Earnings call transcript Q4 2022

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Operator

Good morning, and welcome to the Outbrain Inc. Fourth Quarter and Fiscal Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.

As a reminder, this conference is being recorded.

turn over to management your like team. I'd the to call Outbrain Now

Unidentified Company Representative

thank us year-end for call morning, you Good and joining Outbrain's quarter to fourth on and results. fiscal XXXX discuss conference this

Yaron the on CFO, have and Kostman; today, Joining Galai; me David call Co-CEO, Kiviat. Outbrain's we Co-Founder Co-CEO, Jason and

to management our make that statements statements risks statements. uncertainties and based subject this are current expectations During to from will conference on cause differ actual results may call, forward-looking These forward-looking materially and assumptions. and

These XX, detail with filed filed and risk Form in our for the reports are discussed reports factors in as the our Form Securities year XXXX. in other subsequent XX-K ended updated and and December Exchange XX-Q in The Commission.

call's undertake do and the Forward-looking original date, any to statements. such statements not speak any update we as duty only of

includes also measures. presentation references to financial non-GAAP Today's

information measures. to for measures the You financial GAAP definitional the and fourth release to reconciliations information should contained of non-GAAP quarter comparable earnings in refer the company's

found Our News earnings release can on our Events. and website, under investors.outbrain.com, IR be

With me turn David. let over call to the that,

David Kostman

report gross Thank million adjusted we in high gross extra Steve. EBITDA of the $XX were to for EBITDA, guidance that for $X pleased I'm the at QX, we and guidance our million of end profit, we provided delivering you, extra exceeded adjusted and of profit.

of For the full on a X% million, growth currency year was constant reflects revenue 'XX, our which basis. $XXX

core we EBITDA coming to develop the business made premium our discipline investments industry-specific years, deliver staying Our of in costs. driven strategic $XX market gross on growth the share drivers challenges were of end extra we We adjusted the Throughout on on focus was XXXX, the disciplined gained by the while and measured our and in market, was and expect that significant million, political the in $XXX million. macroeconomic, and profit business. principles

on privacy with focus monopoly, that regulatory seeking some strengthened actions, a the partnerships up the the was segment focus DOJ, premium largest break XXXX position signing contextual of the of open as year which believe is publishers, on. and one our advertising to web. on the is the companies We we multiyear record new competitive of like digital

we GEDI business than in give annually, the amount Axel direct Springer we U.K. you publishers the went largest in important the Italy. is worth go. Germany, from mainly share such anchor markets, more numbers, U.S., twice in $XXX which gains in competition from relevant some let FOX million These most market and and Mail News To the were the in Daily as

QX. in contributed the commanding This markets business $XX million XX New just for positions many News to with X publishers with market globally. us top share

on cash off. the gain approach, to including core with order the to and very of that our shareholders in prepayment our deals, us us business. Consistent product, superior Most exciting and told monetization our and and that prove that engagement higher for by our are is terms technology metrics they dilution avoiding we're about that were any choose use laser quality is ad of management paying our for partners focus disciplined

of also funnel the of turn now. with our XX in presence more and existing broaden excited about beyond us acquisition will for on our We're I solution, well the The with our video as to publishers. strategy and potential partners. to in advertiser than it added Video fits allowed growth very our Intelligence GI full also video business We which XXXX mid offering publisher optical

seeking TAM our primarily results and for are To We from integrations, had engagement close X,XXX their increasingly meaningful, to measurable primarily more have great side. the enterprise to a our enterprise budget, call In support awareness bidding metrics. also in-article total, opportunity currently whether brands which broaden page, or strategy. on a we consideration to will see as brand attention looking and advertiser

advertisers. of to the direct and engagement response to cornerstone our Predicting proposition value performance is

is So prediction be leveraging AI-based a natural our capabilities our core extension to enterprise relevant brand. for

these we give direct exclusive in our way. to attractiveness access by can advertisers also supply premium the driven them Our to a is

by are, We essence, design. in supply pattern optimized

one As had and video, users the or approach enabling brands, advertising and of the leveraged watching clicking Audi the like maximize our with Audi through to of to experiences side. example to our studio user deliver to engagement brand recently potential premium enterprise Swipe, creative, interactions innovative audio the actively

resulted more format. than versus a X comparable in times higher campaign The engagement

premium user close you turn, that base just the about the advertising, in This brand one in this a to was will So hear of on which, loop more throughout and XXXX. investment extension advertiser of better areas supply experience. drives higher-quality XXXX, more drives global of premium flywheel, our

