NASDAQ:OB Outbrain Q2 2024 Earnings Report $3.36 +0.02 (+0.45%) Closing price 03:59 PM EasternExtended Trading$3.38 +0.02 (+0.59%) As of 07:11 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Outbrain EPS ResultsActual EPS-$0.04Consensus EPS -$0.06Beat/MissBeat by +$0.02One Year Ago EPS-$0.08Outbrain Revenue ResultsActual Revenue$214.15 millionExpected Revenue$55.30 millionBeat/MissBeat by +$158.85 millionYoY Revenue GrowthN/AOutbrain Announcement DetailsQuarterQ2 2024Date8/8/2024TimeBefore Market OpensConference Call DateThursday, August 8, 2024Conference Call Time8:30AM ETUpcoming EarningsOutbrain's Q1 2025 earnings is scheduled for Friday, May 9, 2025, with a conference call scheduled at 8:30 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Outbrain Q2 2024 Earnings Call TranscriptProvided by QuartrAugust 8, 2024 ShareLink copied to clipboard.There are 9 speakers on the call. Operator00:00:00Good day, and welcome to Outbrain Incorporated 2nd Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen only mode. Question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I'd like to turn the call over to Outbrain's Investor Relations. Operator00:00:21Please go ahead. Speaker 100:00:22Good morning, and thank you for joining us on today's conference call to discuss operating Q2 2024 results. Joining me on the call today, we have operating CEO, David Kaufmann and CFO, Jason Kiewviatt. During this conference call, management will make forward looking statements based on current expectations and assumptions. These statements are subject to risks and uncertainties that may cause actual results to differ materially from our forward looking statements. These risk factors are discussed in detail in our Form 10 ks filed for the year ended December 31, 2023, as updated in our subsequent reports filed with the Securities and Exchange Commission. Speaker 100:01:01Forward looking statements speak only as of the call's original date, but we do not undertake any duty to update any such statements. Today's presentation also includes references to non GAAP financial measures. You should refer to the information contained in the company's 2nd quarter earnings release for definitional information and reconciliations of the non GAAP measures to the comparable GAAP financial measures. Our earnings release can be found on our IR website, investors. Operating.com, under News and Events. Speaker 100:01:32With that, let me turn the call over to David. Speaker 200:01:36Thank you, Sam. Good morning and thank you for joining us today for our Q2 Teads, combining the 2 companies into a platform that we believe will define the next generation of open Internet advertising. This is a transformative merger that positions us as one of the largest open Internet advertising platforms. It dramatically changes our financial profile in terms of profitability and growth opportunities. We believe the combination will deliver significant accretion to our shareholders to synergies and the financial leverage of the transaction. Speaker 200:02:20The 2 companies have amazing teams of talented, innovative, driven people that have been instrumental in establishing our 2 companies as category creators and leaders, out winning performance and teams in branding. Together, we believe we will create a scaled global platform that can deliver outcomes for advertisers currently only rivals by walled gardens. We've been clear that our vision is to become a true end to end full funnel platform for the open Internet with the level of service and standards centered on serving brand needs. The news of our merger with Teeth allows us to take a massive leap forward in executing this strategy. The reception we've seen from many industry players reinforces our confidence in the merger's rationale. Speaker 200:03:11Many of our partners for media owners to brands and agencies express their excitement about the opportunities the new company would create. For example, Peter Wurttemberger, Executive Vice President at Akzo Springer wrote to us, this is a significant milestone for both companies and we are thrilled to see your expanded capabilities. We look forward to seeing the positive impact this partnership will have on the industry and on our collaboration. And another one, Alexandre Chaban, CEO of GroupM France, one of our agency partners wrote, this merger of the leaders in performance marketing and video branding promises to be an exciting and transformative alliance. These statements are just 2 of many examples of the overwhelmingly positive feedback from so many of our clients and I want to take this opportunity to thank them for that and for their continued partnership. Speaker 200:04:09The 2 companies will continue to operate that standalone business as we prepare the post merger integration plans. Closing, which is subject to regulatory approvals, outbound shareholder vote and other standard closing conditions is expected by Q1 2025. Now I want to provide an update on Q2 and the progress on our 2024 growth drivers. For Q2, I'm pleased to report that we delivered extra gross profit of $56,000,000 towards the higher end of our guidance. We significantly exceeded our adjusted EBITDA guidance with $7,400,000 and we generated positive free cash flow for the 4th consecutive quarter. Speaker 200:04:57These results are driven by positive trend in our core business and the momentum in our growth drivers. As you may recall, these growth drivers we talked about revolve around 3 pillars. The first pillar refers to expanding our share of wallet with advertisers across both brands and agencies as well as performance advertisers. Onyx Direct sales continued to grow through the combination of new clients, new markets and rebookings. We successfully launched Onex in Israel and Spain and have several campaigns live in both countries. Speaker 200:05:31This is in addition to the U. S, UK, Germany, Italy and Japan. In addition, Onex has continued to see strong rebooking rate of nearly 40% in Q2, reflecting the business impact Onex has delivered for our clients. Notably, we secured multiple campaigns from enterprise partners such as Disney Plus, Purina, Nissan, including a great campaign promoting the Taylor Swift Aerostore. Sorry, I had to mention this campaign to get some credit with my daughter. Speaker 200:06:04On the performance side of our business, one of our main initiatives is shifting certain buyer profiles to our DSP, ZEMANTA. Our DSP enables these clients to drive ROAS at a larger scale on the open Internet, allowing us to capture a larger share of wallet from these clients at a higher ex TAC margin. In the first half of 2024, we achieved remarkable growth on our DSP with advertiser spend growing by approximately 50% in comparison to the first half of 2023. Moving on to our second pillar, we've continued to expand our supply footprint outside of our traditional feed, enabling advertisers to reach consumers with a range of placements across the entirety of the open Internet. These revenues which are on inventory beyond our traditional feeds represented approximately 20 7% of our revenue in Q2 2024 versus 24% in Q2 2023. Speaker 200:07:11Our 3rd pillar, we continue to invest in deepening our partnerships with top premium media owners. We signed new exclusive feed partnerships among others with Epiro in France and the Daily Beast in the U. S. We also renewed several partnerships, including Ad Alliance in Germany and Vox in the U. S. Speaker 200:07:32This resulted in logo retention of 99% in Q2. Also Keystone saw continued adoption by some of our top premium publishers. Let me share a few highlights on our products and ARGO. We launched a new AI driven targeting solution, Predictive Demographics. Predictive Demographics enables our clients to reach relevant demographic audiences without relying on 3rd