Viant Technology Inc. (NASDAQ:DSP) Q3 2023 Earnings Call Transcript

Viant Technology Inc. (NASDAQ:DSP) Q3 2023 Earnings Call Transcript November 6, 2023

Operator: Hello, again, everyone, and welcome to Viant Technology’s Third Quarter 2023 Earnings Webinar. My name is Kelsey, and I will be your operator today. Well, before I begin the webinar or turn it over to the Viant leadership team, I’d like to go over just a few housekeeping notes for the program. As a reminder, today’s webinar is being recorded. Attendees are in a view and listen-only mode. Following the speakers’ remarks, there will be a question-and-answer session. If you’d like to ask a question please click on the Raise Hand tab located at the bottom of your screen and please ensure your Zoom name reflects your full name and firm. We thank you for your attendance today. And I will now turn the webinar over to KC Carey with Viant Technology.

KC Carey : Good afternoon and welcome to Viant Technology’s third quarter 2023 earnings conference call. On the call today are Tim Vanderhook, Co-Founder and Chief Executive Officer; Chris Vanderhook, Co-Founder and Chief Operating Officer; and Larry Madden, Chief Financial Officer. I I’d like to remind you that we will make forward-looking statements on our call today, including but not limited to our guidance for Q4 2023 and our platform development initiatives that are based on assumptions and subject to future events, risks, and uncertainties that could cause actual results to differ materially from those projected. These forward-looking statements speak only as of today, and we undertake no obligation to update or revise these statements except as required by law.

For more information about factors that may cause actual results to differ materially from forward-looking statements and our entire safe harbor statement. Please refer to the news release issued today as well as the risks and uncertainties described in our quarterly report on Form 10-Q for the quarter ended September 30, 2023 under the heading risk factors and other filings with the SEC. During today’s call, we will also present both GAAP and non-GAAP financial measures. Additional disclosures regarding these non-GAAP measures, including a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the news release issued today, which has been posted on the investor relations page of the company’s website and in our SEC filings.

I would now like to turn the call over to Tim Vanderhook, Chief Executive Officer of Viant. Tim?

Tim Vanderhook : Thanks, Casey, and thanks, everyone, for joining us today. We wrapped up a very strong third quarter with accelerating growth across our business and results that exceeded our guided range on all key metrics. We continue to win larger shares of budgets from our clients, by offering best-in-class products supported by industry-leading AI. We have focused execution and a commitment to enabling mid-market advertisers to get the highest return on their ad spend. As we look to the fourth quarter and beyond, we continue to see a number of favorable drivers of the business. Most notably, the ongoing migration and accelerating transition of approximately $60 billion of linear television advertising moving into connected TV.

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Q&A Session

Second is the pending signal loss due to Google’s deletion of cookies in 2024; and third is the application of artificial intelligence and generative AI, which we discussed in detail during our inaugural Innovation Day event on October 26. And I want to share more on each of those areas and provide more clarity on how we see them driving our long-term growth and profitability. I’ll start with the continued shift from traditional linear TV to connected TV. Linear TV represents an additional $60 billion of ad spend coming into the programmatic ad market as this trend accelerates. Our growth is outpacing the market, and we believe a big driver of our success comes from our Household ID technology. This enables us to deliver addressable advertising as well as provide attribution and reporting in this cookieless environment.

In CTV, Household ID is available on over 85% of all ad requests, Q3 saw us deliver another quarter of strong double-digit growth in Connected TV, again, outpacing the market, and Chris will talk more about that growth in this channel later on. I also want to take a moment to share some of the ways that we’re leveraging AI to develop the most advanced DSP in the market. And for anyone who wasn’t able to attend our innovation day event, I highly encourage you to check out the video replay, that link is available on our Investor Relations website. The primary objective of our Innovation Day was to highlight the progress we’re making in our journey towards our north star of autonomous advertising. We’re bringing the ease of use of advertising on search and social media to the purchase and measurement of advertising in the programmatic ecosystem.

We believe we can leverage AI to reduce the friction involved in onboarding a customer into a DSP, saving them days or even weeks of ramp-up time, enabling them to more quickly utilize the full suite of tools and features available on our platform. Our push to further simplify and automate our platform should continue to expand our addressable market to millions of midsized advertisers that can now use our DSP to reach new customers and expand their businesses. I want to highlight how we’re helping our customers solve two widespread challenges in the programmatic ad market. The first is choice overload and the second is campaign optimization, both of which are tied to the same dilemma. The programmatic ecosystem is moving too fast or even a seasoned trader.

Never mind a new entrant entering this space. How can we use AI to provide a platform that helps ad buyers to easily and efficiently maximize their campaign performance? During our Innovation Day event, we explained what we call choice overload. Traders today are forced to deal with an insurmountable number of options when planning an ad campaign, making decisions across channels, audiences, devices and ad formats. They are faced with countless combinations. One way we’ve helped to address this challenge is with our recently announced AI recommendations engine, which is capable of processing and optimizing these options at a speed the human brain simply can’t match. The result is actionable suggestions that save time while improving campaign performance and ultimately, trader productivity.

The second topic from our Innovation Day event, I want to highlight is our AI Bid Optimizer solution. It uses artificial intelligence to analyze historical bid opportunities to predict the lowest media costs for all of these ad opportunities without sacrificing any ad performance. We first announced this new feature over the summer, and I’m pleased to report that adoption to date has far exceeded our expectations. Over half of our customers are currently utilizing AI Bid Optimizer, and we’re continuing to see an average savings of 35% of their CPMs. This is notable for multiple reasons. First, it allows our customers to concentrate their time on strategic tasks rather than the time-consuming ones. They don’t have to manually adjust their bids and last, it speaks to the advantage of a buy-side only DSP like ours.

Any technology provider representing both the buy and sell side of the transaction has an inherent disincentive to drive down CPMs. Our customers recognize this misalignment and this is contributing to our growth. The final driver of our momentum is Google’s deletion of cookies, which is reported to begin in Q1 2024. Viant has long been a leader in this space through the use of our patented Household ID, a scalable, interoperable and privacy-compliant identifier present in over 80% of ad requests. We believe that Google’s deletion of cookies and other identifiers will further accelerate the growth of ad spend flowing through Viant as we offer one of the only scalable and now proven solutions available today in the form of our Household ID. We look forward to continuing our growth momentum into the fourth quarter.

And I now will hand the call over to Chris to discuss more around our products and our customers.

Chris Vanderhook : Thanks, Tim. I want to start to talk about the Viant Data Platform, which has long been a massive advantage for those customers who have the vision and expertise to leverage its potential. Our data platform offers the ability to safely and seamlessly join first-party data with all the top third-party data providers in a privacy-friendly way. And it should come as no surprise that the insights, reporting and attribution opportunities here are substantial. . It must also be noted that historically, the barrier of data skills necessary to access these insights has also been very high. At our recent Innovation Day event, we announced a new product called Chat with Data. This product allows our customers to unlock the power of the data platform simply and easily through a natural language set of commands.