ADTH - Earnings call transcript Q4 2023 | AdTheorent Holding Company Inc

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to AdTheorent's Fourth Quarter and Full Year 2023 Earnings Call. [Operator Instructions] Please be advised that this conference is being recorded.I would now like to turn the conference over to your first speaker, David DeStefano, Investor Relations. David, please go ahead.

David DeStefano

Good afternoon, and welcome to AdTheorent's fourth quarter and full year 2023 earnings call.

We will be discussing the results announced in our press release issued after the market closed today. call AdTheorent's Patrick Officer, like current Elliott.Before you today's are Chief Lawson; to expectations. today statements that Officer, forward-looking Financial we conference me Chief the Jim Executive and remind based With on include company's will begin, I'd and These uncertainties, subject risks are may results statements a number actual forward-looking significant differ of to and our materially.

other that to reports financial results release please refer the For Securities in Commission. future and filings and a and and our our discussion with the could affect of earnings disclosure factors today's Exchange business,

today's measures All also except will to obligation the during as we are to of today, no financial law.We by refer statements call. available to based upon assume statements, required us both information update GAAP such any non-GAAP and and

to the included Investor Relations You reconciliation measures press posted at GAAP website our our of www.adtheorent.com. to non-GAAP release find section the our in can of

we that, call unless non-revenue non-GAAP discuss All are financial Jim. to over me of let measures our today otherwise.With turn state we the

James Lawson

Thank and fourth call. earnings Thank you, XXXX quarter afternoon, our joining you good for David, everyone.

will of deprecation ranges. cookie we ad and the call, a and about for update gross year how including pressures our quarter, our end regulatory from and machine our adjusted During product market AdTheorent's progress learning just other the benefit to pleased the of EBITDA provide targeting.I'm focused profit and I report and disfavor revenue, outlook above with which the today's high-level to ID Google's full that high our platform generated adjusted fourth fourth dynamics, in XXXX, areas key plans, innovation on finish a discuss up investment quarter results exciting discussion we expect

impressions, XX% our generate to interest return and to growth we leading growth Our XX% and scoring consistent see to products, for on spend engagement, which revenue differentiated self-service best-in-class a our machine greater meaningfully our heightened our customers, high-priority past continues learning delivers approach ad spend growth on year-over-year.Once adoption.Over management of prudent growth these XX% growth, AdTheorent the trajectory layering robust in quarter, million growth accelerated our and fourth drove our platform.In outperformed QX in we accelerated with ML-powered including XX% customer on adjusted This a million audience again, EBITDA, yielding leverage, incremental top the we combined have predictive in DSP. margin $XX.X all significant rate. cost of year-over-year Health, $XX.X ad which to of saw by operating year, vectors, continue generated which highly differentiated of revenue, innovations

we operationalizing intelligence a reminder, a have and been As productizing advanced XXXX. artificial early learning, branch machine since of

in with confident to lead these self-service. the growth technological pillars in future on picture of we in stabilization the look to our now a more each drive durable targeting, to in macro ability be appears growth. I'll the and algorithm-based that greater detail.First, ad stages programmatic discuss beginning Now of

platform particular, media Overall buyers and note quarter. spend. with self-service impressions doors larger our attracting record opening self-service in and the small, QX, XXX% contribution is As stated driven platform to AdTheorent fourth but buying already decisioning continued in revenue media several scaling and monetize large platform helping developing served our that the self-service remains up delivery sophisticated more fully engine. revenue prior to build by customers.In retaining Momentum are ad platform our relatively adopted and we industry's activity, self-service I've is most calls, in year-over-year, excited

their the our of their transact revenue self-service progress as industry and currents AdTheorent campaign customers overall to independent And platform resources with include ad creative internal spend AdTheorent is platform us post evaluation and as component. on as buying growth translating managed and evaluations use industry still and seamlessly AdTheorent completed Health. same about agreements customers customers innovations a scale to self-service accelerated we capabilities holding can customers enables delivery grows in results two platform. higher the an grew longer driver the self-service like outstanding a quarter addition, to signed our global to of evaluation demand. our needed, XX% on holding at AdTheorent being first generate largest in of platform, and is year-over-year platform evolve, the holdco our the Health larger and QX a talk platform.Second, I'd keeping how In our those companies companies, the management offering, exciting These third with progress.Adding regardless campaign base as the meaningful on as access choose revenue agency of Despite customer number service offering global model cross

