PART I [Business](index=6&type=section&id=Item%201.%20Business) Viant Technology Inc. provides a cloud-based demand-side platform (DSP) for programmatic advertising, leveraging a proprietary people-based data approach to reduce reliance on third-party cookies - Viant's core product is a cloud-based demand-side platform (DSP) for programmatic ad buying across omnichannel inventory[23](index=23&type=chunk)[24](index=24&type=chunk) - The platform utilizes a proprietary Household ID and identity graph, offering a people-based data approach as an alternative to cookie-based tracking, a strategic advantage given Google's planned cookie deprecation by end of 2024[29](index=29&type=chunk) Key Financial Performance (2021-2023) | Fiscal Year Ended | Revenue (in millions) | Net Loss (in millions) | Adjusted EBITDA (in millions) | | :--- | :--- | :--- | :--- | | Dec 31, 2023 | $222.9 | $(9.9) | $29.1 | | Dec 31, 2022 | $197.2 | $(48.1) | $(6.1) | | Dec 31, 2021 | $224.1 | $(37.6) | $37.1 | - The U.S. programmatic advertising market is projected to grow from **$121.8 billion** in 2022 to **$178.3 billion** in 2025, a **14% CAGR**, indicating strong market tailwinds[30](index=30&type=chunk)[33](index=33&type=chunk) - As of December 31, 2023, the company held **37 issued patents** and **9 pending patent applications** for proprietary products and technologies[48](index=48&type=chunk)[80](index=80&type=chunk) [Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks across business operations, data privacy, intellectual property, and capital structure, including platform enhancement, evolving regulations, and cybersecurity threats - Business and operational risks include dependence on platform enhancement, the evolving market shift away from cookies, intense competition, long sales cycles, and macroeconomic impacts on advertising budgets[86](index=86&type=chunk)[87](index=87&type=chunk)[90](index=90&type=chunk)[92](index=92&type=chunk)[98](index=98&type=chunk) - Data privacy and technology risks stem from stringent, evolving laws (e.g., CCPA, GDPR) and changes by tech giants like Google and Apple, which could significantly impact data availability and platform operations[142](index=142&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) - Cybersecurity risks include potential cyber-attacks on IT systems and data, which could result in operational disruption, litigation, regulatory fines, and reputational damage[168](index=168&type=chunk)[169](index=169&type=chunk) - Capital structure and tax risks involve dependence on distributions from Viant Technology LLC, substantial payments under the Tax Receivable Agreement (TRA), and the implications of its dual-class stock structure and 'controlled company' status[189](index=189&type=chunk)[192](index=192&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk) [Unresolved Staff Comments](index=46&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[241](index=241&type=chunk) [Cybersecurity](index=46&type=section&id=Item%201C.%20Cybersecurity) Viant maintains a cybersecurity risk management program, overseen by the Board's Audit Committee, with no identified material threats to its business - The company has a cybersecurity risk management program based on the CIS Critical Security Controls Version 8 framework to protect critical systems and information[242](index=242&type=chunk)[243](index=243&type=chunk) - Cybersecurity governance is overseen by the Board's Audit Committee, with the Chief Information Officer (CIO) having primary management responsibility[246](index=246&type=chunk)[248](index=248&type=chunk) - As of the report date, no cybersecurity threats have been identified that materially affect or are reasonably likely to materially affect operations, business strategy, or financial condition[245](index=245&type=chunk) [Properties](index=47&type=section&id=Item%202.%20Properties) The company's headquarters are in Irvine, California, leased until May 2031, with 9 additional leased office spaces and no owned real property - The company's headquarters are in Irvine, CA, leased for approximately **56,000 square feet** until May 2031[250](index=250&type=chunk) - Viant leases **9 other office spaces** in the U.S. and does not own any real property[250](index=250&type=chunk) [Legal Proceedings](index=47&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings but is not party to any litigation expected to have a material adverse effect - The company is not currently a party to any litigation expected to have a material adverse effect on its business[251](index=251&type=chunk) [Mine Safety Disclosures](index=47&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[252](index=252&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=48&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Viant's Class A common stock trades on Nasdaq under "DSP", with no public market for Class B, and the company has not paid cash dividends - The company's Class A common stock trades on Nasdaq under the symbol **"DSP"**, with no public market for Class B common stock[255](index=255&type=chunk) - Viant has never paid cash dividends and has no current plans to do so[257](index=257&type=chunk) - There were no issuer purchases of equity securities during the reporting period[258](index=258&type=chunk) [Reserved](index=49&type=section&id=Item%206.%20Reserved.) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=50&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In fiscal 2023, Viant achieved **13.1% revenue growth** to **$222.9 million** and a significant improvement in net loss and Adjusted EBITDA, driven by increased advertiser spend and cost controls, maintaining strong liquidity Financial Highlights (FY 2023 vs. FY 2022) | Metric | FY 2023 (in millions) | FY 2022 (in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $222.9 | $197.2 | 13.1% | | Gross Profit | $102.5 | $80.4 | 27.4% | | Contribution ex-TAC | $143.4 | $124.7 | 15.0% | | Net Loss | $(9.9) | $(48.1) | 79.3% improvement | | Adjusted EBITDA | $29.1 | $(6.1) | 574.6% improvement | - Revenue growth in 2023 was primarily driven by a **57% increase** from marketers in the retail and public services industry verticals[294](index=294&type=chunk) - Sales and marketing expenses decreased by **21%** in 2023, primarily due to lower personnel and advertising costs[298](index=298&type=chunk) - The company maintains strong liquidity with **$216.5 million** in cash and cash equivalents and **$231.6 million** in working capital as of December 31, 2023, with no outstanding balance on its **$75.0 million** revolving credit facility[359](index=359&type=chunk)[367](index=367&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=78&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate exposure on its variable-rate credit facility, though no outstanding balance existed as of December 31, 2023 - The company is exposed to interest rate risk through its variable-rate revolving credit facility[401](index=401&type=chunk) - As of December 31, 2023, there was no outstanding balance on the credit facility, eliminating market risk from interest rate changes at that time[401](index=401&type=chunk) [Financial Statements and Supplementary Data](index=79&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for fiscal years 2021-2023, including statements of operations, balance sheets, equity, cash flows, and notes - The financial statements were audited by Deloitte & Touche LLP, which issued an unqualified opinion[405](index=405&type=chunk) Consolidated Statements of Operations Summary (in thousands) | Year Ended Dec 31 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Revenue** | **$222,934** | **$197,168** | **$224,127** | | Loss from operations | $(18,296) | $(49,260) | $(42,795) | | **Net loss** | **$(9,943)** | **$(48,089)** | **$(37,609)** | | Net loss attributable to Viant | $(3,443) | $(11,913) | $(7,742) | | Loss per share (basic & diluted) | $(0.23) | $(0.84) | $(0.63) | Consolidated Balance Sheets Summary (in thousands) | As of Dec 31 | 2023 | 2022 | | :--- | :--- | :--- | | **Total Assets** | **$404,911** | **$377,883** | | Cash and cash equivalents | $216,458 | $206,573 | | **Total Liabilities** | **$130,522** | **$112,115** | | **Total Equity** | **$274,389** | **$265,768** | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=103&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting and financial disclosure - None[559](index=559&type=chunk) [Controls and Procedures](index=103&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with no material changes reported - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2023[560](index=560&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2023, based on the COSO 2013 framework[563](index=563&type=chunk) - The Annual Report omits an auditor's attestation report on internal control over financial reporting due to exemptions for emerging growth companies and non-accelerated filers[564](index=564&type=chunk) [Other Information](index=104&type=section&id=Item%209B.%20Other%20Information) The company reports no other material information and no director or officer adopted or terminated a Rule 10b5-1 trading arrangement in Q4 2023 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended December 31, 2023[568](index=568&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=104&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[569](index=569&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=105&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2024 Proxy Statement - Required information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders[572](index=572&type=chunk) [Executive Compensation](index=105&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the 2024 Proxy Statement - Required information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders[574](index=574&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=105&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership by beneficial owners and management is incorporated by reference from the 2024 Proxy Statement - Required information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders[575](index=575&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=105&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information on certain relationships, related party transactions, and director independence is incorporated by reference from the 2024 Proxy Statement - Required information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders[576](index=576&type=chunk) [Principal Accountant Fees and Services](index=105&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the 2024 Proxy Statement - Required information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders[577](index=577&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=106&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists exhibits filed with the Annual Report, with financial statement schedules omitted as information is included elsewhere - Financial statement schedules are omitted as they are not applicable or the information is already included in the financial statements[580](index=580&type=chunk) - The Exhibit Index lists all documents filed, including corporate governance documents, material contracts, and compensatory plans[581](index=581&type=chunk) [Form 10-K Summary](index=108&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports that there is no Form 10-K summary - None[583](index=583&type=chunk)

IRVINE, Calif.--(BUSINESS WIRE)--Viant Technology Inc. (NASDAQ: DSP), the leading people-based advertising technology company, today released its first Sustainability Report for the calendar year 2023. The Viant Sustainability Report recaps Viant’s efforts to decarbonize digital advertising last year, fostering better measurement, improved efficiency and facilitating investment in renewable energy. Viant also achieved a significant milestone by attaining carbon neutrality for the calendar year 2023. Vian ...

