Loading...
01/11 10:51
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call shows strong financial performance, with revenue and ARR growth, and optimistic guidance. The Q&A section supports this with positive sentiment on growth opportunities, particularly in AI and new pricing models. Despite some lack of clarity on specifics, the overall sentiment is positive, with a focus on future growth and shareholder returns. The market cap suggests a moderate reaction, placing the stock price movement in the 'Positive' category (2% to 8%).
Q2 Revenue $200 million, an increase of 8% year-over-year. This growth was led by an 18% increase in Marketplace and other revenue and a 5% increase in Subscription revenue. The reasons for the growth include strong execution, sales momentum, and stable macroeconomic conditions.
Net New ARR $14 million, the largest organic increase in the past 7 quarters, equating to a 7% year-over-year growth. This was driven by momentum in use cases like Commerce Media, CTV, and Cross-Media measurement.
Non-GAAP Operating Income $45 million, a 10% increase year-over-year. This improvement was attributed to cost efficiencies achieved through expanding offshore operations in India.
GAAP Operating Income $21 million, more than double the previous year, with a margin expansion of 7 points to a record quarterly high. This was driven by sustainably lower stock-based compensation.
Gross Margin 72%, down 3 points year-over-year due to higher cloud hosting expenses related to platform modernization.
Free Cash Flow $57 million, of which $50 million was used for share repurchases. This reflects strong cash generation and a focus on returning value to shareholders.
Million-Dollar Plus Subscription Customers 132, a 5% sequential increase to a new high. This growth reflects strong customer acquisition and retention.
Data Marketplace Revenue Grew by 14%, driven by stable ad spending and new CTV integrations.
AI product enhancements: Invested in AI product enhancements, including a new AI-powered audience segment builder and AI Agentic orchestration for marketers.
Usage-based pricing model: Rolled out a new usage-based pricing model to attract midsized brands and expand sales motions.
Commerce Media: Expanded partnerships with companies like Uber, PayPal, and General Motors to enhance customer experiences through data-driven collaboration.
CTV and publisher integrations: Extended Netflix connectivity integrations to 10 new international markets and introduced Meta attribution insights for retail media networks.
Cost efficiencies: Achieved cost efficiencies through expanded offshore operations in India, contributing to a 10% increase in non-GAAP operating income.
Revenue growth: Q2 revenue increased by 8%, with Marketplace and other revenue growing by 18%.
AI integration: Positioned to guide customers in leveraging AI for marketing outcomes, with partnerships spanning search, commerce, and creative applications.
Rule of 40 target: Focused on achieving Rule of 40 financial targets by FY '28, with current progress at Rule of 31.
Macroeconomic Risks: The company acknowledges a relatively stable macro backdrop but narrows its revenue guidance range to reflect less macroeconomic risk halfway through the fiscal year. However, economic uncertainties could still impact subscription usage and marketplace revenue.
Gross Margin Pressure: Gross margin declined to 72%, down 3 points year-on-year, due to higher cloud hosting expenses related to platform modernization. The cost optimization from migrating customers to an upgraded back end is taking longer than expected, which could delay financial benefits.
Customer Churn and Sales Cycle: While churn was better than expected, the average deal cycle remains lengthy at roughly 9 months. This could pose challenges in maintaining sales momentum and achieving revenue targets.
Platform Modernization Costs: The ongoing platform modernization effort, including running two platforms simultaneously, is incurring higher costs and delaying expected savings. This could impact operating margins in the short term.
Regulatory and Compliance Risks: The company operates in a highly regulated environment, and any changes in data privacy laws or regulations could impact its operations and customer relationships.
Competitive Pressures: The company faces competition in areas like AI, Commerce Media, and CTV. Maintaining leadership in these areas requires continuous innovation and investment, which could strain resources.
Ad Spending Volatility: Marketplace revenue growth is tied to ad spending, which, while stable now, could be subject to volatility, impacting revenue from the Data Marketplace.
Execution Risks in New Pricing Model: The rollout of the new usage-based pricing model is in its pilot phase. While early feedback is positive, there is a risk that the model may not scale as anticipated, potentially affecting revenue growth.
Revenue Growth: FY '26 revenue is expected to be between $804 million and $818 million, reflecting growth of 8% to 10%. Subscription revenue is projected to grow mid- to high single digits, while Marketplace and other revenue is expected to grow mid-teens.
Gross Margin: Gross margin is expected to be approximately 72% for FY '26, slightly lower than prior expectations due to delays in cost optimization from platform migration.
Operating Income: Non-GAAP operating income for FY '26 is expected to be between $178 million and $182 million, with a margin of 22%. GAAP operating income is projected to be between $83 million and $87 million, with a margin of 10% to 11%.
Free Cash Flow: Free cash flow is expected to increase in FY '26, with a substantial portion allocated to share repurchases.
New Pricing Model: The usage-based pricing model is being expanded beyond the initial pilot due to positive feedback. This model is expected to drive incremental revenue growth by improving land and expand sales motions.
AI and Technology Integration: AI is expected to drive incremental growth opportunities, with new tools like the AI-powered audience segment builder and AI Agentic orchestration. Expanding partnerships with AI application providers and platforms like Netflix are anticipated to contribute to future growth.
Rule of 40 Target: The company remains confident in achieving its Rule of 40 target by FY '28, with expectations of 10%+ revenue growth and operating margin expansion driven by fixed cost efficiencies and AI-driven growth.
Free Cash Flow Allocation: $57 million in free cash flow was generated in Q2, with $50 million allocated to opportunistic share repurchases. Fiscal year-to-date, $80 million has been spent on stock repurchases.
Remaining Authorization: $177 million remains under the share repurchase authorization, which expires on December 31, 2026.
Share Repurchase Activity: The company repurchased $50 million worth of shares in Q2 and $80 million fiscal year-to-date.
Future Plans: The company plans to continue deploying a substantial portion of free cash flow towards share repurchases, depending on market conditions.
The earnings call shows strong financial performance, with revenue and ARR growth, and optimistic guidance. The Q&A section supports this with positive sentiment on growth opportunities, particularly in AI and new pricing models. Despite some lack of clarity on specifics, the overall sentiment is positive, with a focus on future growth and shareholder returns. The market cap suggests a moderate reaction, placing the stock price movement in the 'Positive' category (2% to 8%).
The earnings call indicates a positive sentiment with several growth catalysts. The company has raised its full-year outlook due to recent sales momentum and confidence in higher revenue growth in the second half. Partnerships with major companies and new pricing models are expected to drive further growth. The Q&A section revealed management's confidence in their strategies, despite some uncertainties. The market cap suggests a moderate reaction, leading to a positive prediction of 2% to 8% stock price increase over the next two weeks.
The earnings call reflects a mixed sentiment. Financial performance shows growth in revenue and operating income, but challenges exist with lengthening deal cycles and regulatory pressures. The Q&A reveals optimism about new solutions and customer engagement, but uncertainty regarding macroeconomic impacts and customer retention. Share repurchase is positive, but competitive pressures and unclear guidance responses weigh on sentiment. Given the small-cap status, the stock is likely to experience moderate volatility, but the overall impact is expected to be neutral, with a stock price movement between -2% to 2%.
The earnings call shows strong financial performance with revenue and free cash flow growth, margin expansion, and a significant share repurchase program. The Q&A highlights optimism about new solutions and customer engagement, with minimal perceived risks. The raised revenue guidance and continued margin improvements further support a positive sentiment. Despite some unclear responses, the overall outlook and financial health suggest a positive stock price movement, especially given the small-cap nature of the company.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
