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spk06: Good morning, and welcome to Outbrain Inc.' 's second quarter 2022 earnings conference call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Anthony Rasmus. Thank you, and over to you, sir.
spk03: Good morning, and thank you for joining us on today's conference call to discuss Outbrain's second quarter 2022 results. Joining me on the call today, we have Outbrains co-founder and co-CEO Yaron Goli, co-CEO David Kostman, and CFO Jason Kibiat. During this conference call, management will make forward-looking statements based on current expectations and assumptions. These statements are subject to risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. These risk factors are discussed in detail in our Form 10-K filed for the year ended December 31st, 2021, as updated in our Form 10-Q for the quarter ended March 31st, 2022, and in our subsequent reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the call's original date, and we do not undertake any duty to update such statements. Today's presentation also includes references to non-GAAP financial measures, You should refer to the information contained in the company's second quarter earnings release for definitional information and reconciliation of non-GAAP measures to the comparable GAAP financial measures. Our earnings release can be found on our IR website, investors.outbrain.com, under the news and events section. With that, let me turn the call over to David.
spk09: Hi, and good morning. We are pleased to report that despite continuing macroeconomic headwinds, We delivered on the guidance we provided for Q2 with extra gross profit of $59.3 million and adjusted EBITDA of $5.9 million. We also grew revenues by 2% or 6% on a constant currency basis. At a high level, on the one hand, we are gaining significant market share with media owners. We are growing our number of active advertisers and we are growing our number of engagements with users. So overall positive metrics. At the same time, the worsening macroeconomic environment and declines in the advertising market are negatively impacting our financial results. Therefore, operationally, we are focused on making the long-term investments that will position us to be stronger coming out of this downturn and also at the same time deepening our cost reduction efforts to drive efficiencies. Let's move to our business and start with the supply side. We have continued to win significant market share with new, large, month-to-year publisher deals. These wins greatly increase our supply footprint and set the company up for much faster growth when advertising demand recovers. In Q2, we launched our partnership with several new large publishers, which we have previously announced, such as Axel Springer, and we also launched a direct-to-device partnership with Xiaomi on the platform side. We renewed long-term deals with many publishers, including Meredith, Vox, Scripps, and others. We're expanding on existing publisher pages by leveraging our acquisitions to grow our footprint in one of our core expansion areas, high-quality, brand-safe video placement, and in programmatic channels, leveraging many years of experience with our video technology. We have implemented our quality rating with several large publishers and are getting positive feedback as to the impact on quality and RPM. Also, post-quarter, we extended our global momentum of premium publisher wins to the U.S., and in August, we signed a multi-year exclusive agreement and launched on a top U.S. publisher. By adding this publisher, we are now the exclusive content recommendation partner four of the top five editorial news publishers in the US by the way the fifth is using an in-house solution so if there is a must buy open web feed for advertisers in the US our brain it is we expect to announce additional major wins in the near term a few words about the short-term impact of this tremendous supply growth these are typically multi-year deals, and we model and analyze them looking at the totality of the potential length of the partnership. We are choosing to gain as much smart market share locked under long-term contracts. However, the initial rollout and getting to full optimization can take time, and combining this with softness on the advertiser side is negatively impacting our short-term results, as you will see from our guidance. On the technology and algo front, SmartLogic adoption on our core network continues to grow, comprising over 80% of mobile and over 50% of desktop partner integration. We are continuously improving the performance of SmartLogic and believe this is one of the key differentiators in our publisher wins and that this platform will continue to support our growth. Now let me turn to the demand side. We continue to see demand softness hit the industry and significantly drive down pricing. Compared to last year, we've seen high double-digit year-over-year declines in CPCs, also impacted by foreign exchange. But our advertiser base has expanded, our co-engagement metrics have grown year-over-year, delivering growth to our performance marketers, and we are seeing great progress in our direct business with enterprise brands, which grew by double digits in Q2. As we mentioned in previous calls, we