COSTA MESA, Calif., Feb. 13, 2024 (GLOBE NEWSWIRE) -- El Pollo Loco Holdings, Inc. ("El Pollo Loco" or the "Company") (NASDAQ:LOCO) announced today that its Board of Directors has appointed Elizabeth ("Liz") Williams as the Company's new Chief Executive Officer and as a member of its Board of Directors, effective March 11, 2024. Ms. Williams will succeed Maria Hollandsworth, who has served as the Company's interim Chief Executive Officer since November 3, 2023. Ms. Hollandsworth has been appointed as Presid ...

Financial Data and Key Metrics - Revenue for Q3 2023 was $59.6 million, a 22% increase YoY [83] - Contribution ex TAC for Q3 was $39.1 million, also a 22% increase YoY and 16% higher than Q2 [83] - Non-GAAP net income for Q3 was $7.6 million, compared to a non-GAAP net loss of $4.4 million in the prior year period [61] - Adjusted EBITDA for Q3 was $9.7 million, a significant increase from the prior year period [86] - Revenue per employee increased by 32% in Q3, indicating improved organizational efficiency [60] - Q4 2023 revenue is expected to be in the range of $64 million to $67 million, representing a 20% YoY increase at the midpoint [62] Business Line Data and Key Metrics - Connected TV (CTV) represented more than 1/3 of total ad spend on the platform in Q3, retaining its status as the fastest-growing channel [59] - Over 25% of CTV spend in Q3 was through Direct Access publishers, a figure that continues to grow [81] - Video, including mobile video and CTV, accounted for well over half of the spend on the platform during the quarter [43] - Streaming audio experienced strong double-digit growth in Q3 [85] - Advertiser spend per active customer increased 11% on a trailing 12-month basis [85] Market Data and Key Metrics - The company is benefiting from the ongoing migration of approximately $60 billion of linear television advertising moving into connected TV [28] - The company's Household ID technology is available on over 85% of all ad requests, enabling addressable advertising and attribution in a cookieless environment [36] - The company's Direct Access program is focused on CTV, providing a more cost-efficient direct path to premium inventory [70][81] Company Strategy and Industry Competition - The company is leveraging AI to develop the most advanced DSP in the market, focusing on simplifying and automating the platform to expand its addressable market [37][38] - The company's AI Bid Optimizer solution has seen strong adoption, with over half of customers utilizing it and achieving an average savings of 35% on CPMs [50][51] - The company is focusing on mid-market advertisers, offering best-in-class products supported by industry-leading AI to win larger shares of budgets [28][79] - The company is well-positioned to benefit from Google's deletion of cookies in 2024, with its Household ID technology offering a scalable and proven solution [76] Management Commentary on Operating Environment and Future Outlook - The company sees a number of favorable drivers for the business, including the ongoing shift from linear TV to CTV and the application of AI [28][35] - The company expects to continue its momentum in Q4, benefiting from the stabilization in the U.S. advertising environment [46] - The company believes that the deletion of cookies by Google will accelerate the growth of ad spend flowing through its platform [76] - The company is confident in the sustainability of its progress, driven by the substantial role of AI in enhancing productivity [60] Other Important Information - The company ended Q3 with $203 million in cash and cash equivalents, $227 million of positive working capital, and no debt [87] - The company has access to a $75 million undrawn credit facility, providing a solid financial foundation [87] - The company's Rule of 40 metric was 47% in Q3 and is expected to increase to 52% in Q4 based on the midpoint of guidance [63] Q&A Session Summary Question: Impact of customer count decline and traction with mid-market agencies [3] - The company is focusing on mid-market customers, with solutions around CTV, Direct Access, and measurement driving new customer acquisition and growth [92] Question: Impact of cookie deletion and positioning of the sales force [14] - The company's Household ID technology is well-positioned to handle the signal loss due to cookie deletion, with no disruption expected [11] - The company is discussing the topic with brands and agencies, focusing on measurement solutions to drive customer adoption [14] Question: Monthly progression of the quarter and impact of Middle East conflict on CTV trends [17] - The quarter saw steady growth, with the last month being the biggest, and no significant impact from the Middle East conflict [126] Question: CTV growth potential with Direct Access adoption [127] - Direct Access is expected to continue growing, with over 25% of CTV spend already through the program, driven by financial and operational efficiencies [128] Question: Impact of AI tools on the P&L [107] - AI tools like Bid Optimizer are both revenue drivers and differentiators, helping to win incremental business and increase contribution ex TAC [107] Question: Tailoring go-to-market strategy for novice users [96] - The company is focusing on simplifying the platform and making it more accessible, particularly for mid-market and SMB customers [113] Question: Behavior of Household ID technology with potential IP signal loss [99] - The company's Household ID technology is not tied to IP addresses but to physical household data points, making it resilient to IP signal loss [11]

[Special Note Regarding Forward-Looking Statements](index=3&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section cautions that forward-looking statements are based on current expectations and subject to substantial risks - Forward-looking statements are identified by words such as "may," "will," "should," "intend," or "expect" and relate to future financial performance, business measures, and market trends[10](index=10&type=chunk) - Actual results may differ materially from expectations due to various political, economic, competitive, and regulatory factors, as detailed in the "Risk Factors" section[11](index=11&type=chunk) - The company uses its "Investor Relations" website and executive LinkedIn accounts as primary channels for distributing material information[12](index=12&type=chunk) PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) [A. Condensed Consolidated Statements of Operations](index=4&type=section&id=A.%20Condensed%20Consolidated%20Statements%20of%20Operations) The statements show a significant improvement in net loss driven by increased revenue and reduced operating losses | Metric (in thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Change (%) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $59,585 | $48,830 | 22.0% | $158,528 | $142,659 | 11.1% | | Loss from operations | $(2,819) | $(12,875) | 78.1% | $(19,178) | $(40,054) | 52.1% | | Net loss | $(672) | $(12,426) | 94.6% | $(13,251) | $(40,081) | 66.9% | | Net loss attributable to Viant Technology Inc. | $(526) | $(3,126) | 83.2% | $(4,070) | $(9,719) | 58.1% | | Basic Loss per share | $(0.03) | $(0.22) | 86.4% | $(0.27) | $(0.69) | 60.9% | | Diluted Loss per share | $(0.03) | $(0.22) | 86.4% | $(0.27) | $(0.69) | 60.9% | [B. Condensed Consolidated Balance Sheets](index=5&type=section&id=B.%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a slight increase in total assets and equity, while total liabilities decreased | Metric (in thousands) | As of Sep 30, 2023 | As of Dec 31, 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total assets | $378,488 | $377,883 | $605 | 0.2% | | Total liabilities | $109,800 | $112,115 | $(2,315) | -2.1% | | Total equity | $268,688 | $265,768 | $2,920 | 1.1% | | Cash and cash equivalents | $203,007 | $206,573 | $(3,566) | -1.7% | [C. Condensed Consolidated Statements of Equity](index=6&type=section&id=C.%20Condensed%20Consolidated%20Statements%20of%20Equity) Equity changes were primarily driven by stock-based compensation, net loss, and noncontrolling interest adjustments | Metric (in thousands) | Balance as of Dec 31, 2022 | Balance as of Sep 30, 2023 | Change ($) | | :--- | :--- | :--- | :--- | | Total Equity | $265,768 | $268,688 | $2,920 | | Additional Paid-In Capital | $95,922 | $108,858 | $12,936 | | Accumulated Deficit | $(36,261) | $(42,993) | $(6,732) | | Noncontrolling Interests | $206,520 | $203,983 | $(2,537) | - Stock-based compensation contributed **$24.7 million** to additional paid-in capital for the nine months ended September 30, 2023[21](index=21&type=chunk) [D. Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=D.%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow from operations improved significantly, while investing and financing activities continued to use cash | Cash Flow Activity (in thousands) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $14,503 | $(13,314) | $27,817 | 209.0% | | Net cash used in investing activities | $(9,660) | $(6,425) | $(3,235) | 50.3% | | Net cash used in financing activities | $(8,409) | $(19,076) | $10,667 | 55.9% | | Net decrease in cash and cash equivalents | $(3,566) | $(38,815) | $35,249 | 90.8% | [E. Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=E.