performance twofold: For advertisers Increased automation, improved helping by automated is and optimization focus CPA advertisers, right the adopt strategy. our

allow for like billing CPC been As in automation ability things for to maximum see CPA, advertisers. a for the drive acquisition, implementing a performance and reminder, we continuous and of improvement the we've cost the target full our conversion per while, for set

this the us competitive have advantage. a significant direction that on believe we We focus gives

saw a adoption advertisers, As in across currently, our demand marketable result, includes advertisers. mode, of have bid conversion record mode. fully double-digit growth. formats worked XX% diversified CBS semi-automatic a which number overall 'XX, mix from shipping in choosing of we types, our vertical and automated with And In a strategy we the ad increase advertisers the quarter, we from

these advertisers uncertainty direct of understand to in relationships critical optimize closely as economic goals and their with is campaigns accordingly. times client have we work we The

have campaign XXXX. and advertiser softness seen However, double-digit needless pricing say, in reduction our was percentages versus XXXX to declined that primarily a average year by marketplace we've tough of prices budgets. The from in

strong team XX% the year, growth, despite conservatively disciplined need acted in acutely expenses and XXXX same even the of act year still in to levels. throughout below our the the efficiency we also The of end a as are approximately and drive carefully. And are the way aware of way. XXXX our managed grew Therefore, XXXX we and when we

the some including teams, we soon headwinds into of expenses and positive we following noticed, count. resulting million, core intelligence costs our planned QX as our telltale in big quickly our teams signs moved $XX cut XXXX, than operating to free XXXX for of our in We and business reduced cash by in as demented and head more Similarly, originally structured flow QX.

several improve serving are XXXX our looking cost and We structure and positions accelerating projects internal of continuously move optimization we in automation to implementing our to across geographies, our our in lower-cost operations. infrastructure, initiated are

to of assumptions. the for outlook our a provide few As to will highlight Jason the key XXXX, want but I guidance,

bidding believe meaningful on to the focus record in record no in in beyond. optimizations efficiency made assume in QX that offering funnel environment. we XXXX focus the will full with combined that growth profitability the market flow led on consistent core algorithms advertisers continuing the for improvement and We cash and video, the our gains our and expect share and We using support investments macro page and our free

I'll now hand over to it Yaron.

Yaron Galai

Thanks, David.

to, our the alluded our plus was caused of David has past advertiser year challenging which the year side than perform or XXXX of industry, decade for business. our any in demand a more to As radically business

serve year was us in spring wins investing disciplined on we Our will that focus while believe loaded the we technology this on future cost mentioned. supply based well management into the balancing

are Here areas. few a piece

upon of said of technology our cetera, publishers the which best one they many we introduced publishers grow entirety some the Keystone, for is revenue the last scale. optimization E-commerce a of around that them enables the for diverse the brand top I of the et and that world, businesses: takes priorities technologies. growth As This build publishers to we we've in revenue need of XXXX. quarter, years best affiliates, via their last platform is newsletters, including brought at it's our why the And built technology marketplace clear subscriptions, the diversification to that at into enable XX

deployed publishers in their now technology advances like to technologies a Germany on We AI Spain, for gears. ChatGPT. Keystone interest We've have the of premium in thanks added recent been and Switching has point site. many, Japan. three

let's will huge the of of with over the outline all hiking Before caution companies start a AI ways future be in that almost word manufacturers built a it's I near AI. some operating stack the guaranteed we've into themselves the years, of

all AI will story same time, it's massive happening, and AI commoditized. are reductions overhyped, new breakthroughs ad fascinating is real, not prediction allow which and presented being the that magical on entirely The smarter new one. solution cost at and immediate bit tasks. partially algorithms, the creation, replace overhyped units revolution for We've a all believe I more there an It's also is that real in will as more.

deliverables. years of time support experience and I consumer the to from for entirely about the think our these leap up in find algorithms been we'll It's R&D, or require industrial speak so. not core cool more a new XXXX. into human how starting more more shortly last I'll user AI doubling that grade have of X mile that solutions and will in we've that prediction many technologies built past

to AI commoditized. quickly Lastly, much of likely is going be

in integrate will are the means in the commodity space learning, will And ML, few into chat creative capabilities several business. machine a in AI or like be everyone. GPT leader for we likely it Outbrain example, ad been everyone said, AI All recommendation has which for ways here For and their leverage a generation, our that years.

