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spk06: Good morning, ladies and gentlemen, and welcome to the Trade Desk Third Quarter 2021 Earnings Conference Call. At this time, all participants have been placed on the listen-only mode, and the floor will be opened for questions and comments after the presentation. If you have a question or comment, please press star 1 to join the queue. To withdraw, press star 2. It is now my pleasure to turn the floor over to your host, Chris Toth. Sir, the floor is yours.
spk14: Thank you, Operator. Hello and good afternoon to everyone. Welcome to the Trade Desk third quarter 2021 earnings conference call. On the call today are founder and CEO Jeff Green and Chief Financial Officer Blake Grayson. A copy of our earnings press release can be found on our website at thetradedesk.com in the investor relations section. Before we begin, I would like to remind you that except for historical information, some of the discussion and our responses in Q&A may contain forward-looking statements. which are dependent upon certain risks and uncertainties. In particular, our expectations around the impact of the COVID-19 pandemic on our business and results of our operations, in addition to potential supply chain disruptions that could disrupt advertising spend, are all subject to change. Should any of these risks materialize or should our assumptions prove to be incorrect, actual financial results could differ materially from our projections or those implied by these forward-looking statements. I encourage you to refer to the risk factors referenced in our press release and included in our most recent SEC filing. In addition to reporting our GAAP financial results, we present supplemental non-GAAP financial data. A reconciliation of the GAAP to non-GAAP measures can be found in our earnings press release. We believe that providing non-GAAP measures combined with our GAAP results provides a more meaningful representation of the company's operational performance. I will now turn the call over to founder and CEO, Jeff Green. Jeff?
spk15: Thanks, Chris, and thank you all for joining us today. I'm here in Europe this week meeting with some of our colleagues, customers, and partners, and I'm thrilled to be joining you from our recently reopened London office. For Q3, I'm pleased to report that the Trade Desk had another very strong quarter. Revenue was $301 million, a 39% increase from a year ago, once again exceeding our own expectations. Excluding political spend related to the U.S. elections in Q3 of last year, our growth was about 47% from a year ago. This performance builds on our momentum year to date. I'd like to start by sharing five major highlights from this last quarter. First, video, which excludes connected TV, accounted for nearly 40% of our business, our highest ratio ever. And our CCTV growth is not just here in the U.S., Like last quarter, CTV spend grew more rapidly in EMEA than any region in the world. Second, in Q3, our international growth once again outpaced the domestic growth, a trend that we expect to continue over the long term. International expansion also continued at a strong pace. Third, the Walmart VFC recently launched, which is, of course, built on top of the Trade Desk platform. It is early days, but we are starting to see test budgets from some of the largest brands in the world flow through the platform. And perhaps most exciting, these budgets are incremental. Fourth, Unified ID continued its strong industry-wide momentum and is reaching critical scale in the market. And fifth, Our mobile business continues to be resilient. As we predicted, the most recent iOS changes have had no material impact on our business, and we expect that to remain the case. With that, I'd like to give you our perspective on the state of the market and then get into a few ways in which we're innovating to drive growth in this market. I get asked every day about where this market is heading. Because the pandemic has changed everything. Because it has massively adjusted the media and tech landscape. It has accelerated the shift to CTV. It forced brand marketers to embrace data and has driven a higher focus on real-time agility for everyone in our industry. I think this is an important backdrop to why we're doing so well and why our prospects are so bright for the future and why I'm so optimistic about the future of the open Internet. Just as a reminder, according to IDC, the total advertising market today is estimated to be at about $750 billion. In just a few years, it is estimated to exceed $1 trillion. And over time, I believe that nearly all advertising will be digital and nearly all of it will be executed programmatically. As that shift happens, accelerated by the pandemic, our commitment to the open Internet only intensifies. Everything we do in terms of our investments, our engineering priorities, our partnerships, and our go-to-market model are designed to create a better Internet. And we want an Internet that is open, privacy safe, and competitive, not one that's just owned by a few companies. And as we work to advance the open Internet, we have a level of support from ad agencies, advertisers, industry bodies, TV content owners, and independent ad tech that is unprecedented. We never thought that our vision would be shared by so many companies outside of our own company. More than ever, companies and marketers are concerned about the Internet being fair and competitive. and many of them are looking to us to help the Internet reach its potential. It's also in that context that many people in recent weeks have asked about our response to the unredacted version of the antitrust complaint against Google filed by a multi-state coalition led by the Texas Attorney General. Of course, the majority of the complaint alleges, among other things, that Google has engaged in unfair and anti-competitive conduct using its market power built on top of DFP, which is Google's ad-serving product for publishers, I expect that Google will take steps to make the market fairer, given the scrutiny that they are under. While that would be a positive development for the industry, as well as good for the trade desk, I want to remind everyone that we have been, we are, and we expect to continue to do very well, regardless of Google's policy choice. A very small percentage of our business runs through Google's ad exchange, and we are not dependent on Google for our business. The bottom line for us is that the market will always ultimately gravitate to transparency and competition over time. And we will continue to innovate to drive the industry in that direction and to deliver more value to our advertising customers. And if we get that right, and I believe we are, as you can see in our performance, we will grab more share of ad spend. To that end, I'm obsessed with the supply chain. The healthier the supply chain, the more competitive and transparent the open Internet will be, certainly in contrast to Walt's Gardens. Of course, we only serve the buy side, and that will never change, but serving the buy side demands that we do our part, working with the industry, to make sure the supply chain is as efficient as possible so that everyone in the ecosystem provides more value than they extract. And we are innovating in the supply chain in ways that are not always obvious. In the last few months, for example, we've been working with the supply side to further reduce the duplication of ad inventory. Because publishers use multiple supply side platforms or SSPs, we often have access to the same inventory from multiple sources. We've asked those SSPs to put in place a solution that identifies duplicative inventory so that we ensure bidding on the right impression at the right time all the time. There's been overwhelming support and adoption for this approach as it increases the overall efficiency of the supply chain. In the same vein, I also want to address the future of identity for the open internet. UID is setting new benchmarks every week and every month. The growth is phenomenal. As