Operator: Our next question comes from the line of Jason Helfstein of Oppenheimer. Your line is open.
Jason Helfstein: Two questions. Lisa, is Reels and Feed with respect to kind of Facebook/Instagram, are they going along the same timeline? Or is it kind of different and product specific? And then second, thoughts around the opportunities around performance advertising. Is that something that you’re thinking about in the pipeline? Do you organically go there? Do you use M&A to get there? Thanks.
Lisa Utzschneider: Yes, sure, happy to take both, Jason. So with Reels, with Meta Reels as I mentioned earlier, we launched viewability invalid traffic in Meta Reels, and in Shorts in Q2. Both are a nice driver of our accelerated measurement growth in third quarter. In terms of the upcoming beta in fourth quarter with Meta and the live feed, that does include Facebook, Instagram and Meta Reels. So that will all be part of the beta in fourth quarter, and so same timeline with GA scheduled for early 2024. In terms of performance advertising, with performance advertising, the way we look at that, it’s a couple of things. The first is, historically, the mid-tier channel, and we define mid-tier as a channel of advertisers spending between $200,000 and $1 million with IAS, many of them are performance advertisers.
And I think that’s a big reason why they’re leaning into our context control solution. But also, the other thing that we’re focused on is our total visibility product and enhancing that product within our overall optimization offering. And you might remember, total visibility provides transparency with supply path optimization. It helps provide additional insights across outcomes, cost targeting tactics. So that’s an area where we are investing more resources, more time and energy. And in 2024, I think in terms of performance advertisers, they’ll see, and all advertisers will see an enhanced total capability offering.
Operator: Our next question comes from the line of Mark Mahaney of Evercore. Your line is open.
IanMorel: This is Ian on for Mark. Congrats on the good quarter. Two questions, if I may. First, it’d be great to kind of walk or go back to the macro. Are you seeing any signs of brand advertisers pausing in Q4 related to the geopolitical risks in the Middle East? And maybe secondly, can you remind us of maybe the trends that happened for advertisers in 2020 related to the Ukraine war? And maybe has there been increased need or conversations around your guys’ brand safety, brand suitability products? And the second question on operating expenses for the fourth quarter, do you guys expect to see any leverage? Or if there was, where would we expect to see that? Thanks.
Lisa Utzschneider: Okay. Thanks, Ian. So I’ll take the first two questions, and then Tania can take the third question. Firstly, regarding the crisis in the Middle East, our hearts go out to all of those who are impacted by the war. We’ll continue to ensure our products provide value to our global customer base during this difficult time. In the Ukrainian conflict that occurred a few years ago, we did see advertisers engage in our context control offering. And I don’t want to correlate the two, but we did see more and more advertisers leaning into our sophisticated context control so that their brands ran adjacent to appropriate content. Tania, do you want to take the third.
Tania Secor: Yes. On the third — on your last question, we do expect operating leverage in the fourth quarter. The midpoint of our guidance has EBITDA, adjusted EBITDA at 35%. We’ve improved our EBITDA margin every quarter this quarter and pleased to be raising both our revenue and EBITDA guide, and that 35% in the fourth quarter would be higher than 34% in the fourth quarter of 2022.
Operator: Our next question comes from the line of Youssef Squali of Truist. Your line is open.
Youssef Squali: Couple for me as well. So starting maybe with the optimization, Tania, I think last quarter you said something to the extent that growth there was going to be similar to the growth in Q2, which was more like 9%, 10%. You ended up obviously doing more than double that. Can you maybe speak to the linearity of demand for optimization throughout the quarter? And where you guys were off, which things surprised you the most I guess in a good way? And then second, on the Q4 guide, I think you just said earlier that there are two areas that account for maybe the slower growth expected in Q4. One was T&E and the other was the [indiscernible] control, which grew double digits, which you think should moderate in terms of growth. Maybe you can just explain why we should expect both of these to decelerate sequentially. Thank you.
Tania Secor: Sure. So we were really pleased to see the acceleration of growth and optimization in the third quarter. And we, after the second quarter earnings call, we talked about optimization growth with possible upside, but the beat was stronger than we had expected on the optimization front. There were several factors driving that. One was just overall across the T&E sector, we saw a stronger spend from particularly media brands and entertainment clients who really spent more in terms of volumes, particularly around promotional campaigns, and we expect that to moderate in the fourth quarter. But we also, as we talked about earlier, we’re really pleased to see that some of the investments we made around mid-tier clients on the context control front did have an impact on our third quarter performance.
So we were pleased to see that. In terms of linearity, the digital media programmatic spend tends to be more variable than other forms of digital media, and we were just pleased to see the benefits from that in the third quarter.
Youssef Squali: And on the second question?
Tania Secor: Was your second question about overall?
Youssef Squali: Yes, just the reasons for the slowdown, sequential slowdown you’re expecting across both.
Tania Secor: You mean in the fourth quarter?
Youssef Squali: Yes.
Tania Secor: Yes. Like I said, we were really pleased to be able to raise our guidance in the fourth quarter. On the measurement front, we expect that social and the strong numbers that we’ve reported on social will continue to drive double-digit growth in measurement. We’re also expecting double-digit growth in optimization, but just wanted to call out the 2 areas we expect moderation, which is the T&E industry moderating because we saw such strong growth in the third quarter and context control growth.
Operator: Our next question comes from the line of Justin Patterson of KeyBanc. Your line is open.
