We expect contribution ex TAC in the range of $41 million to $43 million, a year-over-year increase of 26% at the midpoint. Non-GAAP operating expenses are expected to be $30.5 million to $31.5 million, representing a year-over-year increase of 1% at the midpoint. And finally, we expect adjusted EBITDA to be in the range of $10.5 million to $11.5 million, which represents a year-over-year increase of 318% or $8.4 million at the midpoint. Adjusted EBITDA margin as a percentage of contribution ex TAC is expected to be 26% for Q4 at the midpoint of guidance, an improvement of more than 18 percentage points from the prior year period. In summary, we delivered strong double-digit top line growth in Q3 while simultaneously managing a double-digit reduction in operating expenses on a year-over-year basis.
resulting in significant margin expansion in the quarter. For the quarter, contribution ex TAC grew 22% and our adjusted EBITDA margin as a percentage of contribution ex TAC totaled 25%. The sum of these two metrics often referred to as the Rule of 40 was an impressive 47% in Q3. Based on the midpoint of our guidance for Q4, we expect this metric to further increase in Q4 to 52%. Our market share gains in Q3 exemplified a substantial impact and effectiveness of our products and our unparalleled service. As I previously mentioned, we maintained a steady cadence of new product launches throughout 2023, and are very excited about what we have coming in 2024. In Q3, we saw a steady increase in customer adoption across these newer products, driving meaningful incremental revenue and contribution ex TAC in the quarter.
We expect this positive trend to continue as customer adoption continues to build across these products and as new products come to market in 2024. And finally, we have a robust financial profile, an unwavering focus on execution and a product portfolio propelled by innovation, consistently setting us ahead of the competition. We remain focused on continuing to deliver strong top line growth and adjusted EBITDA margin expansion in the quarters ahead, all while creating enduring value for both our customers and valued shareholders. And with that, I’ll pass it back to Tim for final comments.
Tim Vanderhook : Thanks, Larry. I want to close our prepared remarks by reiterating that our strong performance this quarter was driven by the significant progress we’ve made across our technology initiatives that are translating directly into value for our customers. But I’m most excited that our Q3 results show investors the strength of our business model and the operating leverage we have achieved. Viant is a great company that we believe offers a compelling opportunity for investors. We delivered 22% revenue growth in the quarter. We have over $200 million in cash on the balance sheet, accelerating profitability and are structurally positioned to capture the opportunity of the enormous tailwind of the $60 billion of linear TV ad spend coming into Connected TV. We look forward to wrapping up the year with another strong quarter. I’ll now turn it back over to the operator to open the video to questions. Operator?
Operator: [Operator Instructions] We’ll hear first from Andrew Boone with JMP.
Andrew Boone : I wanted to touch on just the advertiser can right? We attended an Innovation Day, all of the new features that you guys had sounded very impressive. Yet at the same time, we’re seeing customers down 13%. So is there anything you can help us understand in terms of either the top of funnel as you guys speak to these mid-market agencies? Or any other way that we understand the traction that you guys are getting with us as we are watching the customer count fall down sequentially.
Chris Vanderhook : Yes. Thanks, Andrew, for the question. Just to reiterate what we’ve said, I think it’s been about this time last year, we started talking about this. It’s really just our focus on the large spending customers in the mid-market. We have a lot of early vintage customers from, call it, 2018 that just haven’t kept pace. From a spend basis, many of those, we require new minimums or increased pricing as a result — and really, that’s — so we were really just pointing ahead that we knew we’d have some lower end customer churn. And that’s really what — a lot of what you’re seeing. We think that, that really relent around Q1, where a lot of those MSAs that are on 12-month kind of rolling agreements, but we largely eat through a lot of that in Q1.
What I will say is though we are continuing at the top of the funnel, we’re gaining just a lot of traction in the mid-market. A lot of the things that we talked about, our solutions around CTV, Direct Access, our focus on measurement with the Viant Data Platform and our Advanced Reporting, a lot of that is really what’s driving new customer acquisition as well as the growth of existing customers. So, we feel that the advertiser cap going down, you can see it really has — and we highlighted this, it has a de minimis impact on really, we shed the kind of lower end of the customer base that really doesn’t have a lot of value.
Andrew Boone : And then I wanted to ask again on the AI tools, but it really brings friction out of the buying process for ad buyers. Talk about the opportunity there in terms of agencies as well as brands in housing. What happens as ad buyers just become more efficient? Where are you guys seeing more traction there? Anything else you can share about that process?
Tim Vanderhook : Yes. I’ll start. I mean it’s not really about in-housing. Anyone who works in the programmatic space, whether you’re a trader or in-house or ad an agency or an independent company. These are just complex systems to be able to manage and due to the many, many choices that the traders are faced with when planning a campaign and then, of course, optimizing from there. So we try and focus on tools that just make it a lot more simpler, and the north star there is search and social ad buying across those platforms, where you’re not choosing every single feature and functionality to a very in-depth level. And so the tools that we brought forward, AI recommendations, giving you site list recommendations, time of day recommendations, location, all basic things that a programmatic trader does, but being able to analyze trillions of different combinations that are out there and simplifying that.
Being able to speed up the process of a customer coming on to Adelphic and understanding how to use it, that ultimately drive a spend and revenue growth and that’s been our primary focus.