party cookies. Speaker 200:08:02Outbrain predictive demographics is establishing itself as a real option for demographic targeting among demand buyers with early data showing an adoption rate surpassing traditional third party targeting segments by up to 40%. For one of our recent clients, a public health campaign in the U. S, predictive demographics drove 2.7 times higher click through rate comparison to campaigns using 3rd party demographic segments. We are encouraged by these results, which signal to us that advertisers are looking for privacy forward audience solutions that can drive results. On the heels of Google's announcement to reverse the plans to deprecate third party cookies in Chrome, we remain committed to driving results with contextual and privacy centric signals. Speaker 200:08:54The successful launch of predictive demographics is a reflection of this. On the algo side, our click through rate has witnessed double digit growth in the first half of twenty twenty four. And we've also witnessed our 3rd consecutive quarter of year over year RPM growth sustaining our upward momentum. In conclusion, our Q2 has been marked by growth, new partnerships and innovative strides in improving campaign performance and user engagement. I'm confident that our trajectory remains strong and that we are well positioned for sustained success in the future. Speaker 200:09:33We are thrilled to embark on the next chapter we teach and are focused on executing our strategy to build towards becoming the preferred full funnel platform for brands on the open Internet. With that, I'll turn it over to Jason. Speaker 300:09:52Thanks, David. As David mentioned, we achieved our Q2 guidance for Axtec gross profit and exceeded our Q2 guidance for adjusted EBITDA, generating positive free cash flow for the 4th consecutive quarter. Overall, we feel we have made updates to our revenue mix and cost structure that are having a positive impact on our profitability now and expect that to continue in the future. Revenue in Q2 was approximately 2 $14,000,000 reflecting a decrease of 5% year over year. New Media Partners in the quarter contributed 6 percentage points or approximately $14,000,000 of revenue growth year over year. Speaker 300:10:26Net revenue retention of our publishers was 89%, which reflects continued headwind from the impact of the demand environment on pricing as well as downward pressure of ad impressions from certain key supply partners as noted in the prior quarter. Consistent with recent quarters, logo retention was 99% for all partners that generated at least $10,000 and our 5 largest churns amounted to only 2 combined points of year over year headwind on NRR. With respect to advertising demand, pricing remains low relative to our history and while it remains down year over year, we have seen positive trends over the course of Q2, improvement month over month. This along with continued improvements in click through rates drove acceleration in RPMs, which have now seen growth year over year for the 3rd consecutive quarter. Ex tech gross profit was $56,000,000 an increase of 3 percent year over year outpacing revenue for the 5th quarter in a row, driven primarily by net favorable change in our revenue mix and improved performance from certain deals. Speaker 300:11:28As noted previously, the investment areas we are focused on are largely areas that we expect will drive a higher ex tech take rate And these areas are helping bring that to fruition. While ex tech gross profit returned to year over year growth in Q2 on the strength of these accelerating growth areas and the positive momentum of RPMs. Over the past two quarters, we've noted volatility from one of our key partners transitioning to a new bidding technology, Alporin being one of the first partners to complete this transition in early May. The transition involves access to new supply opportunities for us and we remain focused on the optimization and rescaling of our demand. This volatility impacted our ex TEC gross profit in Q2 by high single digit percentage. Speaker 300:12:10Our overall Q2 ex TEC gross profit would have grown double digit percentage year over year excluding this one isolated headwind. Moving to expenses. Operating expenses decreased by approximately 1% year over year to $51,200,000 in the quarter as we continue to balance investments in our strategic priorities with continued cost discipline. The OpEx decline year over year was driven by compensation and bad debt savings as well as timing benefits of expenses shifting from Q2 into H2, offset partially by the increased professional fees related to our announced anticipated transaction with fees. As a result, we doubled our adjusted EBITDA year over year to $7,400,000 Moving to liquidity. Speaker 300:12:54Free cash flow, which as a reminder, we define as cash from operating activities less CapEx and capitalized software costs, was approximately $300,000 in the 2nd quarter as a result of offsetting impacts of profitability, strong collections of receivables, timing of income tax and other payments and seasonality. As a result, we ended the quarter with $229,000,000 of cash, cash equivalents and investments and marketable securities on the balance sheet and $118,000,000 of long term convertible debt. In December 2022, the company's Board of Directors authorized $30,000,000 share repurchase program. And in Q2, we purchased approximately 500,000 shares for $2,000,000 As of June 30, we have $6,600,000 remaining under our current authorization. Given the pending acquisition of Teeds, we currently do not intend to continue repurchasing shares. Speaker 300:13:48Turning to our outlook. In our guidance, we assume regular seasonality and as noted in the prior quarter, continued execution of our growth drivers. Additionally, our guidance reflect the Outbrain as a standalone business with the assumption that the announced transaction with Keyes will not close before year end. With that context, we have provided the following guidance. For Q3, we expect ex tech gross profit of $58,000,000 to $62,000,000 and we expect adjusted EBITDA of $8,000,000 to $10,500,000 We maintain our previous full year 2024 guidance for extec gross profit of $238,000,000 to $248,000,000 and are increasing our guidance for adjusted EBITDA to $31,500,000 to $36,000,000 Now, I'll turn it back to the operator for Q and Operator00:14:38A. Thank you. And we'll take our first question from Andrew Boone from JMP Securities. Please go ahead, Andrew. Speaker 400:15:00Good morning and thanks so much for taking my questions. You highlighted the growth in RPMs in the quarter. Can you talk about the drivers of that? Your confidence that this can continue? And then, Jason, can you wrap that into the implied guidance for 4Q and talk about your confidence just given the implied acceleration that that full year guidance implies for 4Q. Speaker 400:15:21And then Dickie, just stepping back, can you talk about the conversations that you're having with advertisers just in the last week, understood still very new, but what's the reception been to the announcement of the Teeds acquisition? Thanks so much guys. Speaker 300:15:37Sure. Thanks, Andrew. It's Jason and I'll take the first couple there. So as far as what's driving RPMs, I mean, it's the 3rd quarter in a row that we're seeing yields or RPMs up year over year. One constant driver has been the click through rates, which we've been kind of each quarter breaking our previous records as far as just how high those click through rates are. Speaker 300:15:59There's a lot that goes into that, obviously, algorithmic improvements, use of additional data signals, optimizations, like some of our dynamic placements that we're using are helping drive higher click through rates. So click through rates have been a good thing for a long time