ways. been ad XXXX. and for helping technology has advertisers since our two AI using been we've First, creative suggestion in us This

creating First of way find performing. large that those a number quickly is best to variations ad are

the Outbrain Close of our now Second expensive using needed their for human creative. marketers campaigns. AI way of to the is ad reducing generator creative and platform labor in are new cost XX%

technology. lab our existing make the as now are testing to that and for chat AI expect enhancement use soon our an to available We creative of to advertisers ad

we And are AI, service, deployed systems such user billion second, and ML make Second, starting of biggest one at predictions in systems space. every we've it use of our convert. propensity making technologies or core XXXX. learning, predict to interest X These our around the to the machine built in our ML, and

those to propensity into AI-based and more can enterprise predict extending brands and their be ability that as Third, have algorithms who benefit them. looking likely looking space. for more to we from pay who who to believe target means will users specifically advertise now smartly to are programmatic engage the we these SSDs to to advertiser more advertisers programmatic buy channels high will interesting with through this such convert them. We This attention the recently, to started DSPs prediction users are for operating

and largely Outbrain's technologies specialized we've homegrown keep evolving in cost-efficient and our These team, capabilities enable a open ML are R&D that components sourced by to AI us way.

long-term learn our the the set data of from. One business is algorithms our continuous and levers the algorithms improvement of biggest in our

In partnerships, become. feeds average XXXX, we data the more CTR to points algorithms. our we per the that points When use year-over-year about minute. but data we we points not In algorithms. and that it's X that yield immediate we with our The financial approximately of data have, data data improve XX% AI better billion earlier, supply start billion consider, value minute. ones potential value mentioned we obtained like an predictions the X.X only our processed XXXX, grown that I'll the pursue of to the we the we've the also per

last improved yield released our testing, resulting our side, internal algorithmic production which, RPM X.X%. according has I into just technologies the AI algorithms On including by several and to team breakthroughs, R&D our approximately mentioned, CTR the potential year, AB

value we appeared from expect improvements these to results macro we advertising not them due demand when reported unique springs challenges, in back slot. the the the While are deliver macro to yet

our on financials. Jason to to CFO, discuss Kiviat, the Now

Jason Kiviat

Yaron. you, Thank

softer of As quarter, David marking Last profit. mentioned a the be budgets of Ex-TAC than in our cautious advertising for to guidance. proved QX prudent, beat the I level advertising guidance seasonality for expect This QX our adjusted a would and of see typically our our we QX demand. achieved of guidance from mentioned, volatility we gross second did historical we continued half to as approach terms EBITDA

was demand a X% along constant both on showing stability. However, lower advertising and approximately in and the reported net QX $XXX a basis. been Revenue has industry. in and XX% of Europe year-over-year the decrease same affecting basis decrease was January into U.S. driven expected posing on The on of our million, February, to yields, largely year-over-year the currency continually stronger than by signs a line, demand in headwinds

growth than points we XXXX. were quality, year-over-year, These new partly XXXX million had media growth or the of by new, points new far partners percentage $XX winning partner contributed record, from growing of supply revenue quarter greater headwinds our X These long-term XX in largest averaged by far partnerships. offset the contribution our page and and on revenue views of approximately in

which would the drove period revenue reflecting this revenues headwinds, that impact which Further, have larger pricing, environment the growth in a supply macro demand in to comes normal continued the the even retention XX%, of environment. demand contributed more Net likely growth the means decline majority was a on of year-over-year. of

at $XX,XXX least was for XX% all partners QX in generated Our XXXX. logo far higher retention at that

data in full on XX% an net basis. the essentially partners impressions same-store As of additional environment on existing impact decline revenue with driven were our for impressions point, XX% year of ad year-over-year, flat entire was retention XXXX our by on pricing as retention implying XXX% ad the the demand the sales

a on Additionally, headwind remained revenue. FX rates

several steeper mix One, words, currency versus was past partners other decrease a a or U.S., constant gross few XX% revenue take XX% segments in revenue, Consistent percentage we've is than expect revenue and European lower more largely gross reported. unfavorable as quarters, of markets. from on reminder, an driven with a decline As year-over-year with our or year-over-year the what was our of outside rates. a in basis by of profit a generated of seen million, the Ex-TAC the profit revenue XX% of of higher $XX.X in is factors:

take of certain on which demand And media lower seeing, onboarding the which of impacts Two, new supply significant portion challenged by performance demand rates and the we're three, part weaker-than-normal partners, our is driven partners, impact a environment. the partners. certain by optimizing with in headwinds

out call, of environment. on macro deterioration in headwind we go As prior the expect we coming no to further the this the assuming quarters, in said

impact due to Operating fourth incurred expense $XX.X the is and offset higher to increased lower due costs, year-over-year to headcount, million expenses. variable lower to decreased partially of prior driven rest rates, compensation items in The decrease the majority Moving expenses January. the The is onetime to of our due personnel-related FX by the $X.X in the approximately million favorability acquisition in mainly of quarter. by decrease of VI year.

