Viant Technology Inc
NASDAQ:DSP
Viant Technology Inc
Viant Technology Inc., established in the digital age, operates as a technology company that specializes in data-driven advertising software designed to transform how marketers approach their digital campaigns. Founded with a vision to harness the power of big data, Viant provides a comprehensive cloud-based platform called Adelphic. This software enables marketers to execute people-based advertising, allowing them to effectively target audiences across a multitude of channels and devices. By leveraging proprietary algorithms and artificial intelligence, Viant's platform empowers clients to optimize their marketing spend through precise targeting, measurement, and integration with various media outlets. As advertisers pivot towards data-centric strategies, Viant's deep analytical capabilities become indispensable in crafting campaigns that are not only efficient but also scalable.
Central to Viant's revenue model is its ability to offer its software as a service (SaaS), enabling recurring revenue streams through licensing agreements with clients. The company monetizes by providing subscriptions to its technology platform as well as executing media buying transactions where it charges a percentage of the media spend. Additionally, Viant enhances its value proposition with its extensive database of authenticated users, which allows brands to harness critical insights into consumer behavior. This data-driven approach helps clients gain an edge in a competitive digital ecosystem by delivering personalized and relevant advertising content. In essence, Viant Technology stands out by merging advanced technical solutions with strategic data insights, solidifying its role as a pivotal player in the evolving digital advertising landscape.
Earnings Calls
In the first quarter of 2025, Viant Technology achieved record revenue of $70.6 million, a 32% year-over-year increase. Contribution ex-TAC grew by 25%, continuing a strong trend with 76% year-over-year growth in adjusted EBITDA, reaching $5.4 million. Despite some advertisers deferring spend due to tariffs, the company anticipates Q2 revenue between $77 million and $80 million, reflecting 19% growth, alongside adjusted EBITDA of $10.5 million to $11.5 million. CTV demand remains robust, now representing 45% of total platform spend. Viant retains a strong cash position and has announced a $50 million increase to its share repurchase program, underscoring its commitment to shareholder returns.
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Hello, everyone, and welcome to Viant Technology's First Quarter 2025 Earnings Conference Call. My name is Emmanuel, and I will be your operator today. Before I hand the call over to the Viant leadership team, I'd like to go over a few housekeeping notes for the program. As a reminder, this call is being recorded. [Operator Instructions]
I will now turn the call over to Nick Zangler, VP of Investor Relations for Viant.
Thank you, Emmanuel. Good morning, and welcome to Viant Technology's First Quarter 2025 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'd like to remind you that we will make forward-looking statements on our call today, including, but not limited to, our guidance for 2Q 2025 and other future financial results, our platform development initiatives and industry trends 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 March 31, 2025, under the heading Risk Factors and in 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 and in our earnings presentation which have been posted on the Investor Relations page of the company's website and in our filings with the SEC.
I would now like to turn the call over to Tim Vanderhook, Chief Executive Officer of Viant. Tim?
Thanks, Nick, and thank you all for joining us today. We delivered record first quarter results across the board, outperforming our guidance across all key financial metrics and positioning the business for continued strength in the second quarter. Revenue increased 32% year over year and contribution ex-TAC increased 25% year over year. Strong top line growth was driven by continued CTV demand, increased use of Viant's addressability solutions including Household ID and IRIS_ID, and further adoption of Viant's AI product suite. Notably, this marks our seventh consecutive quarter of greater than 20% year-over-year growth in contribution ex-TAC.
Adjusted EBITDA increased 76% year over year to $5.4 million in Q1. This marks our ninth consecutive quarter of greater than 30% year over year growth in adjusted EBITDA. Before providing an update on our strategic priorities, CTV, addressability, and ViantAI, I would like to first offer our insights and observations on the advertising environment in light of recent tariff announcements and explain why we believe Viant is well positioned to navigate this period of macroeconomic uncertainty.
Year to date, through April, ad spend across our platform has been strong with little discernible impact from recent tariff announcements. Year over year growth rates for revenue and contribution ex-TAC increased in each month throughout the first quarter with the strongest performance observed in March. Strong double-digit growth trends persisted throughout April. Generally, advertisers have thus far exhibited a heightened level of resilience to tariff-related macroeconomic challenges, having weathered the late 2022 advertising downturn caused by fears of a recession that ultimately never materialized. It is only very recently that we have seen a small number of advertisers adjust their plans, redirecting ad spend from the second quarter into the latter part of the year.
Should macroeconomic pressures intensify, we believe we remain positioned to outperform the broader advertising industry and our peers owing to a broad diversification of U.S. based advertisers, limited exposure to those verticals most directly impacted by tariffs, and strategic alignment to secular growth channels, including CTV and the ongoing adoption of differentiated product offerings in the industry.
To further elaborate, we serve a broad and diversified group of well over 1,000 advertisers, spanning all major industry verticals, with no one advertiser representing more than 5% of the total ad spend on the platform. After conducting a thorough review of our advertiser base, we anticipate recently imposed tariffs will only minimally impact our future performance as exposure to high-risk verticals like automotive, for example, is limited. It is also worth emphasizing we believe our business is strategically positioned to foster the growth of proliferating digital channels, including CTV, streaming audio, and digital-out-of-home.
These are secular growth channels in the early stages of adoption, making them more resistant to economic cycles. Collectively, these three digital channels represented over 50% of our total ad spend on our platform in 2024, up from 43% in 2023 and 40% in 2022. And based on historical precedents, we would actually expect an economic downturn to accelerate the ongoing shift of linear TV ad spend into CTV, where campaigns are addressable. More granularly, our winning strategy with advertisers hinges on our differentiated platform offerings, tailored to support growth within proliferating digital channels.
In CTV, our Direct Access program provides advertisers with a streamlined path to premium inventory, eliminating unnecessary intermediaries and delivering greater spend toward working media. Our addressability solutions Household ID and IRIS_ID empower advertisers to deploy sophisticated ad campaigns and measure efficacy through the use of industry-leading audience and contextual identifiers. And ViantAI, which we expect will prove to be a disruptive innovation, is currently providing early adopters with meaningful workflow improvements, operating structure efficiencies, and meaningful media cost savings and ROAS enhancement. The continued uptake of these innovative solutions is creating powerful tailwinds that support our long-term secular growth strategy.
Moving to our strategic priorities: CTV, addressability, and ViantAI. CTV was the strongest driver of top line growth in the quarter and leading in CTV is our highest priority. We are committed to being the premier DSP for CTV advertising, a position we believe we currently hold and intend to strengthen. This is evidenced by our recent performance and our product roadmap, which is strategically focused on CTV dominance.
