminder, this call is being recorded. After the speaker's remarks, there will be a question and answer session. If you plan to ask a question, please ensure that you set your Zoom name to display your full name and firm. If you'd 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 for Viant.

Thank you, Emmanuel. Good morning, and welcome to Vine Technologies' first quarter 2025 earnings conference call. On the call today are Tim Vanderhoek, co-founder and chief executive officer, 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 but not limited to our guidance for 2Q 2025 and other future financial results, our platform development initiatives 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 March 31st, 2025 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 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 Vanderhoek, Chief Executive Officer, Byatt.

Tim? Thanks, Nick, and thank you all for joining us today. We delivered record first quarter results across the board, outperforming our guidance across all key financial metrics and positioning the business for continued strength in the second quarter. Revenue increased 32% year-over-year, and contribution XTAC increased 25% year-over-year. Strong top-line growth was driven by continued CTV demand, increased use of Viance addressability solutions, including Household ID and IRIS ID, and further adoption of Viance AI product suite. Notably, this marks our seventh consecutive quarter of greater than 20% year-over-year growth in Contribution X-TAC. Adjusted EBITDA increased 76% year-over-year to $5.4 million in Q1. This marks our ninth consecutive quarter of greater than 30% year-over-year growth in adjusted EBITDA. Before providing an update on our strategic priorities, CTV, addressability, and Viant AI, I would like to first offer our insights and observations on the advertising environment in light of recent tariff announcements and explain why we believe Viant is well-positioned to navigate this period of macroeconomic uncertainty. Year-to-date through April, ad spend across our platform has been strong, with little discernible impact from recent tariff announcements. Year-over-year growth rates for revenue and contribution XTAC increased in each month throughout the first quarter, with the strongest performance observed in March. Strong double-digit growth trends persisted throughout April. Generally, advertisers have thus far exhibited a heightened level of resilience to tariff-related macroeconomic challenges, having weathered the late 2022 advertising downturn caused by fears of a recession that ultimately never materialized. It is only very recently that we have seen a small number of advertisers adjust their plans, redirecting ad spend from the second quarter into the latter part of the year. Should macroeconomic pressures intensify, we believe we remain positioned to outperform the broader advertising industry and our peers. Owing to a broad diversification of U.S.-based advertisers, limited exposure to those verticals most directly impacted by tariffs, and strategic alignment to secular growth channels, including CTV and the ongoing adoption of differentiated product offerings in the industry. To further elaborate, we serve a broad and diversified group of well, over 1000 advertisers, spanning all major industry verticals with no 1 advertiser representing more than 5% of the total ad spend on the platform. After conducting a thorough review of our advertiser base, we anticipate recently imposed tariffs will only minimally impact our future performance as exposure to high risk verticals like automotive, for example, is limited. It is also worth emphasizing, we believe our business is strategically positioned to foster the growth of proliferating digital channels, including CTV, streaming audio, and digital out of home. These are secular growth channels in the early stages of adoption, making them more resistant to economic cycles. Collectively, these three digital channels represented over 50% of our total ad spend on our platform in 2024, up from 43% in 2023 And 40% in 2022, and based on historical precedents, we would actually expect an economic downturn to accelerate the ongoing shift of linear TV ad spend into where campaigns are addressable. More granularly, our winning strategy with advertisers hinges on our differentiated platform offerings, tailored to support growth within proliferating digital channels. In CTV, our direct access program provides advertisers with a streamlined path to premium inventory, eliminating unnecessary intermediaries and delivering greater spend toward working media. Our addressability solutions, Household ID and IRIS ID, empower advertisers to deploy sophisticated ad campaigns and measure efficacy through the use of industry leading audience and contextual identifiers. And Vyan AI, which we expect will prove to be a disruptive innovation, is currently providing early adopters with meaningful workflow improvements, operating structure efficiencies, and meaningful media cost savings and ROAS enhancement. The continued uptake of these innovative solutions is creating powerful tailwinds that support our long-term secular growth strategy. Moving to our strategic priorities, CTV, addressability, and buy-in AI. CTV was the strongest driver of top line growth in the quarter, and leading in CTV is our highest priority. We are committed to being the premier DSP for CTV advertising, a position we believe we currently hold and intend to strengthen. This is evidenced by our recent performance and our product roadmap, which is strategically focused on CTV dominance. During the first quarter, over 45% of total spend on our platform was allocated to CTV, clearly demonstrating the dominance of our CTV offering. Over 55% of CTV spend is now running through our direct access premium publishers. which uniquely connects advertisers directly to premium CTV inventory. When advertisers utilize direct access, supply side fees are significantly reduced. This means more of their budget goes directly toward working media, increasing impression win rates without the need to raise bid prices. We expect direct access will continue to attract incremental CTV spend to our platform, enabling Viant to maintain market leading CTV growth. Fundamentally, we believe the DSP that wins in CTV will win across all other open web digital channels. In our view, CTV will become the cornerstone of every advertiser's