as reduction is the implemented mentioned operations. down X% attention headcount with in driving to began efforts from greater to of of FTEs, approximately and efficiencies January in current we XXX down quarters, previous focus cost June We continue X% XXXX on As a series business headwinds. a our from XXXX we adjust our which

of XXXX. for maintain to to our accounts expenses which essentially around stay headcount, We for are operating XX% flat planning

in As a result, adjusted the EBITDA was approximately quarter. $X.X million

in Free Moving was provided cash to operating and which from cash less as flow, CapEx we software define activities liquidity. capitalized costs, QX. approximately $XX.X million

cash This year full net lower XXXX, of use driven primarily For of approximately $XX million. was we saw by a profitability.

million In ended approximately authorized debt. convertible and full X.X repurchase million cash on XXXX, million marketable which February repurchasing in equivalents of completed cash, Board securities sheet We $XXX our quarter resulted we program. and with million that balance not the in the share in of $XXX announced shares. a the November, long-term we total, authorized, $XX of previously repurchase investments In

authorized December, which executing Directors million we $XX began share new program, incremental in repurchase and In the of QX. company's a Board

it opportunities. current believe while investing market is enhance shareholder way in still conditions under to an continue to We growth attractive value

our Now outlook. turning to

prior As improvements million $XX we remains discussed today $X.X we material profit guidance, seasonality. negative provided that macro quarters, visibility the breakeven. we have conditions and In context, to advertising guidance: QX, persist assume limited. EBITDA of of to to in Ex-TAC our gross With expect adjusted or current expect with and we million, deterioration no regular following For that $XX million budgets

platforms. expectation provide we innovation; product the from that macro growth to in and growth our growing of and advertiser of invested new offering; see through expect at saw throughout Ex-TAC year year: HX XXXX, gross additional $XXX site and adjusted we yields deployment to publishers at returned how For Scaling and of nonpublished lap million. algorithm video the million, we is expanding in we over full to relationships context we least our and and year-over-year supply; environment the drive XXXX, have and we expect existing spend that attracting QX XXXX, To begin improving past we least the and EBITDA as with our we our profit deterioration $XX new full of areas growing

a areas, flat year of is these more driven the growth meaningfully in assume by of the macro our we course of contributing our execution As environment, assumed half second over investment year. the the

our Our guidance plan more We investment expenses are areas. achieve been where assumes year operating or past this for that and roughly through to the prioritization strict so. also flat they efficiently have core to of

with monitor generation. closely results environment flow we profitability the cash will However, and a on focus and

operator the I'll it to back Now Q&A. for turn

Operator

[Operator Ross question. proceed Barclays. with Instructions] Our Please with your is from first question Sandler

Ross Sandler

Maybe for and you for then you David, can seasonality just one after said maybe Jason that. with starting normal answer the guidance XXXX. macro, this the But one

be You all said good. That in growth will XQ. positive rates sounds pretty

of the one rest. You're reporting little than bit a few companies that's the later

the So the categories right first are easy as stage as in and Ukraine guys conflict the overall you comps we're across What geos in March. now seeing lapping of environment? far

And then rate environment? growth the of improving back half? what an that just that take to a comps Is easy it positive get or does to in function

to you without And margin? next can then And talk of -- cadence Ex-TAC get Ex-TAC in? or years, does margin like normally range giving that, the what number is specifics, the path the Jason, of the GP kind over the on couple what's back previous it that just to take

David Kostman

So I'll start.

we the stability see So market. in been generally, saying we've

that have rates stabilized, to So QX assume we decline going that's we're started what end we those of in next into that see going and decline year. QX rates of of saw and into then

had. we stability relative So no major improvement, but

between softer, and don't the mentioned of part we our any I February, okay. think see currently big then definitely in are which looking is U.S. business December We January in major of a differences Jason Europe, second was but half