During the first quarter, over 45% of total spend on our platform was allocated to CTV, clearly demonstrating the dominance of our CTV offering. Over 55% of CTV spend is now running through our Direct Access premium publishers, which uniquely connects advertisers directly to premium CTV inventory. When advertisers utilize Direct Access, supply side fees are significantly reduced. This means more of their budget goes directly toward working media, increasing impression win rates without the need to raise bid prices. We expect Direct Access will continue to attract incremental CTV spend to our platform, enabling Viant to maintain market leading CTV growth.
Fundamentally, we believe the DSP that wins in CTV will win across all other open web digital channels. In our view, CTV will become the cornerstone of every advertiser's marketing strategy with other digital channels serving complementary roles. In fact, this reprioritization of CTV is currently underway. Advertisers are increasingly recognizing the fallacy of last-touch attribution campaign strategies where Big Tech takes credit for outcomes by showing the last ad before a purchase, without truly providing any incremental value. Last-touch attribution has trained advertisers to allocate spend to consumers that would have purchased their product anyway. This is not advertising. This is simply a tax. Smart advertisers are shifting gears, directing ad spend based on incremental lift where another dollar of ad spend drives new business growth through another incremental sale. And data shows CTV trounces search and social in driving incremental lift. Chris will elaborate further in a few minutes.
Moving to our leadership position in addressability Viant's Household ID, our patented audience targeting and measurement solution, is experiencing unprecedented demand. Household ID boasts availability across roughly 80% of biddable ad inventory, significantly exceeding other identifiers. This quarter, ad spend linked to Household ID surged 33% year over year as we continue to activate Household ID matches with our premium Direct Access publishers, making them both biddable and addressable. We anticipate continued growth for Household ID as an influx of data-driven advertisers prioritize the CTV channel. Direct-to-consumer e-commerce businesses, performance advertisers, and small- to medium-sized businesses, all pivoting budgets to CTV can leverage Household ID to target highly responsive audiences and track campaign effectiveness.
Our contextual targeting and measurement solution, IRIS_ID is also gaining traction among both publishers and advertisers. With the addition of Paramount, Lionsgate Films, CNN, and TCL, among others, as newly-minted IRIS-enabled publishers, the presence of IRIS_ID across all available CTV bid requests has more than doubled since acquiring IRIS in November 2024. IRIS_ID allows advertisers to target CTV ad inventory at the video level, enabling them to align their brand, product, or service with contextually relevant content. As recently reported by Upwave, an independent measurement platform, Campaigns utilizing IRIS_ID demonstrated a 5x lift in brand favorability, a 3x lift in ad recall, and a 2x lift in brand awareness and consideration when measured against CTV control groups. This performance has been a key driver in attracting new customers to Viant in the quarter. As IRIS_ID continues to win adoption among publishers, advertisers gain the ability to deploy contextual campaigns at greater scale, which will lead to increased utilization over time.
Finally, I will provide an update on our ViantAI product suite. As a reminder, two phases have rolled out, and we expect to complete the next two phases later this year. The four phases consist of AI Bidding, AI Planning, AI Measurement and Analysis, and AI Decisioning. I'll very briefly touch on all 4. Less than two years after launch, AI Bidding now automates 85% of the ad spending on our platform up from 80% in Q4 2024. with AI Bidding, advertisers enable Viant's algorithms to find and buy optimal ad placements across the open web, aiming for the lowest cost while meeting their KPIs. With surging use, contribution ex-TAC generated from AI Bidding is up 75% year over year.
AI Bidding is a major success, and we expect to see a similar adoption trajectory across our other AI products. In the third quarter of 2024, we launched AI Planning, which enables advertisers to create enterprise-level ad campaigns in seconds. Early agency adopters are reaping the benefits of an improved workflow as their capacity for new business pitches has accelerated, greater operational efficiency as employees are redeployed to more strategic initiatives and improved return on ad spend, as ViantAI is now utilized to navigate the complexities of campaign construction to yield optimal results.
Launching later this quarter, AI Measurement and Analysis is expected to revolutionize reporting with on-demand insights. Advertisers can simply ask ViantAI for a specific data and receive answers in seconds, eliminating the need for lengthy reports. This streamlines productivity and empowers continuous campaign optimization. And finally, we expect to launch AI Decisioning in the second half of 2025, enabling advertisers to grant ViantAI the autonomy to manage their media plans. ViantAI will actively adapt campaigns to market fluctuations, aiming for the best possible outcomes. And in contrast to Big Tech black box services, ViantAI is fully transparent, providing advertisers with detailed insights into their campaign data, including publisher allocation, clearing prices, return on ad spend metrics, and so much more.
To summarize, our business is growing quickly, fueled by our investment in secular growth channels and our distinct innovative offerings. Looking ahead, we expect CTV to emerge as the most effective digital channel, addressable campaigns to become widespread, and AI to usher in a new era of efficiency, further improving return on ad spend for our customers. Viant is well positioned for long-term growth as these market dynamics evolve.
Before turning it over to Chris, I want to briefly address the recent District Court ruling, which affirmed Google is a monopolist in ad tech and marked a win for the ad tech industry at large. The DOJ is pursuing remedies that could include a divestiture of both the DoubleClick assets and Google AdX, which collectively include Google's SSP and ad server. If these assets are spun off into an independent entity, it is reasonable to expect this new supply-side platform to seek out incremental demand through additional partnerships with third-party DSPs beyond Google's DV360. In time, this could present an opportunity to provide our clients with access to YouTube ad inventory through our buying platform. Additionally, the removal of DV360's exclusive access to YouTube may level the playing field among DSPs, which provides Viant an opportunity to attract ad spend from advertisers looking to consolidate on our platform. Truly, any regulatory action taken to limit Google's illegal market dominance will improve Viant's competitive positioning. And in our view, an open market for YouTube is the most beneficial outcome.
With that, I'll now turn it over to Chris.
Thanks, Tim. I would like to address 3 major industry topics head on. These topics have dominated the conversation with investors in recent meetings. They are: number 1, Big Tech attribution misrepresentation and the growing preference among advertisers to optimize for incremental lift measurement; number 2, the emerging opportunity to win incremental ad spend from data-driven advertisers diverting spend from search and social; and number 3, the investor misperception that Amazon is a material threat to open Internet DSPs.