marketing strategy with other digital channels serving complementary roles. In fact, this reprioritization of CTV is currently underway. Advertisers are increasingly recognizing the fallacy of last touch attribution campaign strategies. where big tech takes credit for outcomes by showing the last ad before a purchase without truly providing any incremental value. Last touch attribution has trained advertisers to allocate spend to consumers that would have purchased their product anyway. This is not advertising. This is simply a tax. Smart advertisers are shifting gears, directing ad spend based on incremental lift where another dollar of ad spend drives new business growth through another incremental sale. And data shows, search and social and driving incremental lift. Chris will elaborate further in a few minutes. Moving to our leadership position in addressability, Viant's Household ID, our patented audience targeting and measurement solution, is experiencing unprecedented demand. Household ID boasts availability across roughly 80% of biddable ad inventory, significantly exceeding other identifiers. This quarter, ad spend linked to household ID surged 33% year over year as we continue to activate household ID matches with our premium direct access publishers, making them both biddable and addressable. We anticipate continued growth for household ID as an influx of data-driven advertisers prioritize the CTV channel. Direct-to-consumer e-commerce businesses, performance advertisers, and small to medium-sized businesses, all pivoting budgets to CTV, can leverage Household ID to target highly responsive audiences and track campaign effectiveness. Our contextual targeting and measurement solution, IRIS ID, is also gaining traction among both publishers and advertisers. With the addition of Paramount, Lionsgate Films, CNN, and TCL, among others, as newly minted IRIS-enabled publishers, the presence of IRIS ID across all available CTV bid requests has more than doubled since acquiring IRIS in November 2024. IRIS ID allows advertisers to target CTV ad inventory at the video level, enabling them to align their brand, product, or service with contextually relevant content. As recently reported by Upwave, an independent measurement platform, campaigns utilizing IRIS ID demonstrated a 5x lift in brand favorability, a 3x lift in ad recall, and a 2x lift in brand awareness and consideration when measured against CTB control groups. This performance has been a key driver in attracting new customers to Viant in the quarter. As IrisID continues to win adoption among publishers, advertisers gain the ability to deploy contextual campaigns at greater scale, which will lead to increased utilization over time. Finally, I will provide an update on our Vine AI product suite. As a reminder, two phases have rolled out, and we expect to complete the next two phases later this year. The four phases consist of AI bidding, AI planning, AI measurement and analysis, and AI decisioning. I'll very briefly touch on all four. Less than two years after launch, AI bidding now automates 85% of the ad spending on our platform, up from 80% in Q4 2024. With AI bidding, advertisers enable violence algorithms to find and buy optimal ad placements across the open web, aiming for the lowest cost while meeting their KPIs. With surging use, contribution extract generated from AI bidding is up 75% year over year. AI bidding is a major success, and we expect to see a similar adoption trajectory across our other AI products. In the third quarter of 2024, we launched AI planning, which enables advertisers to create enterprise-level ad campaigns in seconds. Early agency adopters are reaping the benefits of an improved workflow as their capacity for new business pitches has accelerated. Greater operational efficiency as employees are redeployed to more strategic initiatives and improved return on ad spend as Vine AI is now utilized to navigate the complexities of campaign construction to yield optimal results. Launching later this quarter, AI measurement and analysis is expected to revolutionize reporting with on-demand insights. Advertisers can simply ask via an AI for a specific data and receive answers in seconds, eliminating the need for lengthy reports. This streamlines productivity and empowers continuous campaign optimization. And finally, we expect to launch AI decisioning in the second half of 2025, enabling advertisers to grant Viant AI the autonomy to manage their media plans. Viant AI will actively adapt campaigns to market fluctuations, aiming for the best possible outcomes. And in contrast to big tech black box services, buying AI is fully transparent, providing advertisers with detailed insights into their campaign data, including publisher allocation, clearing prices, return on ad spend metrics, and so much more. To summarize, our business is growing quickly, fueled by our investment in secular growth channels and our distinct innovative offerings. Looking ahead, we expect CTV to emerge as the most effective digital channel, addressable campaigns to become widespread, and AI to usher in a new era of efficiency, further improving return on ad spend for our customers. Vyan is well positioned for long-term growth as these market dynamics evolve. Before turning it over to Chris, I want to briefly address the recent district court ruling, which affirmed Google is a monopolist in ad tech and marked a win for the ad tech industry at large. The DOJ is pursuing remedies that could include a divestiture of both the DoubleClick assets and Google AdEx, which collectively include Google's SSP and ad server. If these assets are spun off into an independent entity, it is reasonable to expect this new supply-side platform to seek out incremental demand through additional partnerships with third-party DSPs beyond Google's DB360. In time, this could present an opportunity to provide our clients with access to YouTube ad inventory through our buying platform. Additionally, the removal of DB360's exclusive access to YouTube may level the playing field among DSPs, which provides Viant an opportunity to attract ad spend from advertisers looking to consolidate on our platform. Truly, any regulatory action taken to limit Google's illegal market dominance will improve Viant's competitive positioning. And in our view, an open market for YouTube is the most beneficial outcome. With that, I'll now turn it over to Chris. Thanks, Tim.