I've said before, I've never seen the industry come together like this around a common agenda, collaborating on new technology that benefits all participants. The daily avails on our platform with UID reached an all-time high just last week, having broken records dozens of times through August, September, and October. The scale we have been able to build in a relatively short amount of time has been outstanding, and it's thanks to unprecedented industry-wide commitment and collaboration. Everyone in the open Internet is aware that Google has announced that they intend to get rid of third-party cookies in 2023. I maintain that this is a strategic mistake for Google to do that, but their policy changes have created collaboration among the open Internet that probably wouldn't have happened otherwise. When fully implemented, we believe UID creates a better Internet for consumers with higher standards for consumer privacy than anything possible with cookies. And the momentum and adoption of UID2 underscores that. Even some of the walled gardens are passing an encrypted version of UID2 in their marketplaces and ecosystems. But one amazing new milestone is that many of the largest advertisers on our platform are now transacting on UID2 or are in the process of implementing it. As you'd imagine, some of these are among the biggest advertisers in the world, and nearly all of the major ad agencies and holding companies like Omnicom, Publicis, IPG, and even independent agencies like Horizon have also adopted UID2. And the case studies are just starting to roll in. Because a common currency makes it easier for a brand to use first party data than cookies ever could, they are using that data more often and more safely. One early case study is with Made In. Made In is one of the fastest growing cookware companies in the US. They're using UID2, the new industry identity currency, in their campaigns and seen amazing results. They have seen a 20% improvement in cost per acquisition. Not just that, but they're seeing their time to convert per user improved by 33% compared to when they don't use UID2. That means they're driving campaign precision and putting their advertising dollars to work as hard as possible. As a reminder, UID, too, started with us, but it belongs to the Internet today. It is open source and being used around the world and across many functions of the Internet, from payment companies to cloud companies to beverage companies to agencies to exchanges. UID is making the open Internet more effective. Meanwhile, CTV is expanding the open Internet in new ways. Since March of 2020, everything has changed about TV. The move to CTV over that time has been the fastest secular shift we've seen at the trade desk ever. Before the pandemic, CTV was getting premium CPMs because of scarcity of AVOD inventory. Now AVOD inventory is growing rapidly and premiums require improvements in efficacy. That means advertisers need an objective platform more than ever, a platform that does not own content or its own content channels. a platform that helps advertisers decide what to buy objectively while managing reach and frequency. And that's a major reason so much CCV demand is gravitating to the trade desk. Lastly, concerning the state of global advertising market today, roughly two-thirds of the total advertising market is outside of North America. That's why we invest so heavily in key growth markets globally. In recent months, We've established a presence in markets like India, Italy, and the Nordics, and Taiwan. And we're making very encouraging strides in every region where we are located. To wrap up our perspective on the state of the market, I'd like to circle back to where this all started for us. I believe digital advertising is still a relatively young industry. I got into this business initially because I thought there was a better way to price advertising, that we could build something like the stock market or the markets for commodities, where there is transparency of information and mechanisms that drive efficiency. Because these are the kinds of characteristics that any market demands, that any mature market creates over time. This approach remains central to our mission at the Trade Desk. We believe that an open competitive market for digital advertising is the only way that we build long-term trust of marketers. It's how we unlock that $1 trillion industry TAM, the bulk of which will be digital. But now given all the opportunities created for us in this fast-changing landscape, I'd like to talk about a few things that are driving us to win more share during this unique moment in time. On 7.7, we launched the biggest upgrade to our system ever. In terms of adoption, we're exactly where we expected to be. By the beginning of 2022, the majority of impressions on our platform will be bought via Solomar. Feedback from our customers has been very positive. They value the platform's ease of use, the ability to be more granular in setting goals, and how Solomar activates on those goals. Everything from campaign optimization to more meaningful measurement. Just as important, the use of both precise goal setting and activation for first-party data has increased the ability of our AI to better optimize every campaign with data. Our goal is for advertisers who activate Solomar to utilize more data per impression and achieve measurable improvement in return on ad spend. In doing so, that helps the advertising flywheel spin much faster. We're also getting very positive feedback from industry analysts. Gartner just released their Ad Tech Magic Quadrant for 2021. The Trade Desk continues to be a market leader, scoring highest for completeness of vision. Perhaps more interesting though, Gartner measures all participants across four critical capabilities. The Trade Desk ranks number one for three of those, media planning, campaign piloting, and campaign results analysis. Each of these are key elements of Solimar. When you consider that we're going up against some of the tech industry's heaviest hitters, such as Google and Amazon, it's pretty remarkable to be leading the pack in these categories. And that's credit to our amazing engineering and product teams and the work that they put into Solimar. It also speaks to the focus we have on customer service. We're always looking to provide more value than we extract. But I think what's perhaps less well understood is the role that Solomar is playing in driving innovation for our customers and for the industry. Solomar is allowing us to advance ideas and efficiencies that are benefiting the entire digital advertising ecosystem. One of those areas is our measurement marketplace. Instead of only using our metrics, we've created an entire marketplace to measure success. Having this marketplace makes end-to-end measurement possible at unprecedented scale. And nowhere is this more apparent than in retail. You all know about the partnership with Walmart which is now available to many of the world's largest advertisers. Major brands such as PepsiCo are already active testing campaigns in the Walmart DSP. Walmart is clearly a pioneer here. What they are doing is unleashing their shopper data so that advertisers can understand the relationship between their advertising tactics and actual in-store or e-commerce activity. We think about this as closing the loop. For many of our largest CPG advertisers, for example, the bulk of their products are still sold in physical stores. If they run an ad for toothpaste, they can now get a much better sense of how that ad actually drove sales, thanks to in-store shopper data. This means that advertisers can be much more precise and agile in everything they do at every stage of the advertising funnel. Advertisers can understand the impact of their campaigns at a micro level, in a particular region, a specific store, or at different times of day. They can also look at their impact across different channels, which ones are working and what kind of creative. But it's not just Walmart. We are now working with many of the major retailers in the