OB - Earnings call transcript Q2 2021

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Operator

Good morning, and welcome to Outbrain's Second Quarter 2021 Earnings Conference Call. Today's call is being recorded, and we have allocated one hour for prepared remarks and Q&A. at this time, I'd like to turn the conference over to Jason Kiviat. Thank you. Please go ahead.

Jason Kiviat

you Outbrain’s us second thank call today's and discuss to quarter morning, for on joining conference Good XXXX results.

the Galai; and on and me call have we Joining Outbrain’s Co-CEO, Yaron Elise Co-CEO, CFO Kostman; David Garofalo. today, Co-Founder

in other of make incorrect materially During statements discussed comments measures. Securities made current forward-looking statements. and statements from factors during duty are to our of our based which because Actual on this financial uncertainties. latest also Commission, We presentation Exchange any forward-looking risks Today's this forward-looking website, and assumptions, conference which the management any and earnings and our references results call, do today's on are press with IR call, update subject conference be the of to undertake key non-GAAP will found or assumptions our to filings expectations any each includes can could in if reports and investors.outbrain.com. differ not release,

refer to You turn Yaron. measures quarter information non-GAAP of to company’s call financial me With to and the reconciliations that, for second over in press measures. let release the comparable definitional should GAAP the information contained the

Yaron Galai

for Good Thank and you, joining morning, us thank Jason. you today. everyone,

to take the recommendations provide ago, two about highlights things. I and the employees our company, I what's next. first and Thank past has and Ori you founded thank years and tried excited helped earnings journey. call for As partners, Outbrain initial everyone new. solve to web. on about Since public we We're we've Lahav our a some story. of as want this present, just and company, our who milestone for exciting us pioneered completed We open offering, to old of this I'll investors for and very public acknowledge the space being reach is Outbrain's part customers, this XX founding opportunity

from content more easily First, consumers publishers discover owners. and enable to media

read differentiation yields understand to And for recommendation is today, in optimizes key industry a you'd model entire value all. primarily create the At focusing yet, sustainable, in you of focus. section does and industry, on founder's from Investors our long-term extracting creates the feel extracting the industry, mattered We for founded as which regardless be also didn't how us impact partners constituencies. of wrote advertising like this if for business believe the ad effect. user media better letter to our consumers, we turn this compounding this and I Why prices the scalable a a most discovery, three I more Let's on user's to effect to prices, leader in discuss and the model the at The on matter? engagement, recommendations even has experience. because about of the our those prices advertising in long-term Outbrain online to on creates ad higher is Outbrain's user for higher owners. engine but advertisers, the the to focused content posted founder's maximizing engagement Second, and in prevailing the letter for website. time, users’ detail that compounding encourage S-X, like for both was engagement our ourselves, first. We it

and drive and the more value more by personalized therefore engaging. us, for recommendations consumers, being First, interesting

on ROAS test actual cost-per-click. the spend. advertisers, a the primarily with or Second, ad time. results users right drives measurable this or Advertisers engagement engages right They our love user technology for because recommendation superior powerful return at it

publisher our are constituency The third owner partners. and media

We've recommendations drive to generated of date. the over our immediate our For billion partner. revenue partners term, $X driver value. lifetime revenue or the the ad LTV of our them, recommendations Outbrain ads In for from are for tremendous

Outbrain the In Spiegel, CNN Monde, you partnerships recently, focus new scale more in what such more We and when such are notifications, Le topic our with of and per partners, More cookies. of MSN, people a recommendations revenue media device drives partnerships future. for what's all the how We a we've on manufacturers, X,XXX many, believe in providing that drives these others. world's Outbrain. this News, user best been will Sankei, the user is the media power growing into touch many the be than environments, Post, can is Washington mobile years consumed accelerating including about York see come. month good I DER organic briefly more Sky which Switching exclusive that recommendations wherever translates push recommendations and of as called able typically companies, growth want loyalty, gears, the New owners our to results. many web content to billion on of through to indication engagement reach with is as in properties, them media which Post, addition, for our Nearly browsers, media engagement and

technologies in space for used for third-party decade, of that a we've are important for use companies cookies, variety our a more us, solutions that use. but of we one Two over built us. all they're Now, just much other and

publishers, experience first-party changes days. the feed these of power world's you're hearing have on is we to the amount which entire data, most premium all First, tremendous about the since a immune we of many

me and and experts innovating at team two the with contextual on core contextual now. We’ve contextual Second, day from don't it to and algorithms continued for any core the need pioneering which been on That built at technologies, advertising of previous the company, space of one. the internet. we my cookies I Quigo, Outbrain, with pioneered decades team contextual

