All right. We're going to get started. Thank you all for joining us. I'm Matt Weber. I cover MNTN here at Canaccord. It's my pleasure to introduce Mark Douglas, MNTN's Founder, President, and CEO. Mark, thank you so much for joining us today.
Thanks for inviting me.
So maybe to start things off, for those in the audience who are maybe a little bit newer to your story, could you give us an overview of your platform, the Performance TV space more broadly, and where you sit within the digital advertising ecosystem?
Sure. I'll start with the Performance TV space. MNTN, we created the term "Performance TV," we created. The idea there was with the advent of streaming television, it created the opportunity to bring full digital advertising, and in particular, direct response performance advertising to television.
All small, mid-size brands that are prevalent on paid search and paid social, email marketing, we're giving them the opportunity, and compelling opportunity, to now find their next customers, leveraging the power of television.
Very cool. You just reported Q2 results.
Yes.
Strong quarter. I think revenue was up 20%, adjusted EBITDA up 50% year-over-year. Could you just walk us through some of the key operating highlights there?
Yeah. I think that's continued adoption of the platform. We also brought on 40% new customers in the core, 40% year-over-year growth in terms of number of customers. We're seeing a lot of that's coming from small business as we continue to grow our mid-market segment of the business.
The combination, it contributed to the top-line growth and the continued expansion in terms of EBITDA and adjusted EBITDA.
Got it. Related to that, you have talked about the Performance TV market moving from early adopter to mainstream. What are the clearest signs that you are seeing that in the customer base?
Yeah, it is actually really simple, is we have to do less evangelizing. We just have more companies coming inbound at the mid-market size who are increasingly aware of the concept of Performance TV. Also, one of the things we reported is we launched the small business edition of Platform Express at the beginning of April, and signed up 7,000 new companies on that, and the starting campaigns. Then hundreds of those went live with pay that campaign.
Yeah.
The combination that we see as indication of the market going mainstream. Going from their early adopter phase and starting to move into the adoption phase.
Yeah, that was going to be my next question because I feel like that was the main product highlight of the quarter.
Yeah.
Maybe dig into sort of the tiering segmentation that you did. What the differences that you identified in terms of customer needs across small, medium, and enterprise.
Yeah.
And sort of what drove that.
Yeah. I think the small business, we see the opportunities of long-tail opportunities. The majority of our revenue comes from mid-size, but we think over time, small business is really important. It tends to be more individual business owners or an emerging startup or an emerging business. What we found is as we were pursuing that, our main platform, what we call Pro, is built for the professional marketer.
Makes sense.
Yeah, all bells and whistles, everything they are used to, full A/B testing, every capability for them to maximize their campaigns.
The small business is more of a business owner, where obviously as a small business owner, marketing is really important, but they don't necessarily have or need all of the professional features. Instead of scaling the Pro edition down, we decided, let's create a version specifically for the small business, built on the same underlying tech, but significantly easier for them to adopt.
Got it. That makes a lot of sense. As we think about you going to market with this offering, what does the customer acquisition funnel look like? How does the conversion journey work with these smaller businesses?
Yeah. Well, there's two. Let's go back to the mid-market. Our mid-market customer, our number one marketing channel is our own product.
We stream MNTN commercials into the homes of our future customers. We have a go-to-market motion with SDRs, basically a sales organization. We announced last quarter that Garland Hill, who built TikTok from zero to billions, had joined MNTN as CRO.
There's other people he's hired. That's our mid-market motion, which is a bit more of a classic sales motion with marketing feeding into that. For small business, it's all marketing driven, 100%. It's not only self-service, self-sign-up, it's self go live.
We have our QuickFrame AI for both versions. With the small business, there are ads waiting for you.
Between the time you create an account and you go to create a campaign, there's already AI-generated ads that you can then modify if you want, waiting for you.
Yeah.
It is like a really fast motion.
Yeah. Very impressive stuff, and we will get to QuickFrame in a minute here. But just maybe before we do that, I believe for your mid-market customers, you have added some agentic and automation capabilities. Can you just talk more about what those do and sort of how much of the campaign management you expect to be agent driven over time?
Yeah. In many ways, when you think of our business, first, the TV ad is an important component. It is the core of what we are doing. But it is the optimization. These brands have, in some cases, big budgets, but they are not huge budgets. Who sees that ad, when they see it, where they see it, meaning what television network they see it on, even down to what show they see it on, is all very important. I recovered the mic.