not on we and demos and have our product them converted Nowhere driving AdTheorent healthcare insights need believe industry.Many with call, healthcare Health Audience customers revenue. or over-ID demand-side demand discussed dependent we for QX probabilities represent impressions for into trials score subsequent and privacy-forward is increased in powerful the the ad data, Health DSPs. algorithms more acute the advertising.On statistical and incremental subject personal individualized HABi. programmatic of early the restrictions towards strong use and than Because a and serve on highly regulated our Builder data, user our using of we demos These to stringent based demand future regulations partner privacy AdTheorent tight and are

learning AdTheorent advertising share the generalist healthcare lack capabilities.Moving benefits other We to privacy are continue growing will Audiences. we within and our to advanced domain Predictive expertise, gain large DSPs space as confident and machine

for cooking of XX% websites on a brand well return lift and high campaign drove category for as witnessed late and campaign audience and need We I third-party in buyers consumers the which expand their or the plus our focus spend independent as ID XX% wine have turn continue Advertisers superior deliver We discuss brand as Xx results other Audiences opportunity. saw ID-based our the of measured and The to of we platforms.In adoption a sales which proprietary populations, the reach wine that and are segment deliver we we for our without are ability to drove our a QX. and solutions for with to customers beyond audiences XXXX. being expensive innovative creation, validation QX, traditional license CTV enthusiasm methodology significant these to like we launch thrilled profitability the for a reach national adopt important of in the since citing of with wine market running the better uplift for versus XX active sequential have privacy time.Finally, third drive XX% and the new publications. we liquor high remains an another ad growth and with from to in greater uptake party.AdTheorent custom a higher sought Predictive manner.To a Audiences, to with by attach visiting AdTheorent over in in to brand, are customer record campaign rates independent aged ability repeatedly driven increase stores, around conscious XX demand and audiences by Strong example, an QX. in greater campaigns our perform performance our runway this likelihood established transparent Predictive Predictive browsing across as cite base platform, drive would in of our Predictive market trends to campaigns a active one increase XX advertiser believe ability Audiences Audiences an in third-party adoption demonstrate ROI foundation this in our and likelihood

CTV offering higher Our advertisers, demand. differentiated with performance-oriented resonate continues to driving

content a reporting approach our normalized targeting, and and this and channel modeling. maximize data learning vast data, have to the and by As analyzing of introduced important leveraging has models to live and are previewed channel across taxonomy content.Network data proprietary a of is other we with CTV the received scalable for in is data leveraged adjacent and that This messy. In publishers seeking machine way a network content is and third CTV valuable quarter custom performance. words, buyers network is DSPs for reportable earnings, our our also from more in adding because publishers. television there solution in signals to precise fragmented standardization targetable QX, for modeling This our By the majority ensuring ads desired channel. no a normalizing created impressions

machine utilize a and learning strong XXXX, solution to to self-service with within and to count industry-leading driving transparent compared advertisers the of is impression scoring CTV advanced deliver and are capabilities advertiser momentum growth XX% XX% of remains on CTV advertisers. up granular ability Our in.CTV quarter sequential third leaning

more however, As composition heavily on towards shifts the basis. recognized net a is revenue demand self-service,

the spend.Moving this is solutions CTV our to overall growth ramp XX.X% revenue, and pressuring enhance reaccelerate continue While which year-over-year, down we CTV continue we up was to mixed will believe as advertisers near-term a build as CTV outlook. XXXX, our to to plan second to the returned on in growth Despite meaningful and year. we ad half on progress In notable in of XXXX. pressure we budgets, environment

value development, have from will cross profitable how of cookies we and reinforce we At January, remain the with AdTheorent as events growth very relative are We on to beginning seeing by investors benefit despite a and XXXX.I'd Chrome cookie levels drive like customers, mixed, major initiatives that are active in officially and and eliminating encouraged of the we budgets larger is deprecation but remains Also, proposition these industry recent broader past, beyond.The also browser. update positioned we AdTheorent's economy from to currents. to XXXX what in will the are XXXX discussed and Google began investment in customer high engaged behind planning.