So comps, just drivers -- QX the and really many in are bear second easier And by pretty of I growth more the not trends half, you but mean, QX when about QX. driven in coming generally, similar. fruit and talk and by it's efforts our to

Jason I'll on to turn that. And maybe

Jason Kiviat

Sorry, yes.

heard So I step a we in mean the our just half. I January seasonality normal down and the from we -- our were of more us to with softer, as relative really we lot our in year, said, well And December the trends saw saw strength into second think, a and QX, as into a February. in as of much was David that reminder, peers saw biggest as course biggest the we,

For the March, indications we've market. got from positive

And we're normal, so would cautiously, uptick I a normal in expecting call CECL March.

remains obviously, visibility, and our limited. us. But mix advertiser any is without our again, asset an on vertical any for reliance specific diversity of certainly So

just then our we I several into more into the yes, in of get we've growth, really flat, travel those. perspective, I may saw don't second QX, have QX, from in will positive using which verticals but we automotive, normal and that really a from And retail this signs. -- the on trends positive these, we overly while signs things from on that macro, and Just rely off, one in that lapping and think couple asked expand see of were that for entertainment finance any Again, you is didn't by but quarters was using to started expecting briefly process years, for which to for than pay think, done but it. unusual. so the forecasting to we're you in say normal And and weaker the that I that, it's to actually last this, QX coming start really XXXX, seasonality. of not much is year been is very political And then think QX, we've really expect -- half disappointed minimal. We

through we And technology, said, traditionally monetize to premium from through the XXX% out Like this that. on is which how over a view -- supply a the and we won adjacent, we're net a I growth recently revenue of to it's do. why why existing technology historically added the discovering learning partner, -- tend -- supply best history ton and land-and-expand for over drive we that model finding our That's our on this partners our each report takes what getting and been how driving that retention notwithstanding. we we've But audience, it at really and expansion, couple and largely is quarters of out our ourselves.

in both original that's publishers our minus platforms what model new another we're the what we that That's see of at we So screens. partners, new of and X that's revenue I the through, think browsers, we'll or that. but this though the partners, single adding to the the and ballpark of growth, again, don't XX% came guiding than also traditional in our year call probably non-publisher more expect manufacturers, every one there, XX% specifically grow point. And I time of expect to is certainly equipment more kind to not

haven't optimization. you in demand through to on And coming overall more we see yet, supply really, a with come continue yes, but the mentioned call. Yaron been just as and invest big our in to predictions. the results our our and know, really we We and imbalance, saw it the seen video obviously, area there able we'll about actually we're, algorithms of gains We just and put the we an based year. funnel we about full quarters on of other expansion as we've formats our article types it of probably offerings in of and placements, more this say coming that focus. talk just what different placements, cautious then and -- And in how

can we by the core. resources X.X smartly the focusing our keeping -- by we last and time, is back our we way, to prioritization the the we've really which the then year, really, with expenses flat, operating and expand of core on been flat of repurpose And at same guidance invest and in look more at our to assume years, for how kind efficiently what plan

the that's year. really for story So the

up. things down The same second As that things far the it margin the just question brought about your bring actually I margin. are think that of I types was will have as the mentioned

what just again, those are, So mix.

of thousands rates, got a different to of always it's have We've take where mix depends going generated. kind factor. and the revenues they and So it partners of the kind of and thousands all be

I publishers, Just attracted to than lower not and but rate, see profitable. to not more we to it average well share well mean, we're the if audience as and what a adding it's specific us as new talking might advertisers open the reach a at also when text well. it we're give look the advertisers with still the that but any brings There's our partner it wallet are obsessed as convert has. an for of is we certain that for at number, dollars an the data example, that

just already our we're now improve adding Yaron how with think data as we the partners. network I that And view as all mentioned we more entire yields our -- across how these when well. points much growing many data adding

certainly -- new and of again, yields, up et we quarters drive again some yields it well. take better rates, think and And improvement the through to and the driven had it click-through up higher drive back I thing lot But partners, several that will a that's some biggest rates certainly macro takes other biggest on means down ourselves that that do there really leverage imbalance then The one the we drives to Demand is that's to thing, that supply/demand mix. probably there's back be headwinds can it I higher deals, pick it up. if things ramping just, find find these as as better well. cetera, the to these

that are [Indiscernible]. things things down or are the that the So

Ross Sandler

the longest in answer call. was That conference

So congratulations.