Beginning with attribution misrepresentation, in our view, Big Tech's deceptive attribution practices are coming to an end. For far too long, search and social media have been wrongfully credited with outcomes originating from more impactful ad channels, particularly linear television and more specifically CTV. By gamifying last-touch attribution, Big Tech has convinced advertisers that it is the very last exposure to their ads that drive the final consumer purchase decision. But we believe this is a fallacy. Enhancements in CTV measurement reveal the true customer journey. CTV sparks consumer demand, and display, search, and social channels merely navigate the consumer to the point of purchase. Advertisers have been misled. And in some cases, this attribution misrepresentation has led advertisers to shift budget away from highly effective channels like linear TV and CTV to the detriment of their own brand.
Look to the prominent sports apparel brand that we all know as a high-profile example. Just a few years back, they slashed their TV budget and went all in on the lower funnel channels like display, search, and social. The result? Seemingly positive lower funnel KPIs, but slumping top line sales. Why? They dedicated too much of their budget targeting existing customers and failed to attract any new customers. And this is the realization many advertisers are waking up to. They have been over-allocating spend to search and social. And in doing so, they have been wasting budget, marketing to consumers that were ready to buy their product anyway.
Google, Meta, Amazon, they've all been winners of the gamification of last-touch attribution. Left unchecked, they will take credit for every outcome. However, advertisers are shifting their strategy, prioritizing the measurement of incremental lift, which identifies the ad channels that bring in entirely new customers, those who would not have made a purchase without the exposure to the highly impactful informative ads delivered via CTV.
Anchored by Household ID, Viant's measurement solutions offer advertisers the ability to measure incremental lift, which is now the most requested measurement feature on our platform. Demand for this feature has in part powered a 500% increase in Household ID-powered ad spending on a trailing 12-month basis over the last 2 years, with a growing portion of that spend directed towards CTV. The convergence of these trends presents a significant opportunity for Viant. As advertisers increasingly turn to incremental lift measurement, we believe our platform reveals CTV's superior impact, driving significant ad spend growth across our platform. Over the coming years, we believe search, social, and other forms of display advertising will come under pressure as advertisers prioritize more effective ad channels like CTV, which proves to drive incremental sales.
This leads me to my next major industry topic. There is a significant opportunity to win ad spend from data-driven advertisers overinvested in search and social. This group, comprising 10 million small businesses, performance marketers, and direct-to-consumer e-commerce companies, is believed to represent over half of the $200 billion U.S. search and social ad market. We think this spend is poised for reallocation to more effective digital channels like CTV. We believe Viant has a compelling value proposition that effectively attracts data-driven advertisers and aligns with their current buying behaviors. Through the use of our addressability solutions, Household ID and IRIS_ID, data-driven advertisers can precisely target niche consumer audiences in contextually relevant environments and gain insightful feedback, including incremental lift measurement to assess overall campaign effectiveness. And unlike search and social walled gardens, our measurement solutions provide advertisers with transparent and objective attribution, helping them allocate ad spend to the channels that deliver the highest return on their investment.
We have built ViantAI to make the open Internet accessible to data-driven advertisers, greatly simplifying the DSP interface. We have stripped away the complexities of a traditional DSP, removing the primary barrier, which has prohibited smaller data-driven advertisers from accessing the open Internet. In its current state, ViantAI is building detailed media plans and manages continuous bidding for advertisers. Our goal is to release a completely autonomous DSP by the end of the year, offering dynamic campaign planning, optimized execution and reporting. We believe the displacement of search and social and prioritization of CTV as the cornerstone of ad campaign strategy, coupled with the simplicity of ViantAI will draw data-driven advertisers to Viant.
Finally, I would like to address the misperception by some investors that Amazon has suddenly emerged as the new threat in the open web DSP space. Let's not forget, we have already been competing with an illegal monopoly for the entirety of our existence, one who entices clients with the bundling of services, price discounting, free use of unique data, and exclusive supply to YouTube, the world's largest video platform. Of course, I'm referring to Google. And just like Google, Amazon cannot convincingly claim to be an objective independent partner to advertisers. Amazon is a seller of ads and purposefully directs ad spend to its owned and operated inventory, Amazon-sponsored ads and Amazon Prime Video, where it extracts full margin. This creates a bias. And by manipulating attribution, we believe Amazon can undermine the effectiveness of competing streaming services by directing spend to Amazon Prime Video. At the opposite end of the bid stream, we believe publishers are reluctant to provide Amazon with addressable signals, be it audience or contextual identifiers, as doing so could incidentally strengthen the Amazon Identity Graph and pull spend away from the open Internet and into Amazon's walled garden. In our view, Amazon's conflict of interest and lack of objectivity weakens its position with the open Internet, and therefore, presents little threat to Viant. Rarely have we ever encountered Amazon DSP in an RFP process.
Now where Amazon is succeeding is in retail media, which is displacing Google search spend. This is where Amazon is taking share, not from open Internet DSPs. As Amazon's e-commerce presence has grown, consumers have migrated search queries from Google to Amazon, which Amazon then monetizes via sponsored listing ads on its e-commerce website and app. This makes up the overwhelming majority of Amazon's reported ad spend. Due to Amazon's e-commerce dominance, investors are quick to point to the quality of Amazon's first-party data as a potential threat. And while highly effective within Amazon's walled garden, its usefulness is limited across the open Internet. Signal goes both ways. A targeted ad campaign requires first-party data from both the advertiser and publisher to construct the data match that permits for targeted ads to flow across the bid stream. What signal are CTV publishers like Netflix, Disney, and Paramount willing to provide to Amazon, a competing streaming service? We believe none. Conversely, both advertisers and publishers willingly provide Viant with access to first-party data to match audiences and power addressable campaigns. 80% of biddable inventory is addressable with Viant, and 95% of households are identifiable within our ID graph, empowering advertisers with the ability to target and measure at unmatched scale across the open Internet.
I will finish with this. Viant is arguably the only completely independent and objective enterprise-level self-service DSP that exists in the marketplace. We plan to continue to fend off Big Tech behemoths, including Amazon, through independence and our focus on our 3 strategic priorities: CTV, addressability, and ViantAI. In CTV, we will direct advertisers to the CTV content that drives the highest return on spend, period, with absolutely no bias. Our addressability solutions provide unmatched scale as we are not limited to a walled garden audience, but rather the entirety of the open Internet. And with ViantAI, we aim to surpass the level of simplicity offered by competing search and social AI products while providing a level of transparency they are seemingly unwilling to match.
And with that, I'll turn it over to Larry to provide more detail on our financial performance. Larry?
