Good afternoon, ladies and gentlemen, and welcome to LiveRamp's Fiscal 2021 First Quarter Earnings Call. As a reminder, this conference call is being recorded.

Thank you, operator. Good afternoon, and welcome. Thank you for joining us to discuss our fiscal 2021 first quarter results. With me today are Scott Howe, our CEO, and Warren Jenson, President and CFO. Today's press release and this call may contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially. For a detailed description, please refer to the investor section of our public filings in the press release. A copy of our press release and financial schedules, including any reconciliation to non-GAAP financial measures, is available at liveramp.com. Also during the call today, we will be referring to the slide deck posted on our website. At this time, I'll turn the call over to Scott.

Thank you, Lauren. Good afternoon, and thanks for joining us today. We hope you and your loved ones are managing to stay safe and healthy during this extraordinary time. The last several months have presented considerable global challenges. Adversity is sometimes sadly unavoidable. But how we respond to adversity is a true measure of the strength of our resolve and quality of our business. In recent months, our teams at LiveRamp have risen to the challenges of COVID and an unprecedented global recession. They've successfully transitioned to a work-from-home model while maintaining strong top line momentum and generated consistent margin growth by improving our processes and efficiencies. Above all, they've done an incredible job of delivering great results, products, and advice to our global customers and partners. Amazing companies are always built on the foundation of amazing people, and I can't thank my exceptional LiveRamp colleagues enough for their leadership and contributions over the past six months. Thank you to all of you who may be listening. Reflecting on LiveRamp's strong performance during the quarter, three overarching themes have emerged. First, our SaaS model is proving itself to be durable, predictable, and profitable. Second, in a time of uncertainty, our customers and partners in the ecosystem are increasingly counting on LiveRamp for advice and results. And third, the investments we've made in recent years have prepared us for an even brighter future. Theme number one: our SaaS model is proving itself to be predictable, durable, and profitable. The advantages of LiveRamp's SaaS model are seemingly on display during this unprecedented period. More specifically, three characteristics give us confidence in our model: durable and recurring revenue. Total revenue was $99 million, up 21% year-over-year. Subscription revenue, which comprises 80% of our total top line, was up 21%, driven by the continued adoption of new and more advanced use cases such as measurement, advanced television, and second-party data collaboration. Our marketplace and other business was up 16% and significantly outperformed the overall U.S. advertising market, which a recent ad exchanger forecast pegged to be down 4% to 8% overall for the year. Across our businesses, we are fortunate to have a diverse customer base that is not overly weighted to any single industry vertical. That said, LiveRamp, along with most companies, is being impacted by the pandemic, and the pockets of our business we expected to be pressured are behaving as we expected. While new logo bookings were light, we compensated for it through strong upsell to existing clients. The majority of our business is generated from large enterprise customers, and we had really nice growth in our $1 million-plus customers during the quarter, $61 million-plus customers up from $53 million last quarter. Two: strong network effects and marginal economics. Beneath the top line, we again generated meaningful gross margin improvement, and I am very excited to report our first profitable quarter. This was a milestone quarter for LiveRamp and a reflection of the incredible leverage in our model. Many SaaS companies, including LiveRamp, talk about the rule of 40, the equivalent of a 400 batting average to which SaaS companies aspire. The calculation is a sum of the company's top line growth and operating profit margins, and it forces discussion within great SaaS companies about the trade-offs between investing more in product to generate stronger top line growth or optimizing for current cash flow. The good news is that as LiveRamp matures, we can generate continued top line growth and ongoing profitability improvement. Our business has initial fixed costs, but the marginal economics reflect favorable network and scale effects. This has been a recurring theme for us throughout recent quarters and gives us confidence in our long-term trajectory. As Warren will walk you through, we benefited from roughly 70% fall-through in our incremental revenue for the quarter compared to the prior year. Three: a position of financial strength. Finally, we will continue to leverage our strong balance sheet and financial position to double down on key growth initiatives. Having financial flexibility allows us to make smart bets that are immediately accretive to our customers. The comScore partnership and more recently, the acquihire of the Acuity team are great examples of this. As we have always been, we will continue to be strategic and judicious in how we deploy our capital. Theme number two: in a time of uncertainty, our clients and partners in the ecosystem are increasingly counting on LiveRamp for advice and results. On our last call, I mentioned that