Viant Technology Inc. (DSP)

Executive Summary / Key Takeaways

• Convergence of Three Catalysts: Viant Technology is simultaneously benefiting from the $60 billion linear TV-to-CTV migration, cookie deprecation driving demand for privacy-compliant addressability, and AI automation that expands its addressable market beyond mid-market agencies to major advertisers and 10 million SMBs—creating a rare triple-tailwind inflection point.

• Masked Momentum: Q3 2025's reported 7% revenue growth significantly understates the business's true strength; pro forma growth of 19% after excluding political headwinds and a seasonal advertiser loss reveals accelerating underlying demand, with contribution ex-TAC growing even faster at 22% on the same basis.

• Objective Buy-Side Moat: As the only independent, buy-side-only DSP without publisher conflicts, Viant's Household ID (covering 95% of US households across 80% of biddable inventory) and ViantAI platform (automating 85% of spend) position it as the transparent alternative to walled gardens, a differentiation increasingly valued by major advertisers like Molson Coors (TAP).

• 2026 Step-Up Story: With political headwinds clearing, a flagship Molson Coors partnership launching in Q2 2026, and a pipeline exceeding $250 million in potential incremental ad spend from major US advertisers, management anticipates accelerating growth and significant EBITDA margin expansion next year.

• Execution vs. Scale Risk: The primary investment tension lies between Viant's proven ability to grow contribution ex-TAC per employee (+7% YoY) and control OpEx (organic growth of just 7% ex-acquisitions) versus its scale disadvantage versus The Trade Desk and Google , which could pressure take rates if competition intensifies for premium CTV inventory.

Setting the Scene: The DSP That Learned to Thrive on Disruption

Viant Technology, founded in 1999 and incorporated in Delaware in 2020, carries a history that explains its resilience. The company's early acquisition of Myspace in 2011 brought an FTC consent order that remains in effect until 2032—a constraint that forced Viant to develop robust privacy compliance capabilities long before GDPR made it fashionable. This regulatory scar tissue has become a strategic asset as the industry grapples with cookie deprecation and state privacy laws.

Viant operates a cloud-based demand-side platform that enables marketers and agencies to plan, buy, and measure digital advertising across channels including CTV, streaming audio, digital out-of-home, mobile, and desktop. Revenue comes primarily from platform fees as a percentage of ad spend, with additional charges for data management and advanced reporting. This model positions Viant at the center of programmatic advertising's most profound structural shift: the $60 billion migration of linear TV ad spend to CTV, where campaigns are addressable and measurable rather than blind reach plays.

The industry structure favors independent players at this moment. Walled gardens like Google and Amazon (AMZN) optimize for their own inventory, creating an objectivity gap that Viant exploits. As CEO Tim Vanderhook emphasizes, "Viant is the only objective buy-side player"—a claim that resonates with advertisers increasingly skeptical of platforms that grade their own homework. This positioning, combined with Viant's emergence as a JOBS Act-qualified company with reduced reporting requirements until 2026, gives it strategic flexibility to invest aggressively in innovation while larger competitors face regulatory scrutiny.

Technology, Products, and Strategic Differentiation

Household ID: The Privacy-First Identifier

Viant's patented Household ID identifies approximately 95% of US households and is available across roughly 80% of biddable ad inventory—four times the coverage of key competing identifiers that reach only about 20% of inventory. This matters because it solves the addressability crisis created by cookie deprecation without relying on fragile device-level signals. Advertiser spend linked to Household ID surged 33% year-over-year in Q1 2025 and increased over 50% for the full year 2024, with revenue and contribution ex-TAC from this solution growing more than eight times over the last two years.

The "so what" is pricing power. In a world where targeting precision is collapsing for most advertisers, Viant's household-level frequency capping and measurement command premium CPMs. This translates directly to gross margin expansion, with contribution ex-TAC growing faster than revenue as high-value addressable inventory commands better economics. CFO Larry Madden's commentary that this growth "more accurately reflects the true strength of our business" points to a durable competitive moat that competitors cannot quickly replicate.

ViantAI: Automation as Market Expansion

The ViantAI product suite represents a fundamental reimagining of campaign management. AI Bidding, introduced eighteen months before Q4 2024, now automates 85% of ad spend on the platform, with contribution ex-TAC from this capability more than doubling year-over-year in Q3 2025. The latest AI Bidding 3.0 model delivers up to 46% reductions in media costs—a staggering efficiency gain that directly improves advertiser ROI and locks in platform loyalty.

