Sabio Holdings Inc.

Good morning everyone and welcome to the Sabio Holdings earnings call for the second quarter of 2023. The financial statements and MD&A have been filed and they can be accessed through the CDAR website. My name is Aideen McDermott, Investor Relations Associate at Sabio, and joining us on today's call, we have Aziz Rahimtullah, Founder and CEO, and Sajid Paranjit, Chief Financial Officer. We will start today's call with Aziz and Sajid discussing our Q2 results, and we will then follow that up with a Q&A session. Before we begin today's call, I would like to remind everyone that certain statements made today may contain forward-looking information that is subject to known and unknown risks, uncertainties, and other factors. For a complete description of risks and uncertainties facing the company, please refer to the company's MD&A and other continuous disclosure filings that are also available on the CDAR website. Please note that all figures discussed today are in U.S. dollars unless stated otherwise. And with that, I will turn it over to Adis.

Good morning, everyone. How are you doing? Happy to have you on our 2Q call. Hold on a sec. My internet just paused for a second. I'm going to jump back on. Based in LA, so we've been having a lot of issues with internet. So, all right, here we go. We are able to deliver double-digit growth despite an increasingly difficult environment, as peers and industry have all pointed out. Our strength was driven by unique value proposition that CTV advertising powered by our 55 million cross-screen household graph brings. This combined by the fact that we have one of the most complete end-to-end tech stacks in the space allows us to touch multiple parts of the CTV OTT ecosystem. while delivering price leverage at good margins. Some key highlights from this quarter include strong renewal business numbers, average deal size increases, and a host of accolades and recognitions, including being added to the LumaScape, a prestigious list of top and growing players in the CTV OTT space. In addition, we are in the final stages of the renewal and increases of our credit facility, providing us operating flexibility. Lastly, the capital raise, we also, as noted, we did a recent capital raise, which Saja will get into, which adds additional leverage for inventory maximization. Finally, we're in a growing sector. A couple of slides I wanted to use to highlight this aspect. So we are continuing now non-paid TV households have outnumbered USP paid TV households. And so this number is just continuing to increase at an ever increasing rate. And as you can see, Sabio has 55 million households. Within the next year, Uh, we potentially have the opportunity to actually have more us households and these are validated homes than cable has in terms of total subscribers in the US. So we're heading in the right direction. Unfortunately, cable continues to see the challenges and we see a huge opportunity. along those lines as well. In addition to that, this is leading to more time spent on streaming, which also benefits us from more advertising spend moving to this platform. And finally, it is more diverse viewership wise relative to general market linear TV, traditional TV, which also is where Sabio has positioned early on and well in that space. So the combination of all these elements certainly bodes well for us in a long-term perspective and really is contributing to our growth this quarter. And then as you can see, we're set for long-term growth. And talking about some of the key elements of this quarter, I'm going to hand it over to Sajid to talk about Q2 specifics. Sajid?