circumstances like these often bring opportunities. Across industries, the pace of digitization has accelerated dramatically. Even prior to COVID-19, digital transformation was likely a top priority for most management teams. However, what would have typically had a multiyear time horizon against it is now being forced to happen in a matter of months. Data is a key enabler of such change, and data-driven experiences are critical to brand differentiation and retention during this time. As our customers pursue their own digital transformations with an unmistakable trend toward addressability and measurement, they are increasingly turning to LiveRamp as an important thought partner and critical tool to enable their omnichannel customer data strategies. For example, a few months ago, we met with a leading global beauty and cosmetics company— a company everyone on this call would know. Their Chief Digital Officer mentioned to our team that while they significantly reduced their overall marketing budget last quarter, they were using this opportunity to reset and ensure 100% of their marketing spend is addressable upon reengaging. As client budgets continue to shift from above the line to below the line, the role we play in helping our customers generate real results has only become more important, and our recent bookings trends reflect this. We closed another strong bookings quarter in Q1, with total growth bookings up more than 50% compared to the prior year driven by strong upsell performance. Exiting ARR also grew nicely and was up 28% year-over-year. Let me describe a few notable wins from the quarter. Early in the COVID cycle, we meaningfully expanded our relationship with one of the world's largest restaurant chains. This company was looking to upgrade their existing identity infrastructure to better understand how their media and television investments were driving people to their restaurants and ready their data-driven marketing efforts for a fast restart. It was all about digital transformation for this customer. One of my favorite reflections from the last quarter comes from our main contact there. He said his company had a 3- to 5-year digital transformation plan that is being forced to happen in 3 months, and LiveRamp is a key partner in enabling this transformation. Another great digital transformation example is a recent win with a U.S.-based specialty retailer, whose business model was disrupted overnight as the country moved into shelter-in-place mode. Historically, most of this customer's sales occurred in stores, and they were forced to quickly scale their e-commerce presence and strategies. They turned to LiveRamp to help integrate different data sets to better understand what digital marketing tactics were driving results and ultimately build and transform their digital marketing engine. A final win I'll mention was a new logo deal with GSK, a multinational pharmaceutical company, to help power and future-proof their first-party data strategy. GSK is leveraging Safe Haven technology as core infrastructure inside its internal data environment to support understanding and segmentation of its first-party data for activation and measurement use cases. We are helping GSK activate audience segments across a wide variety of digital and social platforms and then perform cross-channel measurement on the back end. The global nature of our business and our ongoing commitment to data privacy and security were key reasons GSK chose to partner with LiveRamp, and it is really nice to see our continued traction in the health care vertical. Theme three: the investments we've made in recent years have prepared us for an even brighter future. At LiveRamp, we're big believers that we must constantly invest in our product to seed an even brighter future. In recent years, we've explored numerous concepts and planted a number of seeds. Not all of them will flower, and we know that. But we are forward in our thinking and methodical in our approach. Let me share just a few of my reasons for optimism as I look to the future. First, LiveRamp is essential addressability infrastructure. The authenticated traffic solution, or ATS, continues to be embraced by the global ecosystem as the neutral and agnostic standard. ATS is people-based, interoperable, and puts the consumer first. We currently have more than 20 SSPs live with or implemented in ATS, including four of the five largest platforms. On the demand side, there are now 40 DSPs bidding on IBL or in the process of implementing. Importantly, global publishers also continue to embrace ATS, and we more than tripled our publisher coverage in Q1. We are now working with more than 125 publishers, including 60% of the comScore top 20 and 50% of the comScore top 50. From a publisher's perspective, ATS not only future-proofs against business model disruption but can also be leveraged to unlock incremental revenue and deliver better results. Today, as the pandemic forces publishers to do more with less at a time when content consumption is at an all-time high, this is a big opportunity. We recently completed a case study with Fitbit, a leading health and fitness technology brand that demonstrates the power and value of advertising without cookies. Fitbit, working with their media agency, ran a major test campaign targeting high-value customers. The incremental business outcomes Fitbit was able to generate were pretty incredible. Fitbit saw a 2x higher return on ad spend, a 34% decrease in cost per page view, and a 13% increase in average order value when leveraging LiveRamp's identity