are focused on expanding our brand business. Our quality focus is helping us land brand budgets and win premium publishers who are looking to improve their user experience and limit certain categories of performance advertisers. This type of brand budget, particularly in Europe, where brand and agency budgets account for more than 60% of our demand, are more impacted in the short term by the softness in the market. but we believe this is the right long-term direction for Outbrain as the premium quality player in the market. To further support this effort, we launched an initiative this quarter called Brand Studio, a dedicated team and resource hub designed to enable these major brands to quickly get up and running with successful campaigns on Outbrain's platform for maximum engagement and memorable interactions. Currently, we are working with a globally recognized food and beverage brand along with a premium auto brand for this new offering. According to our internal data, initial results for the premium auto brand show more than three times higher engagement than benchmarks for comparable formats in the auto category and 18% more dwell time across the publisher page compared to industry benchmarks. Let me sum up. We ended another quarter on target, and are building and investing in the future. That said, we remain very cautious about our ability to accurately predict the future macro impacts on the business. Conditions have deteriorated globally, but we are particularly impacted by our large presence in Europe and Japan, which account for over 40% of our revenues, and where results are further negatively impacted by exchange rates. Therefore, as you will hear from Jason, we are revising our outlook downward at this time, I'm personally disappointed to be in such a position, but these are difficult times in terms of the high level of uncertainty as to the outlook. Having gone through cycles, these times of uncertainty and challenges provide a real opportunity to recalibrate and make sure we act in a fiscally responsible manner. I believe that we will come to this period as a stronger and more disciplined organization. We've made adjustments to our cost base, responding to these environments, which Jason will elaborate on, and we continue to monitor the trend. We're focused on controlling the things we can control, and we're focused on making the long-term investments that will position us to be stronger coming out of this downturn. From a strategic perspective, the supply winds in H1 and our competitive position in major markets is a great testament to the strength of our technology, our monetization and engagement capabilities, and the quality of our trusted partnerships. While the current macroeconomic situation is challenging, we also see it as a driver of opportunity to lock up gains in supply that we expect will pay off for our shareholders when economic conditions stabilize and we see stronger demand. We believe that the secular trends driving our industry, such as the shift of marketing budgets to digital, the importance of more measurable results for advertisers, and the deprecation of third-party cookies provide our brain with tremendous opportunity. We believe that continuing to focus on our core business, our commitment to premium publishers, and expansion of quality brand and agency advertising is the right one for our shareholders. So despite the headwinds, we will remain focused on investing in our top growth areas. We have a strong balance sheet with over $150 million of net cash to support our growth strategy. We believe our long-term investment thesis is compelling and and we have great conviction in the opportunity in front of us. With that, I will turn it over to Yaron.
spk08: Thanks, David. Before I update about Keystone, I want to explain some of our frameworks for managing the two-sided marketplace that David mentioned. It's especially important to understand how our marketplace operates at times of macro demand uncertainties. We like to think of our two-sided marketplace using the bed and blanket metaphor. The bed symbolizes our supply partnerships, while the blanket symbolizes the advertising budgets we bring in to cover the bed. In quote-unquote normal times, the blanket and the bed are well-matched, resulting in strong yields for us and for our partners. We typically grow our bed in bigger, longer-term step changes by signing new partnerships. We then, over time, enlarge our blanket by adding more advertisers and, over time, expanding their budgets. The macro headwinds right now are making the blanket side harder than usual to predict. But we're still bullish on our ability to grow our advertiser blanket into the future when those headwinds cease. The indicator we look at internally is our ad coverage, which historically was at right about 100%. That is also currently the case. We cover our entire bed with blankets, albeit right now with softer pricing. That's a typical demand-supply imbalance. This indicator is at the core of how we're intentionally building our bed and blanket for growth. We view this period as a great opportunity to play offense on the bed building side by locking more long-term partnerships at an accelerated pace. You can see that in our growth of new business, which was at