I the the addition exciting at week. level like hand my announced over I Before last note would to call partners, we to board an

positions I Officer Interactive, at of the the a of wealth at public and Marketing a and board for senior call We’re over brand highlight Welcome NBA, have and Chief the advertisers. Kate thrilled of career to will who consumer aboard, Twitch Twitter, new preview advantage impressive the recently Kate. on Jhaveri. She companies, Outbrain is offering. will the market, continuing our with results, the and brings Amazon's growth Kate our an going in forward turn Facebook, on opportunity competitive added executive focus and David? to David, our and in Microsoft. experience now member, currently momentum exciting the with differentiated

David Kostman

XX% you first gross Ex-TAC year-over-year was Thank yet gross all increased Ex-TAC in XX% to profit $XXX million. QX us We're revenue, host as excited quarter grew record and $XX profitability. you, million. public Yaron. earnings a our profit, to for call ‘XX company. on to another year-over-year Revenue

general year-over-year we our Our growth category. in rate growth outpaced see the

the million XX We continued operating to leverage, delivering quarter. adjusted EBITDA demonstrate strong of in

Our was and emerge force as free web. a open media the to XXX%, driving conversion retention revenue partner flow XX% was our continues Outbrain cash of of EBITDA. net adjusted

publishers compete based who need every technology, and engaging. page For smarter, we more media making more with owners a and Facebook state-of-the-art personalized, and Google AI to attention, for recommendation provide user

Our exclusive, inventory. relationships typically with full of media have owners which control we are our means

renewed on average time. revenues, partners based These our are a tenure at for top commonly two platform. seven have an they our three XXXX to XX at of years partnerships years on Looking

reach, advertising increasingly with and easy an For and to seek performance. solution, scale, dollars outcome-based more marketers end-to-end buying, performance use to allocate we platform, an solution, who deliver

as SSP on one advanced proprietary and can the You side. of on exclusive other think side, us a an DSP

exclusive are trends, our we create differentiated and but and market So, model. a similar enjoying end-to-end supply highly relationships, sustainable

to you we you provide wherever every online. day, an of videos, and articles, navigating a personalized ever-growing universe online created better podcasts users is For technology and key that innovation. they showing our experience meet want dedication Underpinning by recommendations to simpler, are organic some and I our fueled of growth time how QX drivers our explaining our results. spend the growth platform

and technology, and proprietary of amounts a private barrier entry. create strong advantage Our data, cloud to infrastructure, first-party contextual vast competitive

I us Our And scalable as do efficiency improve we leverage systems, faster, to to our grow tailwinds. high strong side, supply architecture free share. on machine rates. learning the this thanks relate recommendations. our to flow data how cost this microservices we top share in two four conversion our to recommendation the market and our relate out allows supporting market dataset and technology through we grow advertiser to infrastructure, way, want continuously and to on cash we market and massive Two how highly Built of a performance of of architecture effective AI call and our the innovate our

in more rates. in a personalization, Let's start in strides and great before. engaging, feed market. recommendation our reach means and users media make deal prediction, explosion engage connected experiences and ever than The consumption resulting participation and innovation made our interest recommendations relevant we've higher with technology we more digital The

are a landscape. model. platforms Google to sales, new shift digital see massive response online bring towards e-commerce On side, a also on used build the on subscriptions, media leads. and see activation. focus direct-to-consumer direct cost-per-click marketing with to but customer drive to grow customers and outcome-based a find in brand, like look buying. a Facebook, a we strong rely a advertisers especially strong turn to and Companies to not with the basis post-pandemic on trend We to now CMO channels CPC drive to continue us they working to and advertising, advertising digital and These or only sales, and Organizations for

