Conference Transcript - MNTN 2026-03-02

Matt Kost, Analyst — Morgan Stanley

Thank you very much. All right. Welcome, everybody. I'm just going to quickly start with the disclosures. For important research disclosures, please see the Morgan Stanley Research Disclosure website at morgansanley.com slash research disclosures. If you have any questions, please reach out to your MS sales representative. And with that out of the way, my name is Matt Kost from the Morgan Stanley U.S. Internet team. Very happy to be joined today by Mark Douglas, CEO of Mountain. Thanks for being here. Thank you. Awesome. So maybe we can jump right into it maybe as a high level. For people in the audience who may be newer to the Mountain story. Talk to us a little bit about an overview of Mountain, where you fit into the advertising ecosystem, and how the business has changed over the past couple of years.

Mark Douglas, CEO

So at Mountain, with the advent of streaming television, relatively early in that journey from linear TV to streaming, we recognized that that was a digital marketing opportunity. And we created the world's first performance TV platform. and the idea of using television as a direct response marketing vehicle, similar to what companies do with paid search and paid social. And we did that specifically for the SMB market, small and mid-sized businesses who the majority of spend was on search and social and now for the first time can really come into the television ecosystem them and drive measurable results from streaming TV. Got it.

Matt Kost, Analyst — Morgan Stanley

And I guess, you know, talking about the ad market for a minute, you've talked about and alluded to it in your comments just now, 92% of your customers are SMBs. Obviously, it's a volatile ad market out there. Given your exposure to that SMB market, are there any macro trends that you'd call out that are impacting them right now? It's a question that we get all the time about your business.

Mark Douglas, CEO

Yeah, so I think the opportunity we're pursuing with performance television, that's a TAM we've essentially created, and so it's not really, I think, subject to macro trends just because the scale of the opportunity is significant, and I think that that arena tends to have emerging companies who are almost by definition bucking the macro trend. So we don't really see macro as significant factors, just significantly like we're creating our own town. We can grow into that, and we've had consistent growth, and we see that as a continuing opportunity.

Matt Kost, Analyst — Morgan Stanley

And just following up on that, I guess thinking back a little less than a year ago when all the tariffs hit, I guess in light of your comments, did that impact your customers, their ability, willingness to spend?

Mark Douglas, CEO

No, I mean, we definitely heard from our customers, some of them, but I think only a single one of them paused spend because, again, when you're an emerging brand, no matter what the factors you're facing, you're not really giving up your growth aspirations. You might give up some of the margin you're taking. You'll find the path. And so that was a really good example of that not occurring. I think I've seen charts in the past that showed, to some extent, performance television being almost, not performance television, being performance marketing, being almost like recession-proof because the number of e-commerce companies and travel brands and other brands that are active in the space. It's a reiteration of macro not really being a key factor. It's more the scale of the opportunity that we're growing into is the key factor.

Matt Kost, Analyst — Morgan Stanley

Let's stick with performance TV, kind of really what you were alluding to there. I mean, the fact that you're bringing performance advertising to streaming TV is really the main differentiator of your platform. So talk to us about some of the technology that you're leveraging there to make that possible. Mountain Match, just one example of something that comes to mind there. And how are you iterating on your offering to grow how much you can scale on performance TV going forward?

Mark Douglas, CEO

Yeah, so I think the comparison is there are really two ad markets. There's a brand ad market, which is represented, I think, has represented past a lot of the television ecosystem. And there's a performance market, which is kind of the segment that we're growing into. They're very, very different. I'll give you a very simple example. Look at two very different types of customers. Let's say you have a customer like a Verizon. Virtually everyone in America can be a Verizon customer. So the technology needs there are very different. You don't have the targeting needs. You don't have the measurement needs. It's more about them building the Verizon brand, that brand being top of mind if it's time for you to potentially want to switch carriers. Now look at an example. One of my favorite customers, Onewheel, they sell a single-wheel skateboard, very extreme sports. You probably see people in San Francisco or New York. It looks fun, but it also looks very dangerous, right? So not everyone's a customer for that. They are not trying to get 100 million customers. They're trying to get their next 10,000. So we have to apply AI models to the targeting, generative models to profile who their target consumer is, machine learning models to find them. Everything has to be much more precise. The budgets are smaller. Verizon probably spends, I think they're the third largest television advertising in the United States. So that means they're spending something like $35 million a month on TV advertising. Someone like Onewheel is going to be spending far lower than that. And so every ad has to hit the right consumer, and that has to be measured. And they have to A-B test the creative, which creatives. Everything is done with a deeper level of technology. Mound services, all those technology needs end-to-end. Purpose built for the SMB market and purpose built so you can take those dollars and you can use them very, very efficiently so each of our customers can find their next customer. And the purpose example was to show how different that is from, like, a big global or enterprise brand. And so the technology to do that, the targeting, the measurement, the campaign management, the creative tools, because they'll have TV ads when we need them. So that's why we have Quick Frame for creative. That's all, like, a part of the whole package we deliver into the market for performance TV.