United States and many more around the world. They will each approach it in their own way, but major retailers everywhere are looking to make the most of their own shopper data. so that they can provide the same kind of closed-loop measurement via our platform to the buy side. And they are joining forces with us because they trust us. They know we don't compete with them, and they know they will retain control of their data. Similar to when an operating system is upgraded, there were many upgrades to key features on Solimar. One of those features is called predictive clearing. What this means is that we use our data tools and our AI to predict the clearing price of first price options. Advertisers can then bid as close to the winning price as possible without overpaying. With SolarMars' upgraded predictive clearing, we've massively upgraded the product to use AI to help our customers save collectively tens of millions of dollars. That's because this upgrade allows us to be much more aggressive in bidding and budget management. significantly lowering CPMs and increasing an advertiser's return on ad spend. We are seeing predictive clearing improvements resulting in the reduction of CPMs across the board of customers that have activated this feature, thanks to the Solomar upgrade. These kinds of efficiencies are important to all of our customers, but they are particularly attractive to the brand marketers who are increasingly paying attention to programmatic and to efficacy. One long-term effect of the COVID pandemic is that there is more pressure than ever on brand marketers to show ROI for their marketing investments and to show how their campaigns are driving business growth. As a result, brand marketers are putting a premium on data and measurability. And Solomar is proving to be tremendously beneficial here. One area where we are making a great deal of progress is new ways of thinking about the marketplace for data and how Solomar ensures we surface the right data at the right price. Of course, our customers have always used data to drive their campaigns, but the market for that data has not always been efficient. Advertisers would have a sense of what kind of data they want to apply, say ad group or geolocation, and they would go find the data for the campaigns in a fairly analog way. With Solimar, the process of finding the right data for each impression is way more automated. Because of more first-party data usage and more precise goal setting in Solimar, our AI tools automatically find the right data for each impression that our platform is bidding on. What that also means, though, is that Solimar may surface many more points of data that are relevant and valuable to a campaign and its goals. If an advertiser has been using two or three data points yesterday on Solomar, they will be using more. As a result of more data, the ad impression is much more enriched. It's more valuable and precise and drives better return on ad spend. The last area I'd like to touch on is our continued growth in CTV. I spoke at an event a few weeks ago called Media in Montauk. Because of COVID, it was actually held in the tent in Manhattan. and a few of you may have actually been there. The event brought together many of the leaders of the media industry, and there were some fascinating discussions around the future of TV. I noted that when I commented, as I have before, that linear or cable TV is a ticking time bomb, and soon everyone will consume content via CTV, there was much more agreement than in years past. The notion that TV is moving to the Internet is not nearly as controversial as it was two years ago. What's clearly not lost on the industry is that COVID has accelerated the consumer shift to digital streaming platforms. I think perhaps what may be a little less appreciated is the scale, the speed, and the permanence of that shift. It's happening fast. In terms of scale, we've already reached the tipping point. Today, we reach more U.S. households via CCTV than via traditional linear TV. But the point about speed was really driven home at the Adweek conference a couple weeks ago. Our Chief Revenue Officer, Tim Sims, was on stage with brand leaders at Anheuser-Busch, Volkswagen, and Colgate-Palmolive. And unprompted, Those advertisers said they believe that the majority of TV advertising will be executed programmatically on CTV within three years. It was a fascinating insight into the future of TV that's worth a lot of replay if you want to understand where this industry is headed. Pre-pandemic, we had a much longer sense of the time horizon for that kind of transformation. But changing consumer habits have accelerated everything so that we have access to the best and broadest portfolio of premium CTV inventory, both here and around the world. Nowhere is that more apparent than in live sports. For a long time, many TV industry insiders felt that live sports would be the tent pole that would prop up linear TV. But once again, consumers have voted and they are switching to digital platforms to watch their favorite teams. We added the NBA League Pass package from Turner Sports to our CTV inventory list this season. Viewership on this platform increased around 50% last season, and their head of digital strategy, Seth Litesky, believes that digital viewers are much more leaned in. To quote him directly, the digital audience we see tends to be stickier because they're really seeking out the content specifically. There's deeper engagement versus someone sitting back on the couch and watching it. eMarketer estimates that there are almost 60 million digital sports viewers in the U.S. right now, rising to more than 90 million over the next three years. The notion that live sports will save linear TV is fanciful, which is why so many broadcasters are pivoting rapidly. The number of impressions we see for the NFL, for example, is up almost sixfold this year. We're also very excited that we recently added Peacock, which in addition to amazing original content, also boasts premium live sports franchises such as the NFL, the English Premier League, and of course, the Olympics. As you can see from our results, demand for CCTV continues to outpace all other channels, both inside and outside North America. I don't see that trend changing for the foreseeable future. Video is the most effective way to reach consumers' hearts and minds, and advertisers are following the TV audience to new digital platforms. At the same time, content providers are working with us directly so that we have access to premium CTV inventory at scale. I'd like to wrap this up by bringing this back to the market opportunity. The total advertising industry is moving rapidly towards that $1 trillion. The bulk of that will be digital, and marketers are embracing data-driven decisioning more aggressively than ever. Our long-term investments have positioned the company to capture this opportunity in the years ahead. Solomar is an innovation platform that is creating new value for advertisers because of how it unleashes data and drives greater return on ad spend. UID2 is becoming a more widely used identity currency across the entire global open internet. And we continue to invest so that we can lead NCTV the fastest growing channel in digital advertising. Consumers are driving advertisers and TV content providers to rethink the future of TV and that's going to be data driven. These are our priorities because this is how we see the industry evolving. I hear the same things in every customer conversation I have regardless of industry or geography. And that's why more of the world's leading advertisers are standardizing on our platform and our retention rate remains over 95%. It's why the major holding companies are embracing UID2. It's why Walmart is partnering with us as they unleash their retail data. It's why SSPs are working with us to optimize the supply chain. I could not be more excited about our growth prospects as we close out this year and head into 2022 and beyond. Now I'd like to turn the call over to Blake before moving to Q&A. Blake?