infrastructure versus the control group run using cookie targeting. Let me be clear on what I'm telling you: ATS works better than cookies. It is getting a great reception from the industry, and we're committed to working with the industry to expand its impact. More details on the Fitbit case study are available in the appendix of our slide deck. Second, LiveRamp is catalyzing data collaboration across the world's largest companies. As COVID-19 continues to turbocharge the pace of change in data-driven innovation, companies are looking to bolster their competitive advantage with data. Nowhere is this more apparent than our Safe Haven offering, which we formally launched earlier this year and now has over 10 primary tenants, dozens of instances live, and a pipeline of promising opportunities numbering in the tens of millions of dollars. Warren will provide an update on our Safe Haven progress during his remarks, so I'll keep going, but I'm very confident about our trajectory here. Third, LiveRamp is transforming traditional industries through data utilization. Over time, we believe digital transformation will touch every tactic in the marketing toolkit. Some of this transformation is already underway. For example, we continue to believe that television represents a massive opportunity for LiveRamp over the next three to five years. We also believe that the pandemic has pushed advanced television and alternative measurement to its inflection point. Television is a $70 billion market in the U.S. alone. Yet in 2019, only a small fraction of it was data-enabled—less than 15%. Over time, we expect the industry will migrate to what can be made addressable and measurable, and the pandemic is accelerating the shift away from traditional planning and measurement to cross-platform strategies that include connected television and other data-driven tactics. There were a variety of large advertising changes to evolve. The data prowess and advanced targeting capabilities in walled gardens are placing enormous pressure on traditional television advertising. The rapid rise of streaming platforms and connected television devices have made reaching eyeballs through advertising alone increasingly difficult. New and more complete television viewing data sets have made it easier for the reach and frequency of all forms of television to be measured regardless of the delivery path to the consumer. These three factors, coupled with the new financial pressure placed on the television industry, will drive even more television advertisers to transact on data-driven audiences, and proving ROI will be critical. LiveRamp is perfectly positioned across all areas of advanced TV to support both the sell and buy sides as these trends accelerate. In the quarter, television was again up strong double digits, fueled by the continued adoption of outcome-based television measurement and an acceleration in CTV growth, which was up triple digits. During the quarter, we expanded our existing partnership with Ampersand, the sales and technology consortium owned by Comcast, Cox, and Charter, to help power the planning and execution across platform and national addressable buys through their AND Platform. As eyeballs continue to split, we are partnering more closely with television programmers to enable them to unify, package, and sell against audience segments across connected television platforms and SSPs. Disney, Discovery, Viacom, CBS, and FreeWheel are among the first to implement these new capabilities. Today, advanced television represents roughly 10% of our revenue and will remain a key growth driver as this continued television revolution plays out. Fourth, LiveRamp's products are applicable to an even broader set of markets and industries. Finally, but importantly, we're seeing the potential for LiveRamp in entirely new markets and industries. For example, we've signed multiple top 10 ATS publishers in several major markets like Japan, China, Australia, and Europe, and these collaborations will accelerate our international capabilities and allow us to better serve our many global clients. We're seeing a similar trend for our Safe Haven offering, where global companies want to launch these collaborations in dozens of countries. In addition, we're also seeing initial success expanding our capabilities to new industries such as health care. The health care market has characteristics with which we're well familiar: complex regulation, fragmented data sets, transformative insights through data, and sophisticated clients. Together, these opportunities give us even stronger conviction about the future. In summary, as we look ahead to the remainder of FY '21, we are optimistic about our capabilities, clients, and market potential. Our SaaS model has proven itself to be durable, predictable, and profitable, and I believe we're well positioned for decades of top line growth and increasing profitability. In times of uncertainty, our customers and partners in the ecosystem are looking to LiveRamp for advice and results, and the investments we've made in recent years have prepared us for an even brighter future. While progress and results are never completely linear, we've got a strong track record of operational management, optimization, and business improvement, and the quality of our team and customers continues to be one of my greatest sources of optimism for the future. With that, thanks again for joining us today, and a huge thank you to our exceptional customers, partners, and employees for their ongoing support and hard work. I'll now turn the call over to Warren.