Jason Kiviat

and will investments was into into those, brands I premium I really share and making to the driving a that want time video the I dollars the think, also meaningful about materializing more are drivers way. in wins the flywheel. article wanted long half more by I getting in something, see the of wallet, our year important actually the increasing second in thing prepared and one to we supply I mid consideration of it rely remarks add -- awareness do from think mean, are talked I of but enough and we the

We that. expect

Operator

your question from next Please Our Boone -question. with with JMP is Andrew Securities. proceed

Andrew Boone

off on I of competitive just wanted environment. start data. about importance just Yaron the to the

looks scale? you as does so an angle, advantage what this and that that change How speak now the deal Yahoo! And closed. can to you environment with of the guys competitive advertisers? like And talk Taboola much is the and competitive about publishers dynamic

Jason Kiviat

Andrew, I'll that. take

interesting are mean way third-party partners. took demand a down, for is few us So scale. a we very, the years. the is a a the supply Gemini share U.S. Gemini, to deals. they also look mean, opportunity had it's very on But side. in shutting today, we I large which will opportunity summer. other by Yahoo! time. one, is see I that I take us the think the third-party it supply deal supply also think distracting. gives the gives way, exiting the big big opportunity. take in next an deal, And an it's publisher long large largest very We the of And obviously, couple It market I

focus admit, Finance on and demand. at there have to there. all I in stocks the way, we still Yahoo! my -- a opportunity And by So the see look I it's track also

native into, video as still full does areas publishers awareness. and expanding other that So to article mid Maybe on market is is funnel, lot time of where a much materialize. And said, into this great, love deal of deal. at it's give in I pure but consideration the a more I look sort it. it but a take we're focusing we're end, segments At when will it's more we also it of data,

So again, this is very, very native focused.

first And end, gain us Apollo. than to not more how there dilution will be at data party a competitor, publisher the materializes, from that I very more data I I shareholders for but much of And financial deal think I just to able publishers. from not for But all, the it of it good financial a rather of I I additional mean fee think -- to scale. be Yahoo! data It's think once it's they have again, think use great another it's think clear. from all I data. than obviously, will great that mean, like be at it's will deal. publishers the able fund scale user getting

but at scale. clear, definitely not that's So deal

think I stake such we've in of a competitor. sort from about of major publishers, heard some some a some -- concern publisher a large

balanced. it's So

two for And an I the to we opportunity. think next see as congratulations years us, it them. in

them that. questions getting we're gives I about mean know of data. usual scale that a all on you longer some environment. asked of term Ex-TAC lot on a the competitive Generally, and larger margins I

margin. that. large you're to the an maybe of ad I we other win, at want operated We I comparing publishers numbers the connectivity to so hundred a we has monetization, could we points. obviously, and use fees for from hear this of when [indiscernible] Ex-TAC, want we referring not that's publishers, other sort mean in this And point side, basis terms compare comparable sort the that accounted -- it's few So estimate the lot a There's a when of mean, when difficult quality, like it's look just competitor in it's the account that When you margins. provide. the insights I do did things the there. with and very surveys analysis of of Ex-TAC Ex-TAC fees we data also and compare that. of on it lot to really of because

Andrew Boone

about more hear Keystone. feel how to are guys love And you you? wanted just to XXXX? pipeline about back And do for what touch publishers then the telling then on I'd I

Yaron Galai

here. Yaron

with that in Keystone we and Europe. middle giant the So of recent. it we're in four it's very U.S. we QX, formally announced mentioned partners the And at time so the doing

we have three those in that we're Europe And code new and one Japan. just publishers on page. Now mentioned -- two in just of I

countries. publishers short-term especially product short than this a in term, smart we these stronger establish also with what's and So SaaS That's in The a those it's expanding to important the using very is a paid launched we're to markets to we important is that's remember plan platform, just differentiator more other these for are -- moat way is that work with. into in financials. but the conditions and terms not partnerships, Keystone of favorable technologies. a this

a billion compared to we that accelerate mentioned revenue around year revenue. year, small faster million outpace about still corporate. Keystone, $X of and it's growth or the of our couple of in this we expect But we last from the again, did said, That dollars to

Operator

question next is with ISI. from Evercore Khajuria with Shweta proceed Please Our your question.

Shweta Khajuria

is you when share et provide mentioned why color that you about publisher in you share few and wins? to quality what exactly these gains David, tech superior wins, What allowed Okay. a were things you gain more you the terms products, cetera. mentioned publisher talking driving in ad Can of you?

you with how then, expect Jason, should how Could did from -- help to seasonality guess, And think QX. understood starting growth QX please we that you I the about just QX that?