Thanks, Aziz. Despite a challenging economic environment, we are pleased to report another quarter of record sales with continued double-digit revenue growth. This came on the back of significant top-line gains in connected TV and LTT streaming. For the three months ended June 30th, 2023, Savio generated 8 million US in sales, up 11% from 7.2 million US in the prior year. Evidencing the stability of our sales model, 74% of sales in the first half of 2023 were generated from repeat customers. The increase was led once again by a CTV and LTT business that continues to grow significantly above the competitive growth rates of our peers and the 21% growth rate for the US CTV industry at large. CTV and OTT sales organically grew 57% to $5 million compared to $3.2 million in the prior year's quarter. For the fourth straight quarter, CTV and OTT streaming was our dominant sales category, accounting for 62% of our overall sales mix versus 44% in the prior year. Meanwhile, the unique analytics and insights provided by our app science business continues to differentiate us from the pack. Approximately 38% of Savio's consolidated revenue during the first half of the year had an outsized component compared to 25% in the prior year's comparable period. Second quarter mobile display sales were $2.9 million U.S., down 24% from $3.9 million U.S. in the prior year's period. Aligned with our sales strategy, Our legacy mobile display customers continue to shift their span with Savio from mobile display to higher margin mobile OTT streaming recognized under our CTV and OTT streaming category. On a trailing 12-month basis, the shift from mobile display to CTV OTT has contributed to a 50% increase in average deal sizes, with CTV OTT as a category representing 64% of our overall sales mix. If our closest peer group continues to experience a sharp deterioration in gross margins, we continue to leverage our end-to-end CTV OTT technology stack to protect ours. Gross margins for the quarter increased to 60% from 59% in the prior year's quarter. Once again, Savio's use of dealing supply and our continued ability to ship legacy mobile display customers into CTV OTT benefited gross margins. Our quarterly adjusted EBITDA loss of 1.7 million US was primarily driven by overhead added during and subsequent to the second quarter of 2022, which included the continued expansion of our sales and marketing apparatus. Sequentially, second quarter operating expenses normalized for commissions were flat in comparison to the first quarter of 2023. Cost efficiencies implemented by management offset incremental headcount additions to our sales force to position ourselves for the 2024 US election. We expect further cost efficiencies to take hold in the quarters ahead as cost reductions implemented during the second quarter are fully realized and additional reductions by management are implemented. Our ability to maintain strong gross margins combined with improving efficiencies in our cost structure positions Savio well for adjusted EBITDA gains for the second half of the year and into 2024. Echoing the thoughts of our closest peer group, rising interest rates have created a more deliberate ad market. Meanwhile, the political and advocacy demand that accelerated in the second half of 2022 may create difficult comps for the rest of 2023 before the material benefits of the 2024 election cycle take hold. We ended the quarter with 1.7 million US in cash on our balance sheet. And subsequent to quarter and we started our task position with the closure of a non broker Canadian once 1.7 million convertible note offering. Finally, the renewal of our loan facility, whatever being continues to progress well. Amendments under an executed term sheet include a potential $3 million us increase to the facility subject to approval from the bank's loan committee. At year end, we have 46.9 million shares outstanding, 4.2 million warrants outstanding, and 3.9 million options in RSU outstanding, with insiders owning 64% of the company. Now, we'll turn things back to Aziz.

Thank you, Sajid. As we mentioned, we are positioned well with our end-to-end offering. Having said that, we are dealing with, as our peer group has mentioned, we are dealing with uncertainty in the macro environment. This is having an effect with major advertisers that we work with, with their level of uncertainty across the board. And this is limiting our visibility as it relates to Q3. revenue relative to the same time last year. The good news is we continue to retain logos and add additional logos, providing us an opportunity to accelerate out of the downturn the ad ecosystem is currently experiencing. In order to be prudent in these uncertain times, we will be undergoing additional cost reduction initiatives with objective of returning to positive adjusted EBITDA in 2023. Just have we delivered since 2020 and we dealt with during COVID. We understand what it takes to use the levers we have at hand to maximize revenue and to return back to profitability while continuing to position ourselves in the CTV OTT growth story ahead of that we still believe is in the early innings. With that, I'll hand it over to Aideen to take questions. Thank you.

Thanks. We will now open up the call for Q&A. So analysts have been given speakers permission, so please raise your virtual hand and we will take questions. Okay, so first up, we have Daniel Rosenberg from Paradigm. Daniel, go ahead.

Hi, good morning, everybody. My first question was around the balance sheet. So there were a few announcements about, you know, subsequent to the quarter. So I just was wondering if you could walk through how we should think about how you'll be allocating capital, especially given, you know, in the Q4 timeframe when, you know, the cash flow comes in in that seasonally strong quarter? Thanks.

Yeah, thanks, Daniel. That's a good question, and you touched on a good point. We did raise 1.7 million Canadian after quarter end through a convertible note offering, and that was really to prepare ourselves for next year in the 2024 election cycle in a higher demand period. Our video and business continues to grow, we saw an incredible increases in our supply and demand integrations that were noted in our mdna and press release. And as part of that that traction, we are, we are continuing to add more higher tier publishers onto the platform. And as we get those higher tier publishers onto our platform, you know, there are certain expectations that the company that they partner with. has sufficient working capital levels. And that was really the focus of that offering was really just to raise for cash reserves to put ourselves in the best position to compete.

And Daniel, to add to that, we feel like we we have what we need in terms of continue to continue growing the company. In fact, if anything, we're going to look at some additional cost cutting measures, but we don't believe there's a need to. You know, we think we're going to in Q4 in that key period, we're going to be able to to keep cash on hand and not allocated to other things.

And so maybe a follow up to that. to that point right there in terms of allocating to other things, would that be, you know, is there a target debt level that you want to be at? Are there growth opportunities that you really be looking to just maximize? You know, what's that balance of, you know, where you see investment versus, you know, balance sheet, shoring up the balance sheet, let's say?