Thanks, Scott, and good afternoon, everyone, and thanks for joining us. Before jumping in, I too would like to thank our associates for their work over the past few months. We represent a critical technology as our customers navigate this crisis and implement their business transformations. I feel fortunate to work with such great people. I also hope that all is well for each of you and your families. Today, I'd like to focus my remarks on four areas: first, talk about Q1, highlighting the strength of our SaaS-driven performance and the durability of our revenue; next, update you on our business trends and what we have seen since our last call; provide a few high-level observations about FY '21; and finally, our Q2 guidance. Q1 results. Well, in short, we are durable SaaS, and our position of neutrality is paying off. Despite the challenges of the global economic environment, we had a strong growth quarter. Total and subscription revenue were up 21%. The usage portion of subscription revenue was approximately 8%. Marketplace was up 16%. As we expected, customer counts were pressured and were flat sequentially. That said, given upsell strength, we had another strong bookings quarter, increased by more than 50%. On a trailing 12-month basis, bookings were also up roughly 50%. Current RPO or our next 12-month backlog was up 33%. ARR ended the quarter up 28%, and net retention was 109%, while platform net retention was 111%. Our Safe Haven and TV products are setting the pace for innovation and powering many of our customers' business transformation strategies. LiveRamp Safe Haven. This fiscal year, we have already added more than five new Safe Haven logos. Safe Haven's revenue, bookings, and ARR were all up triple digits. Our pipeline is now in excess of $35 million, and interestingly, over 40% of the pipeline is outside the U.S. In short, the combination of ATS plus Safe Haven is a winning global hand. TV also had a standout quarter. TV-related revenues were again up over 50%. Maybe even more importantly, we are exactly where we want to be in Connected TV. Our CTV revenue was up over 100%. Operationally, it was also a great quarter as our gross margin was 71%, up 9 points year-over-year. Productivity was principally driven by hosting and identity graph optimizations. In the U.S., our gross margin was 73%, which is very close to our long-term model commitment. And while we are far from declaring victory, we were profitable on a non-GAAP basis, and operating leverage was striking. Revenue increased by $17 million, and our operating income improved by $24 million. Normalizing for both transition-related spending and COVID savings, we estimate our top line fall-through was over 70%. Finally, our EBITDA was $4 million in the quarter. A few additional specifics worth noting. In the quarter, we further strengthened our bad debt reserves. Client-related concessions were very manageable, and in fact, we are tracking below our original estimate of $4 million. COVID-related savings were approximately $4 million, principally related to T&E and facilities. As part of our non-GAAP adjustments, we recorded $3.6 million of third-party spend associated with the execution of our restructuring activities and long-term planning. Finally, stock-based compensation was roughly $16 million. In the quarter, we reversed approximately $5 million of previously accrued costs associated with select long-term performance awards. Lastly, our balance sheet continues to be in great shape. Our cash balance ended at $650 million, and we have no debt. Our receivables exposure is appropriately reserved. In summary, we're in a great position. We are SaaS and our revenues are demonstrating the durability of our business model. We are in the middle of a powerful secular growth curve and have a great set of customers, employees, and products. We are powering some of our clients' most important transformational initiatives. We have an incredibly strong balance sheet. And finally, the strength of our business performance is a reflection of who we are as a company. ATS and our other products are succeeding because we are neutral. We are Switzerland. We don't compete with others in the ecosystem. We do not buy, sell, or arbitrage media. We are an agnostic identity infrastructure provider. Now, I'd like to provide an update on the current operating environment, in other words, share with you what we're seeing and experiencing. We've updated the same chart we presented on our last call. A few takeaways. First, our products are benefiting from a secular trend toward addressability and measurement. This is clearly evident in our revenue performance and bookings. I'll repeat something I alluded to a moment ago: in May, ATS, CTV, and Safe Haven all had strong global momentum. Today, that momentum is even stronger. Next, all that said, we would also like to highlight that the challenges and negatives are real, and we expect these pressures to continue. Just as we said last quarter, deal cycles are extending and the current economic environment will continue to impact our bookings, ARR growth, customer accounts, and retention metrics. But when you add it all up, things feel stronger today than three months ago, and as a result, we will reiterate that FY '21 will be a solid growth year, and our path towards profitability is even more clear. As always, and especially in this environment, we ask that you be conservative in your expectations. I'd now like to close by providing Q2 guidance and sharing a few thoughts for FY '21. For Q2, we expect revenue of up to $100 million and a non-GAAP operating loss of up to $7 million. Please keep in mind this guidance excludes intangibles, stock-based compensation, and restructuring and related charges. A few other callouts for Q2. In Q2, we expect marketplace to be flat to slightly down. This pressure is principally being driven by a strong quarterly comp in the prior year and, to a lesser degree, reduced linear TV-related transactional revenue. We expect gross margin to be approximately 69% given incremental investments in security and select product certifications. We expect between $1 million and $3 million of restructuring and related spend and approximately $1 million of CapEx. While we do not intend to provide formal full-year guidance, a few high-level thoughts on the full year. As I mentioned, we expect FY '21 will be a growth year. In fact, we expect growth in both subscription and in marketplace. That said, we would remind you that the challenges and pressures highlighted are real and will over time negatively impact our metrics. Finally, we continue to expect considerable operating leverage and meaningful year-over-year margin improvement. Our projected expense phasing is highlighted on the slides. Other full-year guidance items have also been included, and you'll see them in the appendix. As always, we ask that you be conservative in your expectations, particularly regarding your top-line expectations, as we are in a very uncertain environment. Before opening the call to questions, I'll close with a few final thoughts. First, again, a huge thank you to our customers and employees. It is you who make this company great. Next, we are SaaS, and our model is demonstrating its durability and leverage. Finally, we are Switzerland: neutral and agnostic. We sit at the center of a strong secular trend, and our role in the ecosystem has never been more important.