Matt Kost, Analyst — Morgan Stanley

Got it. Let's stick with creative for a second. So, you know, obviously it's not generating a significant amount of revenue, but you just alluded there to how important it is for the customer experience and for retention of your advertisers. So talk about the innovations you're making there, Quick Frame AI, and a little bit about customer adoption and how important the creative tools are. Yeah, so we see it as a revenue enabler,

Mark Douglas, CEO

not specifically the revenue from QuickFrame, but how it enables customers to get live on our platform faster and also have more creative, meaning if you lower the cost and lower the time to have it, then you can have more of it. The more you're thinking about how to communicate your value to consumers, the more likely, and trying different ideas, the more likely you're finding kind of the messaging and the creatives that really hit home for that consumer. So that's why we built Quick Frame. We wanted to have a solution that was really specifically built for TV 30-second ads, which means it has to be generated in multiple scenes, consistent characters across the scenes. We've been very happy with the adoption. and we announced early on, right out the gate, we had over 5,000 users. The number is greater now. We're doing, it's still in beta. We're doing a series of product releases that we think just really nail the fit from our customers. We're actually getting a lot of feedback from our own use of it. We now, our own commercials are largely, we're using our own tools to build our commercials and we're getting a good response, like marketing response too.

Matt Kost, Analyst — Morgan Stanley

So it's a really key component.

Mark Douglas, CEO

And the netted out is more than 95% of our customers have never advertised on TV before, which means more than 95% don't have a TV ad when we meet them. And they certainly don't have many TV ads. So that quick frame solves that problem. It allows them to get that creative at a lower cost faster and build creative more often.

Matt Kost, Analyst — Morgan Stanley

Got it. You gave that really helpful example just a minute ago about Verizon versus OneWheel and sort of the differences in the needs of those enterprise versus SME-type customers. I guess, talk to us about the key differences in terms of approaching and onboarding those customers. So, you know, time-to-first campaign, retention, and how do you ensure that you're profitable when you're going after these smaller advertisers?

Mark Douglas, CEO

Yeah, I mean, I think the profitability, I'll start with there, is just having discipline in terms of customer acquisition costs. and so forth. And you can see that in our numbers. We've been able to do that pretty consistently, profitably pretty consistently for many, many quarters. Adjusted EBITDA, unadjusted EBITDA base, and now EBITDA bases. In terms of, go back to the original question.

Matt Kost, Analyst — Morgan Stanley

So just the difference between onboarding, time to first campaign, the process of... Yeah, so that relates very specifically

Mark Douglas, CEO

to the previous question. The majority of the time it takes for a customer to go live is waiting on creative, especially in the mid-market where not only do you have to build creative for TV, you also need approval. Like people, there might be a bigger marketing team, and so there are people that need to approve and so forth. So one of the other reasons, when I mention Quick Frame, I keep mentioning Fast. It's not only a Fast for them, it's Fast for us. So if they get creative faster, that means they go live faster. And that's something that we want to see happen. And honestly, they want to see happen. When they're new to TV, they're excited about it. They want to get live. There's a lot of momentum there. And so that's the key thing. And the go-live times, typically on our platforms, literally it approaches 90% of the time it's just waiting for a creative. So that's the number we've been attacking, and we're really happy with how that's progressing right now.