roughly 10% in the first and second quarters. These are higher than the roughly 7% growth of new business that we've seen for quite a few of the preceding quarters. To summarize the self-focus on our land and expand approach, we're confident in our ability to expand our partnerships over time as macro conditions stabilize and advertising demand rebounds. We gained that confidence by the fact that we're at roughly 100% ad coverage, albeit at softer pricing rates right now. And therefore, we're using this macro environment to focus on accelerating the land part. This approach is somewhat contrarian. It would probably be easier to slow down the growth of new supply and make the blanket feel thicker or yield higher. But we believe that leveraging periods like this as opportunities will serve out-brand shareholders well in the long term. This enhanced investment in our publisher side is a good segue to our next topic. I'm excited to update you on our progress with Keystone, which you may recall we introduced on our last earnings call. As a reminder, Keystone is a platform for maximizing media owners' overall diverse business outcomes while optimizing the user journey and experience. Keystone introduces a new business model for Outbrain and will be delivered as a software-as-a-service solution. We will be formally launching the product later this quarter. We initially rolled it out with two early design partners, including a very large US news publisher, The technology puts Outbrain higher up on a publisher's value chain, expanding it way beyond the advertising layer. I'm now excited to update that we've doubled to four design partners, including our first one in Europe, a premium financial publisher. We're continuing to work with these early design partners to develop it into the best user journey optimization platform for media owners. Keystone is an investment in extending the strategic value we bring to the media owners we work with. Now, as many of them seek to diversify with new sources of revenue, such as subscriptions and e-commerce, our keystone technology will be well-positioned to perform the same best-in-class optimization as it has been doing for editorial content and ads for many years. And with that, I'll hand it over to Jason Kiviat, our CFO, to discuss the financials this quarter.
spk05: Thanks, Jeroen. As David mentioned, we achieved our Q2 guidance for both ex-tech growth profit and adjusted EBITDA, despite seeing further deterioration of demand beyond the levels we shared on our last call in May. Revenue increased 2% year-over-year to approximately $251 million and increased 6% on a constant currency basis. This growth was the result of growing our supply, as well as improvements to our technology that drive engagement, being largely offset by the material demand headwinds seen across our industry. Adding new media partners in the quarter contributed 10 percentage points of revenue growth year over year, and our net revenue retention was 91%, reflecting the impact of the demand environment reducing monetization levels on our platform. The 91% net revenue retention rate for Q2 reflected a few opposing factors. First, and consistent with what David shared, it reflects healthy growth of our supply or ad impressions that was more than offset by reduction in yields on our platform. Yields on the platform were driven down by overall pricing pressure from the lower advertising demand. While revenue increased, XTAC gross profit decreased 11% year-over-year to approximately $59 million and decreased 8% year-over-year on a constant currency basis, driven by a few factors. One was unfavorable mix of revenue. As we said in the past, we typically see our margin fluctuate by one to two percentage points up or down due to mix. lower yields year over year, and lower performance on certain media partners driven in part by the lower yields. In addition, the onboarding of certain new supply is typically an investment period, but we have seen it in the past. The soft demand environment, particularly in Europe, where we added meaningful supply, has put more pressure on both the new deals and existing relationships during the period. We expect to grow out of this headwind in the coming quarters. Moving to expenses. Other costs of revenue increased approximately $3 million year over year. driven by our investment to increase serving capacity to facilitate yield growth through our algorithmic and optimization improvement efforts. Operating expenses increased approximately 10 million year-over-year. Approximately 7 million was from higher personnel-related costs, reflecting increased headcount year-over-year, including from our VI acquisition in January. As noted in the prior quarter, we also have higher costs associated with being public and are seeing higher marketing, T&E, and facility expenses as activity impacted by COVID comes back to more normal operation. As mentioned last quarter, we were implementing a series of cost reduction efforts to adjust to current business headwinds. We've since increased our efforts in recent months, and management expects the benefit of these actions to reduce costs by an additional estimated $12 million in the second half of 2022, as compared with our prior guidance issued in May. More than half of these