for us and go in the right direction. The one kind of new thing I'd say this quarter was we started to see just a better trend on cost per click on CPCs, which have been a headwind and remain a headwind for us year over year in Q2. But over the course of the quarter, we started to see it go in the right direction as far as just narrowing the headwind year over year. So that was a real positive. Speaker 300:16:38It comes with maybe some market dynamics and also some changes we made internally as well. So good things there at RPMs and we obviously see it not only driving better revenue but also better margins. And then as far as the confidence in the back half and Q4, yes, we do expect acceleration in Q3 versus Q2 and also Q4 versus Q3 versus the 3% ex that growth we saw in Q2, we get to I think 6% in Q3 at the midpoint and 17% in Q4 at the midpoint. So maybe just a lot of the good things that we see driving the success in Q2 and into Q3, we see continuing into Q4. So that's definitely a piece of it, but I think a big piece of it and that step up from the 6% growth to 17%. Speaker 300:17:30The difference is a lot of it's coming from year over year comps actually. So 8 points of even comps in Q4 is one way to look at it. Last year, we didn't have a normal Q4. Obviously, it started with the attacks on October 7 and the war and the impact on our war related news page views and just advertising demand. And also just we talk about the key tech partner transition, we did start to see some headwinds on that really in Q4 of last year. Speaker 300:17:58So the 2 of those things combined ease the comps for Q4 and that's driving I think 8 points of improvement as compared to the Q3. And then continued success of the growth drivers that we're already seeing some success with obviously. And yes, RPMs, election, so just those are more smaller items there flowing through our model, but all that combined? Speaker 200:18:23Andrew, I'll take the second one. Thanks. So it's been actually a very exciting week with overwhelmingly positive feedback from players in the industry, both advertisers and video owners, publishers on the advertiser side specifically, they really view this as a huge opportunity to have one player that can provide the full funnel solution on the open Internet. When we talk about full funnel, that means branding, consideration and conversions on an end to end basis due to advantage of the data. So it was overwhelmingly both the teeth on the teeth side and on our side, really people are expecting as quickly as possible for us to close this and be able to bring them the value proposition we're talking about, which is really the combination of leaders in performance, which is us and leaders in branding that is key. Speaker 200:19:16So it's been great and it's been a very exciting week as you can imagine. Speaker 400:19:22Thank you. Operator00:19:25Thank you. And we'll take our next question from Yigal Aronian from Citi. Please go ahead, Yigal. Speaker 500:19:33Hey, good morning guys. You have Max on for Yigal. I guess first maybe just start with what you're seeing in the ad macro. It seems like it was maybe it's been a little more mixed, but what you're seeing now and kind of how you see that playing out through the rest of the year, if there's anything maybe geographical or vertical to call Speaker 300:19:57out? Sure. And I can start with that. So yes, like I said, we did see continued RPM and even CPC gains over the course of Q2, which is a combination of a lot of factors. So it's hard to know how much of it is macro versus internal or specific to us, but we did see positive things. Speaker 300:20:18So that's a good sign. Geographically, I'd say we see strength in Europe, particularly Germany, which is our 2nd largest market and Spain, where a couple of our stronger markets throughout the quarter. And yes, I mean, going forward, I think it's hard to predict anything, I guess, macro wise going forward. But we obviously hope to see the continued acceleration of what we saw through Q2 is what we're hoping for, but not overly relying on that, I'd say, in our guidance. Speaker 500:20:56Okay. Thanks. Yes, that's helpful. And then maybe just spending a little time on Samantha, obviously some good growth there. Is there anything maybe like specific you guys can call out on what's driving this? Speaker 500:21:10And then maybe just kind of like bigger picture, in the combined company, how do you see Samantha fitting in with Keyes and maybe just with the Tech Stack too as you look to combine obviously early days, but maybe just any early thoughts on how you think about combining those going forward? Speaker 200:21:32Sure. I'll take that, Max. So on ZEMENTA, it's been one of our growth drivers for this year has been really to grow the share of wallet from performance advertisers by just delivering superior ROAS to them and also allowing them to spend more on the entirety of the open Internet, again, in line with our vision of becoming the main gateway for the open Internet for both brand advertisers and performance. We started last year to ship some type of clients that just had better performance on the Dementor platform into that. So that causes 2 things, a) they spend more because outbrain publisher network, but they also can spend on 3rd party platforms, other SSPs and so and then that grows the shareholder and also we for us, it's a margin enhancer. Speaker 200:22:22We've seen we said 50% growth in the spend on the mentor and I think that will continue to be one of the main growth drivers for the company standalone. As to the combination, we see it's a little bit early days. We have not yet gone deeply into sort of product planning, etcetera. We just started I think we mentioned the post merger integration planning. And generally, I would say the Meta platform is very, very focused on performance buyers. Speaker 200:22:50So I believe it will continue to be part of our growth drivers in the future for those type of buyers. Speaker 500:23:01Okay, great. Thanks guys. Operator00:23:04Thank you. And we'll take our next question from Laura Martin from Needham. Please go ahead Laura. Speaker 600:23:10Yes, I also have 2. The first one is when you think about revenue synergies, is it a bigger upside driver that Teeds will be able to sell in performance advertising from the Outbrain core business or the reverse Outbrain adds more upper funnel from the Tees client base? Speaker 200:23:32Hey, Laura. It's actually on both sides. So what we've heard and also throughout the process, Teads was going sort of to the mid funnel and to conversions, but again only with enterprise brand buyers. So that's the focus in terms of the customer base and that customer base also has different objectives on their campaigns. So we see a huge opportunity and also the teams management sees a huge opportunity to just drive leveraging our prediction technology algorithms, just better conversions and low funnel business for the brand advertisers. Speaker 200:24:10At the same time, we have about 40% of our business today is with brand and enterprises. They do mostly performance. I mentioned a few campaigns that we have. So for example, if you look at automotive client like Audi, we mentioned it in the call, they can really have us as the partner for the entirety of the funnel. So I think it's in both directions. Speaker 200:24:35When we gave the synergy number that we when we announced the deal, the $50,000,000 to $60,000,000 that doesn't include minimal top line synergies. It's mostly just around operating synergies and other opportunities across the 2 networks. Speaker 600:24:52Okay. Thanks. And then Jason for you, the gross revenue came in really light, but the net revenue, which is how we value came in right in line sort of with our estimates. So is that related to this unique