Your first question comes from Brian Fitzgerald from Wells Fargo.

The quarter was better than your original guidance, but what was your biggest surprise? Was it clients coming back on the platform as active customers more quickly? Was it higher volume among the customers who remained active? Was it strong performance in TV? Anything there you would hang a hat on? Any sense of what was better or worse than in your original thoughts?

Brian, it's Scott. As I think about that, I really think it's what I highlighted in my prepared remarks that we were really pleased to hear from so many of our clients, and they shared a couple of anecdotes that they were looking at us as critical infrastructure during the recession and beyond. As a result, our upsell continued to hit on all cylinders. We won some really nice new opportunities and areas like Safe Haven and CTV, and we saw our usage continue at a robust pace as well. So I really think there's no single thing, but rather it was clients continuing to do a lot of things with us.

And then maybe a quick follow-up. If you had to say it was around, was it more so to Safe Haven or ATS? Thinking both of them strength in Connected TV anyways, would you parse out which product line is stronger?

It was really across the board because all of those factors impact our subscription as clients start to embrace ATS. It's still early for that. It improves the value they're getting from the subscription as they embrace Safe Haven. The subscription is a critical piece of that. And so I think what it demonstrates is the power of our model, where through our initial platform, we have the ability to stack additional product offerings and increase the value that we're delivering to our clients and partners.

Brian, I might just add a couple of things on that point. It's pretty interesting. I would say our clients are clearly looking to us to help them future-proof their environment. So all the things that you've talked about are all very much linked together. I'd just repeat a little bit of what I said in the prepared remarks. If you look at relative contribution, I mean, obviously, the revenue dollars are different. But CTV was up over 100% in the quarter. Safe Haven was strong across all three of those metrics: bookings, revenue, and ARR were all up over 100% year-over-year. So strong performance across the board.

Your next question comes from Stan Zlotsky from Morgan Stanley.

This is Melissa Dunn on for Stan. I wanted to ask a little bit more on the TV business. We continue to hear a lot more about Connected TV, and you mentioned a lot of good statistics around this area. I'm hoping to get a little bit more color on how Connected TV might be benefiting from the current environment and how customer conversations have been trending compared to earlier in the calendar year.

Yes, Melissa, it's Scott. We continue to think television is at an interesting inflection point. We also believe that we're really well positioned with our Data Plus Math assets and also what we're doing in the Connected Television space on the sell side. As viewing increasingly shifts to time-shifted and mobile devices, the whole concept of Connected Television becomes increasingly important. We have really benefited on both sides. On the advertiser side, what we're seeing as a function of the recessionary environment is a real drive for advertisers to make everything accountable and measurable. Our Connected Television efforts, and in particular, Data Plus Math, allow for the same kind of robust targeting to occur in television that many advertisers have previously deployed in the programmatic space. Moreover, instead of just measuring on reach and frequency, they can actually drive to specific outcomes, such as how many products they sold or how often people visited the website. For recession-pressured clients, that kind of measurement really matters a lot. On the sell side, they are reacting to the advertiser demands for more precision, more accountability, and more visibility into who's seeing the ads and how they're reacting. I mentioned Ampersand and their AND Platform, for instance. That's a really terrific piece of technology that they are introducing that gives their clients a lot more precision in how they plan and activate campaigns. One of the reasons, again, I'll come back to why I'm optimistic is that this isn't one side or the other; it's both the buy and the sell side acting in concert together.