walled the AI-driven improve side, engine, complementing of performance ROAS creatives. investing advertiser play in on performance innovative into spend the experiences spend new open to advertisers Second, web. proprietary and We ad the video role on on that the by we important and our an continue which social and leverage in gardens, heavily

put rates these users advertisers you trends, high when these you powerful together and better engagement more seeing performance. more with So, four tracks and get

have QX dynamically but like, AI product our not smart of composition CAD, managing the as the recommended the feed, Let’s the different feed load released Smartfeed placement. logic technology, on frequency ad on the activities the also engine powering, to side. just UI to the experiences, and of from XXXX, what feed refer The of and undertaken, composition has business some of what deeper gets into in looks we dive experiences, we first feed media the top owner optimizing every in the of

logic We and that smart have delivers lift. seen estimated revenue user engagement to close higher XX%

also superior by more properties. our technology. won QX, than In such QX, smart XX% of mobile XXX as end accelerating more we We logic deployment, Dailymotion, Street, and and the have Sports relationships our new logic than are feeds The Illustrated, new adopted smart media of

extended typically in and QX, strategic do year, publishers. premium throughout longstanding also we we as Additionally, renewed several of our the with partnerships

recommendation is we personalized quality, open is growth year-over-year. and an the wherever goal tremendous content XX% exciting platform, growing seen to We've more are and than space, appetite power know, websites. our kicked representing is As now XX these recommendations mobile another carriers, at towards recommendations, months designed recommendation internet initiative content device media revenue, and off frontier, high a media from base. more user ago, than partners environments. These consumed. companies, all we showcase to our much monetize strategic days new the the About of powering to represent on software XXX% than to leverage step important of an and more manufacturers, This

the advertisers number advertising provide results the in growth business, of of translate platform drive to more used advertisers The to side Moving the them. we in and To of our best drive increase brand, a without ability the Outbrain growth not year-over-year establish some for to build than to XXXX, consideration, would XX,XXX context, advertisers. our using sales. saw

for made investment we the CPR. just realizing conversion, move that building strategy, past conversion bid on-site months value, conversion optimization and now engine CPA not optimizing are AI-based the advertisers purchase see all-lifetime towards value, We is in over an XX performance every when strategy, We and their higher bit campaigns with bid, spend in leads growth real momentum leading platform. increased to placement, every seen driver. CBS user, automatically that optimizes to a conversions. every budget maximize to be to or time, on We’ve our sales ad, great strong every continues Video conversion goal,

very are Clip, approximately e-commerce more XXX product use video for X% more downloads, QX. direct-to-consumer in designed our about QX, that a released players and year-over-year than in increased than XXX% help revenues. format accounting app to Our by this One new advertisers excited QX of solution we in video drive registration. We performance sales, and is we revenues had

our public our just to to a investments we say used Before I business this once chapter start media to users, and excited as want made again, provide how the I and our new owner accelerate are to to long-term shareholders. are into company. The advertiser our partners, conclude, and growth value

a premium nature with that support of transparent industry, our see see in key the our environment we to positive business. our differentiator. in our Looking are for outlook in quality combination superior paired forward, a be year, partner continued choice, as will the our and we This positive continue and guidance. network, driving you macro continues trusted to recognition The momentum of the

the call CFO, Elise. turn I'll over Now, our to

Elise Garofalo

Great. And again, everyone. Thanks, David. welcome,

been As sequentially. and you we numbers, can delivering see very strong have both from year-over-year, our performance,

are in growth delivered top advertising outpacing and We as also, digital strong from benefiting execution plans. on the are against line, that the growth we but broadly, strength our the bottom we

we Before important value. I attributes wanted aspects results, model business that of few cover share a to are long-term for the creating our

whereby in in First, improvements demonstrating is supply high the of business, and improvements and for expansion. growth meaningful in another, of area marketplace, headroom benefits those of compounding demand areas, have multiple platform. across our interconnectivity There the growth drive each we one of levers technology there's our within drivers a degree

in a obsessed we landing portfolio that with are huge Second, media have and distribution we our expanding. owner asset