Yeah, I think we're going to be more focused on showing up the balance sheet. I don't think we really have a desire to look for growth opportunities at this point. I think there is a level, as I mentioned, in terms of visibility in the marketplace, it's limited. We just want to position ourselves as we come out of this currently challenging environment. um to be ready for you know what what entails and we think there's going to be opportunities early part of next year uh to potentially pick up some companies who won't have as strong with balance sheet so really that's our focus in q4 is to shore up our balance sheet and really you know once again watch cost all across the board

Yeah, and to that end, you may talk about growth opportunities. We actually feel that we're very well positioned for the growth opportunity ahead in 2024 in that U.S. election cycle. So I think that is touched upon right now is our focus will be on becoming a more efficient company, knowing that we have made the investments to prepare ourselves to really maximize the opportunity ahead.

understood appreciate all that context and my next question is just around the shift in legacy mobile to see TV. I was wondering if there's been a change in you know the pace of that shift from the customer front and then maybe you anticipate that shift to kind of persist, you know how should we be thinking about that, as we model, the business.

Yeah, so I think if you compare the first quarter and the second quarter of 2023, that rate was pretty consistent, around a 23% to 24% decline. What we would expect going forward probably is, as Zita touched upon, the uncertainty in the overall economy, particularly as it pertains to Q3, is that that shift would be more pronounced, probably in the third quarter, going back to more normal levels in the fourth quarter and beyond.

Okay, I'll leave it there and pass the line. Thank you very much.

Thanks, Daniel.

Thanks, Daniel.

Up next with question, we have Kiran Swethrin from Ace Capital. Go ahead, Kiran.

Morning, guys. Thanks for taking my questions. Not to start, can you comment on some of the new logo activity in the quarter? Is there any verticals that you call out that have seen some strength here? Just some commentary on that would be helpful.

Yeah, in 2Q, we did see a return in automotive in Q2. Having said that, We are concerned about some of the overhanging clouds as it relates to the UAW strike. There's automotive worker strike that's potentially around the corner that could have some potential effects. We saw growth in travel. We did see gains in CPG. We saw Q2, we saw some level of normalization. Having said that, some of these headwinds that we're experiencing currently in Q3 are not consistent with what we saw in Q2. And so it's been this really interesting kind of time. Having said that, we feel like we're seeing more traction now in Q4. So their visibility in Q3 is limited. There's some things that are still obviously in flux. And some advertisers are really looking to kind of potentially punt to Q4, move those dollars in Q4. But You know, overall, we saw a solidification Q2. Having said that, it's been this, you know, we do believe that interest rates are finally really taking hold, especially as it relates to marketing budgets. And that's having some effect in Q3. But we believe that some of these advertisers are just waiting and also negotiating upfront deals. We're having, you know, a lot of good conversations about upfront deals. Now, some of our peers, including Roku, came out and said they're upfront. deals are you know smaller than they were um they have less upfront deals than they did previous year um we're relatively new to the game for with our front deals so we believe we have some upside opportunity as it relates to Q4 and going into next year but right now Q3 is just it is all over the place that's helpful Aziz um

Now, moving on, looking at your margins for the rest of the year, how do you see the supply side costs evolving? Would it be fair to assume that you might see better pricing given the environment on the cost there as well?

Yeah, it is possible and we, you know, we do believe that there's an part of this capital raise that Sasha alluded to is to give us some additional leverage to do that. So we do think there's an opportunity certainly in Q4. Having said that, keep in mind that there will be some election spending taking place at the end of this year. so you got the Republican primary portion which should start kicking in towards the end of this year which will affect inventory prices so you know in part of usually what you see is advertisers get out of the way of political and they don't want to really be around political what I believe is happening is some of these advertisers say okay let's you know yes there's going to be some political spend let's negotiate our Q4 in Jose Cisneros- going into the 2024 cycle, and then we might take some pauses in between the key periods of that. Jose Cisneros- Political spend which which should happen if you think about the primaries their early January they start off early January, so they will be starting to have so spend in December, so that. Jose Cisneros- Combined with retail season is going to be a little bit challenging so yeah we think there's some opportunities for supply, but quite honestly what we're seeing more than. Price opportunities is we are seeing the opportunity to integrate directly with some big partners. And to us, that has more value than just simply price because these are major players in the space who are integrating directly with us, some of which we hope to announce in the coming weeks. That we believe is a bigger opportunity. They see us as a demand source that can help push additional revenue to them. And these are big players, which is strategically important for us.