AI Planning, launched in Q3 2024, can build enterprise-level campaigns in seconds, creating "drastic improvement in workflow" and "return on ad spend improvement" according to management. AI Measurement and Analysis, launched in early 2025, provides on-demand insights through a chat interface, acting as a "trusted copilot." The upcoming AI Decisioning, set to launch at year-end 2025, will combine all phases with dynamic spend deployment, enabling Viant to target the 10 million small businesses, performance advertisers, and direct-to-consumer e-commerce companies that represent over half of the $200 billion US search and social ad market.

This matters because it transforms Viant's addressable market. Historically strong in the mid-market, ViantAI allows opportunistic expansion upmarket to major advertisers like Molson Coors while simultaneously moving downmarket to performance advertisers needing a "do it for me" solution. As Chris Vanderhook notes, "With ViantAI, there are no switching costs. If you can chat, ViantAI can handle the rest." This product-led go-to-market strategy is expected to deliver faster growth and higher margins than early SMB-focused entrants.

Iris TV and Locker: Building the Identity Graph

The November 2024 acquisition of Iris TV introduced IRIS_ID, an industry-leading content identifier for CTV that allows video-level contextual targeting. IRIS_ID's presence across CTV bid requests more than doubled since acquisition through Q1 2025, and management expects to achieve 50% CTV bid stream penetration in the coming months. Advertisers using IRIS_ID see an average 48% increase in conversion rates versus control groups—a performance lift that justifies premium pricing.

The February 2025 acquisition of Locker, a data collaboration platform, streamlines first-party data activation for publishers. This strengthens Viant's position against walled gardens by enabling publishers to integrate once and seamlessly enable all alternative ID partners. The strategic implication is a reinforcing flywheel: more publishers adopt IRIS_ID and Household ID, which attracts more advertiser spend, which funds further platform development.

Financial Performance & Segment Dynamics

Q3 2025: Headwinds Masking Strength

Viant reported Q3 2025 revenue of $85.58 million, up 7% year-over-year, and contribution ex-TAC of $52.99 million, up 12%. These modest headline figures obscure the underlying momentum. Excluding the impact of lapping 2024's political ad spend and the departure of a seasonal advertiser due to a corporate merger, pro forma revenue grew 19% and contribution ex-TAC grew 22%—rates that signal a business accelerating into a favorable 2026 setup.

Adjusted EBITDA of $16.03 million grew 9% year-over-year, with margins expanding to 30.2% of contribution ex-TAC. The "why" behind these numbers reveals operational leverage: platform operations expense increased only 3% despite volume growth, while sales and marketing expense rose 29% to support future customer acquisition. Technology and development expense jumped 37%, reflecting strategic investments in Iris TV and Locker, but excluding these acquisitions, organic non-GAAP operating expenses increased a modest 7% year-over-year and decreased 1% sequentially.

This expense discipline matters because it demonstrates that Viant can grow contribution ex-TAC per employee (+7% year-over-year) while maintaining lean operations. As the company laps acquisition-related costs in 2026, this operating leverage should drive significant EBITDA margin expansion, with management targeting 27% margins for full-year 2025 (nearly 200 basis points improvement) and "significant" expansion in 2026.

CTV: The Growth Engine

Connected TV ad spend reached a new all-time high in Q3 2025, representing 46% of total advertiser spend on the platform. Year-to-date, approximately half of all CTV ad spend has been directed through Viant's Direct Access premium publisher program, which offers efficient, targetable, and measurable access to inventory from Disney+ (DIS), Paramount+ (PARA), NBCU (CMCSA), Tubi (FOXA), and Samsung. This matters because Direct Access inventory commands higher margins than exchange-bought inventory, and the 70% growth in Direct Access CTV ad spend in 2024 outpaced overall CTV growth of over 40%.

Management sees a "multiyear tailwind" as $60 billion in US ad spend has yet to transition out of linear TV. With live sports monetization accelerating across CTV, the total addressable market could grow from $30 billion to $90 billion, potentially exceeding that with diversions from search and social budgets. For Viant, which is growing CTV spend at nearly double the industry rate, this represents a multi-year revenue driver that improves overall mix and margins.