%20Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [Note 1 Nature of Operations](index=9&type=section&id=Note%201%20Nature%20of%20Operations) The company operates a demand-side platform for programmatic advertising and functions as a holding company - Viant Technology Inc. operates a cloud-based demand-side platform (DSP) enabling marketers and agencies to centralize planning, buying, and measurement of advertising across various channels[29](index=29&type=chunk) - The company completed its **IPO on February 12, 2021**, and underwent a corporate reorganization, resulting in Class A and Class B common stock[30](index=30&type=chunk)[32](index=32&type=chunk) - Viant Technology Inc. consolidates Viant Technology LLC and records a noncontrolling interest related to Class B units held by Class B stockholders[32](index=32&type=chunk) [Note 2 Basis of Presentation and Summary of Significant Accounting Policies](index=11&type=section&id=Note%202%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) Financial statements are GAAP-compliant, consolidating Viant Technology LLC and using significant management estimates - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP and consolidate Viant Technology LLC, with all intercompany balances and transactions eliminated[33](index=33&type=chunk) - Management's estimates, particularly for revenue recognition, stock-based compensation, and income taxes, are subject to increased judgment due to macroeconomic and geopolitical uncertainties[36](index=36&type=chunk)[37](index=37&type=chunk)[40](index=40&type=chunk) - The company adopted ASU No. 2016-13, Financial Instruments—Credit Losses, at the beginning of fiscal 2023, which **did not have a material impact**[50](index=50&type=chunk) Allowance for Doubtful Accounts (in thousands) | Period | Balance as of | Provision for doubtful accounts | Write-offs, net of recoveries | Balance as of | | :--- | :--- | :--- | :--- | :--- | | Dec 31, 2022 | $1,015 | - | - | - | | Mar 31, 2023 | $1,162 | $22 | $(84) | $1,162 | | Jun 30, 2023 | $1,135 | $27 | $(54) | $1,135 | | Sep 30, 2023 | $1,149 | $14 | - | $1,149 | [Note 3 Revenue](index=14&type=section&id=Note%203%20Revenue) Revenue is primarily recognized at a point-in-time, with most contracts having a duration of less than one year - The **majority of the company's contracts** have an original expected duration of less than one year[51](index=51&type=chunk) Revenue Disaggregation (in thousands) | Revenue Type | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Over-time revenue | $1,019 | $133 | $2,188 | $494 | | Point-in-time revenue | $58,566 | $48,697 | $156,340 | $142,165 | | Total revenue | $59,585 | $48,830 | $158,528 | $142,659 | [Note 4 Property, Equipment, and Software, Net](index=15&type=section&id=Note%204%20Property,%20Equipment,%20and%20Software,%20Net) Net property, equipment, and software increased due to investments in capitalized software development costs Property, Equipment, and Software, Net (in thousands) | Asset Class | As of Sep 30, 2023 | As of Dec 31, 2022 | | :--- | :--- | :--- | | Capitalized software development costs | $86,617 | $72,988 | | Total property, equipment, and software, net | $27,180 | $23,106 | Depreciation Expense (in thousands) | Expense Category | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Platform operations | $3,147 | $2,510 | $8,769 | $7,219 | | Total Depreciation | $3,678 | $3,089 | $10,367 | $8,905 | [Note 5 Leases](index=15&type=section&id=Note%205%20Leases) The company holds operating leases for office space with total lease costs increasing year-over-year - As of September 30, 2023, operating leases had a weighted-average remaining lease term of **approximately seven years** and a weighted-average incremental borrowing rate of **3.5%**[55](index=55&type=chunk) Total Lease Cost (in thousands) | Period | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Total lease cost | $1,502 | $1,279 | $4,273 | $3,700 | Future Minimum Lease Payments (in thousands) | Year | As of Sep 30, 2023 | | :--- | :--- | | Remainder of 2023 | $1,260 | | 2024 | $4,481 | | 2025 | $4,359 | | 2026 | $4,291 | | 2027 | $4,216 | | Thereafter | $10,934 | | Total undiscounted future lease payments | $29,541 | [Note 6 Intangible Assets, Net](index=16&type=section&id=Note%206%20Intangible%20Assets,%20Net) Net intangible assets decreased due to ongoing amortization of customer relationships and trademarks Intangible Assets, Net (in thousands) | Asset Class | As of Sep 30, 2023 (Net Carrying Amount) | As of Dec 31, 2022 (Net Carrying Amount) | | :--- | :--- | :--- | | Developed technology | $0 | $58 | | Customer relationships | $110 | $356 | | Trademarks/tradenames | $193 | $253 | | Total | $303 | $667 | Amortization of Intangible Assets (in thousands) | Period | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Total | $102 | $277 | $364 | $841 | Estimated Future Amortization of Intangible Assets (in thousands) | Year | As of Sep 30, 2023 | | :--- | :--- | | Remainder of 2023 | $103 | | 2024 | $107 | | 2025 | $80 | | 2026 | $13 | | Total | $303 | [Note 7 Accrued Liabilities](index=17&type=section&id=Note%207%20Accrued%20Liabilities) Total accrued liabilities remained stable, with accrued traffic acquisition costs as the largest component Accrued Liabilities (in thousands) | Accrued Liability | As of Sep 30, 2023 | As of Dec 31, 2022 | | :--- | :--- | :--- | | Accrued traffic acquisition costs | $29,332 | $29,631 | | Other accrued liabilities | $5,837 | $5,432 | | Total accrued liabilities | $35,169 | $35,063 | [Note 8 Revolving Credit Facility](index=17&type=section&id=Note%208%20Revolving%20Credit%20Facility) The company increased its revolving credit facility to $75 million and extended its maturity to April 2028 - On April 4, 2023, the company amended its Loan Agreement, increasing the revolving credit facility borrowing capacity from $40.0 million to **$75.0 million** and extending the maturity date to **April 4, 2028**[62](index=62&type=chunk) - As of September 30, 2023, there was **no outstanding balance** under the Amended Loan Agreement, and the company was in compliance with all covenants[64](index=64&type=chunk)[65](index=65&type=chunk) [Note 9 Stock-Based Compensation](index=19&type=section&id=Note%209%20Stock-Based%20Compensation) Stock-based compensation expense increased, with significant unrecognized compensation to be recognized over two years - As of September 30, 2023, unrecognized stock-based compensation for RSUs was approximately **$23.0 million**, and for nonqualified stock options was approximately **$12.8 million**, both expected to be recognized over a weighted-average period of 2.0 years[69](index=69&type=chunk)[71](index=71&type=chunk) Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Platform operations | $1,171 | $1,233 | $3,187 | $3,622 | | Sales and marketing | $2,588 | $2,324 | $7,620 | $6,929 | | Technology and development | $1,529 | $1,430 | $4,363 | $4,024 | | General and administrative | $3,446 | $2,724 | $9,565 | $7,280 | | Total | $8,734 | $7,711 | $24,735 | $21,855 | Nonqualified Stock Option Valuation Assumptions | Assumption | Three and Nine Months Ended Sep 30, 2023 | Three and Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Risk free interest rate | 3.8% - 4.3% | 1.4% - 2.0% | | Expected volatility | 75.8% - 81.5% | 61.5% - 62.7% | | Expected term (in years) | 6.0 - 6.1 | 5.9 - 6.0 | [Note 10 Income Taxes and Tax Receivable Agreement](index=21&type=section&id=Note%2010%20Income%20Taxes%20and%20Tax%20Receivable%20Agreement) The company recognized a minimal income tax expense and maintains a full valuation allowance against deferred tax assets - The company recognized an income tax expense of **$0.2 million** for the three and nine months ended September 30, 2023, with effective tax rates of **(36.9)%** and **(1.4)%** respectively[78](index=78&type=chunk) - A **full valuation allowance** has been established against deferred tax assets as of September 30, 2023, as realization was not more likely than not[79](index=79&type=chunk) - **No liability related to the Tax Receivable Agreement (TRA) has been recorded**, with a total unrecorded TRA liability of approximately **$10.3 million** as of September 30, 2023[80](index=80&type=chunk) [Note 11 Loss Per Share](index=23&type=section&id=Note%2011%20Loss%20Per%20Share) Net loss per share for Class A common stock improved significantly, with several equity instruments being anti-dilutive - Anti-dilutive shares excluded from diluted loss per share calculation for the nine months ended September 30, 2023, included **3,944 thousand restricted stock units**, **5,775 thousand nonqualified stock options**, and **47,082 thousand shares of Class B common stock**[84](index=84&type=chunk) Loss Per Share of Class A Common Stock | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Basic Loss per share | $(0.03) | $(0.22) | $(0.27) | $(0.69) | | Diluted Loss per share | $(0.03) | $(0.22) | $(0.27) | $(0.69) | [Note 12 Noncontrolling Interests](index=23&type=section&id=Note%2012%20Noncontrolling%20Interests) The company consolidates Viant Technology LLC and reports a 75.2% noncontrolling interest as of September 30, 2023 - Changes in the company's ownership interest in Viant Technology LLC, while retaining control, are accounted for as **equity transactions**[85](index=85&type=chunk) Ownership of Viant Technology LLC | Owner | Units Owned (Sep 30, 2023) | Ownership Percentage (Sep 30, 2023) | Units Owned (Dec 31, 2022) | Ownership Percentage (Dec 31, 2022) | | :--- | :--- | :--- | :--- | :--- | | Viant Technology Inc. | 15,541,093 | 24.8% | 14,643,798 | 23.7% | | Noncontrolling interests | 47,082,260 | 75.2% | 47,082,260 | 76.3% | | Total | 62,623,353 | 100.0% | 61,726,058 | 100.0% | [Note 13 Commitments and Contingencies](index=24&type=section&id=Note%2013%20Commitments%20and%20Contingencies) The company has non-cancelable lease and hosting commitments and is subject to ordinary course legal proceedings - As of September 30, 2023, non-cancelable operating lease commitments for office space were recorded as operating lease liabilities[88](index=88&type=chunk) - The company is subject to various legal proceedings and claims, but management believes **none will have a material effect** on its business or financial condition[90](index=90&type=chunk) Estimated Hosting Commitments (in thousands) | Year | Estimated Obligation | | :--- | :--- | | Remainder of 2023 | $3,100 | | 2024 | $7,000 | | 2025 | $5,700 | | 2026 | $1,300 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes financial performance, highlighting revenue growth, improved profitability, and key business factors [Overview](index=25&type=section&id=Overview) The company operates a cloud-based DSP, generating revenue from platform fees, with recent results showing strong growth - Viant operates a cloud-based demand-side platform (DSP) that enables programmatic advertising across channels like desktop, mobile, and connected TV[93](index=93&type=chunk)[94](index=94&type=chunk) - The DSP offers self-service options, customized audience segments, and advanced reporting to improve return on advertising spend (ROAS)[95](index=95&type=chunk) - Revenue is generated through platform fees (percentage of spend or fixed CPM) and service fees[96](index=96&type=chunk)[97](index=97&type=chunk) Key Financial Highlights (in thousands) | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Change (%) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $59,585 | $48,830 | 22.0% | $158,528 | $142,659 | 11.1% | | Gross profit | $28,620 | $21,300 | 34.4% | $70,703 | $57,985 | 21.9% | | Contribution ex-TAC | $39,102 | $32,071 | 21.9% | $100,781 | $91,350 | 10.3% | | Net loss | $(672) | $(12,426) | 94.6% | $(13,251) | $(40,081) | 66.9% | | Adjusted EBITDA | $9,668 | $(1,804) | 635.9% | $16,094 | $(8,762) | 283.7% | [Factors Affecting Our Performance](index=27&type=section&id=Factors%20Affecting%20Our%20Performance) Performance is driven by customer acquisition, platform investment, macroeconomic conditions, and market seasonality - Future growth depends on retaining existing customers, increasing their platform usage, and adding new customers[100](index=100&type=chunk) - Revenue grew **22%** and advertiser spend per active customer increased **11%** for the three months ended September 30, 2023, compared to the prior year[101](index=101&type=chunk) - Active customer count was **301** for the twelve months ended September 30, 2023, **a decline from 334** in the prior year[101](index=101&type=chunk) - Macroeconomic uncertainties led to a cost reduction plan in Q4 2022, including a **13% reduction in employee headcount**[103](index=103&type=chunk)[104](index=104&type=chunk) - The advertising industry experiences seasonal fluctuations, with the **fourth quarter historically showing the highest activity**[106](index=106&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Revenue grew significantly, driven by key industry verticals, while operating expenses showed mixed results - Revenue increase for the three months was primarily due to a **42% increase** from retail, consumer goods, and travel, and **7%** from other verticals[113](index=113&type=chunk)[122](index=122&type=chunk) - Sales and marketing expense decreased by **$2.8 million (17%)** for the three months and **$10.0 million (21%)** for the nine months, primarily due to reduced personnel and advertising costs[115](index=115&type=chunk)[124](index=124&type=chunk) - Total other income increased significantly due to **higher interest income** on cash and cash equivalents[119](index=119&type=chunk)[128](index=128&type=chunk) Revenue Performance (in thousands) | Period | Sep 30, 2023 | Sep 30, 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended | $59,585 | $48,830 | $10,755 | 22% | | Nine Months Ended | $158,528 | $142,659 | $15,869 | 11% | Operating Expenses (in thousands) | Expense Category | 3M Sep 30, 2023 | 3M Sep 30, 2022 | Change (%) | 9M Sep 30, 2023 | 9M Sep 30, 2022 | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Platform operations | $30,965 | $27,530 | 12% | $87,825 | $84,674 | 4% | | Sales and marketing | $14,146 | $16,949 | (17)% | $38,006 | $47,991 | (21)% | | Technology and development | $6,151 | $5,576 | 10% | $18,217 | $15,590 | 17% | | General and administrative | $11,142 | $11,650 | (4)% | $33,658 | $34,458 | (2)% | | Total other expense (income), net | $(2,328) | $(449) | 418% | $(6,108) | $27 | NM | | Provision for income taxes | $181 | $0 | NM | $181 | $0 | NM | [Key Operating and Financial Performance Measures](index=33&type=section&id=Key%20Operating%20and%20Financial%20Performance%20Measures) This section defines and reconciles key non-GAAP measures used by management to evaluate core operations - **Contribution ex-TAC** is a key profitability measure, calculated as revenue less platform operations expense plus other platform operations expense[134](index=134&type=chunk)[136](index=136&type=chunk) - Active customers are defined as those with at least **$5,000 in total aggregate contribution ex-TAC** over the previous twelve months; the count decreased from 334 to 301 YoY[137](index=137&type=chunk) - **Adjusted EBITDA** is defined as net income (loss) before interest, taxes, depreciation, amortization, stock-based compensation, and certain other non-core items[142](index=142&type=chunk) Key Operating and Financial Performance Measures (in thousands, except per share data) | Metric | 3M Sep 30, 2023 | 3M Sep 30, 2022 | Change (%) | 9M Sep 30, 2023 | 9M Sep 30, 2022 | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Gross profit | $28,620 | $21,300 | 34% | $70,703 | $57,985 | 22% | | Contribution ex-TAC | $39,102 | $32,071 | 22% | $100,781 | $91,350 | 10% | | Net loss | $(672) | $(12,426) | 95% | $(13,251) | $(40,081) | 67% | | Adjusted EBITDA | $9,668 | $(1,804) | 636% | $16,094 | $(8,762) | 284% | | Non-GAAP net income (loss) | $7,609 | $(4,434) | 272% | $10,824 | $(17,154) | 163% | | Non-GAAP earnings (loss) per share—basic | $0.08 | $(0.06) | 233% | $0.11 | $(0.24) | 146% | | Active customers | 301 | 334 | (10)% | 301 | 334 | (10)% | [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with sufficient cash and an undrawn credit facility for short-term needs - The company's primary sources of cash are revenues and existing cash, with a **$75.0 million** senior secured revolving credit facility available, of which **$74.1 million was undrawn** as of September 30, 2023[161](index=161&type=chunk)[169](index=169&type=chunk) - Material cash requirements include operating lease commitments (**$29.5 million** total undiscounted) and hosting commitments (**$17.1 million** total) through 2026[163](index=163&type=chunk)[58](index=58&type=chunk)[89](index=89&type=chunk) - **No liability related to the Tax Receivable Agreement (TRA) has been recorded**, with an unrecorded liability of approximately **$10.3 million**[164](index=164&type=chunk) Liquidity Position (in thousands) | Metric | As of Sep 30, 2023 | As of Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $203,007 | $206,573 | | Working capital | $226,810 | $227,745 | Cash Flows Summary (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Operating activities | $14,503 | $(13,314) | | Investing activities | $(9,660) | $(6,425) | | Financing activities | $(8,409) | $(19,076) | | Net decrease in cash | $(3,566) | $(38,815) | [Critical Accounting Policies and Estimates](index=43&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant judgment, particularly in revenue recognition and stock-based compensation - Critical accounting policies and estimates include revenue recognition (net versus gross assessment), valuation models for stock-based compensation, and internal use software[182](index=182&type=chunk) - There have been **no material changes** to critical accounting policies and estimates since the Annual Report on Form 10-K for the year ended December 31, 2022[183](index=183&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes in the company's market risk exposure during the reporting period - **No material changes** in market risk exposure occurred during the nine months ended September 30, 2023[184](index=184&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of the end of the reporting period - Management concluded that disclosure controls and procedures were **effective as of September 30, 2023**, providing reasonable assurance that required information is reported timely[186](index=186&type=chunk) - **No material changes** in internal control over financial reporting occurred during the quarter ended September 30, 2023[187](index=187&type=chunk) - Management acknowledges that control systems have inherent limitations and can only provide **reasonable, not absolute, assurance** against errors and fraud[188](index=188&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to ordinary course legal proceedings not expected to have a material adverse effect - The company is subject to various legal proceedings and claims arising in the ordinary course of business[191](index=191&type=chunk) - Management does not believe that any current proceedings or claims will have a **material adverse effect** on the company's business or financial condition[191](index=191&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) This section details risks related to business operations, data privacy, IP, capital structure, and stock ownership [RISK FACTOR SUMMARY](index=46&type=section&id=RISK%20FACTOR%20SUMMARY) This summary outlines principal risks including customer dependence, industry shifts, competition, and data privacy - Success and revenue growth depend on **adding new customers** and increasing platform usage[194](index=194&type=chunk) - The company may not realize expected benefits from an industry shift away from **cookie-based consumer tracking**[194](index=194&type=chunk) - **Failure to innovate** and make correct investment decisions in offerings and platform could lead to loss of customers and declining revenue[194](index=194&type=chunk) - The **evolving programmatic advertising market**, if it develops slower or differently than expected, could adversely affect the business[194](index=194&type=chunk) - Significant **revenue concentration** from select advertising agency holding companies poses a risk if these relationships are lost[194](index=194&type=chunk) - **Macroeconomic conditions** and geopolitical events have had and could continue to have an adverse impact on the business[194](index=194&type=chunk) - **Diminished access to advertising inventory** or people-based data could decrease platform effectiveness and revenue[194](index=194&type=chunk) - Stringent and changing **data privacy and security obligations** could lead to regulatory actions, litigation, fines, and reputational harm[194](index=194&type=chunk) [Risks Related to Our Business and Operations](index=47&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Operations) This section details risks from customer dependency, market evolution, macroeconomic pressures, and operational challenges - The company's success relies on attracting new customers, increasing existing customer usage, and continuous platform enhancement[195](index=195&type=chunk)[197](index=197&type=chunk) - The shift away from **cookie-based consumer tracking** may not occur as rapidly as expected, or competitors may develop alternative solutions[196](index=196&type=chunk) - The programmatic advertising market is evolving, especially in channels like **connected TV and streaming audio**; slower development could adversely affect growth[200](index=200&type=chunk)[201](index=201&type=chunk) - A significant amount of revenue comes from **advertising agencies**; loss of these relationships could harm the business[202](index=202&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk) - **Long sales cycles** make it difficult to project new customer acquisition and revenue generation[206](index=206&type=chunk) - **Macroeconomic conditions** (inflation, rising interest rates) can cause customers to decrease advertising budgets, impacting revenue[207](index=207&type=chunk)[208](index=208&type=chunk) - The company