Matt Kost, Analyst — Morgan Stanley

You talked in passing a moment ago about using your own platform as a means of acquiring users. So talk to us more about how that fits into your marketing and user acquisition strategy and your plan to use that going forward. Is that a growing part of your marketing mix? How important is it?

Mark Douglas, CEO

Yeah, so we use a number of different channels in order to acquire customers. So our own platform is the leading source of new customers for Mountain, meaning we run Mountain TV commercials on streaming TV. And essentially, the ads are not like billboards, I think, but it's like you ever see a billboard that says, you could advertise here? It's somewhat, the ads don't say anything like that, but that's kind of the message, right? You, SMB customer, could be here on Housewives, on Landman, on my favorite show last week, which is Traders, the favorite reality show. And so that's the mix. But we also use social, LinkedIn, Instagram, and TikTok, and other vehicles to acquire customers. And so that mix allows us to do that with a pretty stable customer acquisition cost. and that fits in the economics of the business.

Matt Kost, Analyst — Morgan Stanley

I guess thinking of it as a driver of your own marketing mix, I mean, what are the unique aspects of using your own platform to acquire users? How are you able to reach people differently?

Mark Douglas, CEO

Yeah, well, the nice thing is the thing about streaming TV, about television advertising, it's like against the literal best content in the world. Like when people go out to dinner, they don't talk. I mean, they don't talk about like the YouTube video they were listening on the way to, on the way to dinner, they talk about the season finale of Traders or when White Lotus, like they're talking about the first episode of White Lotus. They're talking about the best content in the world. And the other thing on streaming TV, the ad space you get against content like that is 30 seconds uninterrupted. It's like a real opportunity to tell your story. and so and it put as a result of that combines with all the tech it performs really really well and i think for all our customers they're doing the same mix they're using social search and and so the opportunity to now make a big platform like television the largest screen in the in the home there's generally no larger screen in a home than than the than the television and they get 30 seconds of time uninterrupted again against that against the best content in the world is a really, I think, important part of marketing mix that more and more S&B customers are recognizing.

Matt Kost, Analyst — Morgan Stanley

I guess thinking about your expectations for 2026, I believe you got into another year of 20 plus percent revenue growth. So what are some of the key growth levers that you're looking at that are kind of underpinning that expectation? And just broadly, what is driving that strength in the business?

Mark Douglas, CEO

Yeah, well, I think one is honestly is AI. And I don't know, maybe that sounds like a coined response. It's not. All the targeting I mentioned is enabled through AI models. Like we used to ask our customers who their consumer is. Now we tell them who their consumer is, and then they agree or adjust to things like that. So we literally use machine learning models. I'm sorry, we use general AI to literally say, what does this company sell? What products do they have? what other things would this someone who bought this, what else would they be interested in and with that really precise consumer profile then we use that in order to essentially run machine learning models in order to find that consumer. The AI models we talked about in the creative, the more creative you have the better performance you're going to get. I mean it plays an important role also. Data and the creative. We have AI media planning right now that we have in beta What that does is it really, again, does the same thing. It looks at, predicts the context of the content that these products and this brand will perform against and tells that to the customer so they can see what the game plan is in terms of the execution of the campaign. So that's basically the number one driver is technology in particular, So that those levels of technology and then also just our continued, you know, sales and marketing expansion is also, with any growing business, an important component also.

Matt Kost, Analyst — Morgan Stanley

Got it. Let's talk for a second about competition. So I think you mentioned right at the top that, you know, you're kind of building this market as you go. You know, so you're changing advertiser behavior away from things, maybe not away, but in addition to stalwart performance channels like search and social. So I guess, how do you see the performance TV competitive landscape changing over the next couple of years? And what aspects of your platform, your go-to-market, and your customer experience do you think create a moat around Mountain?