the the and at very margins, have profitability. meaningful believe competitive and for base attributes efficiency. levels. with make our CapEx operating business we Third, And our to for attractive low scale leverage to technology growth model scale opportunity these is efficient business, continued through we Together, organizational and ready continue and drive in highly last, high and technology

sales by click-through the a equivalent driven of in results, Now, is to Revenue approximately quarter delivered increases rate same-store supported metric, platform, $XXX.X in in and base, second retention the on the which existing revenue existing $XX compared engagement financial by ending by rate XX%. from supply quarter $XX.X our to growth supply Net representing higher June Growth of the XX% yields grew million, on second was XXXX. we XXth, the ongoing to or XXXX. our grew our million, or demand, turning of performance by improvements to platform. million strong both

Approximately saw mobile, from in growth geographically, referred environments X of to globally. to we points revenue, see by this or growth which the continued of was media driven quarter, of new that half in David strength quarter. second revenues addition also We the which delivered all supply total growth. And XX% grew million $XX the we strength approximately new of earlier. Across represented continue approximately in of

As a of of XX% the is over our US. outside revenue reminder,

million. to profit for year-over-year, XX% keep our partners, after Ex-TAC paying revenue two reasons. acquisition Next, million Ex-TAC the gross increased gross profit, outpaced growth traffic which $XX.X is we media or costs revenue to $XX.X

drove First, media our And we higher impact guarantee revenue the of favorable yields have with from higher media the mix second, margin period. on performance platform partners in partners on improved arrangements. the

addition overall in to sequentially, XX% business. gross profit to year-over-year comparison, speaking grew strengths the In the continued Ex-TAC

compensation higher XXXX, increase headcount to financial we performance. related relates to million saw the approximately compensation higher the of both $XX to to expenses, Moving increased an driven million strong operating to incentive half million quarter continued growth. second increase costs, XX% invest of in $XX.X we and Approximately in as by $XX.X or our

with that profit gross to even excess meaningfully. million as to investment delivered platform, second which quarter, an also the driven the the foreign impact other professional more increased increased come business. we yield the drove quarter The in higher $X in Adjusted effects of dropped as the line, continued of the last primarily second four increase normal the The of EBITDA pandemic. our performance, following over growth million marketing currency estimated and remainder $X.X Ex-TAC of ’XX, was operations back gradually from costs, our growth expense had by $XX.X period. primarily we million bottom in We and of times, year’s to unfavorable in on exceeded our improvements fees

to less define which profit was EBITDA cash adjusted margin, by operating $XX.X we cash costs, flow, quarter. the XX.X%. software and Ex-TAC was Free as Our provided capitalized in gross activities, CapEx less million

expenses. and pro the million $XXX cash for cash in million This following XX%. of our we of ratio flow conversion strong, divided quarter, $XXX end adjusted July quarter forma of cash the after ended is capital $XXX free our million, sale approximately public $XXX guidance. and Group, cash Last, by million. convertible now the the our our was for We million the with we Our to the of from balance raised equivalent $XXX which which gross Baupost to of cash EBITDA. IPO, equivalents, cash notes proceeds was $XXX adjusting and raised of came raised turning and estimated The the raised million,

million, or For million to the of million, as of This at continued $XX.X approximately EBITDA gross $XX.X year-over-year of ended ongoing growth, EBITDA of in XX% or Ex-TAC to this we XXXX, public, our doubling the and $XX.X be are to operating approximately XXXX, or $XX to million able the growth the approximately midpoint we expect In associated of adjusted still normal, provide with delivering and $XXX absorption year-over-year or we the ending becoming results the million, plus. September expect at the at for very and profit third as return with well includes in year-over-year continues And exceed internal very midpoint summary, adjusted expect the year that of growth of outlook while costs million million, to the we to the And EBITDA $XX.X strong quarter outlook of to nearly investment post-COVID growth XXth, $XXX plan. XX% year, pleased XXst, range, costs an our margins year-over-year increase $XX.X Ex-TAC midpoint. midpoint. at of December to gross XX% range. full XX% million profit

about even us. are the closing to the back turn opportunities remarks. I'll call more for excited now of ahead We Yaron