the of are quarter. news, around showing shift the to and behaviors the will of aren't This reality so. Journal do restricted to this have ready of yet industry of Street noted for concerns deprecation despite advertisers As cookie end the Chrome other imminent users targeting now that deadline are still their January isn't the to XX% consumers.As remaining third reevaluate going advertisers privacy to to last change, month, for the in X% force Wall new and be but by article, media eliminated many approach cookies buying

opportunity. For AdTheorent, a huge is this

of including learning for aggregate the the have other to draw DSPs, privacy algorithms framework, models, ad machine customers we And We is post AdTheorent Google's because we've data our the machine never impressions. inferences post-cookie We've we active preparing score in of systems how always opportunity.As and have data which deprecation cookie and to cookie as will history, exchanges with been unlike our for future, from cookies learning discussed, statistical agnostic. have data are XX-year and a part clear we our leverage used relied ABIs on and targeting. patterns immune view

have are now in scale scrambling not used IDs to historically demand-side challenged effective platforms with IDs. less cookie-based other backfill the targeting We and even business.Other and user ID are alternate

I market.Before next highlight conclude, I out competitive proposition expand and quarters, the we few over other four to that As in phased over naturally AdTheorent's the value innovations next moat will meaningful cookies plan the to versus few want bring market are a quarters. solutions superior to

as audience research algorithms our can as significant are video to explore aggregate hard be I and Google be large excited exchanges product incorporating science more generative excited nonhealth and video introduction of world, transcripts, privacy enhance health of market part this opportunity will APIs transcription into as across our performance signals systems a teams data-driven.Fourth, facilitate campaigns business. advertisers contextual configuring work work of and and we offering, nonexperts functionality, HABi, our to Builder, learning Audience post-cookie lead post-cookie additional version parallel enhanced are our for leverage into into our digital creative the in First, and introducing machine and the mentioned, our are platform, audience expect data we health AI are UI/UX with using our from by to and health CTV lines business develop keywords we data incorporating user make video and modeling, into campaigns.Third, CTV tech at models data our upside data our advanced to framework.Second, custom patient creation language extracting we from complex our the Health ad AI to and to we of video health such to excited rollout

open highly Patrick, business am leader to in firm, programmatic Frost the DSPs XXXX I and us there. recognition remarks industry resilience The turn optimism and call before XX Frost enabled for dedication much innovation, and Radar would So open that XX-year-old Patrick. Frost XXXX the Radar in I'll just state to the top work research with #X note of over market whose evaluated focused the more across our to Sullivan, was to over competitors.I to come.Now, on a what advertising note like finish our a Internet. to the And two by elevating the call teams ranked larger and great & AdTheorent conclude consulting Demand-Side AdTheorent named for AdTheorent is a acknowledging team trailing remain turning finally, Platforms. we for expertise, pleased my the received high

Patrick Elliott

afternoon, and for joining today. Good Jim. thank Thanks, all us you

QX As Jim revenue, and our report a mentioned, margin performance, end outlook. to we exceeding adjusted of the robust are thrilled EBITDA AGP high margin

We growth quarterly which of began to $XX second our a are AdTheorent's momentum, and are QX the million and announce guidance to year-over-year proud very in half marking reaching $XX sustain a record-breaking $XX.X full revenue. of strong confident XXXX.We year year We the growth. ended surpassing million with range million, its potential with XX.X% revenue to in

momentum XX% AdTheorent to of amidst or traffic EBITDA with last and amortization of $X.X in XXXX, XX.X% $XX.X the for cost customer the our revenue. and in representing converted self-service we revenue, this revenue from $XX.X record across was mainly margin revenue key up quarter, discipline In growth up and higher operating the full an previous revenue. quarter, profitability $XXX.X growth XXX% in million at AGP adjusted beginning achieving demonstrates EBITDA million.Our with to stock-based compared our on XXXX, market our engagements range continued the of to contributed of expenses, totaled related of and in generation discussed our a QX. inflection in to successful $XX solutions, XX% landscape.For the significantly pipeline the higher our performance by QX growth year, exceeding million, reflecting business last our gross period of the saw as and increased to guidance Audience The outlook versus Adjusted same our ever-changing our we year, And increased largest both outlook consolidation strong This XX.X%, defined year, million XX% company's million GAAP average X.X% into our QX, Despite QX costs and and for compensation, we rate increase above the depreciation in $XX.X accelerated items, profit, due of set least quarter verticalized from XX.X% trends this to achievement.Notably, year. our growth leverage revenue, the reported year. was QX larger million percentage generation industry, demand we saw operating agility algorithmic million, was Health, remarkable particularly end spend driven pillars high of AdTheorent an call, growth at in agency year, excluding onetime for The $XX pointed $XX.X the adjusted fourth compares growth was increased revenue of per within tax point platform revenue. revenue the This a year-over-year up revenue which our less brand million, XX.X% Health.Non-GAAP customers. year-over-year. by indicating an experienced pipeline starting solution increase. XX.X% to the to As and revenue Predictive of adoption primarily AGP prior acquisition our active strong margin