Mark Douglas, CEO

Yeah, well, I think the TAM for the segment will keep growing. So that's an important component of what we're doing. In terms of the TAM, it's a whole set of facts. excuse me do we have a water in the room or something like that thank you I appreciate it the thank you so much sorry I couldn't drop that

Matt Kost, Analyst — Morgan Stanley

that would actually would have made a good sizzle reel

Mark Douglas, CEO

there you go so I think one the TAM here can continue to expand so that's really important and the nice thing is again we're contributing to the creation of the town because we enable the idea that the the smb market could do performance marketing there um so that's the and remind me the question i want to make sure i nail it you're talking about the competitive landscape yeah and then in terms of competitive landscape the um as tam grows there's bound to be competition to show up the old saying is if you don't have competition and you don't have a market, right? And so I think competitively in terms of our defensible position, the performance tech I've mentioned, we have a big head start on that. It is really hard to catch up. The things that maybe a potential competitor wants to do that we've already done in built-in platform, we're already doing additional things that I'm not talking about, because honestly I don't want competitors to know about. So we're continuing to invest in that. Also, our relationships with the networks, we are the number one player in PerformanceDB, and so we have deep relationships with the networks right now around that, the pricing that reflects that, that also contributes to our performance. And then our go-to-market motion, I think, is another really important point. We've been going to market here for a bit and really learn, like, how to bring companies in, get them through a sales cycle, get them through a go-live cycle, and have them be successful. And so all of those play a role. Like, if you bring them in efficiently but they don't see the performance or they can't get the creative, and everything you've heard me talk about in terms of platform is kind of a direct response to having a competitive, like a big moat that also works efficiently to bring on customers. and grow the business.

Matt Kost, Analyst — Morgan Stanley

I think something that's probably a really, not really, but somewhat poorly understood differentiator of what you do is the relationships with the networks that you just mentioned. So I guess maybe spend a second on the supply side and what you're doing with them and sort of the win-win that you have with them that others would have a hard time maybe replicating. So I think the streaming networks view us as a growth channel

Mark Douglas, CEO

because we're bringing a cohort of customers in the market that they previously didn't really have good access to. They might have had some smaller customers in the local market, but definitely not e-commerce, right? Definitely not travel. Online, you know, kind of highly targeted, highly measured. That just, I mean, it was rare to see, even, it was literally rare to see, like, kind of a true emerging e-commerce brand leveraging TV. and the reasons were the targeting, the data, the measurement, the integration with Google Analytics, and all the different measurement platforms and stuff like that. So as a nature of work growth channel, we have really collaborative relationships with all the streaming networks, and I think they see us in a different bucket. One thing we confidently, every time we're having meetings with any of the networks is more than 95% of our customers have never advertised on TV before, and weren't going to, if not enabled by a platform like Mountain. And so it's created really, really key relationships. Also, our relationship with the networks are one-to-one, meaning that we have direct partnerships, negotiated what's called private marketplace deals, which I think are really critical to having the relationship and the pricing that makes this work well for everyone.

Matt Kost, Analyst — Morgan Stanley

Got it. You mentioned travel and e-commerce is important verticals. Do you have outsized exposure to any particular verticals, and how does seasonality and vertical-specific events impact the predictability of your business?

Mark Douglas, CEO

Not really. I mean, a really good example that this is going back to like 2020 a year that I think everyone wants to forget, but like 23% of our revenue came from travel. That went to zero in one week, and we had a great year. So as long as we're continuing to grow and so forth, I don't think there's any revenue concentration or vertical exposure

Matt Kost, Analyst — Morgan Stanley

that we feel concerned about. That's interesting. I mean, I guess 2020 is sort of an unusual example, but what did happen that year? Because you're talking about bringing in groups of advertisers who've never done this before. So if some of them went dark because of the situation at that point in time, who replaced them?

Mark Douglas, CEO

Well, it honestly relates back to one of the earlier questions you asked, which is about macro, is that in challenging times, emerging companies, SMB companies, growing companies, they don't give up their aspiration for growth. And so when they – so they find – this happened earlier this year with tariffs, or earlier last year, with tariffs and things like that. So when one segment goes out – there's always winners and losers is maybe the way to say it. And so if one sector is facing some really big headwinds through factors out of their control, that generally means someone else is actually growing as a result of that. And so overall, I think the performance advertising space in general tends to be, you know, kind of relatively immune from like individual factors because it's just so broad and there's so many different companies and no player in this market is really highly dependent on one. That was particularly challenging, obviously, but yeah, there were a lot of other companies that were like, I'm not giving up my growth aspirations, I'm doubling down, and they did.