Thanks, Chris. Before I begin, I would like to remind everyone that we have posted a presentation on our Investor Relations website that includes supplemental financial information to accompany today's call. In terms of our results for the first quarter, revenue for the quarter was $70.6 million, representing a 32% increase year over year and exceeding the high end of our guidance range by 4%. Contribution ex-TAC totaled $42.7 million in Q1, up 25% compared to the prior year period and also above the high end of our guidance range. This represents our seventh consecutive quarter of 20-plus percent growth in contribution ex-TAC. It also marks our strongest rate of growth in 5 quarters, excluding the impact of seasonal political spending.
We continue to see meaningful expansion in the number of customers generating significant levels of contribution ex-TAC. On a trailing 12-month basis through Q1, we saw a 37% increase in the number of percent of spend customers generating over $1 million in contribution ex-TAC. Additionally, contribution ex-TAC across our top 100 customers grew by 24% year-over-year on a trailing 12-month basis. New customer momentum also remains strong. Our top 30 new customers added over the past year generated on average more than $780,000 of contribution ex-TAC during the period, more than 3x the level generated by new customers in the comparable period last year. This underscores our continued success in winning larger, more strategic accounts. These trends, fueled by growth from existing and new customers, reinforce our strong competitive positioning and support our ability to continue outgrowing the broader programmatic market. We delivered strong performance across most customer verticals in Q1, with ad spend across 3 of our largest customer verticals, healthcare, consumer goods, and business services leading the way.
CTV remained a core growth driver in Q1, accounting for over 45% of total platform spend, our highest CTV mix on record. In addition, CTV spend reached an all-time high for a first quarter, reflecting continued momentum as advertisers increasingly prioritize premium addressable video to drive performance. Spend across all emerging digital channels, including CTV, streaming audio, and digital-out-of-home collectively represented 54% of total platform spend in Q1, the highest combined share in our history. This milestone highlights the accelerating adoption of next-generation media formats, underscoring our position as a leading partner for advertisers moving beyond traditional display.
Video, inclusive of CTV, represented 62% of total platform spend in the quarter, further reflecting the continued shift toward high-impact measurable formats. Non-GAAP operating expenses totaled $37.3 million for the quarter, reflecting a 20% year-over-year increase and flat sequentially. Notably, these figures include incremental costs related to the recent acquisitions of IRIS TV, which closed in November 2024 and Lockr, which closed in February 2025. Excluding the impact of these acquisitions, organic non-GAAP operating expenses increased 14% year-over-year and declined 2% sequentially.
While we remain committed to investing in AI and technology to fuel long-term growth and market share gains, we continue to prioritize operational discipline. Over the past 12 months, we increased contribution ex-TAC per employee by 13%, reflecting improved efficiency across the organization. Adjusted EBITDA for Q1 was $5.4 million, exceeding the high end of our guidance by more than 27% and growing 76% year-over-year. Adjusted EBITDA as a percent of contribution ex-TAC was 13% for the quarter, expanding by 360 basis points compared to the prior year. This margin improvement was achieved while continuing to invest in our ViantAI product suite and integrating the IRIS TV and Lockr acquisitions, demonstrating our ability to scale efficiently while executing on strategic priorities.
Non-GAAP net income, which excludes stock-based compensation and other adjustments, totaled $2.8 million for the quarter, up 109% from $1.3 million in the prior year. Non-GAAP basic earnings per Class A share outstanding totaled $0.04 in the first quarter, compared to $0.02 in the prior year period. In terms of share count, we ended the quarter with 63.1 million total shares outstanding, consisting of 16.4 million Class A shares and 46.7 million Class B shares. We ended the quarter with $174 million in cash and cash equivalents and $199 million in positive working capital, with no debt and access to a $75 million undrawn credit facility. For the quarter, cash flow from operating activities before changes in operating assets and liabilities was $8.2 million, representing a 30% year-over-year increase.
In the quarter, we invested $12.6 million in operating assets and liabilities, largely driven by seasonality and continued growth. Additionally, we used $22.7 million in cash for financing activities during the quarter, including $17 million for repurchases of our Class A common stock and $3.2 million for taxes related to the net settlement of equity awards. As a reflection of our confidence in our strategy and market positioning, we capitalized on recent stock market volatility and aggressively repurchased Viant Class A common stock in the open market at a valuation discount. Since initiating our $50 million share repurchase program in May 2024, we have returned $46.5 million to shareholders, including $17 million in Q1 and $24.9 million year-to-date through May 2. This has resulted in the repurchase of 3.5 million shares at an average price of $13.12 since inception. As of May 2, $3.5 million remains available under the current authorization. Having nearly exhausted our existing $50 million share repurchase authorization, today we have announced the approval of a $50 million increase to our share repurchase authorization, which we expect to deploy strategically to support existing shareholders, particularly when our stock is undervalued. Our solid financial foundation, combined with disciplined execution and strategic capital allocation, positions us exceptionally well to capture the significant market opportunity ahead.
Turning now to our outlook. While we remain encouraged by the strength of quarter-to-date ad spend across our platform, macroeconomic uncertainty, specifically related to recently imposed tariffs, have prompted a small number of advertisers to delay campaign activations originally planned for Q2. As a result, our Q2 guidance reflects the deferral of approximately 3% to 4% of expected Q2 revenue and contribution ex-TAC to the second half of 2025. We view these shifts as temporary and timing driven, not indicative of reduced spend commitments or structural weakness. In fact, the majority of the spend is expected to be realized in the second half of 2025. While this dynamic introduces some near-term forecasting variability, customer engagement remains strong and our long-term growth outlook is unchanged.
Given these factors, our guidance for the second quarter of 2025 is as follows: revenue of $77 million to $80 million, representing 19% year-over-year growth at the midpoint; contribution ex-TAC of $47.5 million to $49.5 million, reflecting 17% year-over-year growth at the midpoint; non-GAAP operating expenses of $37 million to $38 million, up 17% year-over-year and approximately flat sequentially at the midpoint; adjusted EBITDA of $10.5 million to $11.5 million, representing 15% growth year-over-year at the midpoint. Our guide assumes record Q2 performance across all metrics: spend, revenue, CXT and adjusted EBITDA, despite the macroeconomic headwinds.
In closing, we delivered another strong quarter, executing against our strategic priorities, advancing innovation across our platform, and returning capital to shareholders through opportunistic share repurchases at compelling valuations. We believe we are well positioned to navigate near-term macroeconomic headwinds while continuing to capitalize on secular tailwinds, including CTV, addressability, and ViantAI.
And with that, I'll turn the call back over to the operator for questions. Operator?