Yaron Galai

Thanks, Elise.

growth expectations, the superior technology our recent space, our from accelerating through our and top our of while positive that benefiting industry on in same results, we see QX well So, positioning. in are at as as you trends time, can as

very significant. recent While our we're that believe performance, is opportunity with continued growth the pleased we company's for

share, company value Our and for business our shareholders. poised to market our create technological advantages capture and model have

goal our Our we business morning. And us turn questions-and-answers. to the grows. and level clarity forward you visibility is as of over with for I to speed up that, the community, keeping thank time this call to a with back maintain and for look want all spending with your moderator the high investment to you to I'll

Operator

is go Our instructions] Jones first Please ahead. question [Operator from of coming Nick Citi.

Nick Jones

first, bit and Maybe Outbrain deprecation, cookie could a benefit taking little positioned? of is in And more Great. IDFA becomes Amid this follow-up. a the impact how potential looming Thanks questions. you on third-party these a a expand the advertising popular? for is as just contextual Thanks. changes, then

Yaron Galai

Sure. is Yaron. Nick. This Thanks Hi.

able two personalize and So, are in to areas compared are areas in opening advertising and being really relative strength the as strength to terms piece, recommendations, serve of I there relevant said industry. the of experience the online that

and The team bunch we a advertising, co-pioneered we, first mentioned, at one, say. space I our I as company, would my myself Quigo, we invented or I of mean, previous invented, the contextual core it, of

is any for Outbrain any and been kind cookies about have or but all. regardless of something so, been and targeting of slapped it's we've decades including contextual added this company. building using contextual previous Contextual not doesn't for and two we've decades two And what at It over slogan on - use cookies. doing now, that do, at technologies rather decade a we works a XXXX

the very important many it’s strength forward. going you're companies are seeing about. that's And industry, think a as us excited we in something so, for And certainly,

as owners and recommendations we've entirety amount The means videos, both recommending articles time. do That and the going we themselves, on us usually fit those of of understand recommendations media feed advertising which we're first-party user ones That been That powers data, part how experience tremendous we immune on for the that properties. can a we with big is forward. we second data, again, of exclusively. and use the good partner same the And third-party the to first-party the And via organic the is, about to is, important Outbrain see cookies. everything a chunk it's a with. gives hearing the it's we power that of

Nick Jones

question. Great. Thanks. a then And maybe separate

restrictions can are your potentially click-through restrictions As volumes of It's the rate, kind offsetting improving about you're traffic and the lower that talk volumes, maybe loosen, at there change or of COVID COVID the seeing any traffic publishers, you trends loosen? as impact Thanks. that?

David Kostman

that take Nick, Hey, one. it’s David. I'll

user the seen So, of impact seasonality supply on better we the CPR, in I for And of there's terms any mean, to technology potential the any now some summer. increased better declines. are engagements, we haven't side compensate traffic. meaningful in business capturing

and business driven by technology the to So, increasing that product. primarily you our see is yield

Nick Jones

Thanks the for Great. questions.

Operator

you. Thank

Shweta Our from ahead. next question is Khajuria of go coming ISI. Evercore Please

Shweta Khajuria

then is, by other And of - of for touched media can innovate Okay, thank second you how could that please. media me, you. that'd And in context questions And what the product other us tailwind of of have could do is about could Thanks. there, be? remind you great. to that big you do a your question CBS metrics impactful One the terms percentage early be in think of A that? is innings, any product, on? you provide advertisers you kind environment. gross what couple new the think spend the formats any be, on How found this

David Kostman

Hi, Shweta.

take second. the the Yaron will first take I’ll one. So

capabilities, give In bidding. using CBS now But terms gets half and more of better don't on daily more our cognitive with continuous is improvement, we we a but numbers, network basis specific than improved CBS, is of actually CBS have CBS. right - a

see right already the So, now, spend we it. XX% of using than more is

acceleration, through We percentage through both revenue improvements of significant of delivering we advertisers will in incidents for see also that terms better of the the see results but in CBS, ROAS. that's generated terms

Shweta Khajuria

please? question, second the on And David. Thanks,

Yaron Galai

Yes.