Matt Kost, Analyst — Morgan Stanley

And I guess your expectation would be that given the scale of performance advertising at this point, it is kind of this always-on spend for a lot of companies, but your expectation would be, it sounds like, that even as things might get more turbulent in the future, if they were to, you'd expect there to be offsetting factors between different verticals.

Mark Douglas, CEO

Yeah. I have yet to see in the performance space. I don't mean just mountain. I mean across the entire space where there's something that really interferes with the market to grow. Remember, growth in the performance advertising space is somewhat indexed to growth of your customers because you're really, I think there tends to be a focus on CPMs in the brand advertising arena because it's viewed more as a cost, but in the performance space, it's viewed more as a revenue enabler. So as companies grow, they tend to grow their marketing spend along with that, and then any company that's providing measurable benefits that's spent is going to tend to grow with them.

Matt Kost, Analyst — Morgan Stanley

Got it. Let's talk for a second about agencies. I think you've called out on a couple of recent earnings calls that you've seen some growth with performance agencies, ones that were maybe more focused on search and social historically. So it seems like an important proof point, frankly, for getting mind share with advertisers. How important is that as a source of new growth? How does it interact with your traditional ways of reaching advertisers?

Mark Douglas, CEO

Well, in the overall performance marketing space, agencies are probably about 10% of the overall revenue, but they are early adopters, right? And they also are force multiplier. One agency can bring many clients. What we're seeing is that the agencies start to recognize this as another growth opportunity for them. And so we're out meeting with a lot of them, signing them up as customers, giving them the support in order to grow performance TV as a component of the business. So it's an opportunity like I'm particularly excited about. In terms of the overall business, it's still likely to be less than 10% to 20% even over time. That's where it typically lands, because most performance advertisers prefer to run in-house. When your goal is measurable revenue, you don't have a strong tendency to outsource that unless you really feel the need to get assistance. Got it.

Matt Kost, Analyst — Morgan Stanley

One thing that we get asked about all the time as it relates to online advertising is how consumer behavior might change going forward. And frankly, streaming TV is probably one of the least frequent areas that comes up as something that might be at risk. In fact, it's something that people highlight as like, well, this will be kind of like a safe port in the storm. People are going to still be watching, you know, Breaking Bad or whatever it is, you know, the traitors, the show of the day. But I guess when you think about how you expect attention to change, do you see opportunities? Do you see risks, you know, and how do you think Mountain fits into that changing?

Mark Douglas, CEO

Yeah, I mean, and I think the underlying source of the change is AI and the agentic AI and other things. We see AI as an enabler for the business. We don't think, so I think one thing that's important to understand is even within performance advertising, there are things that you're going to buy where you know you need it, and you tend to use search for those things, right? And then there are things you buy that you didn't know you needed, right? And you tend to discover those things on TV, on social, like the, I see many things like on TV ads or on Instagram where I'm like, I didn't really, I didn't know I needed this, but I need it. Like, I want it. And so the behavior in them is very different. So on TV, people love to be entertained, and shopping itself is a form of entertainment for many people. And so I think that's why you can logically think, oh, this thing is somewhat like this is where people are going to go for entertainment. I don't think we're going to see a mass abandonment of shopping. Now, shopping for bounty paper towels, you might say, I'm not manually doing that anymore if the agentic AI can do that for me. And so that's really a competitor to search, the Amazon search or Google search. The other thing I'll say is I've never in the history of performance advertising see a rising tide not lift all boats. Because if the companies who are benefiting from new ways of acquiring consumers, they don't want to become dependent on any one source of revenue. and again some of their customers might come from discovery some might come from the person word of mouth and they're just doing a search to find it or whatever it is but I guess to finish trying to answer your question I kind of agree I think the introduction of AI marketing or things like that I think overall that's going to be beneficial to everyone I think in particular on TV, the thing to leave behind is this is a channel where people discover new things, and that's an activity.

Matt Kost, Analyst — Morgan Stanley

I don't think that people want to outsource the AI. And it sounds like from just the way you went through that, it sounds like from a roadmap perspective, everything you're thinking about doing still is in the streaming TV world. There's not other services that are interesting or that you're focused on.

Mark Douglas, CEO

Yeah, I mean, we're definitely exploring some very closely related areas, but for the most part, it's video on large devices.