We will begin with Jason Kreyer, Craig-Hallum.
This is Cal on for Jason. So maybe just first, if you could just provide a little more color on what you're hearing from your customers today? And then just in particular, as CTV continues to become a larger portion of your spend base, how do you see that potentially insulating the fundamentals from any sort of downside risk on the spend side?
Yes. I'll take the first one -- your second question on CTV. We're seeing just incredibly strong growth there. There are secular tailwinds that we wanted to align ourselves with a few years back. I think we're successfully doing that. The Direct Access program continues to be a great selling proposition. The fact that we do not take fees, we're eliminating a lot of middlemen fees in there. So if a marketer wants to buy CTV, they're going to do that through Direct Access because they're going through less middlemen. It's a great proposition. And really, just the scale of our Household ID just continues to pay big dividends to marketers because they want to be able to target in CTV and ultimately, that plays out in the measurement where they see how impactful that is. Those are all the things combined that got that to the share that it is today at 45%. Do you want to add anything there?
No.
And sorry, Cal, what was your first one again?
What customers are saying, I believe, was the...
Yes. And are you specifically talking related to tariffs?
Yes, just the sentiment and what you're hearing from customers.
Yes. As we talked about, pretty limited in terms of the numbers of advertisers. If I were to characterize it, less than 10 advertisers. And those are predominantly in consumer goods and some retail. They have pretty direct exposure to supply chains that were hit by the tariffs. So we saw some delayed spending out of them in the second quarter, and they postponed some of those investments into second half. So there is certainly, as everybody is -- you'll hear on other calls, there's some uncertainty out there. But we believe that marketers have become much more resilient just over the past -- I think they've weathered a lot of storms. The kind of fake economic recession or worries of economic recession in late '22 caused a little bit of a headwind to ad spend, but it quickly came back in Q1 of 2023. I think COVID, there was certainly a lot of uncertainty in the market. Yes, there was a short pause, but marketers quickly responded. And I think what's happening now is I think there's a lot of scenario planning happening.
A lot of what-ifs.
Yes. There is uncertainty of tariffs, where they're going to land, who they affect, how they're going to handle pricing of their goods to consumers. So I know that there's a lot of scenario planning going. And that's actually good news because when they're scenario planning, they're not sitting there dazed and confused. They're planning for multiple options. And I think it's going to set up -- all things being equal, at this point, I think it's going to set up for a good second half of '25.
And then maybe just a quick follow-up. Can you just kind of walk through the process of convincing advertisers to shift spend away from search and social? And just any key points that you're seeing resonate in the market to get these advertisers to move more spend to your platform?
Just to start, it's about education on the consumer journeys and what's impacting what and analyzing each channel independently and then all together. And we do a lot of this education, but I would say so much is happening from even third-party measurement companies. You've seen Meta roll out incrementality models for people to use. I think more of the sophisticated advertiser set is definitely moving towards this move towards allocating spend based on incrementality, but it's a big sea change from the enormous wall of money that's been spent towards last-touch attribution. So I would characterize it as it's all about education. Now that streaming TV or CTV is here, we're able to connect the dots better on a journey from TV ad exposure, showed up on Google search, bought the product on your website or through a retailer. So now that we're able to connect those dots, it's really just an education process while the marketers understand that new path.
And I think when your platform, which ours is, it's becoming the default measurement experiment of choice with our clients, over half of them are using incrementality to decide where they're going to spend their money. So you're educating them upfront on trying out a new form of measurement of what sometimes it's called conversion lift or sales lift, but really is, I spend another dollar in advertising, what drove another sale, then marketers are heat-seeking after that. And that's why you see the share of spend on our platform in the last quarter here reach 45% in CTV. That is much higher as a percentage of mix of ad spend on our platform versus other -- versus competitors.
And the reason is, is that their default measurement of choice is still last-touch attribution. And it's because they have such high preponderance of display ad spending in their platform, so if you use last-touch attribution, it always shows things like search outperformance because it was the last ad before purchase or display ads last seen because there's so many more of them because they're such cheaper. But when you look at incrementality, it's completely turned around. The CTV on average with our -- and this is other data that's out there, not just in ours. But on average, it has a 200% incremental lift compared to other formats and channels. If you look at search, social, and much of display advertising, that's in the mid-single digits to low-double digits of incrementality. It's not even close. So yes, we do some upfront education, but really, the marketers are just heat seeking. When they see those results, they're moving the money to what's driving the largest incremental impact.
Next Chris Kuntarich, UBS.
Hi Chris, how are you? Emmanuel, maybe we'll come back to Chris.
Understood. Following, we have Matt Condon of JMP.
My first one is just on the advertisers that pushed spend to the back half of the year. Can you just talk about your confidence in that spend actually coming through in the back half? Like, what gives you that confidence that spend is actually going to be there in the second half of the year? And then my second one is Google launched something that appears to be akin to your Household ID, or at least they're implementing IP addresses into their DSP, into DV360. Can you just talk about what the differentiation of your Household ID is compared to what they have on their platform?
Yes, I'll take the first one. How we're confident in the money being moved to the back half? Those aren't verbals. Those aren't -- that wasn't what we were characterizing. And our platform, think of it like an order entry system. They are taking money. They may be taking some investment out of the second quarter, but they are replacing it. And so we already see that in platform and where it's scheduled. So we're highly confident in that.
Yes. And then just addressing Google, doing quite a sea change from where they've been over the last 5 years. What I would say is they would exclude and actually hide the IP address, as you mentioned, Matt. And so they've made a change to enable IP address for use across their products. Our Household ID, so one thing that's important, does not represent IP address. IP address is commonly used, I would say, amongst most industry ecosystem participants. What Household ID is focused on people-based identifiers where an IP address is a digital identifier that is out there with cookies. So what is Household ID? Simply put, it's your home address, your postal address, where we're then attaching other people-based identifiers to that physical home address. Very different than what Google has enabled, which is allowing the IP address to flow through Google AdX and their exchange there. So they focus on a digital identifier, similar that an IP address could represent a household. But our data structure is actually based on physical address, not IP address. So similar, but different.