Health record advertising the and connected continue in linear to to core our from on continue initiatives of programmatic the advertising recording independent to and our Predictive platform offering to highs. of an the shifts value execute open traditional on and drivers to Internet our our driven acceleration growth self-service market, TV.Our take and delivers addressable We strategic ID advantage by from products business, expanding be to AdTheorent Audience forms to of increase our customers

or CTV profit totaled highs.Full XX.X% gross of also end revenue high for year of margin adjusted the spend reached platform AGP our million exceeding outlook. all-time $XXX.X Additionally,

or margins consistent G&A, AGP million company year. onetime amortization costs increased and expense savings and for primarily the managed our hosting to platform with versus in compensation data approximately previous expenses, $X realized expected, we total and X.X% Operating costs.During prior the across stock-based As historical were professional services higher million flat due from be primarily across items year, results. also excluding and to the expenses the year, and depreciation entire insurance TAC, compensation, $X.X

growth us a and year were margin equivalents. XXXX. the line to profit, top position million better XX.X% for drive year in business year $XX.X cash sheet while investing We to our As exceeding for to than We and closed was balance in million, EBITDA growth.Moving XXX expectations full out cash the adjusted result, cash gross points basis a $XX.X able adjusted flow. lower the and with against

contract to first vendor December taxes million, collections Our We and million, the timing free year fourth of in of quarter and of $X.X for cash resolved revenue the XXXX. the early trends large overpayment reversing was the on a the cash collections of half negative timing due anticipate in taxes. we flow of termination mainly $X.X for cash

strong we ample and We annual to debt continue to a towards capital accelerated no expect growth. already are have and pacing structure liquidity.Looking with ahead XXXX,

lines. to allow will with model. in growth this through we our make both accelerate through This of shift we investments the revenue full the period be of $XXX XX.X% strategic an align toward adjusted will guidance profit the We which XX% the XXXX. expansion, For we XXXX profit XXXX. Revenue gross of strategy at adjusted adjusted EBITDA versus range margin $XXX XX% without XX.X% and margin XX% growth decided framework of midpoint to EBITDA we compared and expansion revenue reaccelerating growth million in and quarterly XX% million, year our to investment the of us expect gross and XX% in margin and to annual be compared anticipate as year.As pivot progress time be have to between reporting XXXX, constraints to to to and between represents

always our shift working, resources the clearly we and where our this pleased are we're placing with performance will most our the for ensure financial investments in XXXX. excited beyond. stakeholders.In summary, XXXX help they'll value by and generate we in time, are XXXX about the Thank we are would driving in session the Q&A growth We're like already to operator. momentum moderated and transition the to you. At Our opportunities ahead this

Operator

take Instructions] Canaccord you. from Maria Thank Ripps Genuity. first [Operator We'll question our at

Maria Ripps

strong Great. the Congrats results. on

whether of expanding this their with about spend their you progress. meaningful how companies you with over you So these for two increase companies holding see And one going global sort holding advertising platform Can talked partners in partnerships just among about forward? talk your be another to could a time? tendency with

James Lawson

agreements, thank in Yes, communicated where have, focusing Maria, you to excited be advertising the service post world.So agreement, only revenue We're some deliver business of generate media building signing with period long types valuation these the largest to to buyers there. very our and the platform and been growth the deals but question. a time. as for been agreements at trying we point able of on we're sustained are can evaluation we calls, prior It's really media with we long be excited large over it a where getting not in process contracts. to a table have quite in the to of buyers

excited post contract opportunities those we're exist to customers. these we opportunities yes, believe So huge in scale really because,