savings are personnel related, with an emphasis on process improvement and efficiencies. In total, we took our annual cash costs down by more than 18% versus our original 2022 plan. Adjusted EBITDA was $5.9 million in Q2. On a constant currency basis, adjusted EBITDA was $5.2 million. Next, moving to liquidity. Free cash flow, which we define as cash provided from operating activities, less capex and capitalized software costs, with a net use of cash in the period of approximately $9 million. The use of cash was due to lower profitability and timing of server purchases. For the full year 2022, we expect a total of $17 million to $20 million of capital expenditures. We ended the quarter with $391 million of cash and cash equivalents on the balance sheet and $236 million of long-term convertible debt. Lastly, we announced previously that on February 28th, our board authorized a $30 million share repurchase program. Through July 31st, we have repurchased approximately 2.3 million shares for a total of $12.6 million, including commission, with remaining availability under the program of 17.5 million. Now turning to our outlook. As David discussed, we have seen a volatile H1 of 2022 that started off generally on target for our growth plan before seeing increasing demand headwinds over the course of the year. The patterns we've seen this year and continue to see into Q3 produce continued uncertainty for H2. As we look forward, we expect Q3 to be a low point in view of the ramp up of our new publisher deals and seasonality, particularly in Europe, combined with the overall advertising softness. In our guidance, we assume moderate sequential growth in Q4. With that context, we have provided the following guidance. For Q3, we expect expect gross profit of $48 million to $52 million. and we expect adjusted EBITDA of breakeven to negative $4 million. For full year 2022, we expect expected gross profit and adjusted EBITDA of at least $228 million and $18 million, respectively. This guidance assumes no further material changes in macro conditions. Now, I'll turn it back to the operator for Q&A.
spk07: Thank you, Sal.
spk06: Ladies and gentlemen, at this stage, we will be conducting a question and answer session. If you would like to ask a question, please press star and one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and then two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Again, if you would like to ask a question, please press star and then one.
spk07: The first question we have is from Ross. The first question we have is from Ross Sandler from Barclay. Hey, guys. Can you hear me? Yes.
spk02: Hey, Ross. Hey, guys. Okay. Just making sure. David, so I noticed your service is up on Fox's website. So is that one of the new large publisher wins in the U.S. that you're talking about? If so, what kind of minimum guarantee did you guys do on that one? Or is this a standard rev share agreement? And then second one, I guess, for David or Jason, the 3Q guide assumes about a 20 percent decline XFX. Not surprising given what we've seen kind of broadly in the digital ad landscape. But any additional color on the linearity, what you're seeing right now, and which categories or geographies are dropping off the most on a constant FX basis. Thanks a lot.
spk09: Hey, Russ. I'll take the first one. So, yeah, we mentioned we want a big one. I mean, if you see us on Fox, we are on Fox, F-O-X. We actually mentioned on the call we've been using Vox, so that's my accent. It's V-O-X. But the New big deal is Fox. So that puts us, as I mentioned, being the partner for four of the top five. So we have CNN, Fox, Washington Post, New York Post. So no political affiliation. So we're very happy. We're happy with that position. We don't go into specifics of deal, but I would say that the Fox deal is not part of our guarantee portfolio. They've worked with different competitors. It's a long-term deal. where we aligned interest with the publisher. So very excited about that one. And second question to Jason.
spk05: Sure. Can you hear me? Yeah. Okay, great. Yeah, so, you know, on Q3, we've seen demand deteriorate over the course of this year, even down further from when we gave our guidance in early May a few months ago. And we see that Q3, you know, we expect it to be the low point of the year. Part of that is because, as you know, we're pretty heavy in Europe. It's about 40% of our business is there. And Q3 is generally just a low seasonal point for us, especially in Europe anyway. One more point on Europe. We tend to see higher brand and agency business there. About 60% or more of our business is brand and agency. And those segments have been, particularly agencies, have been pulling back spend faster than others. advertisers as we've seen we do expect you know q4 to to recover a bit you know we're we're cautiously optimistic on seasonality and spend patterns but you know between elections and the world cup and the holiday season you know we do expect some seasonal uplift there as well as a ramp up on the optimization of some of this new supply and degrading onto our platforms that includes as you as you pointed out fox and an axle springer between us last quarter as well as the benefits from the cost saving actions taken that we mentioned on the call.
