We're going to get started. Thank you all for joining us. I'm Matt Weber. I cover Mountain here at Canaccord, and it's my pleasure to introduce Mark Douglas, Mountain's founder, president, and CEO. Mark, thank you so much for joining us today. Thanks for inviting me. So maybe to start things off, for those in the audience who are maybe a little bit newer to your story, could you give us an overview of your platform, the performance TV space more broadly, and where you sit within the digital advertising ecosystem?

Sure. So I'll start with the performance TV space. So Mountain, we created the performance, the term performance TV we created. And the idea there was with the advent of streaming television, it created the opportunity to bring full digital advertising and in particular direct response performance advertising to television. So all small mid-sized brands that are prevalent on paid search and paid social, email marketing, we're giving them the opportunity and compelling opportunity to now find their next customers leveraging the power of television.

Very cool. So you just reported Q2 results, strong quarter. I think revenue was up 20 percent, just leave it to up 50 percent year over year. Could you just walk us through some of the key operating highlights there?

Yeah, so I think that's continued adoption of the platform. We also brought on 40% new customers in the core, 40% year-over-year growth in terms of number of customers. So we're seeing a lot of that's coming from small business as we continue to grow our mid-market segment of the business. And so the combination, you know, it contributed to the top line growth and the continued expansion in terms of EBITDA and adjusted EBITDA. Got it.

So maybe related to that, you've talked about the market, the performance TV market moving from early adopter to mainstream. What are the clearest signs that you're seeing that in the customer base?

Yeah, I mean, it's actually really simple is we have to do less evangelizing. So we just have more inbound companies coming inbound at the mid-market size who are increasingly aware of the concept of performance TV. Also, one of the things we reported is we launched a small business edition of Platform Express at the beginning of April and signed up 7,000 new companies on that. and the starting campaigns and then hundreds of those went live would pay that campaign so the combination that we see is indication of the market going mainstream and moving going from their early adopter phase and starting to move into adoption phase.

Yeah that was gonna be my next question because I feel like that was like the you know the main product highlight of the quarter so yeah maybe dig into sort of the tiering segmentation that you did what the differences that you identified in terms of customer needs across small, medium, and enterprise, and sort of why you, what drove that?

Yeah, so I think the small business, we see the opportunity as a long-tail opportunity. So majority of our revenue comes from midsize, but we think over time, small business is really important. So it tends to be more individual business owners, or an emerging startup, or emerging business. And what we found is as we were pursuing that, our main platform, what we call Pro, is built for the professional marketer. So it has all bells and whistles, everything they're used to, full A-B testing, like every capability for them to maximize their campaigns. The small business is more of a business owner where obviously as a small business owner, marketing is really important. but they don't necessarily have or need all of the professional features so instead of scaling the the kind of pro edition down we decided let's create a version specifically for the small bills business built on the same underlying tech but very significantly easier for them to adopt got it that makes a lot of sense and so as we think about you going to market with this offering how What does the customer acquisition funnel look like?

How does the conversion journey work with these smaller businesses?

Yeah, well, there's two. So let's go back to the mid-market. Our mid-market customer, our number one marketing channel is our own product. So we stream Mountain commercials into the homes of our future customers. We have a go-to-market motion with SDRs, basically a sales organization. We announced last quarter that Garland Hill, who built TikTok from zero to billions, had joined Mountain as CRO, and there's other people he's hired. That's our mid-market motion, which is a bit more of a classic sales motion with marketing feeding into that. For small business, it's all marketing-driven, 100%. It's not only self-service, self-sign-up. It's self-go live. We have our quick frame AI for both versions. With the small business, there are ads waiting for you. Between the time you create an account and you go to create a campaign, There's already AI-generated ads that you can then modify if you want, waiting for you. So it's like a really fast motion.

Yeah, very impressive stuff, and we'll get to quick frame in a minute here. But just maybe before we do that, I believe for your mid-market customers, you've added some agentic and automation capabilities. Could you just talk more about what those do and sort of how much of the campaign management you expect to be agent-driven over time?