client that had an impact and it only had an impact on gross revenue, but not net revenue? Is that how I should take your commentary about the one time disruption of I assume it's Microsoft? Speaker 600:25:14Yes. So Speaker 300:25:21definitely impacted both. It's not just one line or the other line. A lot of the things that we're focusing on right now are things that are higher margin segments or drivers. I think Samantha DSP business is a good example of that in that the way that works is it's actually a net revenue business in that the fees that are charged for customers to use the platform and buy media spend are recognized on a net revenue basis. So it's just an accounting thing there and we might see some trade off in gross revenue in exchange for X Tech when we're doing that. Speaker 200:26:05Maybe I just want to add on the Laura on the one partner. So again, strategic partner, they made the transition. We are the 1st native partner to make a full transition, signed a new agreement with them that transition also involves access to new types of supply within Microsoft, like Outlook and Games and others. So it's a transition. We were the first to complete it. Speaker 200:26:29We see also big upside opportunities potentially down the road, but I think we just need to be cautious with sort of how we scale up our buyers on that. Speaker 600:26:42Thank you. Operator00:26:44Thank you. And we'll take our next question from James Heaney from Jefferies. Please go ahead, James. Speaker 700:26:51Great. Thank you, guys. Could you just talk about the growth that you saw from Onex in the quarter? And maybe if you could comment on your pivot from being more of a performance ad platform to servicing more upper funnel objectives? And I have another follow-up. Speaker 200:27:06So we're talking about Onex. We had strong rebookings. We don't break it down specifically, but strong rebookings, good adoption. We launched it in more markets and like I said about sort of second half of it. I think that's actually one part of the business that in the second half may get somewhat impacted by the seeds merger. Speaker 200:27:25I mean, it is addressing sort of the upper funnel opportunities with large agencies. And so that's Onex. Speaker 700:27:37Great. And then, Jason, just on your full year EBITDA guide being raised, I'm just curious where you're seeing the majority of the cost savings in the business. And just broadly speaking, how to think about the balance of growth and profitability? Thank you. Speaker 300:27:54Sure. Yes, we do we've been a bit focused on in the last couple of years on just improving our business model in general. And I think that we've done a lot of that both in terms of changing our revenue mix and our approach to these investment areas that tend to have higher margins and higher profit margins as well, which I think we've been pretty successful at it. If you look at take rate now versus where it was a year or 2 years ago, but also with cost structure. And we've been pretty focused on that last year and the year before and we continue to focus on it this year. Speaker 300:28:29And so we've been outperforming our plans on costs and some of that comes with just operating more efficiently, really being hard on ourselves with which areas to invest in and which not and really scrutinizing our spend on that. We do expect to step up in the second half of the year on costs in some areas. Obviously, some of the hiring we've done for the investment areas happened during Q2. And so we expect that to be a little bit higher in the second half of the year. But we think it's a nice setup for us to obviously deliver the higher level of EBITDA and remain prudent in our spending. Speaker 700:29:12Thank you. Operator00:29:15Thank you. And we'll take our next question from Zach Cummins from B. Riley. Please go ahead. Speaker 800:29:22Hi, good morning. Thanks for taking my questions. Jason, I was curious, what are your assumptions that you're baking in for Microsoft in the second half of the year? Are you assuming you're relatively stable from these Q2 levels or any sort of improvement baked into the second half? Speaker 300:29:39Yes. So we obviously are looking at this very closely. Again, we believe we're the 1st native partner to complete this transition and we've been very focused on driving the rescaling as we said it a few months ago. I think right now what we've seen is just volatility and that's really our approach to the forecast for the second half of the year is accounting for it with just a greater range of variability in our Q2 in our H2 numbers. Because on one hand we do see upside, on the other hand we've seen volatility and so we thought the best approach was to just account for with a wider range of variability. Speaker 800:30:23Understood. And in terms of just your overall footprint on the open Internet, I think metrics you shared was 27% on your nontraditional, I'd say, formats on the open Internet. Can you speak to the ideal mix as you go over time in terms of your footprint, just for standalone Outbrain? Curious how you're continuing to drive that strategy. So Speaker 200:30:50we are really trying to build ourselves as the main gateway to the entirety of the open Internet. We have a strong asset in the bidding some great wins on the premium publisher side this quarter. Some great wins on the premium publisher side this quarter. So again, we're very, very focused on our core supply base and brand and enterprises on premium. We believe that sort of premium supply drive premium demand, mostly going for performance on 3rd parties where they're looking for fewer rollouts and Samantha is just a great platform to do that. Speaker 200:31:31Again, overall, we see ourselves in terms of growth that we deliver through sort of these efforts as the sort of outperforming competition on organic growth, and that's what we're looking at in terms of, again, growing the entire budget base that we can deliver both on our publisher base and on the 3rd party supply. Speaker 800:31:56Understood. Well, thanks for taking my questions and best of luck with the rest of the quarter. Operator00:32:05And that will conclude the question and answer session. I'd like to turn the floor back to David Crossman closing remarks. Speaker 200:32:12Thank you, Camilo. Thank you all for joining us today. We appreciate your support and partnership and looking forward to the exciting journey ahead together with all our shareholders. Thank you very much. Operator00:32:25Thank you. Ladies and gentlemen, this does conclude today's teleconference.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallOutbrain Q2 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Outbrain Earnings HeadlinesBlackRock, Inc. Reduces Stake in Outbrain Inc. by 12.64%April 30, 2025 | gurufocus.comOutbrain to Release First Quarter 2025 Financial Results on May 9, 2025April 29, 2025 | globenewswire.comSilicon Valley Gold RushA new technology has sparked a modern-day gold rush in Silicon Valley. OpenAI’s Sam Altman invested $375M. Bill Gates has backed four companies in this space. The World Economic Forum calls it “the most exciting human discovery since fire.” Whitney Tilson believes this trend could mint a new class of wealthy investors—and he’s sharing one stock to watch now, for free.May 7, 2025 | Stansberry Research (Ad)Teads Celebrates Major Milestone as CTV HomeScreen Powers 1,500 CampaignsApril 22, 2025 | globenewswire.comIs Outbrain Inc. (OB) the Best Under-the-Radar Stock to Buy Now?April 18, 2025 | msn.comIs Outbrain (OB) The High Growth Low Debt Stock to Invest in Now?March 22, 2025 | msn.comSee More Outbrain Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Outbrain? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Outbrain and other key companies, straight to your email. Email Address About OutbrainOutbrain (NASDAQ:OB), together with its subsidiaries, operates a technology platform that connects media owners and advertisers with engaged audiences to drive business outcomes worldwide. It offers a suite of solutions for media owners that facilitates content discovery and monetization for its media partners on their own sites; Onyx by Outbrain, a branding platform; AI platform that delivers customized experiences; engaging video experiences for publisher audience development and advertiser purposes; tools and services to promote organic editorial experiences to their audiences, enhancing audience engagement, recirculation, and monetization opportunities; and Keystone by Outbrain technology that extends ad server optimization. The company also provides advertising solutions for advertisers, including ad experiences, such as standard native, carousel and app install ads, outstream video, contextual pre-roll video, and high-impact display; AI-powered prediction engines; Conversion Bid Strategy tool that uses engagement data and machine learning to optimize bid strategies to hit the advertiser's desired campaign goals; data comprising targeting offerings based on consumer interest segments, as well as complex offerings that predict audience characteristics based on contextual and interest data; Outbrain platform, which enables advertisers to optimize campaign goals, engagement, and delivering other measurable business outcomes; and full-stack buying solutions. Outbrain Inc. was incorporated in 2006 and is headquartered in New York, New York.View Outbrain ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Disney Stock Jumps on Earnings—Is the Magic Sustainable?Archer Stock Eyes Q1 Earnings After UAE UpdatesFord Motor Stock Rises After Earnings, But Momentum May Not Last Broadcom Stock Gets a Lift on Hyperscaler Earnings & CapEx BoostPalantir Stock Drops Despite Stellar Earnings: What's Next?Is Eli Lilly a Buy After Weak Earnings and CVS-Novo Partnership?Is Reddit Stock a Buy, Sell, or Hold After Earnings Release? 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There are 9 speakers on the call. Operator00:00:00Good day, and welcome to Outbrain Incorporated 2nd Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen only mode. Question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I'd like to turn the call over to Outbrain's Investor Relations. Operator00:00:21Please go ahead. Speaker 100:00:22Good morning, and thank you for joining us on today's conference call to discuss operating Q2 2024 results. Joining me on the call today, we have operating CEO, David Kaufmann and CFO, Jason Kiewviatt. During this conference call, management will make forward looking statements based on current expectations and assumptions. These statements are subject to risks and uncertainties that may cause actual results to differ materially from our forward looking statements. These risk factors are discussed in detail in our Form 10 ks filed for the year ended December 31, 2023, as updated in our subsequent reports filed with the Securities and Exchange Commission. Speaker 100:01:01Forward looking statements speak only as of the call's original date, but we do not undertake any duty to update any such statements. Today's presentation also includes references to non GAAP financial measures. You should refer to the information contained in the company's 2nd quarter earnings release for definitional information and reconciliations of the non GAAP measures to the comparable GAAP financial measures. Our earnings release can be found on our IR website, investors. Operating.com, under News and Events. Speaker 100:01:32With that, let me turn the call over to David. Speaker 200:01:36Thank you, Sam. Good morning and thank you for joining us today for our Q2 Teads, combining the 2 companies into a platform that we believe will define the next generation of open Internet advertising. This is a transformative merger that positions us as one of the largest open Internet advertising platforms. It dramatically changes our financial profile in terms of profitability and growth opportunities. We believe the combination will deliver significant accretion to our shareholders to synergies and the financial leverage of the transaction. Speaker 200:02:20The 2 companies have amazing teams of talented, innovative, driven people that have been instrumental in establishing our 2 companies as category creators and leaders, out winning performance and teams in branding. Together, we believe we will create a scaled global platform that can deliver outcomes for advertisers currently only rivals by walled gardens. We've been clear that our vision is to become a true end to end full funnel platform for the open Internet with the level of service and standards centered on serving brand needs. The news of our merger with Teeth allows us to take a massive leap forward in executing this strategy. The reception we've seen from many industry players reinforces our confidence in the merger's rationale. Speaker 200:03:11Many of our partners for media owners to brands and agencies express their excitement about the opportunities the new company would create. For example, Peter Wurttemberger, Executive Vice President at Akzo Springer wrote to us, this is a significant milestone for both companies and we are thrilled to see your expanded capabilities. We look forward to seeing the positive impact this partnership will have on the industry and on our collaboration. And another one, Alexandre Chaban, CEO of GroupM France, one of our agency partners wrote, this merger of the leaders in performance marketing and video branding promises to be an exciting and transformative alliance. These statements are just 2 of many examples of the overwhelmingly positive feedback from so many of our clients and I want to take this opportunity to thank them for that and for their continued partnership. Speaker 200:04:09The 2 companies will continue to operate that standalone business as we prepare the post merger integration plans. Closing, which is subject to regulatory approvals, outbound shareholder vote and other standard closing conditions is expected by Q1 2025. Now I want to provide an update on Q2 and the progress on our 2024 growth drivers. For Q2, I'm pleased to report that we delivered extra gross profit of $56,000,000 towards the higher end of our guidance. We significantly exceeded our adjusted EBITDA guidance with $7,400,000 and we generated positive free cash flow for the 4th consecutive quarter. Speaker 200:04:57These results are driven by positive trend in our core business and the momentum in our growth drivers. As you may recall, these growth drivers we talked about revolve around 3 pillars. The first pillar refers to expanding our share of wallet with advertisers across both brands and agencies as well as performance advertisers. Onyx Direct sales continued to grow through the combination of new clients, new markets and rebookings. We successfully launched Onex in Israel and Spain and have several campaigns live in both countries. Speaker 200:05:31This is in addition to the U. S, UK, Germany, Italy and Japan. In addition, Onex has continued to see strong rebooking rate of nearly 40% in Q2, reflecting the business impact Onex has delivered for our clients. Notably, we secured multiple campaigns from enterprise partners such as Disney Plus, Purina, Nissan, including a great campaign promoting the Taylor Swift Aerostore. Sorry, I had to mention this campaign to get some credit with my daughter. Speaker 200:06:04On the performance side of our business, one of our main initiatives is shifting certain buyer profiles to our DSP, ZEMANTA. Our DSP enables these clients to drive ROAS at a larger scale on the open Internet, allowing us to capture a larger share of wallet from these clients at a