spk07: Thank you. The next question we have is from Andrew Boone from JMP Securities.
spk01: Hi, guys. Good morning. Thanks for taking my questions. To start off, Can we talk about kind of going back to the bed and the blanket analogy? How long does it take you guys to pull the blanket a little bit wider and recover some of that demand more broadly? As you guys have seen it in the past, when you guys add a major publisher, how do we think about the timing of when you guys can start to pull it back in a more normalized environment, understood, you know, macro is an issue today. And then secondly, going back to kind of one of Ross's questions, can you talk about any industries that may have been weaker Were there any advertisers that may have been pulled back? For context here, I think some people are worried that crypto and gambling kind of pulled back. Do you guys have any exposure there, or is there anything you want to highlight?
spk07: Thanks so much. Maybe, Ron, you want to take the first? I'll take the second.
spk08: Sure. Thanks, Tony. So in terms of the bed and blanket, as I said, a bed is a step change kind of thing. So we add new partners, like the ones we just discussed, and that is a big step change in the size of the bed. Covering the blanket takes more time. These are individual decisions by an advertiser. They need to set up their campaign, see their return on expense, and expand their budgets over time. Again, as I said, in the normal time, that length of time is pretty predictable. We know how to ramp up as we make the step changes in the bed size. We know how to ramp up the budgets, and we know how long that's going to take. In this macro environment, it's taking longer than usual. It's still happening. Again, as I said, we're seeing 100% ad coverage in our beds, so that's what's giving us comfort in adding more We're seeing the advertisers that are seeing positive return on expense, performance marketers that keep spending. So, again, we covered the entire breadth, but it's a kind of inner blanket. That is going to take longer. It's hard. It's really hard to predict with all the things happening in the macro environment exactly how long it's going to happen. But given that we're still seeing 100% coverage, we have good comfort in that, and that's why we're playing offense on adding more. adding more distribution or supply partnerships, like the ones we mentioned, coming off its own building.
spk09: Maybe Andrew Hyatt, David, I'll add to that. I mean, we're very confident in the deals. I mean, they take some time because of the weakness. They may take a little bit more time. These are multi-year deals, three to six-year deals, some of them. So we know how to model them. We've done it in the past. And it is part of our overall strategy. I mean, we are... know trying to get as much of exclusive access to sort of a feed inventory at attractive terms you know we then leverage that feed presence into other parts to sort of expand sort of on our strategy of full full page monetization and we leverage the feed the feed data that we have the presence there plus our beta technology in order to be sort of a a bigger partner for for the publishers on other placements made article and top of articles, so the feed is critical also, and the bidding technology for that. And on the demand side, we're very focused on brands and higher premiums, so VI acquisition is part of that, so that helps us on those placements on the mid-article to monetize them in a much better way. The growth we see on brands and agencies, which I'll touch upon in a second, the weakness too, but in terms of the strategy, the strategy is really being able to offer to those brands and agencies the full page, the feed, the in-article, video, and we invested in Brand Studio, which I mentioned. So that's just overall the strategy and getting into these deals and securing exclusive access so that inventory is part of it. And we're very confident in the model. In terms of the demand impact, we're seeing more negative impact generally on brands. I mentioned our presence in Europe. Japan is It's very large. It's almost half of the company. It's in sort of mid forties percent. So we see clearly weakness, weakness there. So more weakness in Europe, more weakness generally on, on brand than performance. And in specific verticals, I mean, we, we, you know, pretty diversified by automotive, which is a significant one relatively for us. We still at a hundred percent fill rate, but we see declines in automotive. We saw some declines in tech. We don't have any particular exposure to crypt at all and to gambling at all, so there's no exposure there.
spk07: Thank you. Thank you.