Yes. And I think IP addresses, although an interesting turn of events for Google to all of a sudden say IP addresses are good, when they have had years and years of scaring the ecosystem that, one, these were privacy violations; and two, that they should be eradicated. Google actually did eradicate IP addresses in AdX. Although they've come out and said that they are going to use them, and they're okay now, they are still not passing that through AdX. So on one hand, it's good. And I do believe they made this move because of a lot of the monopoly trials that are going on right now, a lot of the investigations. They're trying to show that they're playing a little nicer. But if you read through it a little bit more, well, again, it's privacy for thee, but not for me. They are not passing that IP address through the AdX ecosystem. So I think that that's a little bit of a false flag from them. But nonetheless, IP addresses, just in general, are probably not the most useful. A lot of times you get an IP address that comes across, it's a server side IP. It may not be necessarily the Household. A lot of platforms like a Roku run through a proxy, so you can't look at those. So it's not a panacea by any means, but certainly, it's much different than our Household ID.
But exactly, as Chris said, the IP address, Google has it on 100%. And if you want it as an industry participant, you have to call every publisher that you're buying from and ask them to enable it. So it's always a fake proposition of we're open and playing ball, but they secretly change the rules behind the scene where it advantages them.
Once again Chris Kuntarich, your line is live.
All right. Sorry about that. Just going back to the April comment, any color you could share there versus the context of the 14% to 19% rev ex-TAC growth guide for 2Q?
And then just the second question would be around volume of new customer conversations. And how is that trending right now versus the beginning of the year? And how are you thinking about that contribution to rev ex-TAC growth at this point versus how you were thinking about it at the beginning of the year?
Yes. Chris, can you reask the first question? I wasn't clear on what you're asking.
You had just said that April was strong persistent growth. And just curious kind of versus the context of 14% to 19%. Was it within that range? Was it above that range? Kind of how should we be thinking about that strong persistent growth in April?
Larry?
Yes. It was within that range. But typically, what we see as we did in Q1, where we build month-over-month. So in Q1, February is bigger than January, March is bigger than February. So we started out the quarter strong. We were pacing to have nice quarter-over-quarter bumps, more than expected in May and June. We did have this little -- the pause or the moving of some money from Q2 to the second half, which muted that -- those May and June growth rates a bit. But it's trending in the direction we typically see, where each month is getting larger than the next. But our overall growth rate, the impact of those handful of advertisers is about 4% to 5% lower growth rate as a result of that money moving out of Q2.
On your next question, Chris, volume of new advertisers. As we said on our last call, our pipeline has never been stronger. We're getting much larger looks at bigger pieces of business, meaning larger and larger advertisers. We're pretty -- we feel very bullish on the back half in terms of new customer pipeline. And in those areas, I would kind of put it in 3 buckets.
One is just -- has been our CTV dominance. When a marketer comes to us, and they see, and they hear about the preponderance of CTV spend on our platform that they naturally ask why. They understand what they're spending in other platforms. And so, as we go through the value propositions there in CTV with the scale of our Household ID and then the recent addition of IRIS_ID, that's drawing a lot of interest and new business interest towards us. Just recently with IRIS_ID, we just had a good handful of -- even in the first quarter of pretty good-sized Fortune 500 brands shifting spend and testing IRIS_ID, and we see great results there. So pretty bullish on that.
And the last one, I'll say, will be in the second half that's going to contribute is ViantAI. A lot of the organizations, agencies, brand marketers, they see the value in AI -- but there is a bit of -- they need to rework their organizations to be able to consume AI. They all want the efficiencies that it offers. And so we've seen a bit of that, but it's been tremendous for new business wins. And we really see a strong pickup of ViantAI in the back half of the year, helping automate workflows, moving work within agencies to more strategic work instead of the [ road ] work of campaign planning and setup and bidding and buying. So we're really excited about that.
Got it. Very helpful. Maybe just one last one on the non-GAAP OpEx expenses in 2025. It was nice 1Q cost controls here. Anything we should be thinking about specifically in the back half of the year that would be driving this above where you were previously talking to?
No. I think it's -- last we spoke, kind of the 16%, 17% range. It does -- included in them -- that is about 500 basis points relating to the acquisitions. So -- but overall, I think for the year, you're talking 16%, 17% growth.
Maria Ripps, your line is live.
I just wanted to follow up on your macro commentary and just ask about 3 verticals. One is Auto. I think, Larry, you mentioned that it's not that significant for you anymore. Maybe just comment on that. Then number two is Retail vertical. I believe that's a sizable kind of vertical for you. Maybe talk about that vertical more broadly. And then three, sort of what are you seeing across your Public Sector vertical here more recently?
Yes. On the verticals, so in automotive, we definitely under-indexed in automotive. And specifically with OEMs, we highly under-indexed there. So we don't believe we have a lot of exposure there. Within retail, as we said, we saw some small impact -- we don't believe that the most affected by tariffs in the retail category, we believe we're under-indexed in that section as well. We've done a large analysis on this. But -- and within public services, Larry, do you want to comment on that?
Yes. Public services has been consistent. It was a big growth -- really big growth driver for us a couple of quarters ago for a couple of consecutive quarters, but it's holding steady and growing nicely.
Got it. And then secondly, I just wanted to ask about your Direct Access program, and you obviously have a pretty strong lineup of partners there. Are you looking to sort of to extend this functionality to add more content or more partners or sort of more inventory? And is there sort of any difference in the economics for you between Direct Access CTV and other CTV spend?
Well, we don't charge a fee for Direct Access. And so no, we do not make -- we don't make more by our clients buying through Direct Access. However, we do see the second derivative there, which is if they're buying more efficiently, they're going to -- in theory, they get better results, and therefore, they spend more money. So that's why we've held our stance there that we don't need to charge for this. It's a benefit to marketers when we can connect directly with content owners. So we want to maintain...
Cut the savings through.
In terms of other partners, really, what we're doing now is you've seen -- you'll continue to see, and you have seen us doing press with the likes of Disneys and Paramountss, not only putting them in Direct Access, but them adopting our Household ID and there are scores of those publishers who have done that, that continues to add to our scale and Household ID and also with IRIS_ID. I mean the fact that they're now picking up, we announced IRIS, TCL, CNN -- or excuse me, I said IRIS, but Paramount was the big one. We've doubled the presence of IRIS_ID in the bid stream on CTV since the acquisition. So that's extremely positive as we continue to roll that out. But we're -- basically, we're making and continuing to reinforce Direct Access program has a lot of benefits, not just cost savings to marketers, and that's why they keep spending more through it.
Barton Crockett, Rosenblatt. Your line is live.
I guess a couple of things, if I could. One is in terms of the commentary around this broad transition in incrementality, you guys, obviously, you point to your own experience, your growth is kind of evidence of that. But it seems this is such a powerful idea that there should be broader evidence of it. The flip side argument could be maybe people just like your products and services. So what else can you point to that argues that this is really a big macro theme versus you guys selling a few products and services that people like?