spk11: Thank you, Jeff, and good morning, everyone. As our financial performance in Q3 indicates, we continue to execute well in the current environment. Connected TV continued to be our fastest growing channel at scale around the world. Solimar is ramping on plan. The Walmart DSP is now available. And as we have consistently stated, we have seen no material impact on our business from the recent iOS platform changes. The value of our business model, being the largest independent DSP focused on the open Internet, continues to resonate strongly with our customers and has allowed us to build trust over the long term. Our appeal is the simplicity of our partnership. We focus exclusively on the buy side, hunting for the impression opportunities that are the most valuable for our customers without the conflicts of owning inventories. When we deliver value for customers on a campaign, they almost always return for future ones, which has led to a retention rate of over 95% across the previous seven years. Q3 was an incredibly strong quarter and a testament to our belief that advertisers are accelerating their shift to data-driven advertising in 2021. Revenue of $301 million was up 39% from a year ago, excluding political spend related to the U.S. elections last year, which represented a mid single digit percentage share of our business in Q3 of 2020, revenue increased approximately 47% year over year. During the quarter, we benefited from continued growth in the digital advertising environment from both agencies and brands. Our performance in Q3 was broad based across all channels, regions, and nearly all verticals. We continue to grow our top line quickly while scaling our cost structure efficiently. helping drive meaningfully positive EBITDA. In Q3, we generated $123 million in adjusted EBITDA, or about 41% of revenue. During the quarter, our EBITDA continued to benefit from temporarily lower than expected operating expenses, partly driven by the virtual environment. This includes items such as travel and live company events that are very gradually starting to return to our cost structure. From a scaled channel perspective, CTV, by a wide margin, led our growth again during the quarter. Exiting Q3, video, which includes CTV and separately mobile, represented just about 40% each as a percentage share of our business. Video, as a percent of our mix, specifically continued to grow rapidly. Similar to last quarter, the increase in video was driven by CTV. Display and audio represented about 15% and 5% of our business, respectively. Geographically, North America represented 88%, and international represented 12% of our business for the quarter. APAC led our growth across all regions this quarter. Shanghai and Hong Kong drove spend growth in northern APAC, and Australia and Indonesia led our growth in southern APAC. In terms of EMEA, London led the way, nearly doubling year-over-year in Q3. As Jeff highlighted, CTV across EMEA was again very strong, growing faster than in any other region in Q3. CTV continues to rapidly increase its relative share of spend in Europe. While still small compared to the share of CTV spend produced in North America, we are optimistic about the trends we are seeing that set us up well for next year. In terms of the verticals that represent at least 1% of our spend, nearly all of them grew very nicely during the quarter. Travel, shopping, and home and garden were the strongest performers in Q3. We believe there is still the potential for share gain and improvement in most of our verticals. Operating expenses were $221 million in Q3, up 27% year over year. The growth in operating expenses during the quarter were primarily driven by investments in our team, particularly in areas like technology and development and sales and marketing. It is these areas that drive our business as we continue to scale for longer-term growth. During the quarter, we saw encouraging leverage from both our platform operations and G&A expenses as we scaled the business. Stock-based compensation expense increased 28% year-over-year. As expected, This marked a sharp deceleration from the first half of the year, as expenses related to the company's employee stock purchase plan moderated significantly. Income tax was approximately $20 million for the quarter, representing a tax rate of about 25%. Adjusted net income for the quarter was $89 million, or 18 cents per fully diluted share. Net cash provided by operating activities was $130 million, and free cash flow was $103 million in Q3. The strong cash generation during the quarter was driven predominantly by our operating results. I would like to remind you that the timing of cash collections and payments can significantly impact cash from operating activities and free cash flow results on a quarterly basis. DSOs exiting Q3 were 87 days, down 14 days from a year ago. DPOs were 73 days, down 9 days from a year ago. We exited Q3 with a strong cash and liquidity position. Our balance sheet had $799 million in cash, cash equivalents, and short-term investments at the end of the quarter. We have no debt on the balance sheet. Turning to our outlook for the fourth quarter, we estimate Q4 revenue to be at least $388 million, which would represent growth of 21% on a year-over-year basis, excluding U.S. political election spend, which represented a high single-digit percent of spend that we benefited from in Q4 of 2020. Our estimated growth rate in Q4 this year would be about 33% on a year-over-year basis. We estimate adjusted EBITDA to be approximately $175 million in Q4. And finally, we anticipate our stock-based compensation to rise in Q4 from our normal run rate. This is being driven by approximately $95 million of incremental stock-based compensation expense we expect to include in Q4 related to a long-term CEO performance award granted on October 6th. The performance option has a grant date fair value of $819 million in stock-based compensation, which is expected to be included in our G&A expense over approximately five years. The total amount expensed is unrelated to whether any of the performance award thresholds are ever met. Only shares that have met the threshold criteria outlined in the performance plan are factored into our total shares outstanding. In closing, we are pleased with the momentum of our business. With large growth drivers such as CTV, our international business, our shopper marketing opportunity which just kicked off with the Walmart DSP a few weeks ago, and our recent platform upgrade in Solomon, we remain highly optimistic about the long-term prospects for our business in 2022 and beyond. I believe we have the structure in place to continue driving long-term growth while scaling our business efficiently, and I am cautiously optimistic about continued improvement in the future. That concludes our prepared remarks. And with that, operator, let's open up the call for questions.
spk06: Thank you. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star 1 on your phone at this time. If you wish to withdraw your question, you may press star 2. We do ask that if you are listening on speakerphone to please pick up your handset for optimum sound quality. Please hold for just a moment while we poll for questions. And our first question today is coming from Sean Patel at SIG. Your line is live. You may begin.
spk01: Hey, guys. Congrats on the results. I had a couple of questions. First one for Jeff, you know, you guys reported you know, a great 3Q, 4Q outlook, when a lot of your peers are struggling and calling out macro issues. I wanted to ask a question about next year, just at a high level. Can you just talk about how you view the setup and the key drivers as you head into next year? I know you touched on a lot of them on your prepared remarks, but just asking in the context of next year. You know, you guys have CTV, Shopper Marketing, International, Solomar, Political. And then second one for Blake, I know you guys haven't given specific guidance for next year yet, but could you just talk a little bit about how you're thinking about revenue seasonality next year? Just given that the past couple years, you know, maybe have been a little bit abnormal just how you think about revenue seasonality next year. And then, you know, I guess specifically, you know, one Q revenue tends to be down about 25 to 26% sequentially. You know, is that a reasonable assumption at this point? Thanks, guys.
spk16: You bet.