is Shweta. button. Yaron. the I unmuted Hi, wrong This Sorry.

when media And ago, business Apple good of of discovering example people all A or the swipe starts a you environments, was consumer think feeds. those or consuming news lock actually kinds where all. a there's couple are not content. other for of or and new means come now the we develop. to many in the those terms of Those screen of those tremendous with and us it looking lock opportunities there's environments, broader growth technologies. users years or where all they're other see suddenly at at from places, to are of your opportunity screens of easy from That new on in left content notifications, new all provide owners, a newsfeeds. content world manufacturers lot a So, to and And in of feed you handset asking places not is that

area - tailwinds. So, again, but there of already. this is strong an that's it's dollars not big are of for tens millions us, It's

So, there's do. we more need a it's know screens something more their chances that feed And and we will online how at to think these just coming in core. of

Shweta Khajuria

Thanks, Yaron.

Operator

you. Thank

is question coming Thill go Please next Brent of ahead. Jefferies. Our from

Unidentified Analyst

Great. then a second making where whether of or James you Thanks areas around on you headcount on about big guide. $XXX cash? for you're plan million just is seems primarily the Elise my to that's Is the two-year for This questions. thinking in that about just my imply be And basis. investments deceleration make talk to taking it, or are is investments, with going Could a decent the other amount to stack it question there Brent. for M&A that elsewhere. It have you're would

or on you're just So, any you that Is if wondering some there decel. Thanks. being other what's cautious? that conservatism could reasons comment driving

David Kostman

This David. is James. Hi,

take I’ll the So, first one.

and in sheet will now, invest to balance right So, we the business we hiring. have continue the terms in of primarily that on in cash

investments. the in guidance, I mean, and it you our opportunities. the see see plan tremendous does We what Now, additional provide

are our hiring, to positive trying we're sort would and looking We’re at current plan. many of accretive projects that accelerate to that be

on that not need at we objectives. our do the of front. We to looking deliver also We’re growth M&A feel M&A any

So, looking at things, for certain adjacent very now accelerating on. go-to-market looking we nothing we strategically is it are update very specifically or areas. but right in that at And can entering terms or potentially potentially actively of we're some areas,

Elise Garofalo

Thanks parts, Hi, Okay. for the question. really. James. Two

a there deceleration. as two-year actually QX, look at on think I isn't the we stack,

stack looked the the quarter the around second we the call the year. it So Ex-TAC if with and consistent at which comparables at guidance, QX, of first XX% midpoint two-year of is growth, it's

basis mean, I a even the things. QX On observing stack introduction you are primarily company a probably costs. One year-over-year. EBITDA, will is the about and public two-year million be that's expenses from certainly function multiplying and $X on of But of to is, is what growing EBITDA QX, two

things So is D&O types the first and main slowly the of out costs second processes, COVID. come And people, then their to from step make change. of those return gradually we insurance, hits normal as

some seeing that. you're So of

So those acceleration combined the the bulk there. of cost two are

softer so, margin, just we the a will EBITDA but margins. expect One EBITDA gross for them I'll to QX And performance other grow some sequential Ex-TAC on year, we QX, still profit typical expect plus XX% to maybe the comment make progression.

course, quarters QX, as company. I the there. And a extraordinary in public think few first then out box what and to of QX our progression last, it's you see our guidance is nothing typical of

that consideration taking we're as into So, well.

Unidentified Analyst

Great. Thank you so much.

Operator

instructions]. [Operator you. Thank

Our is coming go ahead. Securities. Josey Ron from Please of next question JMP

Ron Josey

Outbrain's just in seeing talk ago, strategy are development question. bid conversion tech the tech a and taking about investments Maybe for the is how launched advertisers. from resolved, Clip. Thanks in installed, you quite maybe just these picture, improvements And talked lifecycle Yaron, in about tracking bigger app and a you're to and the year and on Great. David, rates product One two, the bit please. your maybe product products improvements. click-through

still a And bit question upfront score rates. question. that's then click-through how you’re initiative. improvements about quite so, product Yaron, improving second that's number just one, quality and on Outbrain's And

implementation us things those timelines, So, lines. understand maybe out, envision you. bigger along help playing picture, just how this Thank you the