And as soon as these and I lost one final here with the new programmatic platform you guys announced. What are your early thoughts on the go to market that you see being available to both your current and new customers and also some commentary on the margin impacts, there will be pretty helpful. Thanks.

I'll have Sajan talk about the margin impact, but as it relates to how we want to go to the market, you know, look, what we're known for is our insights, our cross screen capability, our service, and then also our creative and, you know, the programmatic offering. We believe is an alternative for some people who don't need any of those additional capabilities so it's not a zero sum in our minds and we're just going to make it available, because some of our key clients have asked us to consider. Having programmatic in addition to what we're offering with managed service so it's not a zero sum in our minds and we will just simply offer that out as an opportunity because. We've had a client tell us we're leaving money on the table. We could actually give you even more than what we're giving you today. And it's a major client. And we would love to do that if you can have programmatic because some of the spend is only allocated to programmatic. Sajid, anything you want to add on the margin side?

Yeah, I think that, you know, speaking of margins, you know, I think that on an income, even that kind of basis, the margin will be kind of neutral. On a gross margin basis, you might see a bit of deterioration as part of it just for the programmatic business. But that business takes less OpEx to run, right? So you see it's sort of more of it going to your very bottom line. And so you may see a bit of pressure on the top cost of sales margin, but those benefits will still be there in the bottom line.

And keep in mind, when even though we have not been talking about programmatic. When we purchased Bedillion in April of last year, this is what we had in mind. We knew that at some point the space is going to continue moving to programmatic. We are playing in the programmatic space through Bedillion because we're actually providing supply to programmatic players in the space today. and we believe so we are technically playing in programmatic today as it relates to our offering this just helps us um that bedillion acquisition in the additional um direct supply we have in there we have one of the most uh highest percentage of direct supplies as a dsp in the ctv ot space today and and that bedillion acquisition helped us do that so um you know we're excited about the opportunity that programmatic plays and and the key to that is you've got to have

good quantity of supply quality supply to make to make that all work that's helpful color guys i'll pass the line thank you thanks karen and next up we have nihao upadaya from ia capsule markets nihao go ahead hey guys thanks for taking my questions um maybe i was just wondering if you could provide some additional color on the cost initiatives that were implemented last quarter and continue to be implemented

Yeah, and so I think that it was really twofold, right? We have cost efficiencies on the operational side and technology infrastructure that took place. Some of them were identified from our acquisition of Adelian. So there were certain cloud computing synergies that we enacted otherwise. And there's also headcount reductions as well. We reduced about a billion dollars of headcount, some of that occurring during the second quarter that's not going to be fully felt until the third quarter and beyond of 2023. And I think a lot of these efficiencies that we've been talking about, because we've been talking about efficiencies since the third quarter of 2022. We basically said at that time, at the end of this quarter two, we ended the heavy investment in our infrastructure. And if you're a casual investor looking at our statements, you may see double digit OPEX growth in 2022. And when you think about that, 2022 was again a 2021 comparable when we were still a private company. 2023 the first half of the year, we saw some moderation in that but not comparable with against the heavy investment period in 2022 after we got our RTO money. I think it's where you're going to see you know the really the benefits of the cost initiatives in Q3 and beyond. If you look at our OPEX in Q2 it's very similar to our OPEX rate in Q3 of last year normalized for commissions and what we're telling you today that we're expecting sequential declines going forward. So I think you're going to see a lot more stability in our structure and efficiencies going forward.

Perfect. Thanks. Thanks for that call. That helps. I guess I was just wondering if you could provide additional color on the app science deal that was signed with the media agency that represents the global automobile manufacturer. Any details around deal size and how the agency chose the app signs offering would be helpful.