David Kostman

that we share the this were significant the on on very year. been for it's year really industry. those which optimization and around a product, and vision and So of competitive wins. and combination the Obviously, technology monetization combination of long-term a publishers, gained do are And with the driven they focused it's significant sort think, win superior again, customer publisher It's I a market service. we connect is, people our area vision, premium of bring by we record

deals years. beyond how of terms part X publishers. of very important we are with but them few deals. partner of years is can those the of Keystone in we an think Most sort of typically in the These of years. into a important some X narrative to are factor and next I mean, it's how them actually I very long-term necessarily, sort are X look

about excited very we're So those.

think we increase also trying we're into our mid-optical. deals, to that a also presence do I these when

leveraging have some AI. to about. We talked other want and placements We other of of to article of strategy very in mid implement placements enterprise leverage success sort brand I the our with those nice that grow a to sort

we We, prepayment get So those matter didn't combination too. to are it's I deals. cash. any around equity the those of more in terms financial disciplined supply obviously, a said and give

of market. focus being with to growing in these need big We on as recovery the driving of and more Jason year. great deals sort more XXXX driver those, a comfortable is said, very what we're you optimized, in ad some better see overall, So yields

versus still the spring-loaded Obviously, Again, on lower, the XXXX. are CPCs that's [indiscernible] think supply. referred

in QX. record So paid we had views

others. don't internally. We [indiscernible] hope just recovers little improve we improvements once and So recovery, market then bit, to continue a for obviously, algorithmic but

in I think financial the that results. will reflected see we

Jason Kiviat

take I'll one, the right. Jason, second

layering the yes, kind growth what reset said, tough on we really top, month and expect So fully saw like seasonality happened each at we QX. of as I year with I was QX advertising budgets normal in drivers these the lapping think beginning QX of that and some see again of on of then can comp effect you feeling last of the

tough that easier easing So in with double numbers helps implied then the in down the single down to from to QX that any decline a an is would clearly hard year right? again be probably but to with single QX, of really it's -- partial over directionally, QX scaling I down mid-to-high mind, giving still in kind period the not we're digits go comp of over half digits be here, up expect that so if the year-over-year QX, And dealing with our which second guidance, and in digits to model. the the in comp

Operator

Our with proceed Please Citigroup. is with Ygal from question. next Arounian question your

Ygal Arounian

color on of I want little bit just talked some a have I things maybe guess, we to get the first, about. more

of new First, on onboarding supply.

same on sounds about next and like But video the left? about are thing you're that article. over what's we talking that more mid it move where And add anything funnel, So normalize on couple the of of and quarters. we could the will with

advertisers of the where year. conversations course What that with needs to technically, But again, more start to kind get contributing get you you are the Just said of in done those over David, and going that's to stages? that to publishers?

David Kostman

first I'll Thanks, part. take the Ygal.

a for on and a and when part up seen few ramp-up pattern a first following we've The we're and big terms takes it months. those the traditional here -- of purpose you ramp in decade

new year, deals And yield traditional the they're a are and confident but we for up, the QX again, is is had better see the the business that CPCs So potentially seen views up. deals, in so when lower is take that we challenge before. we of a more yields Again, We not $XXX improvement about following CPC. will improving resulting on see definitely ramp following of there winning ramping the those depth our we've really we patterns it's ramping and also following we some that's lot talked in it's those patterns much million you're than once demand gradually record up softness in and models supplier. ideal in in of financial and demand performance

businesses selling can premium company of we're excel. and proposition, when really with looking that countries, I than metrics, In our desire of a -- predict focused is already terms which around many on I our unique create today accountability, metrics, trends of deal brands -- we've many engagement strategy attention a supply. the sort opportunity be we more drive back there's with most clear believe based the getting to have brands. others I supply. of to why big and what for mean, more brands those we outcomes. in today the European shifting mean, measurement, are is mean, we ability the to business where seen better want we and very on premium brands those the on agencies our goes huge request engagement these are we But to and That a deal enterprise

have which top most advertisers of among be look the at have the controlled to the large XX market you publishers, these the top names if that on. are X So the geographies, share in we or

doing we we way, getting mean, in we a Zemanta of and we're on other bidding the mean, served doing which this, bidding a have with acquisition important and improved the I appeared what over which talked Microsoft, the properties. and to well, and improvements been time product we've is ahead So of by need our and for mid when do, time, hundreds. in us we've certain both article, share long that the for behind the very hundreds years We're on bidding more technology around about very partner, continuously long that. I this we've been them large working

be to mid our in more perfectly on with video The of that terms into campaign that So us ability is competitive acquisition type looking format advertisers instream are that helping at. very an awareness VI is article. that of falls