Yaron Galai

Ron. Thanks, Sure.

in Outbrain. of centers our of So, we people. R&D in everything in terms about technology the - have we core over we do XXX have two the the at day development is lifecycle, first and Israel since Slovenia, And XXX

big of which technological of investing improvements In long market. development technologies bringing area is terms and on those are focus a obviously us, of for and research algorithms, to lifecycles in

and succeed, of That’s nature the don't. sometimes they development. Sometimes research they

that. That's learning advertisers of Quality criticism and giants, algorithms a of that starting the announced Sometimes ago, roll doing months they're of and is rolling we've and we're a rating gradual to publishers example rollout, had longer. some tech great new out, cycles the shorter set changes. of algorithm sometimes abrupt few a out from

owners doing months, advertisers rating next make a working that the with over to they we're this algorithm. can sure media quality to So, gradually and adjust few

the engaging ones is signals actually recommendations, engaging are there's the enables improve introductions into one and can in that on more the currently is, variety it's the users, what of on is of high users What we feed, And the people. focused ads more engaging. algorithm Those specifically, is of the a engaging we're obviously we've of name and signals and the with us, we we based live recommendations that quality very, engaged the our majority quality think the recommendations. on huge understanding opportunities not used rating clicking - all are and biggest changes cohort algorithms the quality that in quality or we before which very and reach. us that and the as more years. implies, engaging that. on so with not fidelity and to or focused of is are different lot of For data folks rating users, are actual recent the use, historically, go about that a they They're doing create personalization of the with we're recommendations,

engaging algorithms So, users. is were Quality more on engagement. more focused historic on focused rating higher

terms quality for We're more starting come, a and with benefits we big months it'll have to we're rollout media users but to many of As think work in some algorithm. said, the that we the to advertisers, owners, of engaging I of more take reach. going few that years this

Ron Josey

Thank you, Yaron.

Operator

Thank you.

Please coming question from Sandler is go of Barclays. next Ross Our ahead.

Ross Sandler

Hey guys. Two questions.

as but on topic, your than any bit Is up I that's margin kind take-rate, you And from follow an using up? percentage, for just forward? assume comment Outbrain lot. is that Taboola. your mix, little Thanks a a lower opportunity that. of look you their to on gross for does Just when account then, with how so the the Ex-TAC picking average to not CBS much spend CBS increase they that guys go

David Kostman

CBS, than is us budget that. of Ross, and Kostman. our to as we David long now spent budgets spend ad achieve as increased said, objectives. basically revenue it with spans, the hi. It's we spend deliver on as their more are XX% return of basically being And we have I will many right to On continuing the mean,

of So, an and they're not sort IO ends. stops that

long they will as dollars, continue we’ve can and budget increased So, the seen as those we with improve to And performance what the us. spent. spend of is continue

want to the basis, CBS significant margin daily question? in then a Elise, to on through replenish continue further a take you So, and very way. they

Elise Garofalo

Sure. focus Ex-TAC profit Listen, we dollar I gross absolute think in terms. on

growing on pie, focused total share that, we the share very we're media owner partners. So, which both our with our in of

is that, We’ll to listen, we discussions. in absolute focus. the continue primary think many profitability mix of continue long alluded the and said a factor, grow of you Ross, - it our a We as dollars, We've absolute as bottom line. That's over margin. we as this. dollars show. we also the generate said point road and We We take grow the said it to but on to the on

Operator

questions [Operator over for queue. floor additional I would comments. in management instructions]. like back turn showing closing no I’m the to to

David Kostman

Okay.

take Sorry. I'll It's that. David.

all for in thank very very about to a our So, as what we about future. we you the public call first We're company. excited QX, attending delivered want confident

you call. Thank trends our you technology quarterly market forward based soon delivering on what see next and and seeing innovation, of we're can both guidance, in look you in terms all to and internally in As the

Operator

you thank for event. Outbrain. interest your today's in and does gentlemen, and This Ladies participation conclude

lines and You at a wonderful time, off have your the and may log this day. webcast disconnect

Outbrain (OB) 17 Aug 212021 Q2 Earnings call transcript