Yeah, and it was, you know, deal size was relatively small, you know, we haven't said any specifics publicly yet, but what it was is an opportunity to help us fine tune our product. And what excites them about what we're doing on AppScience is we're the only insights platform that is focused in on the diverse market space. If you think about it, you got Nielsen, who and and you know i haven't looked at the recent numbers so you know but nielsen from what we've seen in the past roughly has about 20 to 40 000 households that account for asian audiences for example in our case we have 55 million households across the us of that 55 million households we actually have asians split up into different categories of asian indian filipino uh, Chinese. And so we could start really kind of starting to separate that out. And and that's not just for, you know, Asian. That's obviously Hispanic and African American. And so where they see the opportunity and and is a additional understanding of that audience marketplace, not only for the major automaker brand, but for um, for other clients they have. And that's just the first portion of that agency. And we're literally what's great about that relationship that we built is we are working closely with them to make our platform in fact we we announced that you know um we have now put in some ai capabilities in app science natural language ai capabilities that we're just testing out today so we're getting an opportunity to really kind of push some of this technology capability out to the marketplace all the while we are now getting a increase in actual publishers who are integrating app sites part of our challenge in app science is unless you're fully integrated with enough publishers, you know, you can't provide enough insights across the ecosystem. That problem is being dealt with. And the fact we are we had a record number of integrations this last quarter. And so the way to think about it is we're literally laying the pipes for app science. And that's what these next couple of quarters are laying the pipes, getting the integrations and then going to the marketplace along with this major automotive brand who has said to us, um they're excited about what we're doing we're working closely we're looking at a uh discussions of a renewal and adding some additional components to that and and uh you know and in other categories including cpg and political so we we're really excited now that we're having this scale up of our publishers who are integrated with up signs So it's still, I know it sounds like we've been talking about AppScience and we are now making some great traction, but it takes a little time from a building person. The good part is it doesn't cost us a whole lot to continue integrating these publishers. We have the capability. And so we don't have to add a lot of OpEx or anything to that. We're just gonna continue integrating publishers and become one of the publishers You know, in terms of the diverse space, become a leader by being integrated with more diverse publishers than any other platform. That's really what we're attempting to do.

Perfect. No, that helps. And maybe one last one for me. In terms of, you know, the broad market, with Disney now offering ad-based subscriptions and most others likely to follow suit at some point, I was wondering if you were in either talk with any of those platforms, as I'd imagine the app science piece would be fairly compelling to them at some point. And if not, do you view that as an opportunity?

Yes, absolutely. And we've had some conversations. I mean, I think as you can imagine right now, a lot of these major entertainment companies are dealing with a lot of challenge with the sag stripe going on overall. And they're really kind of in this challenging time. We're doing a lot of layoffs, heavy layoffs. So we've had some conversations, but there's a lot of changes going on in that world today. But we do see an opportunity. If you can imagine, everyone who has a streaming ad supported streaming platform needs better insights. They need more demand for that inventory. And we're in a unique position where we're an independent player. we can basically provide that capability to both. So yeah, we will have some further conversations, but as we continue to grow, you could see, as Sajan mentioned, we once again grew market share in the CTV OTT space. We're going to continue growing market share in the CTV, even in a bad environment, right? Yes, we are seeding mobile. We believe CTV OTT, as we've said numerous times, is our opportunity. And that is where we continue gaining market share. And if we continue getting market share, we integrate with uh you know all of these Publishers on the upside side that creates a big opportunity for everyone who has an ad supported vehicle perfect thanks guys uh thanks for answering my questions I'll pass the line thanks Neal thanks Neal and up next we have Gabriel Long from beacon Securities go ahead Gabe

Morgan, thanks for taking my questions. A couple of things. First, just to confirm on the cost saving side of things, you mentioned you're expecting about a million dollars of cost to come out. So was that a million annualized? Is that a million per quarter?

Yeah, so that was a million annualized that we've already enacted on the headcount side of the coin. We are expecting some further synergies to be enacted as its course progresses. We become a more efficient company overall.

We've identified more cost-cutting opportunities and we're going to do that in the coming weeks.

How should we think about that from a dollar perspective than beyond the million you've already announced?

Yeah, I think, you know, we're still doing an analysis around that front, and there'll be more news to share shortly. I think is that, you know, what we'll tell you is that you're going to see sequential declines from a current operating infrastructure. And, you know, again, touching upon the comparison the last year, right, we're already at close to Q2 2022 OPEX rates, right? So we're expecting to come under that, you know, in its course progress.

Gotcha. Is there any particular areas you guys are focused on, on trying to drive some of those synergies?

