Earnings Sentiment

Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.

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Sentiment Distribution

   

Earnings Call Transcript Word Cloud

     

Bullish Statements during Earnings call

Statement
We are pleased to deliver strong Q3 results as AdTheorent returned to solid year-over-year revenue growth
We are very excited about the momentum in the business and the future of AdTheorent
But we're really happy with the progress we're making, getting our platform in front of those types of organizations, and I think it's going to be a really exciting 2024
Third quarter revenue of $40.9 million was above the midpoint of our guidance range and a return to year-over-year growth, up 9% versus Q3 2022
Thanks to the hard work and strong execution of the AdTheorent team, we remain on pace to deliver revenue growth for the full year of 2023
We also drove operating leverage during the quarter, delivering $4.7 million of adjusted EBITDA, an 11.6% margin, above the high end of our guidance range and up 32% year-over-year, driven by higher adjusted gross profit margins and continued cost discipline
Results were especially robust in areas of investment, including self-service, AdTheorent Health and our algorithm-based predictive audience solutions, all of which saw exceptional growth during the quarter as customers responded enthusiastically to our differentiated offerings
Beginning with self-service, we believe we have the best performance-oriented DSP in the market, and we are confident that continued self-service adoption will drive long-term growth
We saw record activity again in the third quarter, driven by a strong mix of new logo wins and increased wallet share as advertisers gravitated to our cost-efficient and transparent self-service platform for both media buying and audience creation
We have a great middle market base, independent agencies and brand direct relationships that are really strong and growing nicely
We also saw very high retention rates, an expanding pipeline of established agencies and brands and outstanding customer satisfaction
This gives us confidence that self-service momentum will continue
But I think the bottom line is, we feel really good
I mean, with health and pharma, we saw a lot of demand in government, CPG really strong, and we're really pleased with that
Jim Lawson I would add to that that we also have a lot of confidence that our margins will continue to remain strong and potentially get even stronger as we go with these new offerings
Yes, we're very encouraged by our return to growth in Q3, and then we see persisting in Q4 and into the future
And I think it's a great, great opportunity for AdTheorent and a great time to be a stakeholder in AdTheorent for that reason
Our uniquely tailored solution and privacy-forward architecture have proven highly effective and are driving tremendous success in the complex healthcare sector, where privacy regulations are especially strict
In our view, AdTheorent's specialized techniques and safeguards, most notably leveraging machine learning algorithms instead of relying on targetable user IDs, give us a sustainable advantage relative to large generalist DSPs
These embedded advantages and our track record of delivering superior campaign outcomes drove 28% year-over-year revenue growth and a 51% year-over-year increase in advertiser count during the quarter
Regarding the deprecation of the cookie, as I just mentioned to Laura, we feel really good about where AdTheorent is positioned
It's a big part of our strategy, going forward, and we feel very optimistic about that
So I think we feel really good about it
We feel good about the CTV growth
And when you look forward, being in a machine learning world, where we can score impressions and we can understand data using statistics, and we can have more than just an ID-based approach, gives us a significant advantage
We feel very good about where we sit relative to the post-cookie world
But at the end of the day, the longer-term view is that we have a fantastic data-driven, machine learning-driven self-service offering, and being able to provide that to both self-service buyers and managed buyers is going to be a key to growth
Finally, in Q3, we received valuable third-party validation for our health audiences with Neutronian's NQI data quality certification based on our superior capabilities in areas including consent and compliance, data quality and sourcing transparency, privacy and performance
In creating the first Black-owned DSP in partnership with Hero, we're very excited about tapping into our audience-building capabilities, our algorithm audience-building capabilities
And moreover, we have a highly differentiated, verticalized set of capabilities, especially in health, where we have a significant advantage, in our view, relative to other platforms, and we believe we'll capture a significant portion of that opportunity
       

Bearish Statements during earnings call

Statement
There are a number of, I think, offerings and products that were challenged or under pressure because of high interest rates and other macro considerations
Year-to-date, free cash flow was $1.8 million compared to $6.1 million for the first nine months of the year, mainly attributed to reduced revenue
There was some weakness in banking, financial services and insurance
On a year-over-year basis, the AGP margin declined from 65.8% of revenue due to competitive introductory pricing to encourage self-service adoption and a shift in mix to CTV offerings, partially offset by the increase in health audiences and other predictive audiences
So if in '22 going into '23 we had a customer that wanted to move into self-service, and we had a very early innings version of self-service, we didn't get that opportunity, and that impacted us, and that impacted our ability to drive meaningful growth at the beginning of the year, especially
So it is difficult
There's been some reports out there that the advertising environment is being fueled by the largest advertisers in that there's still a large number of smaller advertisers that are still struggling and not really spending
We're still waiting for a rebound in the total ad market
We couldn't be more pleased with the customer interest generated in such a short period of time
So we couldn't feel better as we sit at the end of the year, looking into next year
Stock compensation expense in the third quarter was $2.6 million for a decrease of $0.2 million, or 7.2% compared to the $2.8 million recorded in Q3 2022
A rebound in the macro environment would be a bonus for us
   

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