spk15: So... First of all, Sean, thank you for both wishing us congratulations as well as just the question. I'm really excited about 22. I don't know that I've gone into a year more excited than I am going into 22. Part of that's because of things that are happening outside of our control. that the regulatory environment is actually really net positive. So if Google and Facebook are a little bit more controlled or forced to make more deliberate decisions, or what's even more likely is that they go a little bit slower, that's a net positive for us given how much they've gained share over the years. Of course, things outside of us, too. changes in iOS and a lot of discussion this earnings season about supply chain challenges we don't see any material impact from iOS and we don't see any material impact from supply chain so given that it makes me even more excited about the things that are going really well so first of all we're consistently grabbing share so just constantly getting more than the space is growing Second, you know, we've never seen what's happening in CTV happen in any channel ever before. And I don't know that we'll ever see something like that happen again. But cord cutting, accelerating, you know, I mentioned that cable subscriptions are a bit of a ticking time bomb. If that weren't enough, there's also subscription fatigue and live sports returning. The upfronts last year were a little bit of a struggle. We anticipate that that's going to create more and more opportunity for CTV and spot market, which is always programmatic. And then here, right now I'm in London, just what's happening here in the UK as well as across the media in CTV is incredibly bullish. Then across the world in international, the TAM in CTV is growing faster than in the United States. If that's not enough, shopper marketing is going incredibly well. We just went live with the largest retailer in the world, which is creating closed-loop measurement, and that's the first of what I predict to be many to come like it. In 22, we have midterm elections, which we think, you know, there's been some forecasts that basically the spend in digital will be the same as the presidential election year. So we think that macro estimation is good for us as well. And then we just shipped a new product in Solimar, so that's going incredibly well, which I'm sure we'll talk more about. And then UID is just going incredibly well. So everything is going great. To just give 30 seconds on the seasonality before I ask Blake to answer. In general, the market was heading towards digital being always on. There's less of a ramp and a difference between Q1 to Q4 where there was this ramp that was caused by seasonality. It's just an always on mindset inside of digital which just changes everything. Before 2020, we were heading sort of towards what we predicted to be 45-55, where 45% of the spend is in the first half of the year and 55% is in the back half of the year. It's really important to note that 2020, because of the global pandemic, it changed all of that. It's such an anomaly. 2021 is a little bit more normal. But both of those are anomalies given just all the changes in the world. And we expect 22 to be a bit more normal. But I'm sure Blake has more to say about that.
spk11: Sure. Thanks, Jeff. Yeah, just to reiterate what Jeff said, I think the sequential growth seasonality, you know, it's obviously changed a bit, you know, the last 18 months or so during dealing with the impacts of COVID. I do believe we're seeming to move closer back to that normal historic seasonality trend, but it's still a little bit early. Difficult to say exactly where the new normal of seasonality ends up, but it does feel like we're getting back on that more normal historical trend.
spk01: Got it. Thank you, guys.
spk06: Thanks, John. Thank you. Our next question is coming from Vasily Krasiov at Cannonball Research. Your line is live. You may begin.
spk08: Hello, sorry. Can you hear me? Yep.
spk04: Okay, Jeff, I wanted to ask you to go into more detail about what you're seeing after Walmart DSP went live. What kind of additional color and takeaways do you have now, and how does that inform your view of the size of the opportunity for the company? And then, are you having any discussions with other retailers, so if you could give us some update on that would be great, and also your view on how material of an opportunity the closed-loop measurement can be for the trade desk, and will it be an important business line, or is it gonna be just an incremental, nice incremental revenue?
spk15: Yeah, thanks for the question, Vasili. So, as it relates to the Walmart DSP, It's always best to start with the very biggest in the world, so it's just phenomenal that we were able to create this partnership in closing the loop with the biggest retailer in the world. But we're only a couple of weeks in, so of course all we're looking at is green shoots and the potential is ahead of us. That potential is obviously massive, with shopper marketing being a $200 billion industry. When you look at what we're doing in spend and revenue, that's just a tiny, tiny percentage. Our entire company is a tiny percentage of that shopper marketing ham. So we think we're as eligible as anybody for that. And that, to me, is the real hope of the shopper marketing and what we're demonstrating here with Walmart, Because still, especially in the United States, most purchases are still made offline, the fact that most of the advertising spend is online, there is this deep need to bridge the gap, to connect the dots between those two. And what has been happening over the years is that retailers like Walmart have tried to monetize their data by creating what we used to call ad networks, which are these little silos where they would sell their data on their own. To me, the most exciting thing is that retailers are recognizing that in order to compete with Amazon, they have to put their data to work in a much bigger way, and that is to close the loop so that instead of getting $10 million from one of the biggest brands in the world who spends billions, to instead get those big CPGs or soda companies or whatever to to optimize spending their billions to selling product inside of those brick and mortar stores or even in their e-commerce efforts so that they're measuring all their marketing spend success by how they sell product in those stores. So for the first time ever, I believe the retailers and the product owners are aligned in what they want, which is something much, much bigger. So because Walmart, the biggest, has gone first It is not a surprise that all other retailers all over the world are saying, we need to execute the same playbook and we need to do more. And so we're talking to dozens of retailers, all the names I suspect that you would predict. And when you look at that in totality, it is definitely one of the most bullish things that we're working on right now. And I'm really encouraged and excited and proud to be Walmart's partner. But I'm just equally excited about all the partnerships ahead for us.
spk08: Thank you.
spk07: Thank you.
spk06: Our next question today is coming from Tim Nolan at Macquarie. Your line is live. You may begin.
spk02: Thanks a lot. Jeff, I wanted to ask how the Solimar rollout is going and maybe how that goes if it's a matter of converting existing users to this new platform or just basically how you progress with that. And relatedly, as part of Solimar, you've talked about the data and the measurement marketplaces. I think I understand in principle how a data marketplace might work. I think you described that. But how does a measurement marketplace actually work? What does that mean? I mean, I guess you use your UID 2.0 as a means of identifying users. But what other sorts of measurement are you including in that? And how does the marketplace work? Thanks.
spk15: You bet. So first, let me just say, we launched this product on 7-7. And so we're only in this about four months. The reception, especially given that it was our biggest release in the history of the company, has been unbelievable, unbelievably strong. And it's relearning a new platform. And so when you're relearning, especially in a year that's been as busy as this one, and especially with the talent shortages that exist inside of ad agencies and even brands, and even to some extent across tech, that has made it so that... Training on something new takes more work, and you really have to entice people to do so. It's a commentary on how strong the product is that we are on track to have the majority of our impressions bought on the new product by the beginning of next year. So now like next wave, that should take one to one and a half years to go from zero to 100%. And it always starts with sort of the enticing or more seductive phase where we're just trying to entice them to move over. And then the stragglers, there's some amount that you always just have to flip the new one on. And you have to have a lot of confidence in order to do that, in order to push people to do it. And we're getting closer to that, much closer to that, just based on how strong the reception has been from the majority of our clients. As it relates to the data marketplace and the measurement marketplace, So there have been a whole bunch of inefficiencies in the way that we price data. And when I say we, I mean the entire ad tech industry. So the way that we price data, especially third-party data, has been bad. The way that we select and pay for data has been bad. And it's largely because there hasn't been a good way to find the data. And so because of Unified ID and because of all the tools that we built in Solimar to make onboarding a brand's first-party data easier, now it makes it easy for them to discover which data they should be buying. So it's a little bit like if you're on Netflix and you've never watched anything before, Netflix has nothing to recommend for you. That's where we were in the data ecosystem five years ago. Now that everybody's watched a lot of shows, if you will, they've used more data, they're Our recommendation for what they should be buying is better than any recommendation engine for data, I think, ever, anywhere. So that makes it possible for us to have the most robust third-party data ecosystem. As it relates to the measurement marketplace, it's highly related to what we're talking about with Walmart. where instead of doing what the walled gardens have done and once again it's really important that the way that we win against a walled garden and especially the way you win in ctv is not to play the game the way the walled gardens have been playing which is uh to grade your own homework we want to make it possible for other people to determine what success looks like And the brand then has an opportunity in a marketplace to say, this is the way that I want to grade my success. So for instance, today, using the Walmart DSP that's built on top of our platform, they can decide to determine success is when I sell a product inside of a Walmart store. And then I can use that as a proxy for how I spend money on ads across everywhere else in the ecosystem. So whether that's leveraging Walmart data or not, that makes choices around reach and frequency and a whole bunch of other things way better. But then we also have the benefit of saying we didn't determine success and we didn't write our own homework. we were just trying to do the right thing leveraging the data sets of other companies that were selected by the brands and agencies themselves instead of us just doing it on our own you put all of those together while it takes some work to integrate all that win hearts and minds and develop an open internet that is way more sophisticated than the one of the past it is a way better internet than one that's just held hostage or captive by a walled garden
spk08: Thanks, Jim.