You know what, great question.
Very good question.
And it's one that gets asked quite a lot, actually. One of the reasons why I'll tell you why it's -- one, it is a -- it is an industry theme. It is picking up steam, but I wrote a post on this on LinkedIn, that old habits die hard. 80% of the money, we believe, that is in digital advertising is spent based on last touch attribution, meaning whoever showed the last ad right before a consumer purchase, gets all the credit for it and the money flows that way. It's absolutely wild to think that, that's where we are today that you're not -- you're essentially going to deprioritize things like television and, say, streaming audio because those are not at the point of purchase ad products. But they do drive the data is clear of how much incrementality that they drive.
And I believe the entire marketing organizations are completely built around these KPIs in digital advertising. I mentioned the sports apparel brand. I mean, it's a great case study around this. There's many more. Starbucks was another example of something similar where organizations are geared towards better and better and more and more efficient KPIs in marketing. But at the same time, over time, they have slumping sales or top line revenue. And so I think it is a little bit of a reeducation to a degree. And part of this is really -- I think CMOs understand this. They understand that TV drives impact and maybe a branded search term isn't responsible for incremental sales, but they keep buying it, and you have to ask why. And I just think it's the over-measurement of things.
And oftentimes, it's the presence of the CFO in the room of wanting more accountability for advertising. So although one thing may appear more accountable like Google Search or display ads at the point of purchase. But we think that this is definitely changing. It's not just us, but it is something that we have to continue to educate in the industry around.
And part of just one piece, Barton, is Meta came out and open source their model for incrementalities because so many advertisers are asking to measure incrementality versus the old traditional cost per customer acquisition. So I think it's -- you'll see more and more evidence come out, yes, from our org. And I think you'll see a litany of research coming out that shows that branded search doesn't provide as much value as initial thought. Social provides less value than initial thought, and television really is the main stimulator of consumer demand.
Okay. And then something on the guidance and the outlook. Correct me if I'm wrong, but I think you guys might have been saying in the last earnings that you expected your revenue to grow faster than your expenses and there to be some margin expansion of EBITDA as a percentage of contribution ex-TAC. Is that something you still see at this point?
Absolutely. For the year, we expect that to be the case. Our guidance is they're roughly equal in this quarter, primarily due to some of that money moving out of Q2 into the second half, but we continue to -- that's a big metric of ours that we're very focused on to ensure that we're increasing our EBITDA margins throughout the year.
Okay. And then if I could just throw in one more. In terms of Google, they have offered to make some concession short of a breakup in terms of not using first look, last look, I think a couple of other things around the minimums allowing publishers to differentiate, giving publishers full view of what goes through. In your mind, do those -- would those be helpful if you didn't get the breakup, but you just got that? Would that be helpful to you?
No.
No. Without a breakup, Google is a machine. And I think the hard part is the antitrust cases are attacking Search or adtech or YouTube or, let's say, significant parts of the machine, but they all work in lockstep to control the flow of Internet traffic, what consumers get exposed to and what they don't get exposed to. I wrote a lengthy post on how Google is the real reason for Myspace's decline, not Facebook, being from the inside, looking at the internal metrics, what happens when you get taken off of Page 1 of Google. You evaporate off the Internet is the answer.
And so Google controls traffic at the start of the Internet journey for most consumers, and they push that traffic wherever they want, usually to their owned and operated businesses that they've either acquired or control through their ad exchange. So short of a breakup, there is no stopping that machine from going through. If you want to use instead of Search, reach out via e-mail, let's say, well, they control Gmail, and they control if you go in the Junk filter as well. And I can't tell you how an organization that big worked perfectly in lockstep to ensure all these pieces were there, but they did, they executed perfectly, and it shut out so many players.
So I personally, my opinion is that short of a breakup, it would have absolutely no impact because they can continue to use the cash flow of business A to subsidize business B until the market participants are gone, which we saw over and over and over. So the mantra that Google came out with that IPO of "Do no evil" (sic) [ Don't be evil ] is certainly we're substantially past that. I think the only solution for future monopolies from the government to do is to break them up. So there's actual repercussions for breaking the law.
Mauricio Munoz, Raymond James. Your line is live.
I just wanted to follow up on the -- on your commentary about the modest demand being pushed out to the second half. And apologies if this was answered already being juggling within calls. But Larry, did you quantify the impact of this event in your second quarter guidance?
Correct. We said it was essentially 3% to 4% of expected revenue in CXT, which equates to about a reduction in our growth rate that we would otherwise have had of 4% to 5% for a CXT in revenue.
That's very helpful. And from a customer perspective, was this driven by your larger customers or the long tail of your small advertiser base? And what channels or formats were most impacted by the pushout?
Why don't you just take the first part, Larry.
Yes. So it was about 5 customers, no like extra large customer, not really super small ones kind of in the middle type customers. In terms of channels, it really was kind of typical of the mix that we normally see because the customers were all a little bit different in how they approach advertising. So it didn't heavily impact one channel versus another. It's kind of consistent -- generally consistent with the mix we ordinarily see.
Great. And then yes, to my question, and this is on the competitive landscape. And Chris, you did touch on this in your prepared remarks. And I'm talking about the perceived competitive threat from Amazon. So yes, there's been a lot of attention and some of our checks continue to suggest that Amazon is looking to expand share at price points. And this is at the very high end of the advertising base. So with the understanding that you are more on the mid-market, I might not even see this.
Maybe you can talk about the defensibility of Viant if other scale DSPs were to come down market and start competing with you for more of the mid- to smaller advertising and agency opportunity, given pressure from Amazon or worsening of the macro backdrop, but if you can comment on that.
Yes. Well, I would just classify Amazon as they compete with many, many, many verticals out there. And then I think what the perception by investors around Amazon is around their data that they have this amazing data set. And of course, within the retail product category, their data set is very, very strong, probably second to none out there. But if you look at other verticals like automotive, quick service restaurants, travel and tourism, the data set that Amazon possesses has no benefit to that vertical category, and they have no position of strength there. So certainly, in retail, if you sell consumer goods, they are going to have a great data set for you as an advertiser.
I think, secondarily, what's driving their revenue growth is the sale of merchandise through their store. And in turn, they require people to spend in advertising based on -- as a percentage of those gross merchandise sales through their retail store. So I think a lot of the growth is really due to the sale of merchandise to the end consumers that's powering their ad platform.