That was nice. That was smooth.
It wasn't a catch. It was a good cable. It's all very important. Traditionally, that's algorithms and machine learning. With the advent of the AI era we're living in, we were very early adopters.
We announced MNTN Matched two years ago which is AI audience targeting, AI creative tools with QuickFrame. We have AI media planning.
Every aspect of their campaign, there are basically AI models that are determining who exactly should see this product, this ad, when should they see it, and so forth. I now refer to us as AI native because half the company is engineering, and we're both extensively using AI technology as well as extensively creating AI technology.
Right. Yeah. I'm glad you brought up MNTN Matched. Maybe just spend a minute on that, just because I think that is part of your secret sauce, and you were early adopters, as you said.
Yeah.
Yeah.
Nothing is more important than who sees the ad.
Think of it this way. If you're T-Mobile, everyone in America could potentially be a T-Mobile customer.
Like, they have a phone for babies. If you're more of a mid-size brand or a smaller brand, those dollars have to really stretch.
Who receives those ads is critically important. The more that we understand who your target consumer is, and the more we understand what they watch, when they watch, that's why we call it matching.
We're essentially matching consumers with products and brands they're potentially going to love. The way to make that match is through all of that decisioning.
That is what MNTN Matched does.
Right.
It really builds an audience tailor-made for the products in those specific ad campaigns, for those people that are going to best receive that.
Yeah. That's bringing in those performance capabilities, too.
Yeah. It's a lot of data involved. I get asked often about data. What's most important is the models applied.
The data is ubiquitous. The models applied to data is where all the value comes in. When you think of half of MNTN is engineering, the biggest portion of that half is on the MNTN Matched and the matching models.
Mm-hmm. Got it. Well, yes, matching the right ad to the right person is important, but as is creative to hook them in.
Yeah.
You have made a lot of progress on QuickFrame. I think you had over 70,000 sign-ups in Q2?
In the first half of the year.
In the first half of the year?
Yeah.
So maybe just talk about how that product has evolved over time and where you see the roadmap from here.
Yeah. The product is between, I think it was October last year and April of this year, we are already on version three.
So it is evolving very quickly. The new product releases literally every week. There is also new AI models releasing what feels at least every month if not faster. A significant portion of our customer base is using QuickFrame. Nearly all the Express customers, and a very healthy, like 30%, 40% of our mid-market customers are using QuickFrame. But there are also people that are coming to QuickFrame just from the creative side because it not only supports TV, it supports social and YouTube also.
We made it so that you can do any form of creation in it.
But it's geared towards paid media. That's the key.
Right. It is free right now?
It is free right now.
How do you see the monetization path playing out? Is there a specific engagement threshold you are looking for before maybe monetizing more directly, or?
Yeah, exactly.
Yeah.
We're testing out. We're mainly focused on its value in terms of enabling the Performance TV component, but we think it does have monetization possibilities.
We're testing those out. We're certainly seeing the inbound interest and adoption, and then seeing that convert into paying subscribers.
We're kind of playing with it now. We like to do these things and then announce the results.
Okay.
The results.
I will be waiting on bated breath. Switching gears, a key theme in the CTV or Performance TV space is obviously the transition of live sports over to streaming. You now offer advertisers access across nearly every major sports league. How have you built that Premium access, and then what has that done for performance and your sales conversations?
Yeah. One of the things I talked about last week was Express Pro and Premium. So Premium is what I refer to as even super Premium. Everything on our platform is Premium.
Meaning that you are on the best networks. Super Premium is guaranteed access to things like live sports, reality television, home improvement, basically specific shows. We want to give people the capabilities or the access they get in an upfront with guarantees, but without any of the headaches, all the downsides of the huge budgets. We launched that in January. We have many customers running in March Madness, World Cup, running on The Kardashians, running on The Real Housewives. We built partnerships with a number of streaming networks, which essentially is, like I said, bringing upfront-like capabilities but bringing it to the SMB market.
We are seeing customers, as a result, they ultimately want the performance, but they also intuitively if you are a certain type of brand, sports is going to resonate. A really good example is BowFlex are one of our customers.
They advertised via our platform in March Madness, targeted advertising, but in one of the biggest sports events. They got really, really good results from it.
Yeah. I used to have one back in the day. Maybe just sticking with that theme about these strong network relationships you have. I think most of your buying runs through prenegotiated private marketplace agreements.