Yeah. So I think that, you know, it's, uh, we're looking across the organization. There are, there are opportunities across the spectrum. Um, you know, we, we, we, we, I mean, we're not gonna cut to the bone. We're still a growth company and we still see a big opportunity ahead. Um, this is, this is basically just becoming a more efficient company, um, as we position ourselves ahead of next year in the years afterwards. Um, you know, as, as far as individual departments, I would expect all departments to be touched in some form or another.

Yeah. Go ahead, sir. You know, to Saja's point, we are still very much in growth mode. Having said that, we do believe there's an efficiencies to take place. So we want to kind of balance the two worlds out carefully overall. But we will see, as Saja mentioned, sequential quarter to quarter declines in OpEx.

Got you. And just looking at the growth for the second half of this year, obviously, there's a lot of variables in play, you know, what's happening, obviously, on the mobile, I guess, mobile side, you know, the macro overall, I'm curious, when you sort of look at and given the visibility you have right now, the Q3, and I guess in the early Q4, do you anticipate you'll be able to show overall revenue growth in the second half of this year versus last year?

You know, it's still I'll tell you, Gabe, this is probably, you know, limited

level of visibility we have has never been this limited. And at this point, we're still doing some assessments on our end as it relates to Q3 and Q4, what we're feeling. I mean, overall, we do believe there could be some additional opportunities coming in from political, but as it relates to the macro environment, specifically with brand spending, we're fortunate that we work with some major brands. Having said that, A couple of brands of ours that we work with are dealing with some macro environments and their own cost restructuring, including in tech and in the automotive space. And so, you know, we're still a fairly small company working with some major brands that, you know, obviously are giving a decent, some portion of their revenue to us. That is having a disproportionate effect as it relates to, you know, what we're seeing and the visibility we're seeing for Q3. We believe and we've been told by them that some of this visibility will come to an end potentially towards the end of Q3, and then we'll see some real kind of clearing of the clouds in Q4. But until we see this all happening, we really are kind of in this spot where we're fortunate to work with these big brands. Having said that, when you're a small company and you work with some major brands, And two or three last year, especially, we're dealing with some really challenging comps because two or three of those brands really came in beyond our expectations last year. And so we're dealing with some challenging comps in that respect, and specifically in the automotive and in the advocacy space. So, you know, that, you know, overall, obviously, that is our aim and our objective. Having said that, we don't have enough visibility yet, especially as it relates to Q3 and going to Q4, where things stand.

And it's actually known that, you know, if we take a more prudent, approach is we kind of managed through this uncertainty that the overall narrative hasn't changed. We're still in a fast-growing industry, CTV, OTT. We're not only riding the tide of a rising industry, but we're outpacing that industry as well. So we're not going to do anything to impair our future growth. We see a big opportunity ahead. But that said, there definitely are rooms for more efficiencies.

unfortunately not all growth is linear so it's like it's it's a sometimes it's a jagged situation where it's like yeah we see this growth then we're seeing this you know overall macro environment pullback which affects everyone and some others as i think uh one of them and the analysts are kind of pointing to the mobile pullback is more severe in general in the marketplace. And if you look at that and what's happening in the mobile marketplace, there's a big pullback in mobile in general across the board and desktop, and then of course, traditional TV. And of those categories, CTV has the biggest opportunity. Having said that, when the broader categories sneeze, the new and upcoming categories of CTV, which is still a small percentage of overall spend, gets a cold. So there's some challenges on that overall.

Gotcha. And as he's just just hoping to give if you give us some sort of big picture commentary on what what you're seeing in the space and i'm talking specifically about maybe on the uh on your traditional dsp side you know whether you've seen any change in behavior from your big agency customers in terms of especially in this kind of market consolidation of buying with stern dsps and how that might impact pricing or demand for you guys going forward and then on the supply side, whether you're seeing any changes in behavior on publishers, maybe some large publishers going direct and how that might impact your supply business going forward as well.