Yeah, so in many ways, when you think of our business, First, our business, the TV ad is an important component. It's the core of what we're doing, but it's the optimization. These brands have, in some cases, big budgets, but they're not huge budgets. Who sees that ad, when they see it, where they see it, meaning what television network they see it on, even down to what show they see it on. It's all very, very important. I recovered the mic. That was nice. It wasn't a catch. It was a good cable. it's all very very important so traditionally that's algorithms and machine learning with the advent of the AI arrow living and we were very early adopters we now now match two years ago AI audience targeting AI creative tools with quick frame we have AI media so every aspect of their playing their campaign there are basically AI models that are determining who exactly should should see this product, this ad, when should they see it, and so forth. And so that's, I now refer to us as AI native, because we're both extensive. Half the company is engineering, and we're both extensively using AI technology as well as extensively creating AI technology.

Right, right, right, right. Yeah, I'm glad you brought up Mountain Match. Maybe just spend a minute on that, just because I think that is part of your secret sauce. And you were early adopters, as you said, so.

Yeah, nothing is more important than who sees the ad. So think of it this way. If you're T-Mobile, everyone in America could potentially be a T-Mobile guy. Like they could have a phone for babies. But if you're more of a mid-sized brand or a smaller brand, those dollars have to really stretch. So who receives those ads is critically important. And the more that we understand who your target consumer is, and the more we understand what they watch, when they watch, and can kind, that's why we call matching. We're essentially matching consumers with products and brands they're potentially going to love. And the way to make that match is through all of that decision. And so that's what Mountain Match does. it really builds an audience tailor-made for the products in those specific ad campaigns for those people that are going to best receive them yeah and that and that's bringing in those performance capabilities too it's a lot of data involved they get asked often about data what's most important is the models applied data is ubiquitous the models applied to data is where and all the value comes in. So when you think of half of the mountain is engineering, the biggest portion of the half is on the mountain matching up the ads.

Got it, got it. Well, yes, matching the right ad to the right person is important, but as is creative, to hook them in. And you've made a lot of progress on Quick Frame. I think you had over 70,000 signups in Q2. In the first half of the year. So maybe just talk about how that product has evolved over time and where you see the roadmap from here.

Yeah, so the product is between, I think it was October last year and April of this year, we are already on version three. So it's evolving very quickly. The new product releases literally every week. There's also new AM models releasing what feels at least every month, if not faster. And so a significant portion of our customer base is using Quick Frame, nearly all the Express customers and very healthy, like 30, 40 percent of our mid-market customers using Quick Frame. But there are also people that are coming to Quick Frame just from the creative side because it not only supports TV, it supports social and YouTube also. So we made it so that you can do any form of creation in it, but it's geared towards paid media. that's the key right right and it's free right now is that it is free right now so how do you like see the monetization path playing out is there a specific engagement threshold you're looking for before maybe monetizing more directly or yeah exactly yeah so we're testing out we're mainly focused on its value in terms of enabling the performance tv component but we think it does have monetization possibilities and we're playing with we're testing those out and we're certainly seeing the inbound interests and adoption which and then

you know seeing that convert into paying subscribers we're kind of playing with that now we like to do these things and then announce the results and I'll be waiting on bated breath so maybe maybe switching gears you know a key theme in the in the CTV or performance TV space is obviously the transition of live sports over to streaming. You now offer advertisers access across nearly every major sports league. How have you built that premium access and then sort of what has that done for performance and your sales conversations?

Yeah so the one of the things we talked about last week was Express Pro and Premium. So Premium is what I refer to as even super premium. Everything on a platform is premium, meaning that you're on the best networks. Super premium is guaranteed access to things like live sports, reality television, home improvement, basically specific shows. So we want to give people the capabilities or the access they get in an upfront with guarantees but without any of the headaches, all the downsides at the large the huge budget and so we launched that in January the we have many customers running in March Madness World Cup the running on the Kardashians running on the housewives and we built partnerships with numbers streaming networks which essentially is like I said bringing up front like capabilities we're bringing it to the SMB market mm-hmm and we're seeing customers like as a result you know kind of they're loving they ultimately want the performance but they also intuitively like if you're a certain type of brand sports is going to resonate really good examples both flex one our customers they advertise vr platform in march madness targeted advertising but in one of the biggest sports events and they you know got really really good results. Yeah, I used to have one back in the day.