Maria Ripps

shift for spend you this CTV mix broadly, more have your about I incremental AVOD you're of several broader then you And about inventory the demand?And see to think last that going the that's whether advertising Great. you on do driving secondly, sort talked talk platform. trends. maybe through then relative Can industry expanded of how partnerships on platform maybe the growing adjusting sort CTV quarter, that

James Lawson

you, Thank Maria.

to mostly we've in differentiated of offering very been best-in-class. innings CTV the have our platform. the managed opportunity. focused What scaling the We're AdTheorent, in is making were our of seen years we services that sure a CTV early early We relative on is and

we more CTV. of see medium the into more across that are As we CTV you executions more find a deliver is and customers CTV them self-service business, many self-service heavy. expensive

our that. that for the customers.At really see opportunity flowing that we this care objective of CTV end At So platform. the the day, through so believe the media don't the are more net is recognition to our about in day, revenue we end get we we early of

go-to-market, some area, follow. data advertisers in to in primarily our a that sure a point in making of focus now valuable in strategic where be but CTV. integration, product, XX%, been targeting revenue driven has products.We're the at area best capabilities and Our making investments best partnerships grew go-to-market, on making methods number revenue publisher we back the and have we getting in growth best to that think could date the of grow reporting that didn't believe quite our and we reenergizing the We we the CTV by that scale will our XXXX, our

Operator

We'll to at Martin Laura move Needham. next

Laura Martin

also. three have I

it's revenue. let's So still interested XXX%, is, were to self-service do percent do to was managed a what I'm What self-service on compared service from first. My guys customers when self-service your the service? in up you of these question doing you cost small but require side total them

James Lawson

the Laura. you, Appreciate Thank question.

is that looking the when and are with KPI campaigns end win we the other to is looking #X that return think outstanding I -- looking business the engine an a to for execute DSPs frankly, gives results.And that's that best-in-class other at the media self-service to I customers or and inventory that And DSPs. to lot of think We platform. can a of added to results platform I filter get, platform inventory allows their self-service with we other out And media than for head-to-head access algorithmic at best we approach put they DSPs. the an efficient investment lot going drive head-to-head noise. what other to We on to sorry, customers of deliver out can for not efficiently performance KPI the better more media go customer. day, think has that them work be ability They're the day, working value both results end more to designed a them most customer We outperforming. the a that the platform that our generate been of where is way for. ad filter and spend.Our is extremely

think I is key. So performance

in as the far than have a at our cost, optimizers and, drive other DSPs. therefore, find where can DSP we lower view, we of As cost any high-value out impressions best price conversions

Laura Martin

then a second And Cool. you, is Okay. -- question Jim, maps. I for was road

year [ were talking Health done ago, going were financial exactly last has you to A on are really going year made very and you But you investors. quarter, AdTheorent ago, go a privacy sense insurance, services then ] sort again, to what the direct you of where about projected were you timeframe they about So next projected. travel. rules, and that to

us you after What's the can So on of you road next give an quarter map? this where update go healthcare?

James Lawson

Great you, Thank Laura. question.

interest optimistic things really of and area use the important the vertical, prohibited our basis over services models, In valuable don't financial We that in We Act. number Equal continue that and financial is insurance environment in Credit the that the other because Housing for couple especially last with ability were had marketers and privacy-forward believe Act, number clients the and a we financial in compliance of automotive the the a manner, in business. with credit our services of have We finance, remain of the market vertical rates, vertical. there we years one our to for facing services big that example, Opportunity vertical.There banking, headwinds challenges the in to customer of campaigns was a were a the our in opportunity of extension been in for drive financial services larger in auto products. Fair about base variables engaged

travel be and very, conditions are -- actually that very have we the but you exciting of the kind have to very strong in macro about a travel. us. for We we industry bullish the year had strong start services, So the mindful financial in.So to you're of and also a is

product, of not in results vertical. We number investments our our a of is lift, go-to-market.We sales another we CTV, incentive We're team. to give us offer bringing our the that making enhancements destination to the -- data Audiences, just in services and and customers as new great number that number also creative changes and have vertical. a a a driving offer members our our a customized travel. partnerships go-to-market made studies a Predictive very we that number have the a our travel measurement leader who new organization travel such the programs number of of we've We're It's it's and travel of across

So we XXXX, XXXX call. be very the of optimistic feel that that travel wrap-up in in stories sorry, -- about success year one talk I'm we'll the will

Laura Martin

Okay. Super helpful.