Yeah.
As we head into this Q4 midterm political cycle, does that help insulate your customers from some CPM pressure, upwards pressure?
Absolutely.
Yeah.
Essentially, that pricing won't change. But they will still be on the exact same networks. Actually, one of the proof points of that is the AI media planning where it is essentially telling customers, "This is exactly how your media buy is going to be executed to get the performance that you are getting, or improve it." And so with that, they can be guaranteed that they are not going to see hiccups.
In this industry, there is what is called private marketplace and open market. Most of the inventory is just open auctions.
That pricing goes up. Private marketplace, which you have to have higher scale, stays constant. I think within the SMB segment, we are the largest buyer of ads.
I think the only company with scale that does private marketplace deals directly with the streaming networks.
Yeah. Feels like that might be a strong relative value proposition for you guys, given, I think, spend in this midterm political cycle is supposed to outpace the presidential cycle a blush.
Yeah.
Yeah.
It's big politically.
Yeah. Then maybe high level as we think about the industry, since you presented last year at this conference, Fox agreed to acquire Roku, and consolidation between content owners and platforms is picking up. So how does that impact supply relationships for an independent company like MNTN?
I don't think it has any impact. At the end of the day, no one says no to money. We represent the biggest growth opportunity in the industry, which is the SMB market, the small-midsize marketers. You look at an example, Paramount and Warner Bros., we work with both teams extensively.
At some point, I assume are going to get consolidated, but the relationship will continue.
And we intend, our spend will continue, unless see any reason they would want that to be otherwise.
Got it. Makes a lot of sense.
Yeah.
You mentioned Garland Hill earlier.
Yeah.
Former Chief Revenue Officer of TikTok that you brought over.
Head of Growth.
Head of Growth, excuse me.
Reporting to the Chief Revenue.
Okay. With a full quarter behind him, what has changed under his go-to-market leadership? You have talked about building out vertical sales teams. How has his leadership brought that about?
Yeah. The verticals is the biggest thing. One cycle that both TikTok went through and Meta, because before six years at TikTok building their revenue from scratch, he was six years at Meta.
One of the things both companies did, is when they reached a certain point, they broke into verticals in order to measure market adoption by vertical, and also start to build knowledge in that vertical.
He has done the same thing at MNTN. We recently restructured into verticals. Each team has independent goals. They have revenue targets, both to grow revenue with existing customers as well as to add customers. That is the biggest change, and we are expecting. We guided up in the second half of the year. Part of that is our confidence in the execution from that.
There is also a lot of other talent. Not everyone who joins the company we do press releases on. You can imagine when someone joins a team.
Yeah.
If they are a good leader, people want to follow. There are people definitely have followed Garland, and there's other executives who we added. We've been focused. One of my themes in the last earnings call was the scaling of the product to meet each opportunity, and then also the scaling of the sales and marketing basically, to meet the opportunity also.
How much is building expertise in the specific new emerging vertical is hiring the right people versus, say, investing in data versus something else that I'm not thinking of?
It's a combination of hiring the right people, some partnerships and a bit of technology. It's one of the advantages of organizing in verticals is that you can then justify certain verticals where you might need to make an investment in partnerships and technology. It can be justified if instead of a team that's just going after everyone, you have a dedicated forecast for that specific vertical that you can then pursue. An example, just a random example, might be healthcare.
There's lots of unique data you need for that, measurement for that. Another might be online stores combined with brick and mortar.
You need different measurement data from that. By organizing that way, the whole company can basically rally around that vertical and then grow the scale, and we're already seeing proof of that.
Mm-hmm. Yep. Makes a lot of sense. You recently announced an integration with HubSpot, which to me indicated leaning in more to B2B and lead gen use cases.
Yeah.
How meaningful could B2B advertisers become on the platform, and does contact-level measurement change the conversation at all?
Yeah. It's MNTN's own number one lead generators. B2B. We're a B2B company, and most of our revenue comes from selling to B2C companies, but we've been approached by a lot of B2B companies, and that's an area we already had success in. We invested last year in another partnership with HubSpot. What HubSpot did is it got us down to, we can tell you the person that you can do both people-level targeting as well as much more granular measurements.
That is another really good example of verticalization, where that is now a dedicated vertical that we are going after. The engineering team is making enhancements to the products, then the sales team, the individual sellers, now have more vertical knowledge as to how to communicate with those B2B companies.