Matt Kost, Analyst — Morgan Stanley

Yeah, fair enough. Maybe let's talk about kind of the headcount and OPEX footprint. So I think half your headcount is engineers. You're continuously investing in a lot of AI development stuff that you've been talking about in this conversation. How do you think about the trade-off between investing in AI now versus profitability? And how do you measure the ROI on the bets that you're making?

Mark Douglas, CEO

Yeah, I mean, I think the market or the use of AI is already divided into those who build the models and those who leverage those models to create additional value. And that could be a lot of value, or, you know, it depends on what it is. For us, it's large around targeting and creative, although we're using AI both in our business as well as in, like, media planning. And we're using AI models across all of those. The cost of that is actually very manageable. Like, so we're not one of the companies. And because the cost of that is working with Google through GCP and Gemini, we're actually working with many models. So I don't see a conflict. The kind of benefit we're getting definitely exceeds the cost. And so we're not fighting this battle. Now, if we were training our own models rather than leveraging the best models out there, that that might be a different scenario and it's also smart because the best models out there

Matt Kost, Analyst — Morgan Stanley

feels like it changes every month and we're pretty agnostic to it yep i guess uh how do you think about that dividing line between renting versus building technology because there's a lot of important proprietary tools that you have built at that mountain yes i guess how do you how do you

Mark Douglas, CEO

locate that line and think about it it's sometimes hard i mean you look at quick frame ai we chose to build that I mean we're using models for the actual generation but we chose to build the entire environment because that the best models are rapidly changing so we're not dependent on any one model as a matter of fact in a 30 second commercial that it generates into multiple scenes and each scene can be a different AI model and and the technology to do that to go across multiple models with consistent characters that that the orchestration of that is actually pretty complex and so that's where we add value in order to pick the models if you're doing a product commercial it tends to go this way if you're doing talking characters these models tend to be used so we chose something that's that important to our business that's something we want to directly invest in like the orchestration layer the environment everything in something that's a little less important and we might make a different choice. In all cases, the area we are essentially generating our own models is on the targeting side, because there are no models to do targeting, and we think we can really differentiate there. So there are specific choices, and even there the cost is manageable. We're not running LLM models across the entire Internet. We're running it against a large but very specific data set that's far smaller than the entire internet. So I think the original part of your question was the cost. It's a very manageable cost, especially relative to the benefit you get. Got it.

Matt Kost, Analyst — Morgan Stanley

Maybe we can close just on really zooming out. We've talked a lot about AI opportunities. I guess when you think about the single most underappreciated opportunity from AI at Mountain, and then maybe a challenge that you think is worth highlighting that you think you're in a good position to execute through.

Mark Douglas, CEO

Yeah, I mean, in terms of underappreciated after this talk, maybe it's not because I've said targeting or what I like to call it matching because the targeting sounds like you're sharpshooting someone. Matching is, I always view our business as we are matching consumers with brands and products they're potentially going to love. And the TV commercial is the means to make that match. It is absolutely the biggest opportunity and where we've already seen a lot of benefit and continue to see the benefit. The same with the creative. It comes up a lot. It's because, I mean, even in our own business, the number of commercials we're making for us has gone up substantially since we started using AI. If you see a commercial from Mountain and it doesn't have Ryan Reynolds in it, it is AI generated. and um and if ryan wasn't in sag maybe that would be ai generated also um so that's just been important we can put out so much more content and consume the thing about i think in this market it's almost consumer level marketing even though we're b2b company and so the the first rule consumer level marketing is you can never predict the behavior of the consumer so it's really good to always have a lot of different messaging and trying out and see what resonates and see what people respond to. So I think it's a reiteration of what we've talked about in terms of targeting, creative, and so forth. In terms of the biggest challenge, honestly, we've established a market that's really making sure that we remain like the market we created, that we, you know, maintain that competitive mode and add to it. So, you know, we are the biggest winner in the market we created, which is performance TV. That term is now a fairly broadly used term in the industry. That did not exist on the Internet when the first time we put performance TV on our website.

Matt Kost, Analyst — Morgan Stanley

That's a great point to close on. Mark, thank you so much.