Got it. That makes a lot of sense and is really helpful. One more for me. The marketplace revenue continues to do really well and was above our expectations. But is there anything you'd call out on the durability of that business? And I know you gave some color on how you're thinking about Q2, but could you offer any other insights on how you're evaluating that piece of the revenue throughout the rest of the year?

Great. Well, thank you, Melissa. I'll take this one. The headline is that the marketplace is benefiting from the same secular trend that Scott just talked about—toward performance-based buying. No question about it. Secondly, when we think about our marketplace, we think all about quality. There is a 100% flight to quality. In terms of the long term for the year, as I mentioned again in the prepared remarks, big picture, we said solid growth year for LiveRamp. We added something this quarter that we expect both subscription and marketplace to be up for the year. Now I would qualify the one thing in Q2. Given the strong comp that we had in marketplace and the fact that we expect some pressure in linear TV-related transaction revenue. We said that marketplace would be flat to slightly down. We think that's a Q2 thing. Again, for the year, we are expecting growth in marketplace.

Your next question comes from Shyam Patil from Susquehanna.

Congrats on a great quarter. I had a couple of questions. The first one, Scott, is on ATS. It seems like the industry has really picked up adoption of that over the past few months; it seems like there's really been an uptick there. I was just curious to get your take on where you think adoption needs to be in the next 12 to 18 months for the solution to be as effective as you'd want it to be, assuming that Google does end up deprecating cookies in 1.5 years from now.

I'm not sure I can give you the exact number, but I would tell you that whatever it is, we're pretty close. One of the stats that I don't think I shared in my prepared remarks is that given the 125-plus publishers that we've already signed, we believe that we can reach 90% of addressable U.S. audiences already. That is exactly what advertisers want. Then it's really a question of how much volume we can deliver. I think there's an opportunity still; we made a lot of inroads with the largest publishers, and that was naturally the place to start. But there's also still some misinformation in the market, and for many smaller to mid-sized or long-tail publishers, they're going to need a solution. They are the content that drives the open Internet, and we want to make sure that we evangelize, connect with them, and introduce them to the solution as well.

That's very helpful. And just my follow-up question for Warren. Warren, you guys put up a really strong growth in the June quarter, up 21%. You mentioned that bookings were up 50%. The exiting ARR was up 28%. The September quarter guidance looks like it's about 11% growth. I was just wondering if you could talk about that. Is that conservatism around the macro? Just wondering if you could talk a little bit about that. And if you're able to maybe talk about July trends and what you've seen in August so far?

Yes. Let me just start with the back with July and then talk about our numbers. We have seen a continuation of the same trends that we saw in the June quarter in July. So we saw no deterioration in our overall trends. That said, relative to the guide, the pressure on revenue growth is all about marketplace and the things that I mentioned. Most specifically, we had a really strong comp last year, and we are expecting some pressure on linear TV-related transaction revenue, even though we expect CTV to be up very strongly. Overall, we continue to see strength and durability in our SaaS numbers. And for the full year in marketplace, we expect it to be a growth year. Again, we feel very fortunate to be in a business that's benefiting from the secular growth trend to be SaaS. When we add it all up, again, we feel very fortunate that we're projecting FY '21 to be a solid growth year for the company.

Your next question comes from Kyle Evans from Stephens.

Scott, Jeff Green spent roughly a quarter of his prepared remarks on their second-quarter call talking about identity and their unique ID 2.0 efforts. On the one hand, that came across to me as maybe the most ringing endorsement for your solutions that I've ever heard. On the other hand, I had some investors that expressed some concern that that was a potentially existential threat to LiveRamp. Could you just give us your high-level view of his commentary and then maybe provide some specifics on why that UID isn't a threat to your business?