Customer Quality Improving

On a trailing twelve-month basis through Q3 2025, the number of customers generating over $1 million in contribution ex-TAC increased 39% year-over-year. Contribution ex-TAC across the top 100 customers grew 18% year-over-year. This customer quality improvement matters because large customers have lower churn and higher lifetime value, reducing revenue volatility and improving predictability. The Molson Coors multiyear partnership, announced in Q3 2025 and launching in 2026, exemplifies Viant's ability to win enterprise-grade accounts that previously defaulted to The Trade Desk or Google.

Outlook, Management Guidance, and Execution Risk

2025: Margin Expansion in Progress

Management's Q4 2025 guidance implies full-year revenue and contribution ex-TAC growth of 17%, with Adjusted EBITDA growth of 25% and margins reaching 27%. The midpoint of Q4 guidance assumes record performance across all key metrics, with revenue of $101.5-104.5 million (+14% YoY) and contribution ex-TAC of $62-64 million (+16% YoY). Adjusted EBITDA is projected at $22.5-23.5 million (+35% YoY), representing 37% of contribution ex-TAC at the midpoint—over 500 basis points of margin improvement versus the prior year period.

The "why" behind this acceleration is the clearing of temporary headwinds. Political ad spend created a 600 basis point drag on revenue growth and 500 basis points on contribution ex-TAC growth in Q4. Excluding this impact, pro forma growth would be 20% for revenue and 21% for contribution ex-TAC. As CFO Larry Madden notes, "the political ad spend headwind will no longer be a factor starting in 2026."

2026: The Step-Up Year

Management anticipates accelerating year-over-year growth in revenue and contribution ex-TAC throughout 2026, driven by new client onboarding. Molson Coors spending will commence in Q1 2026 but ramp significantly in Q2 and beyond. The $250 million pipeline of potential incremental ad spend from major US advertisers, combined with the 10 million SMB opportunity that AI Decisioning will address, creates a multi-pronged growth catalyst.

Non-GAAP operating expenses are expected to grow at a lower rate in 2026 than in 2025, as the company will have lapped nearly all OpEx contributions from the Iris TV and Locker acquisitions. This combination of accelerating revenue and decelerating expense growth should drive "significant EBITDA margin expansion" in 2026, according to Madden.

The execution risk lies in delivering AI Decisioning by year-end 2025 and successfully penetrating the SMB market. While ViantAI's product-led approach requires less personnel investment than traditional sales models, competing with Google's Performance Max and Meta's (META) Advantage+ will demand continuous innovation. As Tim Vanderhook states, AI Decisioning "will compete with Google's PMax and Meta's Advantage+ solutions, but will direct spend to demand generation channels like CTV and streaming audio that drive incremental lift," positioning Viant as the transparent alternative to black-box algorithms.

Risks and Asymmetries

Scale Disadvantage vs. Walled Gardens

Viant's primary vulnerability is its scale relative to The Trade Desk and Google . While Viant's Household ID covers four times the inventory of competing identifiers, Google's DV360 and The Trade Desk's larger customer bases secure more favorable inventory pricing and access. This could pressure Viant's take rates if competition intensifies for premium CTV inventory. The severity is medium-high: if Google antitrust remedies open YouTube inventory to all DSPs equally, Viant benefits, but if Google uses its scale to maintain pricing advantages, Viant's margin expansion could stall.

Agency Concentration and Customer Churn

The company receives a significant portion of revenue from a select number of advertising agency holding companies. While management notes that the top 100 customers are growing 18% year-over-year, the loss of a major agency relationship could create a 20% revenue headwind. This risk is mitigated by Viant's diversification into direct advertiser relationships (Molson Coors) and the SMB market, but remains a key monitoring point.

Privacy and Regulatory Compliance

The FTC consent order governing Myspace's historical privacy practices extends until August 2032, creating ongoing compliance costs and potential operational restrictions. More broadly, state privacy laws like California's Delete Act (effective August 2026) and potential federal legislation could require costly platform modifications. While Viant's privacy-first architecture positions it better than cookie-dependent competitors, regulatory risk remains a structural cost that walled gardens can more easily absorb.