higher ex TAC margin. In the first half of 2024, we achieved remarkable growth on our DSP with advertiser spend growing by approximately 50% in comparison to the first half of 2023. Moving on to our second pillar, we've continued to expand our supply footprint outside of our traditional feed, enabling advertisers to reach consumers with a range of placements across the entirety of the open Internet. These revenues which are on inventory beyond our traditional feeds represented approximately 20 7% of our revenue in Q2 2024 versus 24% in Q2 2023. Speaker 200:07:11Our 3rd pillar, we continue to invest in deepening our partnerships with top premium media owners. We signed new exclusive feed partnerships among others with Epiro in France and the Daily Beast in the U. S. We also renewed several partnerships, including Ad Alliance in Germany and Vox in the U. S. Speaker 200:07:32This resulted in logo retention of 99% in Q2. Also Keystone saw continued adoption by some of our top premium publishers. Let me share a few highlights on our products and ARGO. We launched a new AI driven targeting solution, Predictive Demographics. Predictive Demographics enables our clients to reach relevant demographic audiences without relying on 3rd party cookies. Speaker 200:08:02Outbrain predictive demographics is establishing itself as a real option for demographic targeting among demand buyers with early data showing an adoption rate surpassing traditional third party targeting segments by up to 40%. For one of our recent clients, a public health campaign in the U. S, predictive demographics drove 2.7 times higher click through rate comparison to campaigns using 3rd party demographic segments. We are encouraged by these results, which signal to us that advertisers are looking for privacy forward audience solutions that can drive results. On the heels of Google's announcement to reverse the plans to deprecate third party cookies in Chrome, we remain committed to driving results with contextual and privacy centric signals. Speaker 200:08:54The successful launch of predictive demographics is a reflection of this. On the algo side, our click through rate has witnessed double digit growth in the first half of twenty twenty four. And we've also witnessed our 3rd consecutive quarter of year over year RPM growth sustaining our upward momentum. In conclusion, our Q2 has been marked by growth, new partnerships and innovative strides in improving campaign performance and user engagement. I'm confident that our trajectory remains strong and that we are well positioned for sustained success in the future. Speaker 200:09:33We are thrilled to embark on the next chapter we teach and are focused on executing our strategy to build towards becoming the preferred full funnel platform for brands on the open Internet. With that, I'll turn it over to Jason. Speaker 300:09:52Thanks, David. As David mentioned, we achieved our Q2 guidance for Axtec gross profit and exceeded our Q2 guidance for adjusted EBITDA, generating positive free cash flow for the 4th consecutive quarter. Overall, we feel we have made updates to our revenue mix and cost structure that are having a positive impact on our profitability now and expect that to continue in the future. Revenue in Q2 was approximately 2 $14,000,000 reflecting a decrease of 5% year over year. New Media Partners in the quarter contributed 6 percentage points or approximately $14,000,000 of revenue growth year over year. Speaker 300:10:26Net revenue retention of our publishers was 89%, which reflects continued headwind from the impact of the demand environment on pricing as well as downward pressure of ad impressions from certain key supply partners as noted in the prior quarter. Consistent with recent quarters, logo retention was 99% for all partners that generated at least $10,000 and our 5 largest churns amounted to only 2 combined points of year over year headwind on NRR. With respect to advertising demand, pricing remains low relative to our history and while it remains down year over year, we have seen positive trends over the course of Q2, improvement month over month. This along with continued improvements in click through rates drove acceleration in RPMs, which have now seen growth year over year for the 3rd consecutive quarter. Ex tech gross profit was $56,000,000 an increase of 3 percent year over year outpacing revenue for the 5th quarter in a row, driven primarily by net favorable change in our revenue mix and improved performance from certain deals. Speaker 300:11:28As noted previously, the investment areas we are focused on are largely areas that we expect will drive a higher ex tech take rate And these areas are helping bring that to fruition. While ex tech gross profit returned to year over year growth in Q2 on the strength of these accelerating growth areas and the positive momentum of RPMs. Over the past two quarters, we've noted volatility from one of our key partners transitioning to a new bidding technology, Alporin being one of the first partners to complete this transition in early May. The transition involves access to new supply opportunities for us and we remain focused on the optimization and rescaling of our demand. This volatility impacted our ex TEC gross profit in Q2 by high single digit percentage. Speaker 300:12:10Our overall Q2 ex TEC gross profit would have grown double digit percentage year over year excluding this one isolated headwind. Moving to expenses. Operating expenses decreased by approximately 1% year over year to $51,200,000 in the quarter as we continue to balance investments in our strategic priorities with continued cost discipline. The OpEx decline year over year was driven by compensation and bad debt savings as well as timing benefits of expenses shifting from Q2 into H2, offset partially by the increased professional fees related to our announced anticipated transaction with fees. As a result, we doubled our adjusted EBITDA year over year to $7,400,000 Moving to liquidity. Speaker 300:12:54Free cash flow, which as a reminder, we define as cash from operating activities less CapEx and capitalized software costs, was approximately $300,000 in the 2nd quarter as a result of offsetting impacts of profitability, strong collections of receivables, timing of income tax and other payments and seasonality. As a result, we ended the quarter with $229,000,000 of cash, cash equivalents and investments and marketable securities on the balance sheet and $118,000,000 of long term convertible debt. In December 2022, the company's Board of Directors authorized $30,000,000 share repurchase program. And in Q2, we purchased approximately 500,000 shares for $2,000,000 As of June 30, we have $6,600,000 remaining under our current authorization. Given the pending acquisition of Teeds, we currently do not intend to continue repurchasing shares. Speaker 300:13:48Turning to our outlook. In our guidance, we assume regular seasonality and as noted in the prior quarter, continued execution of our growth drivers. Additionally, our guidance reflect the Outbrain as a standalone business with the assumption that the announced transaction with Keyes will not close before year end. With that context, we have provided the following guidance. For Q3, we expect ex tech gross profit of $58,000,000 to $62,000,000 and we expect adjusted EBITDA of $8,000,000 to $10,500,000 We maintain our previous full year 2024 guidance for extec gross profit of $238,000,000 to $248,000,000 and are increasing our guidance for adjusted EBITDA to $31,500,000 to $36,000,000 Now, I'll turn it back to the operator for Q and Operator00:14:38A. Thank you. And we'll take our first question from Andrew Boone from JMP Securities. Please go ahead, Andrew. Speaker 400:15:00Good morning and thanks so much for taking my questions. You highlighted the growth