Overview

Viant Technology Inc. (NASDAQ:DSP) is a leading advertising technology company that operates a cloud-based demand-side platform (DSP) enabling the programmatic purchase of advertising. The company has demonstrated impressive financial performance, reporting annual revenue of $222,934,000, annual net income of -$3,443,000, annual operating cash flow of $37,752,000, and annual free cash flow of $24,276,000.

Recent Developments

In the latest quarter, Viant reported strong results, with revenue growing 28% year-over-year to $53,393,000. The company's contribution ex-TAC, a key profitability metric, increased 22% to $34,121,000, driving adjusted EBITDA of $3,075,000 in the quarter. This momentum has carried over from the second half of the previous year, as Viant continues to capitalize on the growing demand for programmatic advertising.

Business Overview

One of the key drivers of Viant's success has been its focus on connected TV (CTV) and streaming audio channels. In the first quarter, CTV grew over 50% year-over-year and represented more than 40% of total spend on the platform, while streaming audio achieved record spend levels, nearly doubling year-over-year and accounting for 10% of total spend. Viant's patented Household ID technology has been a significant differentiator, enabling its customers to achieve superior campaign performance across these high-engagement, cookieless channels.

Viant's vision for "autonomous advertising" is resonating with both existing and prospective customers. The company's AI-powered features, such as AI Bid Optimizer and Chat with Data, are driving increased efficiency and higher return on ad spend for its customers, leading to greater platform adoption and consolidation of ad spend. Viant's pipeline of larger customers remains promising, with the company onboarding new customers who are quickly embracing its newer product offerings.

The company's Direct Access program, which connects customers directly with premium CTV inventory from partners like Disney and Paramount, has also been a notable driver of CTV spend on the platform. Over 50% of Viant's CTV spend in the first quarter was through the Direct Access program, up from over 40% in the previous quarter. This program is helping drive lower media costs and higher win rates for advertisers, ultimately delivering better return on ad spend and improved campaign performance.

Viant's focus on innovation and its ability to adapt to the evolving programmatic landscape have been key to its success. The company's investments in its platform and technology have positioned it well to continue driving growth and profitability.

Outlook

For the second quarter of 2023, Viant expects revenue in the range of $63.5 million to $66.5 million, representing a year-over-year increase of 14% and a quarter-over-quarter increase of 22% at the midpoint. Contribution ex-TAC is expected to be in the range of $40 million to $42 million, representing year-over-year growth of 22% and quarter-over-quarter growth of 20% at the midpoint.

Looking ahead, Viant expects to continue outpacing the overall programmatic market, driven by the growing adoption of its Household ID technology and the successful rollout of its AI-based products and features. The company's strong customer relationships, innovative platform, and focus on delivering measurable results for its clients position it well to capture a larger share of the rapidly evolving programmatic advertising market.

Liquidity

Viant's financial position remains robust, with $206 million in cash and cash equivalents, $227 million in positive working capital, and no debt as of the end of the first quarter. The company also has access to a $75 million undrawn credit facility, providing ample liquidity to fund its growth initiatives and strategic investments.

The company's recent announcement of a $50 million share repurchase program further demonstrates its commitment to enhancing shareholder value and confidence in the long-term prospects of the business. Viant's strong balance sheet and cash flow generation capabilities give it the flexibility to invest in product development, sales and marketing, and strategic acquisitions to drive continued growth and market share expansion.

Conclusion

Viant's success in the programmatic advertising market is underpinned by its innovative technology, strong customer relationships, and the growing demand for more efficient and effective advertising solutions. As the industry continues to evolve, with the ongoing deprecation of third-party cookies and the increasing importance of cookieless identifiers, Viant's Household ID technology and AI-powered platform position it as a compelling partner for advertisers seeking to maximize the return on their advertising investments.

Overall, Viant's impressive financial performance, strategic initiatives, and strong market positioning make it a compelling investment opportunity in the rapidly evolving programmatic advertising landscape.