Sure. Well, Kyle, I will tell you that all of us at LiveRamp are firmly in the first camp. We think that whenever anyone in the industry talks about identity and addressability as being important, that evangelism is good for the entire industry. Our biggest challenge is just educating the industry as to why they need to move faster. We're so pleased that many of our clients' partners have started to vocalize the same things. That said, I think it's also really important to reinforce that Trade Desk is one of our important partners. They will have their own identity that is utilized to power their own decision-making algorithms on their media platform. Remember, they're in the media business. We will be interoperable with them. We think it's important for clients as they think across all the things that they need from an identity solution to really think holistically. More specifically, the checklist of things that I think are most important: number one, it's got to be people-based. Because if it's people-based, then you can get people's permission, you can give them visibility, you can gain their consent. That serves across all the different touchpoints across which you interact with people. Second, it's got to have permission and security at the center. That's something we started thinking about several years ago. So not only have we inoculated the digital advertising industry, but also increasingly the mobile application providers as well. The vast majority of the 125 publishers that I talked about are using ATS for both digital and the mobile application space. They've already protected themselves against changes in IDFA. It's got to be neutral, which is so important—that someone doesn't have a bias towards another business in their decision-making. We work with everyone and anyone who's ethical in this space, and we pledge to be interoperable. As a result, we're going to work with Trade Desk, Facebook, Google, Amazon, and we already do, and that is part of the reason that our partners and clients find our solution attractive.

Great. That's super helpful. Could you maybe take a second and elaborate on the linear transaction pressure— that you've been highlighting in the Q2 guide? I just want to make sure I understand exactly what that is.

Just think about this, Kyle, as linear TV and trends in the industry. It's nothing more or less than what's going on overall in the TV industry in traditional linear TV. You've got a powerful secular move toward Connected TV, and some pressure in linear TV, and our transaction-related revenue associated with linear TV, like the rest of the industry, is feeling some pressure.

Great. And then lastly, maybe some commentary around the overage. I think you said 8% of the revenue was overage. Was that above expectation? And how do you expect that to look as we phase into the rest of the fiscal year?

We would say, look, this is an area where everybody should be cautious because it's one of the things that could move depending upon what happens in the macro environment. It was 8%. In Q1, I would say July was right in line with the 8%. Again, we saw no deterioration. And in fact, saw a very solid July. Looking ahead to future quarters, we would tell you, just be cautious. There still is a lot of uncertainty in the market. But at least so far, that trend has been pretty stable.

Your next question comes from Tim Nollen from Macquarie.

I have another question about TV, just to double-check some numbers from the quarter. I believe early in the prepared remarks, you said that TV was up 3x year-over-year. Later, you said CTV was up double. I just wanted to make sure I heard that right. And then if you could help us understand what you're doing in the two because they're not the same thing. We often use CTV very broadly to talk about targeted TV, but it's quite different. Can you help us understand what you're doing in terms of linear addressable versus what you're doing in terms of CTV?

Why don't I clarify, Tim, the first part, and then I'm sure Scott will weigh in on the second. TV in total, which includes both elements that you just described, both CTV and linear was up over 50%. CTV, obviously, the fastest-growing part of the business, was up over 100%.

In terms of how we work with the various constituencies, remember, our television business, I've described it before as in a sense, we're riding every horse in the race. We work with everybody. So on the one hand, from an advertiser and agency perspective, typically, they're working with us through Data Plus Math and buying accountable outcomes and more granular targeting based on their existing audience segments. On the addressable side, the work we do is really with the MVPDs, where we power addressable targeting on linear TV—more granular targeting than the typical gross ratings or TRPs or demos that have historically been the norm. On CTV, that looks like many of our existing platform relationships where we're powering the targeting engine driving a lot of their efforts. I mentioned Ampersand in the call and their AND Platform; we're a really important supplier to that build in terms of powering some of the measurement and addressability underneath it.

Your next question comes from Jack Andrews from Needham.

I was wondering if you could drill down a bit more on the relationship between ATS and Safe Haven. I'm just wondering how symbiotic those really are because you talked about the significant ramp in the pipe for Safe Haven. I was just wondering how much of that might be driven specifically by the capabilities of ATS in conjunction with what's happening with Safe Haven.