spk06: Thank you. Our next question today is coming from Yusef Squally at Truist Securities. Your line is live. You may begin.
spk10: Great. Thank you very much. That's Yusef Squally. So, hey, guys, congrats on a really strong performance there. So two questions from you. One, Jeff, Can you maybe speak to the level of adoption of UID 2.0, particularly by brands? You've done a great job bringing on a lot of ad tech partners, but you gave the example of Made In, which was super helpful. Thank you. But what are the gating factors to you guys bringing on a lot more brands over time, which clearly is the holy grail? And then... On 2022, just at a high level, what's the setup for connected TV beyond some of the color that you've given? Particularly, I'm thinking about accelerating adoption in Europe and Asia in particular. If you can update us on where you think current penetration of connected TV stands in US versus Europe versus the rest of the world, that would be super helpful. Thank you.
spk15: So as it relates to the scale of UID, so We have produced hundreds of millions of unique users inside of UID, and the growth rates are breaking records seemingly every week. I think we mentioned in the prepared remarks that I think we broke our record something like 12 times in the quarter. It just every week feels like we're hitting a new watermark and getting more and more users. So the month-over-month gains being in triple digits while we're talking about billions of unified IDs is just unbelievable. And as I've said before, the momentum around this initiative, there's nothing I've ever seen like it. The collaboration is phenomenal. The fact that we're collaborating with competitors across the board is fantastic. The fact that even walled gardens are creating paths to pass this through. While it's encrypted and they may not necessarily consume it, they are supporting customers so that they can use it if they want to. And then you've got infrastructure plays like Snowflake adopting it. That's of course not necessarily because they share the same vision or have the same concern about an open internet that we do, but it is because having a currency that makes it so they can activate data improves their value proposition. So when you look at whether it's them or a LiveRamp or a Nielsen and just all the companies, including all the agencies with all of the data products and data companies that they bought, that making them interoperable has just created a tremendous amount of momentum. You are right to point out that we're entering the phase where it's really important for advertisers and publishers to adopt it. What's fantastic with case studies like the one we mentioned from Made In, is that we're proving the lift. And so advertisers now know that if they onboard their first party data using Unified ID, that they will get better results. It doesn't take long for other advertisers to say, oh wow, I need to do that too. And if that weren't enough, if the carrot weren't enough, there is the stick that is in 2023, third-party cookies are expected to go away. So these sorts of initiatives are the only way that they can put data to work. So with all of that, it's similar to my opening remarks on just all the secular tailwinds as well as all the ways that we're operating to grab land. it's a very similar phenomenon with UID there's a bunch of external forces that are pushing people to use this and then there's a bunch of benefits and a bunch of things that we've created in the product itself that get us to that direction I do want to underline that with unified ID This is not a Trade Desk initiative anymore. While we may have instigated it, we've open sourced it. We have lots of other companies, including other DSPs that are using this. This is bigger than us. This is something that we wanted to create as a currency to raise all boats recognizing that the collective open internet would be better for it that even consumers will be better for it and arguably especially consumers will be better for it because they'll have more centralized controls that they can take with them and and they won't just be managing privacy settings from one walled garden to the next And especially when you only do that on a device, that means that consumers would be forced to manage their privacy in a double-digit number of places, and very few understand or can coordinate well enough to do that well. This will really create a better internet for the consumer. On the second part of your question on expanding CCB to the rest of the world, so we've started with some phenomenal partnerships all over the world. And I'm really excited about some of those things that we talked about during the prepared remarks. One that I just want to underline is we have an expanded relationship with Peacock. And you'll remember that Peacock has rights to the NHL, has rights to the NFL, it has rights to the Olympics, and of course here in the UK to the English Premier League to say nothing of the other $30 billion of content that they have. So doing more partnerships like that with content owners all over the world is the most important thing that we can continue to do. Because in most of the major markets, we already have a starting point that is really strong, not dissimilar from what we did in retail where we started with the biggest. We've done very similar things like that in CTV all around the world. We just have to keep doing more of it.
spk08: Thank you, Seth.
spk07: Thank you.
spk06: Our next question today is coming from Justin Patterson at KeyBank. Your line is live. You may begin.
spk09: Great. Thank you. Jeff, you're crossing the $1 billion revenue level this year, and there's clearly strong retention characteristics with this model. What does a company need to do to get the $2 billion or even $5 billion in revenue over the next few years? And then as a follow-up to that, perhaps you could expand on the supply chain efficiency initiatives you're working on and really how that can create opportunities for you going forward. Thank you.
spk16: Thanks for the question.