faces payment-related risks, including **sequential liability arrangements** with agencies, potentially impacting working capital[213](index=213&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk) - Dependence on third-party hosting services like **Google Cloud Platform and Amazon Web Services** means operational issues could harm the business[232](index=232&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk) - The company faces liabilities from its ownership and operation of **Myspace.com**, including potential claims for content and privacy practices[244](index=244&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk) - The market is **intensely competitive**, with large competitors having more resources and greater brand recognition[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) [Risks Related to Data Privacy and Artificial Intelligence](index=52&type=section&id=Risks%20Related%20to%20Data%20Privacy%20and%20Artificial%20Intelligence) The company faces evolving risks from data privacy regulations, technology platform changes, and the use of AI - The company processes personal information subject to complex and evolving laws like **CCPA, CPRA, and GDPR**[254](index=254&type=chunk)[255](index=255&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk) - **Non-compliance** with data privacy obligations could result in regulatory investigations, litigation, fines, and reputational harm[255](index=255&type=chunk)[265](index=265&type=chunk)[267](index=267&type=chunk) - Changes by technology companies (e.g., **browser providers restricting third-party cookies**) can fundamentally alter the ability to operate the platform[268](index=268&type=chunk)[269](index=269&type=chunk)[270](index=270&type=chunk)[271](index=271&type=chunk)[272](index=272&type=chunk) - The use of **generative AI technologies** introduces new privacy compliance risks and potential regulatory scrutiny[263](index=263&type=chunk)[284](index=284&type=chunk) - **Cyber-attacks and security breaches** targeting IT systems and confidential data pose significant risks[273](index=273&type=chunk)[274](index=274&type=chunk)[279](index=279&type=chunk)[282](index=282&type=chunk) [Risks Related to Our Intellectual Property](index=57&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Success depends on protecting intellectual property, though enforcement is difficult and infringement claims are a risk - Protecting proprietary methods and technologies is crucial, but **enforcement can be difficult**, and third parties may copy or design around the technology[285](index=285&type=chunk)[287](index=287&type=chunk) - The **patent prosecution process is expensive and time-consuming**, and issued patents may not be broad enough or may be invalidated[286](index=286&type=chunk) - The company is subject to **third-party claims for alleged infringement** of proprietary rights, which can result in significant defense costs[288](index=288&type=chunk)[289](index=289&type=chunk) - Advertising content distributed through the platform can lead to **litigation related to copyright or trademark infringement**[290](index=290&type=chunk) [Risks Related to Our Capital Structure and Related Tax Matters](index=62&type=section&id=Risks%20Related%20to%20Our%20Capital%20Structure%20and%20Related%20Tax%20Matters) As a holding company, it relies on distributions from its subsidiary to meet tax and TRA obligations - Viant Technology Inc. is a holding company dependent on distributions from Viant Technology LLC to pay income taxes and obligations under the **Tax Receivable Agreement (TRA)**[291](index=291&type=chunk) - The **IRS might challenge tax basis step-ups** and other tax benefits, potentially reducing anticipated tax savings[292](index=292&type=chunk)[293](index=293&type=chunk) - The company is required to pay continuing members of Viant Technology LLC **85% of net cash tax savings** from tax basis step-ups under the TRA, and these payments may be substantial[294](index=294&type=chunk)[295](index=295&type=chunk)[296](index=296&type=chunk)[297](index=297&type=chunk)[299](index=299&type=chunk)[300](index=300&type=chunk) - Viant Technology LLC is required to make **tax distributions** to its members, which may be substantial and could exceed the actual tax liability for many members[301](index=301&type=chunk)[302](index=302&type=chunk)[303](index=303&type=chunk) - There is a risk that Viant Technology LLC could become a **publicly traded partnership taxable as a corporation**, leading to significant tax inefficiencies[304](index=304&type=chunk)[305](index=305&type=chunk) [Risks Related to Our Financial Position and Capital Requirements](index=65&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Capital%20Requirements) Operating results fluctuate, and sustained growth requires additional capital and management of restrictive debt covenants - Operating results may fluctuate due to changes in pricing mix, seasonality, and market demand, making **future results difficult to predict**[306](index=306&type=chunk)[307](index=307&type=chunk)[308](index=308&type=chunk) - Future growth may require **additional capital** through equity or debt financings, which may not be available on favorable terms[309](index=309&type=chunk) - Continued business growth will lead to **substantial financial and resource requirements**, potentially increasing costs without sufficient revenue[310](index=310&type=chunk)[311](index=311&type=chunk)[313](index=313&type=chunk)[314](index=314&type=chunk) - The amended revolving credit agreement contains **covenants that may restrict operations** and affect the ability to execute business strategies[315](index=315&type=chunk) - **Seasonal fluctuations** in advertising activity, with higher spending in Q4 and lower in Q1, can materially impact revenue and cash flow[317](index=317&type=chunk) [Risks Related to Ownership of Our Class A Common Stock](index=67&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Class%20A%20Common%20Stock) Class A common stock price is volatile, with insider control and 'controlled company' status impacting governance - The market price of Class A common stock has been **highly volatile**, ranging from $3.15 to $68.31, and may continue to fluctuate[318](index=318&type=chunk) - **Sales of substantial blocks of Class A common stock** by insiders could cause the market price to decline[320](index=320&type=chunk) - The company is a **"controlled company"** under Nasdaq standards, allowing it to rely on exemptions from certain corporate governance requirements[321](index=321&type=chunk) - Insiders control approximately **71% of the voting power**, limiting other stockholders' ability to influence key decisions[322](index=322&type=chunk) - Charter documents and Delaware law include provisions that could **delay or prevent a change in control**[323](index=323&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk) - An **exclusive forum clause** in the certificate of incorporation could limit stockholders' ability to obtain a favorable judicial forum for disputes[326](index=326&type=chunk)[327](index=327&type=chunk)[328](index=328&type=chunk) [General Risk Factors](index=69&type=section&id=General%20Risk%20Factors) The company faces risks from evolving regulations and its status as an emerging growth company - The business is subject to a wide range of evolving laws and regulations, with **non-compliance potentially leading to investigations and fines**[329](index=329&type=chunk)[330](index=330&type=chunk)[332](index=332&type=chunk)[333](index=333&type=chunk)[334](index=334&type=chunk) - As an **emerging growth company (EGC)**, the company benefits from reduced reporting requirements, which might make its stock less attractive to some investors[335](index=335&type=chunk)[336](index=336&type=chunk)[337](index=337&type=chunk) - **Failure to maintain effective internal controls** could lead to inaccurate financial reporting and a material adverse effect on the business and stock price[338](index=338&type=chunk)[339](index=339&type=chunk)[340](index=340&type=chunk)[341](index=341&type=chunk) - The trading market for Class A common stock depends on research from securities analysts; **unfavorable or ceased coverage** could cause the share price to decline[342](index=342&type=chunk)[343](index=343&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities](index=71&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities,%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) No unregistered sales of equity securities or issuer repurchases occurred during the quarter - **No unregistered sales** of equity securities occurred during the quarter ended September 30, 2023[344](index=344&type=chunk) - Neither the company nor any affiliated purchasers **repurchased any shares** of Class A common stock during the quarter ended September 30, 2023[345](index=345&type=chunk) [Item 3. Defaults Upon Senior Securities](index=71&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - **No defaults** upon senior securities were reported[346](index=346&type=chunk) [Item 4. Mine Safety Disclosures](index=71&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable - This item is **not applicable**[347](index=347&type=chunk) [Item 5. Other Information](index=71&type=section&id=Item%205.%20Other%20Information) No other information was required to be reported under this item - **No other information** was reported[348](index=348&type=chunk) [Item 6. Exhibits](index=72&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the report, including certifications and XBRL files - Exhibits include Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, Certifications of Principal Executive and Financial Officers, and Inline XBRL documents[349](index=349&type=chunk) [Signatures](index=73&type=section&id=Signatures) The report is duly signed by the CEO and CFO in compliance with Securities Exchange Act requirements - The report is signed by Tim Vanderhook, Chief Executive Officer and Chairman, and Larry Madden, Chief Financial Officer, on **November 6, 2023**[354](index=354&type=chunk)

Note: Contribution ex-TAC, non-GAAP operating expenses, adjusted EBITDA, and adjusted EBITDA as a percentage of contribution ex-TAC are non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are available in the appendix. (1) As a percentage of contribution ex-TAC. | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |---------------------------------------------------------------------------------------- ...