in RPMs in the quarter. Can you talk about the drivers of that? Your confidence that this can continue? And then, Jason, can you wrap that into the implied guidance for 4Q and talk about your confidence just given the implied acceleration that that full year guidance implies for 4Q. Speaker 400:15:21And then Dickie, just stepping back, can you talk about the conversations that you're having with advertisers just in the last week, understood still very new, but what's the reception been to the announcement of the Teeds acquisition? Thanks so much guys. Speaker 300:15:37Sure. Thanks, Andrew. It's Jason and I'll take the first couple there. So as far as what's driving RPMs, I mean, it's the 3rd quarter in a row that we're seeing yields or RPMs up year over year. One constant driver has been the click through rates, which we've been kind of each quarter breaking our previous records as far as just how high those click through rates are. Speaker 300:15:59There's a lot that goes into that, obviously, algorithmic improvements, use of additional data signals, optimizations, like some of our dynamic placements that we're using are helping drive higher click through rates. So click through rates have been a good thing for a long time for us and go in the right direction. The one kind of new thing I'd say this quarter was we started to see just a better trend on cost per click on CPCs, which have been a headwind and remain a headwind for us year over year in Q2. But over the course of the quarter, we started to see it go in the right direction as far as just narrowing the headwind year over year. So that was a real positive. Speaker 300:16:38It comes with maybe some market dynamics and also some changes we made internally as well. So good things there at RPMs and we obviously see it not only driving better revenue but also better margins. And then as far as the confidence in the back half and Q4, yes, we do expect acceleration in Q3 versus Q2 and also Q4 versus Q3 versus the 3% ex that growth we saw in Q2, we get to I think 6% in Q3 at the midpoint and 17% in Q4 at the midpoint. So maybe just a lot of the good things that we see driving the success in Q2 and into Q3, we see continuing into Q4. So that's definitely a piece of it, but I think a big piece of it and that step up from the 6% growth to 17%. Speaker 300:17:30The difference is a lot of it's coming from year over year comps actually. So 8 points of even comps in Q4 is one way to look at it. Last year, we didn't have a normal Q4. Obviously, it started with the attacks on October 7 and the war and the impact on our war related news page views and just advertising demand. And also just we talk about the key tech partner transition, we did start to see some headwinds on that really in Q4 of last year. Speaker 300:17:58So the 2 of those things combined ease the comps for Q4 and that's driving I think 8 points of improvement as compared to the Q3. And then continued success of the growth drivers that we're already seeing some success with obviously. And yes, RPMs, election, so just those are more smaller items there flowing through our model, but all that combined? Speaker 200:18:23Andrew, I'll take the second one. Thanks. So it's been actually a very exciting week with overwhelmingly positive feedback from players in the industry, both advertisers and video owners, publishers on the advertiser side specifically, they really view this as a huge opportunity to have one player that can provide the full funnel solution on the open Internet. When we talk about full funnel, that means branding, consideration and conversions on an end to end basis due to advantage of the data. So it was overwhelmingly both the teeth on the teeth side and on our side, really people are expecting as quickly as possible for us to close this and be able to bring them the value proposition we're talking about, which is really the combination of leaders in performance, which is us and leaders in branding that is key. Speaker 200:19:16So it's been great and it's been a very exciting week as you can imagine. Speaker 400:19:22Thank you. Operator00:19:25Thank you. And we'll take our next question from Yigal Aronian from Citi. Please go ahead, Yigal. Speaker 500:19:33Hey, good morning guys. You have Max on for Yigal. I guess first maybe just start with what you're seeing in the ad macro. It seems like it was maybe it's been a little more mixed, but what you're seeing now and kind of how you see that playing out through the rest of the year, if there's anything maybe geographical or vertical to call Speaker 300:19:57out? Sure. And I can start with that. So yes, like I said, we did see continued RPM and even CPC gains over the course of Q2, which is a combination of a lot of factors. So it's hard to know how much of it is macro versus internal or specific to us, but we did see positive things. Speaker 300:20:18So that's a good sign. Geographically, I'd say we see strength in Europe, particularly Germany, which is our 2nd largest market and Spain, where a couple of our stronger markets throughout the quarter. And yes, I mean, going forward, I think it's hard to predict anything, I guess, macro wise going forward. But we obviously hope to see the continued acceleration of what we saw through Q2 is what we're hoping for, but not overly relying on that, I'd say, in our guidance. Speaker 500:20:56Okay. Thanks. Yes, that's helpful. And then maybe just spending a little time on Samantha, obviously some good growth there. Is there anything maybe like specific you guys can call out on what's driving this? Speaker 500:21:10And then maybe just kind of like bigger picture, in the combined company, how do you see Samantha fitting in with Keyes and maybe just with the Tech Stack too as you look to combine obviously early days, but maybe just any early thoughts on how you think about combining those going forward? Speaker 200:21:32Sure. I'll take that, Max. So on ZEMENTA, it's been one of our growth drivers for this year has been really to grow the share of wallet from performance advertisers by just delivering superior ROAS to them and also allowing them to spend more on the entirety of the open Internet, again, in line with our vision of becoming the main gateway for the open Internet for both brand advertisers and performance. We started last year to ship some type of clients that just had better performance on the Dementor platform into that. So that causes 2 things, a) they spend more because outbrain publisher network, but they also can spend on 3rd party platforms, other SSPs and so and then that grows the shareholder and also we for us, it's a margin enhancer. Speaker 200:22:22We've seen we said 50% growth in the spend on the mentor and I think that will continue to be one of the main growth drivers for the company standalone. As to the combination, we see it's a little bit early days. We have not yet gone deeply into sort of product planning, etcetera. We just started I think we mentioned the post merger integration planning. And generally, I would say the Meta platform is very, very focused on performance buyers. Speaker 200:22:50So I believe it will continue to be part of our growth drivers in the future for those type of buyers. Speaker 500:23:01Okay, great. Thanks guys. Operator00:23:04Thank you. And we'll take our next question from Laura Martin from Needham. Please go ahead Laura. Speaker 600:23:10Yes, I also have 2. The first one is when you think about revenue synergies, is it a bigger upside driver that Teeds will be able to sell in performance advertising from the Outbrain core business or the reverse Outbrain adds more upper funnel from the Tees client base? Speaker 200:23:32Hey, Laura. It's actually on both sides. So what we've heard and also throughout the process, Teads was going sort of to the mid funnel and to conversions, but