spk15: This might be the most important question for us as a company. I'm always reminded of the locker scene at the end of the movie Hoosiers where they're talking about how do we win this game, this smaller team from a smaller town competing with teams that are much bigger than them in every way. It's not dissimilar from what we're doing with some of the biggest companies in tech and arguably the history of the world. And the way I look at it is we cannot lose sight, just like that locker room speech in that movie, ignore the fans, ignore all the outside forces, and just play your game. Do it the right way. And this is essentially the same thing I'm saying to our team over and over again. If we just stick to what we do really well, we continue to win in CTV, we continue to service our customers the way we have, we focus on the buy side the way that we always have, we try to make the supply chain more efficient, we add more value than we extract. If we keep doing all the same things that we've done for the last 10 plus years, I think we're going to get from $1 to $5 billion ahead of anybody else playing the same game. So this is one of those where it's not about us trying to exploit the weaknesses of other companies. This is about us just focusing on fundamentals, protecting our culture, continuing to build tech the way that we have, focus on recruiting the best talent, and if we do that, we'll be successful. So that's number one. Number two, I would say is we have to win in CCBs. And the good news is in CCV that that market around the world is perfectly fragmented. It's not broken into so many pieces that you have to aggregate millions the way you would have to in websites or apps. Those do gravitate to markets, and those have been very good to us. But there is a way for us to integrate almost directly and create a more efficient supply chain in CCV more easily than we can in the rest of it. And then, of course, outside the United States. So we've been investing outside the United States heavily for a long time, where our employees are a third of our employee base outside the US, while our revenue is low teens. And that differential is because we're investing ahead. Most of the open Internet competitors cannot afford to make those investments the way that we have, which is why we continue to win share. We're doing more and more to invest in those, and we're going to get better at winning more aggressively and growing more quickly there as the open Internet led by CTV continues to move in our direction. As it relates to the supply chain, I should mention Google a little bit here because as we mentioned in the prepared remarks, there's been just a lot of discussion around the complaint led by the Texas Attorney General Office. I just want to reiterate, our strategy has always been to compete and prepare for the market to be fair and competitive. We expect at end state that markets always trend towards fair and competitive. And to whatever extent that the market currently is both inefficient and not competitive, we think it's going to move in that direction. It's already been moving in that direction at a macro level in the sense that Google's ad exchange used to be the very biggest exchange. It's not for us anymore. It's not for the industry anymore. While they have really strong market share in DSP itself, as it relates to their ad exchange, it's not the biggest. And literally, we plugged in hundreds of them all over the world. So as a result, I believe Google needs us more than ever. And we are going to succeed regardless of any policy decisions that Google makes or not.
spk06: Thank you. Our next question today is coming from Laura Martin at Needham. Your line is live. You may begin.
spk05: Hi, guys. Great results. Maybe one for you, Jeff, and then one for you, Blake. So on the shopper marketing, which the Walmart – you said that Walmart has started and you're negotiating with a lot of other people to join. How big – This closing the loop feels like it is best practice. So do you feel, Jeff, that this closing the loop kind of shopper marketing could be bigger than your core business today at maturity? That's the one for you. And then, Blake, you were very careful to say the word nearly all verticals had grew in the quarter. So I'm really intrigued by what didn't grow in the quarter and what percent of digital ad revenue would that represent as it starts to return inevitably in 2022? Thanks, guys.
spk16: You bet.
spk15: So I think over time, the same way that I look at it, so I'm, actually let me back up. I am constantly looking at the trillion dollar cam that is traditional advertising and just looking at all the different ways to slice that. For instance, the fact that two-thirds of that pie is outside the United States is part of the reason why we've just been obsessive about growing our business outside the United States. And we've invested ahead, and we are ahead in lots of markets. The markets like India, which have huge potential, or in China, which is our fastest growing office in the world, or all of our expansions that we highlighted in places like Italy and Taiwan, all of these are because we see growth potential to get to that other two-thirds of the pie, and we would be silly to only focus on one-third of the pie. Shopper marketing is incremental to that. Not all of that is captured in that $1 trillion, but it collectively is about a $200 billion PAM. So that is incremental, but at end state, I expect that to be our share to be as a percentage similar to our percentage of the $1 trillion pot. And so I don't expect it to ever surpass that business. We might win more than our share in that particular TAM just because closing the loop is the holy grail and because I think we're in a great position to continue to partner across all of retail. But I do think that our core business and the thing that we've been working at for the last 10 years will always be the lion's share of our spend. But we've merely scratched the surface in both categories. So it's a little early to tell because we're just a tiny, tiny speck of what we're yet to become.
spk11: And then I'll follow up, Jeff. On the second question, Laura, with regards to the verticals, you know, the obvious one that – showed pressure, you know, on a year-over-year basis this quarter was the politics. So obviously, you know, that vertical was super high last year because of the elections, and so you obviously see some pressure there. I would say the only other one that to call out, and it's not a significant share of our mix, you know, we do see some volatility in the family and parenting vertical a bit, and so it was a little bit lower than normal for Q3, but Nothing of major concern for us. And so those are the ones that move around that we see. And then there's others, obviously, Stu, that we believe there's opportunity still remaining. But political is the large negative year over year in Q3, which is expected.
spk08: Thanks very much. Congratulations.
spk16: Thanks, Laura.
spk06: Thank you. Our next question today is coming from Mark Skudowitz. at Rosenblatt Securities. Your line is live. You may begin.
spk13: Thank you. Just a couple on UID. Jeff, you mentioned UID, too. Daily avails are now in the billions. I was wondering if you could share what percentage of the media that you've sold year-to-date was resolvable to those avails and what you expect that media mix to trend to in the first half of next year. And then I just had a quick follow-up. Thanks.
spk15: Yes, so as it relates to the entire media chain, there's still a lot of work to be done for it to be present from publisher to every link in the chain to be available to the advertiser. The bigger thing right now is where it's available in the graph, if you will, where we do all the measurements. And that is probably the most promising thing that's happened with UID to date, where if you combine device IDs plus UIDs, that sum is greater than device IDs plus cookies. So it's already creating more traction in that modeling or that graph than what we have before UID existed. But there is still a lot of work to do. And it just relates to the question that I answered earlier, which is we especially need more advertisers and publishers to be connecting it throughout the entire chain. We expect the advertisers to start. And because they bring incremental dollars, that then makes all the publishers connect. But the fact that we've gotten to literally billions creates incentive for both sides to do that now, and it's just implementation. So the difficult part is not actually winning hearts and minds. It's just getting from winning hearts and minds throughout the entire organization to implementation, and that just takes time. So at this point, I believe it is just a matter of time before that happens.
spk13: And maybe just to follow that point in terms of implementation, just on the specific to large publishers, how many have committed to UID to date and what might be holding them back, particularly as you brought on more and more ad tech partners? It would seem to me that you talk a lot about advertisers onboarding first-party data, but isn't the large publisher involved more of the impetus to sort of get UID sort of off the ground. I just appreciate, I guess, specifically how many large publishers you have committed to date and sort of what we should be thinking about in terms of milestones in the first half of next year. Thanks.