So on the DSP side, we're not seeing a whole lot of change. I mean, it's been pretty consistent. The only change we're seeing on the DSP and despite You know, to talk about a lot of consolidation happening. We don't believe it's taking place in CTV OTT right now. We believe that what we're dealing with on the DSP side is more of a macro environment situation. And certainly there are, you know, one or two advertisers of ours who have asked us to now make sure we have a programmatic offering. that they could then also leverage. And so that's the change we are seeing. There's a request for us to provide programmatic in addition to what we're providing today. And that is being necessitated by a lot of last minute deals. So, you know, going back to kind of the behavior, a lot of last minute deals are happening within, you know, two weeks. You know, hey, listen, we decided to allocate this budget. Here we go. And we're seeing this and we're not the only one seeing this across the board industry. David Price- Is a just in time kind of situation where the the planning cycles are compressed which leads, you know which obviously benefits programmatic in some capacity, because ability to switch on and off quickly. David Price- Is play as relates to the ssp side, we see a continued opportunity there, in fact, if anything. We have been speaking with some major studios and providers of content distribution about, you know, for us to obviously tap into the inventory that they have. And these are big players in the CTVOTT space and, you know, not other DSPs. We're talking about actual, like, end, you know, companies who have it. And they are very open to us integrating with them. So that provides us an additional opportunity in supply for Vidalia. And if you could If you can imagine, Medellin today, as we've talked about, is really used as a tool for us to manage our margins, to get the most cost efficiency to pass on to our clients on the DSP side. That's really what it's being used for. The other opportunity that is coming up even more so as other SSPs say, oh, we're not going to sell to ad networks and we're not going to provide to third parties, we're going to provide to third parties. And so we are getting a record number, as Sajid mentioned, we have a record number of DSPs that have integrated with us. And the dollars are not huge yet, but they're going to start scaling up as we get into this election cycle next year. So we are set up well from the DSP side, both from a managed service and then eventually a programmatic offering by the time election cycle comes around next year. and uh and I'm talking about the general election obviously not the primaries and then separately from that we're set up in the to provide supply to people when they need it going into the the general election next year so you know we've said all the things and it's not all about political quite honestly we believe that that the consumer is fairly healthy and we think that the the challenges we're seeing in q3 are are more of a delay than it is a cancellation our advertisers are still with us we haven't as you saw about our renewal rate we continue having great conversations we have not lost any you know we're not losing any major brands any we have not lost any major nameplates uh in the last couple of quarters so it's like Nothing like that is happening. It's not like, oh, we're going to be using the trade desk. We're not using you guys anymore. In fact, we are getting a record. We got a record number of nameplates that want to test this. I think people want to have additional options. They do not want to just use the trade desk and have another Google on their hands. They don't want to do that. They want to have a diversity of DSPs and supply partners that they have. Sorry, I know that's a big trap I provide to you, but that's really what we're hearing across the board. And not only just in the US, by the way, we talked about, we recently had someone join us in the UK and we're seeing the same thing out in the UK and European markets. A lot of interest in what we are offering as an alternative to the key players that they see over and over again.

That was great. That's super helpful. Just one last question for Sajid. When do you expect that the final approval for the, uh, for the term long extension to, uh, to materialize.

Yeah, I don't expect between 30 and 45 days. Um, you know, the, the bank is, uh, it's doing their best. I've got a deep process for us. Um, you know, they, they are very keen to renew as well. Um, you know, they, we are a, uh, an outlier in their book. You know, as we talked about before, you know, the advertising in general is dealing with a very uncertain market at this time. And we are actually faring a lot better than some of the other companies in their portfolio. So I think that, you know, we did sign a term sheet with them. So that's good news. And I'm looking forward to wrapping this up in the days to come.

And we did have, you know, and Sajid being the amazing CFO he is, we did look at alternate options. We have other options that are available at our disposal, but, you know, we really liked what in the relationship we have with Avid Bank and And they really have been very responsive to our needs. And so because of that, you know, Saja is very close to finalizing some details there. But we did have alternative lenders who were very interested in, you know, kind of playing with us on this. So I'm really excited, which is a great spot to be in. I mean, in this environment, to have multiple options, and it just speaks to the work Saja and his team are doing. I mean, we have built some great relationships across the board.

Got you. Thanks for all the feedback. Great. Thank you, Gabe.

Thanks, Gabe. So that's it for all the questions today. So I will just hand it back to Aziz for his closing remarks.

Thank you, Aideen. As we mentioned, we are in a growing industry. We're set up well, both with our end-to-end technology across the board, touching every aspect of CTV OTT. Having said that, we are dealing with headwinds as it relates to the macro environment. And we are seeing the challenges of that macro environment in Q3, but we do believe there's a clearing of clouds that are happening in the Q4 timeline. So overall, we are optimistic of our long-term growth, and we're excited about the technology and the capabilities we have to get there. So on that basis, thank you for joining us for the call and look forward to chatting with you again in the next couple of quarters.