spk06: Ladies and gentlemen, just a reminder, if you would like to ask a question, please press star and then one, no. The next question we have is from Shweta Kajuria from
spk00: Okay, thank you. Possible to get a sense of incremental revenue opportunity from Keystone? So you now have four partners. I know maybe this year may be too aggressive to have an expectation from that product coming in or being meaningful, but how should we think about that? And has anything changed with your go-to-market strategy for that product as you try and scale that. Thank you.
spk08: Thanks, Switzerland. I'll take that. So we not only have not shared any financial projections on this, we even haven't launched the product yet. So we're launching it later in this quarter. New products like this take time to build out, and this is a long-term investment on our side. The what's setting to me is the keystone is it expands our TAM with In some few ways so one way is It lets us play outside of the feed to helping with cultures that are looking to diversify their new sources Beyond or above the ads for the e-commerce and subscriptions. So this is going to play a not necessarily within the AppReview, but on any other pixel that the publisher owns and chooses to use pieces of them. So that's one significant increase in TAM. And obviously embedded in that is playing in those revenue spaces that are additional to the advertising and subscription, e-commerce, newsletters, all those areas where publishers are looking to diversify. The other way this expands our TAM is it does let us play with media owners and publishers that are not necessarily using AppRain from the feed itself. So one example of the design partners was using someone else for the feed and using AppRain for Keystone. So that's an additional expansion of TAMP for us. The importance of Keystone for us is really with better aligning with how the future of publishing in general is going to look. And I think we're hearing this from many different directions where advertising is obviously one of the most important, not the most important revenue source for most publishers, but they're all looking at registration, subscription, especially with everything that's happening with the future of cookies. They're looking at e-cars or, uh, retail media, and so this really gives us a footstep in all of those areas.
spk07: Okay, thank you.
spk09: Shredda, I would add just one point on that. I mean, the whole sort of case on strategy also is super helpful in our sort of core feed business. I mean, every discussion we have, with the top-level people and publishers. I mean, this comes up, and part of their bet on us is sort of bet on when companies choose long-term partners, it's looking at technology, technology roadmap, and vision. And this part is very important of being on page and being more entrenched with those publishers, create a stronger relationship, more data. So there's a lot to it, and sort of increases the time, but also really strengthens the core positions.
spk00: Okay, thanks David, thanks Yaron.
spk06: Thank you. Ladies and gentlemen, just a final reminder, if you would like to ask a question, please press star and then one no. The last question we have is from Laura Martin from Needham.
spk04: Hi there, so maybe a couple. The first one is on guarantees. So can you remind us how the guarantees work because it seems to me lowering your yield is bad. Your take rate went up by 300 basis points. So I don't exactly understand why we're taking softer demand and allowing your yield to fall when basically you're just paying out a higher rep share to everyone by doing that. So can you explain? And what percent of your tax was guaranteed in the quarter?
spk09: Hey, Laura. Thanks for your question. It's David. So guarantees account for about 20% of the overall portfolio. Some of these are complicated, so you have different step-ups, you have different raptures that come into play when you exceed certain levels, so it's really difficult to pinpoint a very specific number, but they account for 20%. When demand is soft and sort of RPMs and higher, are coming down because primarily of CPC. I mean, it does potentially negatively impact those deals. But again, there are 20%. It's sort of our natural course of business to enter some of them. I mentioned one last year, which is actually a red shirt. So it's a different type of arrangement.
spk04: Okay. So stay on the strategy point then. Why would you ever add supply, which low, because you have soft demand, which lowers your average yield, which then steps up by 300 basis points your payout rate, which just hurts you, actually.