Viant Technology Inc. (NASDAQ:DSP) Q2 2023 Earnings Conference Call August 7, 2023 5:00 PM ET Company Participants Ben Tapper - Investor Relations Tim Vanderhook - Co-Founder and CEO Chris Vanderhook - Co-Founder and COO Larry Madden - Chief Financial Officer Conference Call Participants Maria Ripps - Canaccord Laura Martin - Needham Andrew Boone - JMP Andrew Marok - Raymond James Jason Kreyer - Craig-Hallum Chris Kuntarich - UBS Operator Hello, everyone. And welcome to Viant’s Second Quarter 2023 Earnings ...

[Special Note Regarding Forward-Looking Statements](index=3&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section clarifies that forward-looking statements involve risks and uncertainties, and actual results may differ materially from expectations - Forward-looking statements are identified by words such as "may," "will," "should," "could," "intend," "expect," "plan," "anticipate," "believe," "estimate," "predict," or "continue"[10](index=10&type=chunk) - These statements cover future financial performance (revenue, costs, profit, EBITDA), business measures, liquidity, market trends, growth strategy, product strategy, security/privacy efforts, macroeconomic/geopolitical impacts, customer acquisition/retention, and expense management[10](index=10&type=chunk) - Actual results may differ materially from expectations due to global, regional, or local political, economic, business, competitive, market, regulatory, and other factors, many beyond the company's control, as detailed in the "Risk Factors" section[11](index=11&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including statements of operations, balance sheets, equity, and cash flows, along with detailed notes explaining the company's accounting policies, revenue recognition, asset details, lease obligations, debt facilities, stock-based compensation, income taxes, loss per share, noncontrolling interests, and commitments and contingencies [Condensed Consolidated Statements of Operations](index=4&type=section&id=A.%20Condensed%20Consolidated%20Statements%20of%20Operations) This statement provides a summary of the company's revenues, operating expenses, and net loss for the three and six months ended June 30, 2023 and 2022 Condensed Consolidated Statements of Operations (Unaudited, in thousands, except per share data) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenue | $57,223 | $51,200 | $98,943 | $93,829 | | Total operating expenses | $62,474 | $64,972 | $115,302 | $121,008 | | Loss from operations | $(5,251) | $(13,772) | $(16,359) | $(27,179) | | Total other expense (income), net | $(2,048) | $320 | $(3,780) | $476 | | Net loss | $(3,203) | $(14,092) | $(12,579) | $(27,655) | | Net loss attributable to Viant Technology Inc. | $(1,063) | $(3,401) | $(3,543) | $(6,593) | | Basic Loss per share of Class A common stock | $(0.07) | $(0.24) | $(0.24) | $(0.47) | | Diluted Loss per share of Class A common stock | $(0.07) | $(0.24) | $(0.24) | $(0.47) | - Revenue increased by **11.8%** for the three months ended June 30, 2023, and by **5.5%** for the six months ended June 30, 2023, compared to the respective prior-year periods[15](index=15&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) - Net loss significantly improved by **77.3%** for the three months ended June 30, 2023, and by **54.5%** for the six months ended June 30, 2023, compared to the respective prior-year periods[15](index=15&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=B.%20Condensed%20Consolidated%20Balance%20Sheets) This statement presents the company's assets, liabilities, and equity as of June 30, 2023, and December 31, 2022 Condensed Consolidated Balance Sheets (Unaudited, in thousands) | Metric | As of June 30, 2023 | As of December 31, 2022 | | :--------------------------------- | :------------------ | :---------------------- | | Cash and cash equivalents | $203,901 | $206,573 | | Total current assets | $298,058 | $314,862 | | Total assets | $361,455 | $377,883 | | Total current liabilities | $74,066 | $87,117 | | Total liabilities | $97,400 | $112,115 | | Total equity | $264,055 | $265,768 | - Cash and cash equivalents decreased slightly from **$206.6 million** at December 31, 2022, to **$203.9 million** at June 30, 2023[18](index=18&type=chunk)[154](index=154&type=chunk) - Total current assets decreased by **$16.8 million**, while total current liabilities decreased by **$13.0 million** from December 31, 2022, to June 30, 2023[18](index=18&type=chunk) [Condensed Consolidated Statements of Equity](index=6&type=section&id=C.%20Condensed%20Consolidated%20Statements%20of%20Equity) This statement details changes in the company's equity components, including common stock, additional paid-in capital, and accumulated deficit Changes in Equity (Unaudited, in thousands) | Metric | Balance as of Dec 31, 2022 | Balance as of June 30, 2023 | | :--------------------------------- | :------------------------- | :-------------------------- | | Class A Common Stock (Amount) | $15 | $16 | | Class B Common Stock (Amount) | $47 | $47 | | Additional Paid-In Capital | $95,922 | $102,885 | | Accumulated Deficit | $(36,261) | $(41,636) | | Treasury Stock (Amount) | $(475) | $(1,074) | | Total Stockholders' Equity attributable to Viant Technology Inc. | $59,248 | $60,238 | | Noncontrolling Interests | $206,520 | $203,817 | | Total Equity | $265,768 | $264,055 | - Additional paid-in capital increased by **$6.9 million** from December 31, 2022, to June 30, 2023, primarily due to stock-based compensation[20](index=20&type=chunk)[66](index=66&type=chunk) - Accumulated deficit increased by **$5.4 million** during the six months ended June 30, 2023, reflecting the net loss for the period[20](index=20&type=chunk)[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=D.%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2023 and 2022 Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands) | Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Net cash provided by (used in) operating activities | $10,855 | $(8,519) | | Net cash used in investing activities | $(6,462) | $(4,338) | | Net cash used in financing activities | $(7,065) | $(18,375) | | Net decrease in cash and cash equivalents | $(2,672) | $(31,232) | | Cash and cash equivalents at end of period | $203,901 | $207,248 | - Operating activities generated **$10.9 million** in cash for the six months ended June 30, 2023, a significant improvement from **$8.5 million** cash used in the prior year[26](index=26&type=chunk)[168](index=168&type=chunk) - Investing activities used **$6.5 million**, primarily for capitalized software development costs and property/equipment purchases[26](index=26&type=chunk)[171](index=171&type=chunk) - Financing activities used **$7.1 million**, mainly for member tax distributions and equity award settlements, a decrease from **$18.4 million** used in the prior year due to debt repayment[26](index=26&type=chunk)[173](index=173&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=E.%20Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies, revenue recognition, asset details, debt, stock-based compensation, income taxes, and commitments - Viant Technology Inc. operates a demand-side platform (Adelphic) for programmatic advertising across various channels (desktop, mobile, CTV, linear TV, in-game, streaming audio, digital billboards)[29](index=29&type=chunk) - The company adopted ASU No. 2016-13 (Financial Instruments—Credit Losses) at the beginning of fiscal 2023, revising its impairment model to an expected loss methodology for trade accounts receivable, with no material impact[49](index=49&type=chunk) Revenue Disaggregation (Unaudited, in thousands) | Revenue Type | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :----------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Over-time revenue | $783 | $173 | $1,169 | $361 | | Point-in-time revenue | $56,440 | $51,027 | $97,774 | $93,468 | | Total revenue | $57,223 | $51,200 | $98,943 | $93,829 | - As of June 30, 2023, two customers accounted for **11.8%** and **10.1%** of consolidated accounts receivable, and one customer accounted for **18.4%** and **12.2%** of total revenue for the three and six months ended June 30, 2023, respectively[45](index=45&type=chunk)[46](index=46&type=chunk) Intangible Assets, Net (Unaudited, in thousands) | Asset Type | Remaining Weighted Average Useful Life (years) | Gross Amount (June 30, 2023) | Accumulated Amortization (June 30, 2023) | Net Carrying Amount (June 30, 2023) | | :--------------------- | :------------------------------------------- | :----------------------------- | :--------------------------------------- | :----------------------------------- | | Developed technology | — | $4,927 | $(4,927) | $0 | | Customer relationships | 0.6 | $2,300 | $(2,108) | $192 | | Trademarks/tradenames | 2.7 | $1,400 | $(1,187) | $213 | | Total | | $8,627 | $(8,222) | $405 | - The revolving credit facility with PNC Bank was amended in April 2023, increasing borrowing capacity to **$75.0 million** (from **$40.0 million**) and extending maturity to