AI Execution and Market Penetration

The success of AI Decisioning, scheduled for year-end 2025 launch, is critical for capturing the SMB market. If the product fails to deliver the promised "do it for me" simplicity, Viant's expansion beyond mid-market agencies will stall. Conversely, successful execution could unlock over half of the $200 billion search and social ad market, representing a revenue opportunity multiple times larger than Viant's current scale.

Upside Asymmetry: Antitrust and Market Share Gains

The district court ruling affirming Google (GOOGL) as a monopolist in ad tech could force divestiture of DoubleClick assets and Google AdX, potentially leveling the playing field for independent DSPs. If YouTube inventory becomes truly accessible, Viant's addressability solutions and AI capabilities could capture meaningful share from advertisers seeking alternatives to Google's black-box algorithms. This represents a low-probability but high-impact upside scenario that isn't priced into the stock.

Valuation Context

At $11.69 per share, Viant trades at 2.28 times sales and 116.8 times earnings, a valuation that reflects both its emerging growth status and execution risk. The P/E multiple appears elevated due to the company's emerging growth company status and strategic investments, but cash flow metrics tell a more nuanced story: price-to-operating cash flow of 20.55x and price-to-free cash flow of 40.43x suggest the market is pricing in meaningful growth acceleration.

Relative to peers, Viant trades at a significant discount to The Trade Desk (TTD) (6.42x sales, 41.65x P/E) but at a premium to PubMatic (PUBM) (1.46x sales, unprofitable) and Criteo (CRTO) (0.52x sales, 6.89x P/E). This positioning reflects Viant's smaller scale but superior growth profile and profitability. The company's balance sheet provides a valuation floor: $161.3 million in cash and cash equivalents, $74.1 million in undrawn revolver capacity, and minimal debt (debt-to-equity of 0.09) create a net cash position that supports strategic investments and share repurchases.

Management's $50 million stock repurchase program, increased by another $50 million in May 2025, with $40.4 million remaining as of September 30, 2025, signals confidence in long-term value. The company has repurchased 4.8 million shares at an average price of $12.42 since program inception, suggesting management views current levels as attractive. With free cash flow generation of $49.27 million over the trailing twelve months, Viant has the financial flexibility to fund both growth investments and shareholder returns.

The key valuation question is whether Viant can grow into its multiple by executing on the 2026 catalysts. If the company delivers the implied 22% pro forma revenue growth and expands EBITDA margins toward the 30%+ range, the current valuation would appear reasonable for a high-growth, high-margin ad tech platform. Failure to scale the SMB market or maintain CTV growth would leave the stock vulnerable to multiple compression.

Conclusion

Viant Technology stands at an inflection point where three powerful trends converge: the $60 billion linear TV-to-CTV migration, cookie deprecation driving demand for privacy-compliant addressability, and AI automation that expands its market from mid-market agencies to major advertisers and millions of SMBs. The company's Q3 2025 results, masked by temporary political headwinds, reveal underlying pro forma growth of 19-22% that better reflects its true momentum.

The strategic positioning as the only objective, buy-side-only DSP with superior addressability coverage (Household ID) and AI-driven automation (ViantAI) creates a differentiated value proposition that resonates with advertisers seeking transparency in an era of walled garden opacity. The Molson Coors partnership and $250 million pipeline of major advertiser opportunities signal successful upmarket expansion, while AI Decisioning's year-end launch could unlock the massive SMB market.

The primary investment tension lies between Viant's demonstrated ability to drive operational leverage (contribution ex-TAC per employee up 7%, organic OpEx growth of just 7%) and its scale disadvantage versus The Trade Desk and Google. If Viant can execute on its 2026 catalysts—clearing political headwinds, ramping Molson Coors, and successfully launching AI Decisioning—the stock's premium valuation could prove justified by accelerating growth and margin expansion. The downside risk is execution failure or intensified competition that pressures take rates and limits market share gains.

For investors, the critical variables to monitor are Viant's ability to maintain CTV growth rates above industry averages, the successful penetration of the SMB market via AI Decisioning, and the company's capacity to compete on inventory access and pricing with larger DSPs. If these elements align, Viant's transformation from a mid-market player to a comprehensive AI-driven advertising platform could drive meaningful outperformance as the ad tech landscape reshuffles toward privacy, transparency, and automation.