spk09: Okay. So, you know, yes, we report on a quarterly basis, but we have a long-term vision and strategy. So these deals, I mean, always, even when the demand environment was stronger, they take time to ramp up. I mean, to optimize a site, to deploy there and create those optimization takes weeks and months potentially. So it's just part of the model. And we believe very much in the long term. So once we have that feed, I mean, these deals, we don't go into deals, you know, to lose money. So we do make money on the deals. And we look at the models and sort of three, four, five, six year basis. So I think we see now great opportunity. We are very committed to growing our leadership. I mean, if I look at most of the big markets today in the U.S., I mentioned the four to five. I think in Germany, we're in a very strong position. Japan, we're in a very strong position. France, Spain, so major markets where we really have that. I mean, that creates a great anchor. great interest for advertisers who want to have the access to exclusive open web inventory that helps us to move up the chain into mid-article, video, out-stream and in-stream video and other placements that makes the whole package much more attractive for brand and agency advertisers. So that's the strategy and we believe it's correct and in the short term it's primarily the softness you see is primarily driven again by our mix. 40 plus percent Europe and Japan is not great these days in terms of mix. It also has an FX impact. By the way, our brand and agency business is about 45% overall as a company, but in Europe, it's about 60%. So these are budgets that are more impacted currently. We're still very focused on the strategy and believe this is sort of the right way to build shareholder value long-term. I think focusing on quality, premium demand, all-page monetization for publishers, stronger mode and relationship with Keystone. I mean, that's our approach. We're very focused on the core, and we're not sort of pivoting to other areas.
spk04: Okay, great. Could you talk about channel shifts? I'm interested in, as we think about video, which is sort of all the rage here on Wall Street, can you talk about what's happening with your video mix as part of your total revenue mix here?
spk09: So video generally is pretty stable, anywhere around sort of high single digits, low double digits, like around the 10% plus minus. We are currently, I mean, we don't have a real strong presence on CTV. We are working on that. I mean, the acquisition, the integration is going well. We integrated into the core. We see good traction with publishers. And, you know, looking into the future strategically, we want to play there. I think part of when you look at the whole universe and you take the macro view, the companies that are enjoying still better growth rates right now are the ones that are enjoying shifts of budgets from linear TV to CTV. So it's not that the advertising market is slower. But this shift of budgets to CTV, we are not enjoying that today. I'm hoping the coming years will have, you know, a stronger strategy there.
spk04: And then my last one's for Yvonne. When do you think of congratulations on the four partners on Keystone? It feels like your evil plan is working. What is your point of view about when we can start to see material revenue from Keystone?
spk08: Thanks, all right. So, as I mentioned with this question, we have not formally launched the product yet. These are our design partners we're working closely with. We are generating revenue from them, but really in terms of meaningful revenue. But launch it first, Kevin, in front of the customers and see how it goes. Also, maybe I'll answer both of your questions. I think I missed it with Shweta's question. We've seen that we've taken a mix in these four customers of both GA graphically and size of partners, and we're seeing that the – where we think the basic impact is probably going to be is with the larger publishers, and so that's definitely going to be some of our focus going forward. We think those are – have a lot of opportunity of, again, diverse revenue sources and, you and significant audiences to optimize for. So that's where we're going to focus in the future. But it's a personalized product, and I think in the future quarters, we'll be updating about this.
spk04: So the answer to my question is like 24? It sounds like you're pushing it off to the future. So 2024 is the answer to my question? That's when we're going to have material revenue?
spk08: Again, we're... We'll be giving guidance on case ideas of business quarter to quarter as we do, and that's going to be obviously embedded in there in terms of being able, again, we first need to get this in real customers' hands and launch it and see how it goes from there. These are long-term investments.
spk09: I wanted to add to your previous question, Laura, on the margin. So we're very focused on the X stock dollars. Obviously, that's also impacted now. But what we're doing right now will position us extremely well when demand rebounds. And you're going to see then, hopefully, I mean, we expect and believe that we'll yield back to sort of accelerated growth. And we're very confident in those investments we're making right now for the future.
spk07: Thank you.
spk06: Thank you. Ladies and gentlemen, we have reached the end of our question and answer session, and I would like to turn the call back to David Kostman for closing remarks.
spk07: Thank you. Thank you all for joining. We look forward to seeing you on our next call. Thank you. Thank you. Ladies and gentlemen, that concludes today's conference. Thank you for joining us. You may now disconnect your lines.
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