Thanks, Jack. It's a great question. What we've found globally is no surprise to anybody: clients want a global solution. If you're a global CPG and you're operating in 60, 70, or 80-plus countries, you want global consistency and a solution for global privacy. We've seen an incredibly strong reception to both Safe Haven and ATS, which offers an incredibly powerful combination. When Scott talked about adoption across the top publishers in all the markets where we operate, we've had a terrific reception. Just in the past several months, if you think about Bird in Germany, Prisma in France, the Seven Network in Australia, and significant reception to Safe Haven. We've also signed one of the largest additional large European retailers this past quarter. Very symbiotic, very beneficial. Two words that are almost ubiquitous in our customers' strategic plans are digital transformation and future-proofing. Both ATS and Safe Haven are vital in helping our customers achieve these strategies.

Really appreciate the color around that. If I could just sneak in a quick follow-up. When you think about the regulatory environment around privacy these days, is there anything on your radar that could really impact your outlook one way or the other in terms of just customer adoption and things like that?

I've long said we think regulation is a real tailwind for us. Particularly today's regulatory climate makes it really hard for most of our advertisers and partners to navigate the complex web of changing regulations at both the state level, potentially at the federal level, and then globally as well. That's our business. We think about it all the time. We design privacy, security, and permissions into all of our products, recognizing that there's no one-size-fits-all. We have to design configurable products to adjust to the different markets and clients we serve, both in terms of staying compliant with current regulations and adjusting for the heightened demands of particular businesses, like financial services or health care, or handling their most sensitive data. We believe this is one of our core advantages, and it's certainly an area that our clients and partners are looking to us for leadership.

Your next question comes from Dan Salmon from BMO Capital Markets.

So Scott, thanks for the updated thoughts in your prepared remarks on the secular shifts with regard to cookies. I appreciate how, when folks like Trade Desk speak to ID solutions, there's a certain level of evangelism that helps float all boats. I also appreciate the point earlier about wanting to be compatible with everybody's solutions and the walled gardens as well. At the same time, it seems like there are more independent providers emerging—proper startups, so to speak—not just big brand names, public equities that everybody on this call is familiar with necessarily, but smaller companies emerging, and they do seem more of them to have some type of deterministic or first-party angle. How has that changed the dialogue for your sales force? Is there— purely a rising tide floating all boats? Or does it create at least a little bit of noise for your sales team to cut through? I don't know if James is on and can add some color to that. But I'd love to hear a little bit more about that in particular. And Warren, I guess, a follow-up for you. I'd love to hear any specific thoughts on competition on the international front as well, but since that falls under your purview, what I wanted to ask about was just an update on efforts to build out the breadth of the basic IdentityLink graph across the global internet audience.

We're no strangers to competition. As you know, for the better part of the last decade, we've licensed our graph to some of our competitors to make their products better. It's part of our pledge of being neutral and interoperable. We welcome competition. It makes our products better and forces us to innovate faster. We even more so welcome evangelism. I think the biggest challenge we've faced as the category creator is educating the industry about the advantages of our technology addressability and the pitfalls in terms of data security, privacy management, and configurable privacy. To the extent that more people talk about it, we think it will benefit us because a smarter ecosystem will come back to us. We believe that the breadth of our products is second to none; there are many niche players that are doing something well. But we work with everyone. Our advantage is in our neutrality—not only in terms of who we work with, but where we operate. It's not just programmatic; it encompasses everything: email, direct mail, television, point of sale, etc. We believe the top clients in the world are sophisticated enough to appreciate that breadth, which will lead them to us.

Dan, I'd reiterate what Scott just said about competition— we love it. It makes us better. Being a global company is a benefit. Safe Haven and much of our approach were borne out of GDPR and working with big, sophisticated multinational clients to meet their global needs. Our progress has been global, and we’ve had a strong reception with important publishers in every market we are in, and our capabilities are increasingly being requested by large multi-nationals to launch collaborations using Safe Haven and ATS globally.

That was our last question. I will now turn the call over to Warren Jenson for closing remarks.

Great. Thank you, operator. To all of you on the call, we really appreciate you taking the time with us today. Let me close with a few final thoughts. First, a huge thank you to our customers and our employees; you are what truly makes this company great and excites us every day when we come to work. Hopefully, you've seen in our results and the things we've delivered not only this quarter but over the last several quarters and years that we are SaaS, and our model is demonstrating its durability and leverage. Finally, to build on what Scott said about being neutral and being Switzerland: we are Switzerland—neutral and agnostic. Our role in the ecosystem has never been more important. Thank you again for joining us. We look forward to speaking with you in the coming days.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.