So it's coming all together.

the premium in we where You'll And market. it it direction. we're but user a in excited that's within -- are focused. mean, the supply, bigger quality are again, about way, premium we in works demand, hear very more very experience, 'XX about that better I

Ygal Arounian

I I'll this think, Yaron stick Dave, next Galai one. with

earnings and big companies. this from DOJ it's web advertiser been especially that mentioned You Google a obviously, topic, open

Just the specific on and about what for mean I operating that thoughts Google more how expanded maybe means, to your want will that, it to is what think get that you drive? benefits and there impacts

Yaron Galai

on things side. to The Yaron impact player the included here. us obviously [Indiscernible] Google doesn't advertising industry most it's I'll one. with take whole any have direct demand and in us online the everyone the both one meaningful on lawsuit of compete that dominant happening the publisher currently, side but and supply

on experience, I benefit Microsoft I as wanting in this I also business. looking hope succeed. any I'd that monopolistic is, to clear helps is has think, learning interim, But the advertising while think to space. ad players think DOJ to if online have Google's pretty all in The also DOJ to break reduce think all Google's

might partnerships I publishers I in and are space. run users to the advertisers being majority that's dealing stand more be think benefit able as and the benefit and specifically to the business might product it in someone will in their anti-churn really think faster of giving we that with us and with now on really space to deep cautious others

Operator

and from Martin is question. Please question Co. next Our proceed with Needham your with Laura

Laura Martin

My guarantees. one is on first

these I guarantees, unprecedented well percent are as of to my number that give question. that in used deals, those was think, guarantees? signing first when I'm new and what the -- Jason, of interested your with What guys us the you percent you're of level tax That's as supply.

Jason Kiviat

Sure.

it by the meaningfully. think, that's level. XX% which yes, we've So is we to percentage that around I revenue changed of It is, hasn't in past said shared, still the around the way, XX%, guarantees, the subject and

any to on a specific but talk specifically to terms it going not combination. deals, any been deal, has new the On

new. So type and guarantee There's there of this points year of non-guarantee of or rev a have share been combination both been deals. of our some just XX growth adding from

Laura Martin

that prepared you your on more comments, loss. than said X early of $XXX David, million your you got then, And new business, in times

or that, it heard I So didn't $XX way the spending I does would $XX worth words, those clarify a Could of lower please? lost business. that or just you delayed? you million And meant whether competitor -- million lost that mean to the you understand

Jason Kiviat

So talking wins about we the were the of share. -- again, market

from was last win $XXX will new $XXX of be million north year. move it well of but of it of million, And we away half business. that did So about north and did well cautious, we

Laura Martin

on And I'm just that. asking you to expand

away from moved that does You it. to What mean lose?

Jason Kiviat

lost That some to it means to competitors, solutions. -- we some of that other was it Yes. of

Laura Martin

higher little that's a normal, than And right?

Jason Kiviat

we've million higher for I so. QX. we X% the had. think wouldn't reported the business I mean general I That's -- higher mean, I seen, $XX of than than competition. say It's you've shift, -- new much

where So we is market, about end focusing focused good high the on. which on position. feel share those the premium, we of Again, market especially

-- and anchor share done, very mean that I is think feel in market a relative deals strong gains, this I those So year. we we're getting

Operator

closing comments There back any Galai questions are further over at time. I'd hand this like no Yaron to the call to

Yaron Galai

and operator, year-end all you for XXXX joining us today our Thanks, thank earnings. for

I of among significant up, We're Board. to at very excited to her Before to Olo. on advertising Outbrain welcome want pioneers AppNexus Board Nithya the Das Directors. brings depth a programmatic top of opportunity take industry wrap the have we of as to and Nithya our experience this expertise executive

you given one being earnings priorities staying us, and at we challenging but on call. core to are QX or We Outbrain, committed our year challenging costs. to macro whether our headwinds, and is macro our very a for focused seeing look was disciplined significant Last accommodating, in on the forward our

Operator

conference. today's concludes This

disconnect Thank You participation. may this for lines your your time. at you

Outbrain (OB) 2 Mar 232022 Q4 Earnings call transcript