Patrick, receivable. lot they're on to there? pivot payers a of this in have cash Okay. because receivable? ops sort just it add accounts on going on with is What receivable for up this cash and slow going accounts the heck large $XX of is meaning you. What's clients, one tax AdTheorent million I free accounts $XX So Is flow, from down to $XX million. year-over-year million

Patrick Elliott

here. your part -- true Yes. are is guess, and that your that dynamic Thanks, we of to pivoting part I customers, your larger -- of already answer, Laura. Yes, is the

come billed in in Another December. and a get part of dynamic, revenue the the of lot did QX, in though, is

And end balances collected AR were timing not such the of just of before the so the year.

that So that driving driving the things increase. really is two

Laura Martin

And that last than was somehow. different year

seasonality the So we year didn't see that quarter? in last fourth

Patrick Elliott

dynamic at of The for the help -- performance. dynamic the AR QX less end incrementals the did like -- And it due of also, it drove drive December, said we that whereas that our in in year. 'XX, in, fourth and had increased come timing just I quarter in really XXXX, to

Laura Martin

But move structural Cool. is we think because Okay. towards you pay this as bigger clients, slower. they

line receivable. to trend ] line This tax in through of growth going a you be accounts So structural be 'XX [ believe is your to a think? you this working is revenue will higher capital the your the

Patrick Elliott

that I capital Yes. think point that year-over-year at is the out working did of end to million our I the $X truth I year. mean, mean improve there that. I'd

through And flow at the into cash the our year, such happened so this XXXX. of just we'll timing that year. this capital way end will translate into that the working be cash cash converted and get in and to flow of and improved It manage

Laura Martin

numbers. Congratulations. Great guys. Thanks,

Operator

We'll at move Matt Condon JMP. to Citizens next

Matthew Condon

talk advertisers, just half you year? they Can are on cookie having Maybe Great. just if in conversations been in back a you of with the gear cookies there change deprecation. about the your the of deprecation for has that up

James Lawson

you Thank Yeah. the for question.

This market our the about for their the about highlighted our in that ID-focused interest of approach response we about our to of ML not we are a here, is Absolutely, the remarks on deprecation planning. in XXX%. a statistics when done more like. everybody's impression post-cookie their in of opportunity. what number advertisers the #X an we've is post-cookie We preparations topics. scoring, talked looks prepared favorite We We've advertisers talk using the despite of is behind topic cookies mind. that and couldn't that One own the fact to actually the get be world.And and excited customers world and their types research solutions,

this AdTheorent.We on have of that engage We and This or it's retargeting, quarters. endeavor months since maybe impression not we're with have and and working believe excited AdTheorent. greater XXXX. customers ID is a in sense be topic who and scoring reaction This for doing new preferable is backfill been been to a have or pivot to super around this profiling than urgency they user able have prior to

and XXXX, yes, that the quite results. continue, about enthusiasm in excited up in we're So conversations will show These that it. believe we

Matthew Condon

stabilization a that's just quarter you're throughout early just the of Can And seeing just mentioned great. Thank about giving demand of just of stages confidence? also linearity the and the you macro. in you what XQ maybe you far so talk then, That's maybe you. Jim, that the

James Lawson

the beginning completion good. slower a customers large number the terms stabilized year, a start like our finalization We a In feel of We campaign in and communication feel of degree. the to macro off has of larger got of Sure. to and budget, starts.

So has a had we accounts. increased. has slow the our little from bit a of start as But in progressed, momentum some the of January quarter

a our year, feel there at little industry from unique we think beginning consistent in where business of that that a budget understanding don't So the of rather. the was number would think or finalizing -- about bit say I companies our of in we're headed.But from good a I I budgets was a a budgeting and delay was AdTheorent of that number customers. with to of

Patrick Elliott

to If add just linearity. that, you I asked our that about could

the booked year our which fiscal our at point in and this this were guidance year of at range year pipeline they think last I provided time, our remarks. are prepared higher support levels revenue the we've than both that