Maybe just sticking with that theme about these strong network relationships you have. I think most of your buying runs through pre-negotiated private marketplace agreements. As we head into this Q4 midterm political cycle, does that help insulate your customers from some CPM pressure?

Absolutely. So essentially that pricing will change that and but they'll still be on the exact same networks actually with one of the proof points of that is right the AI media planning where it's essentially telling customer this is exactly how your media buy is going to be executed to get the performance that you're that that you're getting or improve it and so with that they you know they can be guaranteed that they're not going to see in this industry there's what's called private marketplace and open market most the inventory is just open auctions that pricing goes up private marketplace which you have to have higher scale stays constant i think within the smb segment we are the largest buyer of ads and

i think the only company with scale that's doing that does private marketplace deals directly with this yeah feels like that may might be a strong relative value proposition for you guys given and I think spend in this midterm political cycle is supposed to outpace the presidential cycle.

Yeah, it's a big political.

Yeah, and then maybe high level as we think about the industry. Since you presented last year at this conference, Fox agreed to acquire Roku and consolidation between content owners and platforms is picking up. So how does that impact supply relationships for an independent company like that?

I don't think it has any impact. I mean, at the end of the day, no one says no to money. We represent the biggest growth opportunity industry, which is the small, the SMB market, the small mid-sized marketers.

And we're, you know, you look at example, Paramount and Warner Brothers, we work with both teams extensively, I mean, they, and, you know, they're at some point, I assume, are going to get consolidated, but the relationship will continue, and we intend our spend will continuacy any reason they would want that to be otherwise got it got it makes a lot of sense yeah um so you mentioned garland hill earlier uh former chief revenue officer of tiktok that you brought over head of growth excuse me to the chief okay okay uh with with a full quarter behind him so what is what has changed under his go-to-market leadership and you've talked about building out vertical sales teams uh sort of how has his leadership you know brought that about yeah so

one thing well that the verticals is the biggest thing so one cycle that both tick-tock went through and medicals before six years at tick-tock building their revenue from scratch he was six years at meta and the one of the things both companies did is when they reached a certain point they they broke into verticals in order to kind of measure market adoption by vertical and also start to build knowledge in that vertical and so we're doing this he's done the same thing at mountain so we recently restructured into verticals each team has independent goals they have revenue targets both to grow revenue with existing customers as well as to add customers so that is um the biggest change that we are expecting we got it up in the second half of And one of that is our confidence in the execution that there's there's also a lot of other talent that's not everyone who joins the company. We do press releases on, but you can imagine when someone joins a team, people, if they're a good leader, you want to follow. And so there are people who definitely have followed Garland and they're more there's other executives we've added. So we've been focused. One of my themes in last earnings call was kind of the scaling of the product to meet each opportunity. then also the scaling of the sales and marketing basically to meet the opportunity also how much is building expertise in the specific new like you know merging vertical is hiring the right people versus say investing in data versus something else that I'm not thinking of it's it's a combination of hiring the right people some partnerships and some and a bit of technology and so it's one of the advantages of organizing and verticals is that you can then justify certain verticals where you might need to make an investment in partnerships and technology it can be justified if instead of the team it's just going after everyone you have a dedicated forecast for that specific vertical that you can then pursue like an example there's a random example might be healthcare there's lots of unique data you need for that measure me for Another might be online stores combined with brick and mortar. You need different measurement data from that. By organizing that way, the whole company can basically rally around the vertical and then grow the scale and we're already seeing proof of that.

Yep, makes a lot of sense. You recently announced an integration with HubSpot, which to me indicated leaning more to B2B and lead gen use cases. How meaningful could B2B advertisers become on the platform? And does contact level measurement change the conversation at all?

Yeah, it's Mountain's own number one lead generator is B2B. We're a B2B company, and most of our revenue comes to selling to B2C companies. But we've been approached by a lot of B2B companies, and so that's an area we already had success in. We invested last year in another partnership with HubSpot. Now, what HubSpot did is it got us down to we can tell you the person that you can do, you can do both person, people level targeting as well as much more granular measurement. And so that's part, that's another really good example of verticalization where that is now a dedicated vertical that we're going after. And so the engineering team is making enhancements to the products. And then the sales team, the individual sellers now have more vertical knowledge as to how to communicate with those B2Bs.

