Adam Foroughi: Yes. I mean I don’t think we’ve ever put them on pause. We’ve been talking about CTV since we acquired World and Array. We launched, I think, a couple of years ago, and we’ve signaled to you all that these are a couple of the growth vectors that we’re really excited about. Our software business, obviously, is really big. We’re in a $2 billion a year run rate. So to have the type of numbers and scale from a new initiative, to put a real big debt on those numbers, it takes a while. But we’re very excited about CTV and Array. The foundation is there on both those businesses. And by taking this market-leading technology, applying it to it, we think we’re going to be able to really accelerate the path of both.
Franco Granda: And then just very quickly here on the apps business growth based on the quarter, how much of that growth came from perhaps your integration with Axon and leveraging that technology for the UA capabilities there?
Herald Chen: Yes. We’re obviously a big customer of our own systems. And we — when we saw AXON 2 in it’s performance, like a lot of our customers we invested more in UA, and we expect to continue to do that rolling into the fourth quarter. So that was a big driver of growth.
Operator: And moving on to Martin Yang with OpCo.
Martin Yang: A question on the share between non-gaming and gaming for software platform. Can you first talk about the general trend on the revenue contribution from non-gaming apps? And then did AXON 2 help either direction of the non-gaming share of revenues to software platforms?
Adam Foroughi: Yes. We don’t break down the percentages, but we’ve talked about a majority of our business is gaming. And then I referenced that this technology is working really well for advertisers of any kind, across every category of mobile application. So we’re seeing quite a bit of growth across all, but non-gaming starts from a smaller place. So we’re actually seeing accelerated growth on non-gaming advertisers.
Operator: And moving on to Ross Compton with Macquarie.
Unidentified Analyst: Looking at the gross margin last year, and then 4Q ‘22, this was 47%. And most recently in 3Q, you guys approached at 69%. I was wondering if you could expand on the processes that have kind of led us here and how we should think about this into 4Q and beyond? Is there a ceiling? Scale, of course, helps longly improve billing technology with AXON, but any kind of understanding on the operating leverage in the model would be great.
Herald Chen: Yes, some of the question was breaking up. But I think you’re asking about the gross margin on software and just the improvement year-over-year. Is that correct?
Unidentified Analyst: Yes.
Herald Chen: Our business model on the software side, first of all, as you know, we report on a net revenue basis, so we start at that level in the P&L. And then in terms of the cost structure itself, that’s directly related to software. A lot of it is the data center infrastructure that we talked about almost a year ago that we had a big new contract that we needed to get to initial amount of initial scale. And so we had to grow into that. I’d say now we’re very much on pace if not growing through some of that contract and so fully utilizing the capacity that we’ve had on board. And that’s why we’ve been able to really expand gross margin all the way through to EBITDA given a relatively fixed cost structure on the R&D front.
Operator: Morgan Stanley’s Matt Cost has the next question.
Matt Cost: I guess the first one would just be, there were some media reports in September and October of some advertisers boycotting one of your largest competitors are pulling back spend. Did you see any material impact on your business in the third quarter? Or do you expect any business — any impact along the lines in the fourth quarter?
Adam Foroughi: It was a little overblown in the media, pretty negligible impact. It was late September to maybe a week or 2 of noise in the market but negligible to ours.