Operator

We'll take Company. Benchmark The at from question Kurnos Dan our next

Daniel Kurnos

year? similar kind you're I'm you the agencies Jim, That call interfaces. mentioned, Great. these very solid about the there if timing the I of if kind if optimism you to work just talk And it seeing, insult else but just this to was adding curious or doing been is a end around the back not guys. initiatives processes an year on maybe will anything the of rollout. we've your it, I end -- to platforms heard of way growth know let's of anything from that some that tell that that's for the one as others and of -- doing integration of there's UI/UX we've just driving simplification

James Lawson

we lines that are buying a outstanding from user. benefit easier also perspective users there of if more of default And that's things more lot just our but of number industry are much a what making within an functionality would decisions not decisions the decisioning.And to very question. That's standard makes experts doing, some platform removing not more platform. to in the out some DSPs say making a there's focus our for the or you among That's a but Dan. that's for our it decisions, we're with industry, streamlined of an that will, interface a streamlined the conformity, evolved up down more platform user. nonexpert There on dumbing you, number and Thank we're from media

exact number result of changes shorter execution mentioned also I remarks we to contributions excited, prepared Builder, the you of our the Audience different need be, think the be period about adoption, as focus in and I campaign their there generative expert between That's help a by will we're we times, that example, lower don't where all of advancements our quite that lot, and platform, making feel the regard.We're that names. going making we're a features our number treatment such first training of Health health in launch. a that names of contract or specific in for like are something AI to the an some to and diagnosis easier as collective on

algorithmic You in again, ID-based These in audiences.And not these statistics that look-alike and generative incorporating more algorithmic plain not on are are language a can speak from These data. we're creating are audiences They HABi into audiences. the English are users based models assist and manner aggregated audiences. AI our will audiences. large

that, we creation think that targeting So nonexpert and usable audience attainable algorithmic and algorithmic for makes more traders.

Daniel Kurnos

of just we international, then guys or perspective, reinvest builds haven't from you recovering, mind That's in product -- but just as to the what's guess, this And what's have kind growth year? sounds on point? follow-on a year, new targets medium what it. top this momentum. picture to talked at to not like I to do have Jim, a the in kind improving -- Jim. platform, platform just willingness reinvest and longer-term which sustainable the really And like after I initiatives your your just obviously, helpful, line of a about whether you in this Got willingness it's going bigger it's asked,

James Lawson

Yes. Thank you, Dan.

to extend scoring that X and near-term public a as long-term would it not our a of think make can today that it's of we with more. superiority make want and lead we love marketplace, short-term are state a I now. road and things. Obviously, we're We balance long this invest, we've could be lot for our frankly, right product in We platform could trying mean tech -- many years a constant been performance map, investment accelerate years. could of we on that -- We that and we impression small that number of machine initiatives. differentiation investments advantage challenge forfeit to kind the company our you're we and on in to advantage for on sure learning-based any hitting and have.But

to And focused, results choices the choices. make we and at our time So same to a number financial we've fantastic shareholders. made for be delivering outcomes of have while

Patrick Elliott

just I'll an increasing our Yes. capitalized software CapEx, Patrick. our we XXXX. from add don't expenditures investment Dan, materially from see that perspective, is this

and We be it we're enable seeing but further relatively depend top-end will and that performance how expect much us consistent, how to that momentum momentum to will -- on invest more.

in So what our will we year. we decisions investment through monitor saying go is are I'm that the light and performance, that of as our

Daniel Kurnos

and efficient And up I if level. there's sneak -- was QX. QX guided of guys That was to, could strong I one I would granularity guess, AGP any you around us Can it. you in it, step why just have in, give the the XX.X%, so third but Got real quick which benefits a call to TAC necessarily I why really aren't sort those year? a AGP, if let's of some of of from mix, kind incremental QX could be know flowing would helpful. just through be

Patrick Elliott

of that's solution, with which QX, Yes, for which us time. we third-party costs margin replaced the of -- by to increases amount harder in real driven AdTheorent Dan. internal AGP margin our the solution, In an was our flowing adoption good through.Sometimes Audiences predict Predictive dollars performance

prudent that we of realized what we guidance. coming kind which so saw the as think our think upside that of a the with our X XX% last future. of amount QX, do through was level, fair in we to to which through consistent historically is -- we But to of a for XX% budget And is years