Mm-hmm. Could we see that vertical start to indirectly show up in the numbers in 2027, or is that a longer-term build-out?
No, I think any investment we're making you're looking for it to start to show up in the next 6- 12 months.
Got it. Maybe a couple questions on financials. You guided to Q3 revenue growth of 25%, the midpoint that's accelerating from 20% in Q2, and the full year guide points to your first $100 million revenue quarter in Q4, which would be great to see. What are the assumptions underpinning that acceleration?
Well, I think it's the investments I already talked about, what we're doing in product, and that starting to contribute. Also most importantly, we think the there, it's just an investment in sales and marketing and the interest we're seeing, the demand we're seeing in the market.
We consider that. Also Q4 is historically, and we expect the same this year, it is the largest quarter for us as a percentage of the year. There is some of that forecasted in also.
Mm-hmm. This is more just a broader question, but I feel like some advertisers might have held back some funds earlier in the year, given all the tariff volatility and whatnot. Are you seeing anything that could suggest that those funds be re-released in Q4? Or just maybe talk about how you're thinking about that.
Yeah, the majority of the SMB market is e-commerce.
Yeah.
It's a majority of our revenue, and Q4 is our biggest quarter.
Yeah.
There just is no doubt. In Q3, the [RRA store is really seeing Halloween.
They probably start with Halloween now. They will start with Thanksgiving.
So you already have people putting out things for Halloween. That is October. Right now, we are in mid-August, so you are just going to see a ramp.
Yeah.
You are not only seeing a ramp in the market, part of that is the lift, but you are seeing our investments in sales and marketing. Th ose take about six to three quarters to start to really show up. You see that also.
Got it. Then maybe on capital allocation, your board just authorized a $100 million buyback program. How are you thinking about buybacks versus M&A versus other uses of capital?
Yeah, there's three uses of capital.
Yeah.
You can invest in a business, which we're doing. This is everything we've been talking about.
You can invest in acquisitions. We're always looking at opportunity, but there's nothing specific that we're pursuing at the moment. Or you can invest in your own stock, and we think the stock's a really good value.
Yeah.
We decided to invest it. The other statement that you made also is that we authorized a $100 million buyback, and we're generating $100 million of free cash flow.
This is just approximately $100 million of free cash flow. So we're not even having to touch the cash in the bank to execute that buyback.
Got it.
We expect that to go up next year, too.
Mm-hmm. I agree with you, by the way.
By up, I mean the cash flow.
Yes. I agree with you, by the way, that your stock is undervalued.
Thank you. With that.
We have just a couple minutes left here. I have a couple more questions, but maybe we will see if there is anybody in the audience that wants to ask a question right now. For SMB focus, what is the average spend that they typically have when they sign up for a rate? So real numbers.
Just, sorry, the question was average SMB spend. Average spend on the platform.
Yeah.
Okay.
Average spend for our midsize customers is deep six figures. Many, many hundreds of thousands because it is, I think, approaching a little less than that per month. For the small business, it is new, but my current estimates are approximately about $15,000 a year.
Okay.
For the smallest, but we are acquiring them at a much faster rate. Yes.
How do you measure ROI?
How do we measure ROI from the platform?
Yeah. If it's a performance-based product,
Yeah.
What is the definition of that?
Yeah. There are two key measures that marketers use, for B2C marketers: return on ad spend, simple calculation, so it's revenue driven by a campaign divided by the cost, what you spend, and cost per acquisition, what did it cost to get them. The technology to do that, we call Verified Visits. There's no clicks on a TV ad, but there are many marketing channels that don't have clicks. So we measure based on where we stream the ad, the household, and then any response on any other device from that household. And we see that using tracking pixels, which is common technology. The key thing in that is what we call our identity graph, which is being able to build identity graphs of, I think it's right now about 142 million households, which is nearly every household in America.
That technology is the key. Our customers also, as they get larger, just even the small mid-market, they use our data. This is common across all channels, search, social, Performance TV. They use Google's data, Meta data. For Performance TV, they use our data. But they also use media mix modeling tools from companies like Northbeam and Rockerbox, and multi-touch attribution. All of these brands basically are trying to understand our view of the data, especially for creative, and then they're looking at their overall marketing contribution using third-party tools. We integrate with 11 of those. There's basically 11 key vendors, and we integrated with all of them.
And with that, I think we are out of time. Mark, thank you so much.
Thank you.
It was a great session.