spk15: Yeah, so one of the things that we've done a lot of is just pushing inside of journalism. And so you might have seen some of the press releases, whether that's BuzzFeed or whether that's Washington Post and the 300... local journalistic outlets that they support technologically or Newsweek or there's just there's dozens and dozens of top 200 publishers who've already been public about their support let alone those who are implementing it behind the scenes you know I was talking about NBC earlier they've been public about their interoperability with UID as well which by the way is all that matters is that their IDs are interoperable You are right, though, that it is important for both advertisers and publishers to adopt UID in order for it to be successful. It does not matter which one goes first. There is this chicken and egg challenge. If publishers go first, then advertisers are incentivized to quickly onboard their data so that they can leverage what the publishers are making available to them. If advertisers go first, then it's on publishers to quickly implement so that they can get higher CPMs because advertisers are telling them, if you can just help me connect my data to this, I will pay more for your inventory. That is what we're seeing. Efficacy goes up by 3x. The cost goes up by one and a half to two X and everybody wins. And so it makes it very, very incentivizing for both publishers and advertisers to do that. And that's largely because we started in the middle with infrastructure where we get like to big scale pretty quickly. And that part we've already done. So there's strong incentive for both sides to act now and that's all working.
spk13: Okay, and just real quickly, is there an inflection point, I guess, just speaking to the milestone, Jeff, of seeing when you talk about implementation being a hurdle, is there an inflection point where that implementation is no longer a hurdle and we see sort of X number of large pubs sign up in the first half of next year? Thanks.
spk15: It's just playing it out in the sense that I believe we've already reached the inflection point where anybody who's not implementing UID is operating at a disadvantage to those who have. It's just a matter of doing the work to get it integrated. And then of course, these are big strategic decisions that have to be understood at least at some level in multiple parts of nearly every organization. So that just takes some time in order to do the ramp up. But we already have so many users and it is such a dominant currency that any other currency should be interoperable with that in order to get some benefit. It's not rational not to be interoperable with that. That inflection point has already passed.
spk14: Thanks, Mark. We have time for one more question, Kate.
spk06: Thank you. Our final question today is coming from Brian Fitzgerald at Wells Fargo. Your line is live. You may begin.
spk12: Thanks. I'll be quick. Two things that stood out to us at Adweek. One was the benefits of using UID across the web and CTV for universal frequency capping. So I want to know if you could talk about how much of a pain point that is for advertisers and unpack that a bit. And then the second one was also from Adweek, and that was AMC Networks talking about how they partnered with you guys to enable programmatic addressable ads in linear TV. They call it a first. They're kind of wrapping a digital wrapper around linear impressions and then getting it across the transom to you guys to be filled. So how quickly are you seeing the evolution from that standpoint? Thanks.
spk15: Thanks Brian for the question really appreciate it and I'll take the first one and then I'm actually joined here by our Chief Revenue Officer Tim Sims who will take the second part of the question and Tim feel free of course to add any color on the first part as well and so I love the first part of the question I mean the second part is great as well because AMC has been just such a phenomenal partner but But you're absolutely right. So one thing that has not been discussed enough is that nearly everything in CTV is consumed on the other side or on the inside of a login. So in other words, you are logged in using an email address to consume the content that you have that you're watching on pretty much every app on every operating system that you have, whether that's a Roku or an Amazon or something else. And because it's on the other side of a login, there's this benefit to using a common currency across all of those. If you think about it from a consumer standpoint, more than ever, we are watching content on multiple apps. Like five years ago, we mostly watched on Amazon and Netflix, and now we watch on lots of apps. And the fastest growing have been AVOD apps, where you're now seeing ads, whether that's on Peacock or Paramount or any of the others. There are ads being shown across all of them. Of course, an advertiser would like to control reach and frequency across all the apps and not just one. If they just do it one app at a time, they are going to waste money. And that waste is totally unacceptable in connected TV because the costs are higher. So as I mentioned in the prepared remarks, the costs initially were higher because of scarcity. That's unacceptable anymore. Your costs have to be justified with increased efficacy. And that efficacy cannot be justified if you do not control reach and frequency universally. This is why unified ID is so strategically important for us, but it's also why it's so strategically important for every major brand in the world, where as they are looking at CTV, the perfectly fragmented ecosystem, they are looking at that saying, I have to control reach and frequency centrally, and if I don't do that, I'm going to operate at a disadvantage, and I'm going to waste money compared to what I did in linear. And given the increased cost of content, the content owners are equally interested in making ads more effective because you can't win by showing an ad load that is as dense as the one that we had in linear so whether you're a content owner whether you're an advertiser or whether you're the dsp like us we all want universal reach and frequency and the only way that that can be done is with a common currency like uid Tim, for the second part.
spk03: Great. Yeah, Brian, thank you for the question on AMC. I'll just zoom out for a second in that one of the things that we're constantly striving to do on the CTV partnerships front is how do we continue to expand and grow the amount of available inventory in television? And one of the interesting things that came out in the AMC release is that that's exactly what we're doing here. We're looking at a new, albeit small, but a new area where we can create more inventory, and that is with addressable linear CTV or television. Now, what's really important to call out as a distinction here is that this looks exactly like what we're doing in CTV with all of our other partners, but it's in the linear feed. So this is an open RTV request to the trade desk where we can make a decision on an impression-by-impression basis. to deliver an ad back to AMC. And so it's unique in that it's expanding into a new area of television in linear, but the look to us is exactly like connected television where we get a request and we're able to bid back in real time on linear television. It's really exciting in early days, but it's a very exciting new corner of television that's being made addressable and available to platforms like the Trade Desk. And the last thing I'll say on this is that one of the reasons that we're able to partner so well with folks like AMC, and one of the reasons that we've been able to partner everywhere in the world is because of our objective place in the market. So whenever networks like AMC are looking to try new things and to push the boundaries and to test new areas of available inventory, they come to us first because of our objective point in the market. So it's an exciting thing to watch, still early days, but definitely an interesting area of where we're going to expand inventory.
spk14: Thank you, Brian, and thank you so much for everyone being on the call today. I know we ran a few minutes over than what we normally do, but appreciate everyone's attendance. Thank you. Thanks, everyone.
spk06: Thank you, ladies and gentlemen. This does conclude today's event. You may disconnect at this time and have a wonderful day. Goodbye. Thank you for your participation.
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