Daniel Kurnos

Super All it. it. right. appreciate helpful. I Got

Operator

to next at Markets. Capital go Michael Kupinski We'll Noble

Michael Kupinski

kind you performing us Congratulations. us with expectations? give your an update on can Hero I Media? strategic an could of just If how wondering, One HERO partnership on the update was you give have you against is

James Lawson

view Hero. the area.Hero our to with to customers who horizontal Predictive to in brands getting our agencies. very capabilities in that AdTheorent question, across with a are as some We Michael. seeking the spectrum. We products for you enable opportunity multicultural Audience a market, unique Thank of fantastic this provide us audiences that love been lot and our We exciting reach customization think has opportunities partnership

provide tap of we different intended that expect business. expect that a again, portion -- is horizontal, Hero drive vertical, progressing a going budgets in not our to the to we of quite a So we our into XXXX. verticals that, growth along and multicultural nicely, budgets horizontal, will think we but a that's for multicultural across And number within

we're actually to the be part And I'm the to progresses, year. the see of that is They confident drove about. contributed show that they in of early.So up excited positive So we're deals excited a end big to success. the number going to partnership it's year results, the which Hero exciting quarter, as that very but in a our fourth

Michael Kupinski

for And what wrong. looking could Got always you. I'm then go

implements problematic aggregate for your for know technology that some is you've those for I renders that them post-cookie there But of Are So exchanges? world. been a work that data their use configuring systems systems? maybe with the of Google chance to for you, some that you

James Lawson

the [ mean been Sandbox Yes. lead Well, working we're with with framework, post-cookie Google Google the we've the in actively and ] I and Privacy there.

Our tech teams with are doing the APIs. testing

of more we aggregated anyway.So are us piece like.And individualized a positive that inherently have cookie, look And buying what when for to for impressions high-indexing media, Google, when It's information we try sit, important a driving like we that's we conversions, optimize it's where to present. buying story. of more those indexing a optimize are media attributes find with attributes replacing are look is do when that's what we are iterating high going and we sight from look impressions, with line is that. other present a clear We an that again, that which that, of into we data story

impact our the IDs.So doesn't the for looking cookie depreciation of not modeling. we're So

driving, from that, when see we what back framework. Our that we can need. getting ability drive we're post-cookie that's aggregated that's we're from to a we what get so that have about Google conversions we're we to the information pleased all know data that conversion And

Chrome -- a and and to head mean advantage still lot But it's frankly. have X% it's think done. the Only do early of be an we I of work been I we to deprecated. right a no, early. cookies start, I team think have have that There's work, So

Michael Kupinski

M&A your question, you Last healthy for given looking us just balance Can there. be your there? your thoughts color sheet, growth? might the for enhance Thanks you Yeah. to that any give

James Lawson

a mean looking a can on always see heads for technology. and we've combinations We've built been XXX you're driving basis, down of role we're a and never But our other never definitely executing a lot business, We're strength think a everything anything. for as definitely and relatively and of opportunities. product are map we're strategic financial type opportunities. looking I the There something give tech day-to-day arguments our part and of our mentioning On for against at future. we've We've exciting homegrown. are outcomes acquired great acquired M&A opportunities types for focusing that. road us closely. good We position our targeted We're on employees. absolutely, I -- small being that company

Michael Kupinski

Great. That's Congratulations again. have. I all

James Lawson

We you, Thank it. appreciate Michael.

Operator

no are turn for further remarks. questions would like closing conference the to there Lawson And time. I Jim this over at to

James Lawson

the inflection point a great to In finish our Thank XXXX. you, third X% that everybody, 'XX, quarter today. reached being our XX% year. set Growth which off had going our health. self-service, the We solutions, We hit the targets strategic for we investments, growth at from business. came audience here accelerated, to predictive fourth an beginning the in paying quarter. We've in from of are in

XXXX. to in AdTheorent to closing, QX.In into be in customers thank not team a continuing EBITDA the This great Our high XX% is remiss XX% up on are profit for such average I margins level. execute spending more with would growth translating at

continuing and with investors is look very speaking soon. into XXXX, momentum forward we Our to again

Operator

today's you Thank concludes for call. this your conference And participation.

disconnect. now may You

AdTheorent Holding (ADTH) 12 Mar 242023 Q4 Earnings call transcript