again only with enterprise brand buyers. So that's the focus in terms of the customer base and that customer base also has different objectives on their campaigns. So we see a huge opportunity and also the teams management sees a huge opportunity to just drive leveraging our prediction technology algorithms, just better conversions and low funnel business for the brand advertisers. Speaker 200:24:10At the same time, we have about 40% of our business today is with brand and enterprises. They do mostly performance. I mentioned a few campaigns that we have. So for example, if you look at automotive client like Audi, we mentioned it in the call, they can really have us as the partner for the entirety of the funnel. So I think it's in both directions. Speaker 200:24:35When we gave the synergy number that we when we announced the deal, the $50,000,000 to $60,000,000 that doesn't include minimal top line synergies. It's mostly just around operating synergies and other opportunities across the 2 networks. Speaker 600:24:52Okay. Thanks. And then Jason for you, the gross revenue came in really light, but the net revenue, which is how we value came in right in line sort of with our estimates. So is that related to this unique client that had an impact and it only had an impact on gross revenue, but not net revenue? Is that how I should take your commentary about the one time disruption of I assume it's Microsoft? Speaker 600:25:14Yes. So Speaker 300:25:21definitely impacted both. It's not just one line or the other line. A lot of the things that we're focusing on right now are things that are higher margin segments or drivers. I think Samantha DSP business is a good example of that in that the way that works is it's actually a net revenue business in that the fees that are charged for customers to use the platform and buy media spend are recognized on a net revenue basis. So it's just an accounting thing there and we might see some trade off in gross revenue in exchange for X Tech when we're doing that. Speaker 200:26:05Maybe I just want to add on the Laura on the one partner. So again, strategic partner, they made the transition. We are the 1st native partner to make a full transition, signed a new agreement with them that transition also involves access to new types of supply within Microsoft, like Outlook and Games and others. So it's a transition. We were the first to complete it. Speaker 200:26:29We see also big upside opportunities potentially down the road, but I think we just need to be cautious with sort of how we scale up our buyers on that. Speaker 600:26:42Thank you. Operator00:26:44Thank you. And we'll take our next question from James Heaney from Jefferies. Please go ahead, James. Speaker 700:26:51Great. Thank you, guys. Could you just talk about the growth that you saw from Onex in the quarter? And maybe if you could comment on your pivot from being more of a performance ad platform to servicing more upper funnel objectives? And I have another follow-up. Speaker 200:27:06So we're talking about Onex. We had strong rebookings. We don't break it down specifically, but strong rebookings, good adoption. We launched it in more markets and like I said about sort of second half of it. I think that's actually one part of the business that in the second half may get somewhat impacted by the seeds merger. Speaker 200:27:25I mean, it is addressing sort of the upper funnel opportunities with large agencies. And so that's Onex. Speaker 700:27:37Great. And then, Jason, just on your full year EBITDA guide being raised, I'm just curious where you're seeing the majority of the cost savings in the business. And just broadly speaking, how to think about the balance of growth and profitability? Thank you. Speaker 300:27:54Sure. Yes, we do we've been a bit focused on in the last couple of years on just improving our business model in general. And I think that we've done a lot of that both in terms of changing our revenue mix and our approach to these investment areas that tend to have higher margins and higher profit margins as well, which I think we've been pretty successful at it. If you look at take rate now versus where it was a year or 2 years ago, but also with cost structure. And we've been pretty focused on that last year and the year before and we continue to focus on it this year. Speaker 300:28:29And so we've been outperforming our plans on costs and some of that comes with just operating more efficiently, really being hard on ourselves with which areas to invest in and which not and really scrutinizing our spend on that. We do expect to step up in the second half of the year on costs in some areas. Obviously, some of the hiring we've done for the investment areas happened during Q2. And so we expect that to be a little bit higher in the second half of the year. But we think it's a nice setup for us to obviously deliver the higher level of EBITDA and remain prudent in our spending. Speaker 700:29:12Thank you. Operator00:29:15Thank you. And we'll take our next question from Zach Cummins from B. Riley. Please go ahead. Speaker 800:29:22Hi, good morning. Thanks for taking my questions. Jason, I was curious, what are your assumptions that you're baking in for Microsoft in the second half of the year? Are you assuming you're relatively stable from these Q2 levels or any sort of improvement baked into the second half? Speaker 300:29:39Yes. So we obviously are looking at this very closely. Again, we believe we're the 1st native partner to complete this transition and we've been very focused on driving the rescaling as we said it a few months ago. I think right now what we've seen is just volatility and that's really our approach to the forecast for the second half of the year is accounting for it with just a greater range of variability in our Q2 in our H2 numbers. Because on one hand we do see upside, on the other hand we've seen volatility and so we thought the best approach was to just account for with a wider range of variability. Speaker 800:30:23Understood. And in terms of just your overall footprint on the open Internet, I think metrics you shared was 27% on your nontraditional, I'd say, formats on the open Internet. Can you speak to the ideal mix as you go over time in terms of your footprint, just for standalone Outbrain? Curious how you're continuing to drive that strategy. So Speaker 200:30:50we are really trying to build ourselves as the main gateway to the entirety of the open Internet. We have a strong asset in the bidding some great wins on the premium publisher side this quarter. Some great wins on the premium publisher side this quarter. So again, we're very, very focused on our core supply base and brand and enterprises on premium. We believe that sort of premium supply drive premium demand, mostly going for performance on 3rd parties where they're looking for fewer rollouts and Samantha is just a great platform to do that. Speaker 200:31:31Again, overall, we see ourselves in terms of growth that we deliver through sort of these efforts as the sort of outperforming competition on organic growth, and that's what we're looking at in terms of, again, growing the entire budget base that we can deliver both on our publisher base and on the 3rd party supply. Speaker 800:31:56Understood. Well, thanks for taking my questions and best of luck with the rest of the quarter. Operator00:32:05And that will conclude the question and answer session. I'd like to turn the floor back to David Crossman closing remarks. Speaker 200:32:12Thank you, Camilo. Thank you all for joining us today. We appreciate your support and partnership and looking forward to the exciting journey ahead together with all our shareholders. Thank you very much. Operator00:32:25Thank you. Ladies and gentlemen, this does conclude today's teleconference.Read morePowered by