Could we see that vertical start to indirectly show up in the numbers in 27 or is that a longer term buildup?

No, I think any investment we're making, you're looking for it to start to show up in the next six to 12 months.

Got it, got it. Maybe a couple of questions on financials. So you guided to Q3 revenue growth of 25% at the midpoint, that's accelerating from 20% in Q2, and the full year guide points to your first $100 million revenue quarter in Q4, which would be great to see. So what are the assumptions underpinning that acceleration?

Well, I think it's the investments already talked about what we're doing in product, and that starting to contribute and then also most importantly we think the opportunities there is just an investment in sales and marketing and and the interest we're seeing the demand we're seeing in the market so we consider that and we also Q4 is historically and we expect the same this year it's the largest it's the largest quarter force was a percentage of the year is some of that.

This is more just like a broader question but I feel like you know some advertisers might have you know held back some funds earlier in the year given all the the tariff volatility and whatnot. Are you seeing anything that could suggest that those funds you know be re-released in Q4 or just maybe talk about how you're thinking about that?

Yeah I mean the majority of the SMB market is e-commerce yeah it's a majority of our revenue and that q4 is our biggest one yeah that there just is no doubt and so like they and q3 the i mean there are already stores releasing halloween the holidays start with halloween now start with may thanksgiving so you already have people putting out things for halloween that's october right now we're in mid-august so that you're just going to see a ramp and you're not only seeing a ramp in the market that part of that that is the lift but you're seeing our investments in sales and marketing those take about six two to three quarters to like start to really show up so that so you see that also got it and then maybe on capital allocation you just authorized or your board just authorized a hundred million dollar buyback program how are you thinking about you know buybacks versus M&A versus you know other uses of capital yeah I mean so there's right three uses of capital you can invest in a business which we're doing this is everything we've been talking about you can invest in acquisitions we're you know always looking at opportunity but we're there's you know nothing specific that we're pursuing at the moment and then the or you can invest in your own stock and and we think the stock's a really good value, so we decide to invest it. The other statement that you made also is that we authorize a $100 million buyback and we generate 100 million free cash flow. So just approximately 100 million free cash flow. So we're not even having to touch the cash in the bank to execute that buyback. And we expect that to go up next year.

I agree with you, by the way.

By up, I mean the cash flow.

Yes, yes.

I agree with you, by the way, that your stock is undervalued. and with that we have just a couple minutes left here I have a couple more questions but maybe we'll see if there's anybody in the audience that wants to ask a question right now yeah sorry the question was average SMB spend and yep yeah average spend for the our mid size customers is deep six figures many many hundreds of thousands because it's i think approaching a little less than that per month and then um for the small business it's new but my current estimates are um approximately about 15 000 a year for the smallest but they're requiring them at much faster rate yes How do we measure ROI from the platform?

Yeah, I mean, if it's a state of performance, it's based by a plug-in.

Yeah, so there are two key measures that marketers use for B2C marketers. Return on ad spend, simple calculations is revenue driven by a campaign divided by the cost, what you spend. And cost per acquisition, what did it cost to get them? The technology to do that we call verified visits there's no clicks on a TV ad But there are many marketing channels that don't have clicks So we measure based on where we stream the ad the household and then any response on any other device from that household And we see that using tracking pixels, which is common technology The key thing and that's what we call our identity graph, which is being able to build identity graphs I think it's right now about 142 million households, which is nearly every household in America. And so that technology is the key. Our customers also, as they get larger, just even the small mid-market, they use our data. This is common across all channels, search, social, performance TV. They use Google's data, Mez data, performance TV, they use our data. But they also use mixed media modeling tools from companies like North Theme and Rockerbox and multi-touch attribution. So all e-commerce, all of these brands basically are trying to understand our view of the data, especially for creative. And then they're looking at their overall marketing contribution using third-party tools. And we integrate with 11 of those. So there's basically 11 key vendors and we integrated with all of them.

And with that, I think we're out of time. So Mark, thank you so much. It was a great session.