For retail, consumer goods businesses, Amazon is going to be a really good partner for you and probably already is in critical to your success. But if you're in financial services, automotive, quick service restaurants, many, many, most other vertical categories that make up the advertising industry, even at the Fortune 500 level, Mauricio, their data set has no value to your business overall. So I think overall, it's less just about a mid-market versus big customer setup, and more about what proprietary data does Amazon have and where does that give them a competitive advantage. That's squarely for the most part in retail, and not so great in most other categories.
And in Retail, one other point, too, just to dispel any misunderstanding. In the mid-market, Google has been in the mid-market. Trade Desk has been in the mid-market, and mid-market customers do buy advertising from Amazon DSP. But as Tim had talked about, most of that is sponsored listing ads. So we don't really see them in the true DSP self-service arena.
Much of what we see even right now is really Amazon going around trying because they've under-delivered with their upfront commitments. Because viewership is down in Prime Video outside of a few big franchises like Thursday Night Football, they're trying to place those ads somewhere, which is why they're going to say, "Hey, I won't charge a fee for that", which I think is a larger problem for them. So we've competed with large companies even in the mid-market, and we've been able to win share there. It really is -- we don't see them in the true self-service space. They do get ad commitments, as Tim is saying, they do get those, predominantly in the retail media side and sponsored listings area.
All right. Nat, (sic) [ Nathaniel Schindler ] I see you on there. We'll take your question.
Yes. Guys, just wondering, we've been hearing a lot about advertisers and really large agencies beginning to bulk a little at the cost of the adtech stack. And specifically relating to one particular competitor that has gotten pretty expensive. How have you guys -- and you are now growing solidly better than that competitor, mostly because of your CTV side, which is the growth area of the industry. How well have you been -- how are the conversations going with the large agencies? And how much room is there to move upmarket in the current environment?
Yes. Thanks for that, Nat. Yes, we are -- as we've said in our last few quarters, we certainly are moving upmarket within what we still want to call the mid-market. A mid-market advertiser spends between $50 million and up to $1 billion a year in advertising. But they're U.S.-based national advertisers. That's how I would characterize them. So we are getting bigger swings at larger accounts, certainly.
One of the -- yes, there are -- there's always [ groans ] of any time -- and if I look over the last 10 or 15 years, you hear where there's inefficient pricing, customers may be getting charged too much. That's always an opportunity for a challenger brand. But it's kind of in our ethos. It's why we don't charge for things like Direct Access because I don't need to. Why not pass the value to the customer? One, why don't I give an easy win to our salespeople when they go out and compete against somebody who's charging for the exact same thing and we don't. That's just a big win, and we can win more customers a lot faster. We want to do that.
We may offer other -- we may have other pricing mechanisms that aren't fixed cost, but maybe are value-based pricing. So we only make our fee if we're providing value there. So there's things that we do where we don't need to charge. We are widely noted as being more efficient from a pricing standpoint compared to larger DSPs. That's always served us well. And I think that's an area where we can stay because from an efficiency standpoint as a company, we don't need to charge those things, and we can still grow our EBITDA percentage.
But Nat, specifically around the competitor that you mentioned, what around -- the Trade Desk, what people are sick of is the incremental fees, not so much the platform fee. It's the incremental fees that are getting charged. And I believe with the rollout of Kokai, there were substantial increases in incremental fees, and that's really what the chatter that you're hearing about as well as it automatically opts you in to purchase through their OpenPath SSP solution. So I think those are the major issues amongst the competitor side.
We really don't play that game, though, of trying to go tit-for-tat on pricing. We price what we think is fair. We try and not charge as many incremental fees as the other customers. Of course, if someone asks for third-party something, there are incremental costs. But we just try and do our best job at negotiating the take rate straight across the board and providing as much transparency and visibility into what's driving value for them.
Thank you, Nat.
Sorry, I wanted to just follow up.
Yes.
You guys talked a lot about Amazon here and following up on the specific pricing issue, one of the things we've been hearing from advertisers and agencies is specifically their lack of nickel and diming kind of as you brought up, that has been a problem, particularly at the large agency side. I know that in the end, though, what's going to matter is the total percentage of the dollars that are being taken by the adtech stack. How do you compare right now, if I wanted to put you versus Trade Desk, where do you think you come out in price on DSP plus data and I know it can vary, but on a -- for an advertiser. And is it -- is there a significant difference?
Yes. I'm sure every advertiser is somewhat different because I think the more scale -- and I think in all DSPs, the more an advertiser spends, the better the deal they may end up getting. But what we say is we get head-to-head all the time. And it's pretty simple. Pick whatever you want to buy, Mr. Marketer, buy whatever publisher you want, what's the CPM? You don't have to do a lot of brain surgery. What can you acquire that content for, put an audience on it, use the same audiences in both platforms, what do you see? And we come out ahead on those all the time. And really, I would say, it's more indicative of our customer base as well. We believe in the mid-market that they are much more data-driven than in the Fortune 100. It's not that the Fortune 100 doesn't -- that they're just buying ads, but a lot of them don't have a heavy reliance on e-commerce. They're not doing monthly and quarterly planning, looking at incremental return on ad spend as much. They're looking to move 1 million cases of toilet paper. So they may not be buying as much data in the market because everybody buys toilet paper. So our customer set, we believe, is largely different. And without a doubt, there's a high scrutiny on, as you say, the ad tech [ TAC ], there's a very high scrutiny. And what I will say is if you're not delivering the returns and if your costs get out of whack and fees that you charge are too much, their results will suffer. And so, it's obvious what happens. They may move their spend to another platform.
And I think there's -- just to add some color to that. There's huge infrastructure costs that someone like The Trade Desk or Google has to carry to support the large holding companies, which is operations in 40 countries or 30 countries, wherever that footprint is. Those international operations are all money losers, absolute money losers. And so you have to -- and the profitable business is actually in North America or the U.S. specifically. So what you end up with is inflated take rates to pay for this international infrastructure that never spits out anything but losses. And that's where I think the main frustration is stemming from is you do have an inflated take rate, but these platforms are required to support that holding company in 40 countries. And the ad spend across those 39 other countries, besides the U.S., doesn't support the staff that's required to be there. And this is always why our strategic perspective was to stay on U.S. national advertisers, what we call the mid-market, and focus on there because we hit operating leverage in our business model at substantially lower ad spend flowing through our platform than The Trade Desk did historically when they went public and were building their business. So we think we have a strategic advantage, not having to support this enormous money loser of international operations and digital advertising because the ARPU of ad spend there is just not supported in those other countries.
At this point, there are no more raised hands in the queue.
All right. And with that, we'll close the call. Thank you, everyone, for joining Viant's earnings call. See you next quarter.