April 4, 2028; as of June 30, 2023, there was no outstanding balance and **$74.1 million** undrawn availability[60](index=60&type=chunk)[163](index=163&type=chunk) Stock-Based Compensation Expense (Unaudited, in thousands) | Expense Category | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :----------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Platform operations | $1,124 | $1,303 | $2,016 | $2,389 | | Sales and marketing | $2,520 | $2,426 | $5,032 | $4,605 | | Technology and development | $1,507 | $1,425 | $2,834 | $2,594 | | General and administrative | $3,378 | $2,614 | $6,119 | $4,556 | | Total | $8,529 | $7,768 | $16,001 | $14,144 | - The company has a full valuation allowance against its deferred tax assets, resulting in a **0.0%** effective tax rate for the three and six months ended June 30, 2023 and 2022; the unrecorded TRA liability is approximately **$10.3 million**[75](index=75&type=chunk)[77](index=77&type=chunk) Loss Per Share of Class A Common Stock (Unaudited) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Basic Loss per share | $(0.07) | $(0.24) | $(0.24) | $(0.47) | | Diluted Loss per share | $(0.07) | $(0.24) | $(0.24) | $(0.47) | | Weighted-average shares outstanding (Basic/Diluted) | 15,135 | 14,114 | 14,943 | 13,962 | - Viant Technology Inc. holds a **24.6%** ownership interest in Viant Technology LLC, with noncontrolling interests holding **75.4%** as of June 30, 2023[82](index=82&type=chunk) - Non-cancelable contractual obligations include operating lease commitments (**$27.3 million** present value) and hosting commitments (**$18.3 million** total through 2026)[56](index=56&type=chunk)[85](index=85&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, including an overview of its business, key factors influencing results, detailed analysis of revenue and operating expenses, and a discussion of liquidity and capital resources. It also includes reconciliations of non-GAAP financial measures [Overview of Business and Financial Highlights](index=23&type=section&id=Overview) This overview describes Viant's advertising technology business and presents key financial highlights for the recent reporting periods - Viant is an advertising technology company operating Adelphic, a cloud-based demand-side platform (DSP) for programmatic advertising across various digital channels[90](index=90&type=chunk)[91](index=91&type=chunk) - Revenue is generated through platform fees (percentage of spend or fixed CPM) and service fees for data management, media execution, and advanced reporting[93](index=93&type=chunk)[94](index=94&type=chunk) Financial Highlights (Unaudited, in thousands) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Change (%) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | Change (%) | | :--------------------------------- | :------------------------------- | :------------------------------- | :--------- | :------------------------------- | :------------------------------- | :--------- | | Revenue | $57,223 | $51,200 | 11.8% | $98,943 | $93,829 | 5.5% | | Gross profit | $23,700 | $20,250 | 17.0% | $42,083 | $36,685 | 14.7% | | Contribution ex-TAC | $33,688 | $31,735 | 6.2% | $61,679 | $59,279 | 4.0% | | Net loss | $(3,203) | $(14,092) | 77.3% | $(12,579) | $(27,655) | 54.5% | | Non-GAAP net income (loss) | $5,095 | $(5,934) | 185.9% | $3,236 | $(12,702) | 125.5% | | Adjusted EBITDA | $6,816 | $(3,077) | 321.5% | $6,426 | $(6,958) | 192.4% | [Factors Affecting Performance](index=25&type=section&id=Factors%20Affecting%20Our%20Performance) This section discusses key internal and external factors influencing the company's financial performance, including customer growth, innovation, macroeconomic conditions, and seasonality - Future growth depends on attracting new customers, increasing platform usage, and continuous innovation, including leveraging AI and machine learning, as contracts generally lack long-term or exclusive obligations[97](index=97&type=chunk) - Advertiser spend per active customer increased by **7%** for the three months ended June 30, 2023, compared to the prior year, driven by adoption of newer products; active customer count was **314** for the twelve months ended June 30, 2023, a decline from **336** in the prior year[98](index=98&type=chunk)[125](index=125&type=chunk)[129](index=129&type=chunk) - The company plans to invest in platform operations, technology, and development, and sales and marketing for long-term growth, which may negatively impact near-term profitability[99](index=99&type=chunk) - Macroeconomic conditions (inflation, rising interest rates, recession risks) and geopolitical events continue to impact the business, leading to a cost reduction plan in Q4 2022, including a **13%** employee headcount reduction[100](index=100&type=chunk)[101](index=101&type=chunk) - Revenue is subject to seasonal fluctuations, with the fourth quarter historically being the highest for advertising activity and the first quarter typically lower[103](index=103&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's revenue and operating expenses for the three and six months ended June 30, 2023 and 2022 Revenue and Operating Expenses (Unaudited, in thousands) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Change ($) | Change (%) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | Change ($) | Change (%) | | :-------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Revenue | $57,223 | $51,200 | $6,023 | 12% | $98,943 | $93,829 | $5,114 | 5% | | Platform operations | $33,523 | $30,950 | $2,573 | 8% | $56,860 | $57,144 | $(284) | (0)% | | Sales and marketing | $11,691 | $17,286 | $(5,595) | (32)% | $23,860 | $31,042 | $(7,182) | (23)% | | Technology and development | $6,172 | $5,011 | $1,161 | 23% | $12,066 | $10,014 | $2,052 | 20% | | General and administrative | $11,088 | $11,725 | $(637) | (5)% | $22,516 | $22,808 | $(292) | (1)% | | Total operating expenses | $62,474 | $64,972 | $(2,498) | (4)% | $115,302 | $121,008 | $(5,706) | (5)% | | Total other expense (income), net | $(2,048) | $320 | $(2,368) | (740)% | $(3,780) | $476 | $(4,256) | (894)% | - Revenue growth for Q2 2023 was primarily driven by a **60%** increase from marketers in the retail industry vertical[109](index=109&type=chunk) - Sales and marketing expenses decreased significantly (**32%** for Q2, **23%** for YTD) due to reduced personnel costs and advertising expenses, reflecting cost reduction efforts[111](index=111&type=chunk)[112](index=112&type=chunk)[118](index=118&type=chunk) - Technology and development expenses increased (**23%** for Q2, **20%** for YTD) due to higher personnel costs and depreciation, reflecting continued investment in developed technology[113](index=113&type=chunk)[119](index=119&type=chunk) - Total other expense (income), net, improved substantially, shifting from expense to income, primarily due to higher interest income and lower interest expense after debt repayment[115](index=115&type=chunk)[122](index=122&type=chunk) [Key Operating and Financial Performance Measures (Non-GAAP)](index=31&type=section&id=Key%20Operating%20and%20Financial%20Performance%20Measures) This section presents and reconciles key non-GAAP financial measures used to evaluate the company's operational performance and trends - Contribution ex-TAC, non-GAAP operating expenses, adjusted EBITDA, and non-GAAP net income (loss) are key non-GAAP measures used to evaluate performance and trends[123](index=123&type=chunk) Non-GAAP Financial Performance (Unaudited, in thousands) | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Change (%) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | Change (%) | | :--------------------------------- | :------------------------------- | :------------------------------- | :--------- | :------------------------------- | :------------------------------- | :--------- | | Gross profit | $23,700 | $20,250 | 17% | $42,083 | $36,685 | 15% | | Contribution ex-TAC | $33,688 | $31,735 | 6% | $61,679 | $59,279 | 4% | | Net loss | $(3,203) | $(14,092) | 77% | $(12,579) | $(27,655) | 55% | | Adjusted EBITDA | $6,816 | $(3,077) | 322% | $6,426 | $(6,958) | 192% | | Non-GAAP net income (loss) | $5,095 | $(5,934) | 186% | $3,236 | $(12,702) | 125% | | Non-GAAP earnings (loss) per share—basic | $0.06 | $(0.08) | 175% | $0.03 | $(0.18) | 117% | | Non-GAAP earnings (loss) per share—diluted | $0.06 | $(0.08) | 175% | $0.03 | $(0.18) | 117% | | Active customers (12 months ended) | 314 | 336 | (7)% | 314 | 336 | (7)% | - Adjusted EBITDA showed significant improvement, increasing by **322%** for Q2 2023 and **192%** for YTD 2023, turning positive from negative in the prior year periods[125](index=125&type=chunk) - Active customers decreased by **7%** for the twelve months ended June 30, 2023, compared to the prior year, as the company cycled through customers not scaling spend[125](index=125&type=chunk)[129](index=129&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, sources and uses of funds, and its ability to meet future cash requirements Liquidity Overview (Unaudited, in thousands) | Metric | As of June 30, 2023 | As of December 31, 2022 | | :----------------------- | :------------------ | :---------------------- | | Cash and cash equivalents | $203,901 | $206,573 | | Working capital | $224,000 | $227,700 | - Primary cash sources are revenue from programmatic advertising and existing cash; potential future sources include debt financing or equity issuance[155](index=155&type=chunk) - Primary cash uses include capital expenditures for technology development, property/equipment purchases, debt obligations, and operating lease payments[156](index=156&type=chunk) - The company believes existing cash, operating cash flow, and undrawn revolving credit facility (**$74.1 million** available) are sufficient to meet cash requirements for the next 12 months and beyond[160](index=160&type=chunk)[163](index=163&type=chunk) Cash Flows Summary (Unaudited, in thousands) | Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Operating activities | $10,855 | $(8,519) | | Investing activities | $(6,462) | $(4,338) | | Financing activities | $(7,065) | $(18,375) | | Net decrease in cash and cash equivalents | $(2,672) | $(31,232) | - Cash flow from operating activities significantly improved, turning positive to **$10.9 million** in H1 2023 from a negative **$8.5 million** in H1 2022[168](index=168&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reported no material changes in its exposure to market risk during the six months ended June 30, 2023, referring to its Annual Report on Form 10-K for a detailed discussion - No material changes in market risk exposure were reported for the six months ended June 30, 2023[177](index=177&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the company's disclosure controls and procedures, confirming their effectiveness at a reasonable assurance level, and notes no material changes in internal control over financial reporting. It also acknowledges the inherent limitations of any control system [Evaluation of Disclosure Controls and Procedures](index=44&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2023 - Management concluded that disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2023[179](index=179&type=chunk) [Changes in Internal Control over Financial Reporting](index=44&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes in internal control over financial reporting occurred during the period covered by the report - No material changes in internal control over financial reporting occurred during the period covered by the report[180](index=180&type=chunk) [Limitations on the Effectiveness of Disclosure Controls and Procedures](index=44&type=section&id=Limitations%20on%20the%20Effectiveness%20of%20Disclosure%20Controls%20and%20Procedures) Management acknowledges that control systems provide only reasonable assurance and are subject to inherent limitations, such as human error and circumvention - Management acknowledges that control systems provide only reasonable, not absolute, assurance and are subject to inherent limitations, such as human error, circumvention, and resource constraints[181](index=181&type=chunk) [PART II. OTHER INFORMATION](index=43&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part includes disclosures on legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings in the ordinary course of business but does not believe any current litigation will have a material adverse effect on its business, operating results, cash flows, or financial condition - The company is involved in various legal proceedings but does not anticipate any material adverse effect on its business, operating results, cash flows, or financial condition[184](index=184&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks and uncertainties that could materially and adversely affect the company's business, prospects, financial condition, results of operations, and cash flow, potentially causing a decline in its Class A common stock trading price [Risk Factor Summary](index=45&type=section&id=RISK%20FACTOR%20SUMMARY) This summary highlights key risks including customer dependence, cookie-based tracking uncertainty, innovation needs, market competition, and macroeconomic impacts - Key risks include dependence on customer growth, uncertainty of cookie-based tracking shift, need for innovation, evolving programmatic advertising market, revenue concentration from advertising agencies, long sales cycles, macroeconomic/geopolitical impacts, advertising inventory access, people-based data access, data privacy/security obligations, technology industry changes, cybersecurity risks, intellectual property enforcement, stock price volatility, and "controlled company" status[187](index=187&type=chunk) [Risks Related to Business and Operations](index=46&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Operations) This section details operational risks such as customer acquisition, platform innovation, cookie-based tracking changes, macroeconomic conditions, and competitive pressures - Success depends on attracting new customers, increasing platform usage, and continuous innovation, including AI/machine learning, as contracts generally lack long-term or exclusive obligations[188](index=188&type=chunk)[190](index=190&type=chunk) - The shift away from cookie-based tracking may not occur as rapidly as expected (e.g., Google's delay until 2024), and competitors may develop alternative solutions, potentially harming the business[189](index=189&type=chunk) - Macroeconomic conditions (inflation, rising interest rates, bank failures) and geopolitical events have impacted and may continue to impact advertising budgets, leading to reduced platform usage and affecting financial results[201](index=201&type=chunk)[202](index=202&type=chunk) - The company faces liabilities from its ownership and operation of Myspace.com, including potential claims for content, compliance with a 2012 FTC consent order, and cybersecurity incidents[238](index=238&type=chunk)[239](index=239&type=chunk)[241](index=241&type=chunk) - The market is intensely competitive, with large players like Yahoo DSP, The Trade Desk, Google, and Amazon, who have greater resources and broader offerings, potentially leading to reduced pricing or market share for Viant[243](index=243&type=chunk)[244](index=244&type=chunk) [Risks Related to Intellectual Property](index=58&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) This section addresses risks concerning the enforcement of proprietary rights, potential infringement claims, and liabilities arising from advertising content on the platform - Difficulty in enforcing proprietary rights (patents, trademarks, copyrights, trade secrets) could allow competitors to use technology without compensation, eroding competitive advantages[280](index=280&type=chunk)[282](index=282&type=chunk) - The company faces third-party claims for alleged infringement of proprietary rights, which could result in significant expenses, damages, and diversion of management attention[283](index=283&type=chunk) - Potential liability and harm to the business can arise from the nature of advertising content on its platform, including copyright/trademark infringement claims, despite contractual indemnification from clients[284](index=284&type=chunk) [Risks Related to Capital Structure and Tax Matters](index=61&type=section&id=Risks%20Related%20to%20Our%20Capital%20Structure%20and%20Related%20Tax%20Matters) This section covers risks related to the company's holding company structure, potential IRS challenges to tax benefits, Tax Receivable Agreement obligations, and the risk of becoming a publicly traded partnership - Viant Technology Inc. is a holding company dependent on distributions from Viant Technology LLC to pay dividends, taxes, and Tax Receivable Agreement (TRA) payments[286](index=286&type=chunk) - The IRS might challenge tax basis step-ups and other tax benefits from IPO-related transactions and future LLC unit acquisitions, potentially reducing anticipated tax savings[287](index=287&type=chunk) - The company is obligated to pay continuing members of Viant Technology LLC **85%** of net cash tax savings from tax basis step-ups and other tax benefits under the TRA, which could be substantial and potentially exceed actual tax benefits[289](index=289&type=chunk)[292](index=292&type=chunk)[294](index=294&type=chunk) - There is a risk that Viant Technology LLC could become a publicly traded partnership taxable as a corporation, leading to significant tax inefficiencies and inability to recover TRA payments[300](index=300&type=chunk)[301](index=301&type=chunk) [Risks Related to Financial Position and Capital Requirements](index=64&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Capital%20Requirements) This section addresses risks concerning fluctuating operating results, the need for additional capital, restrictive debt covenants, and the impact of seasonal advertising activity - Operating results may fluctuate due to varying pricing and service options, seasonality, changes in customer demand, economic conditions, and technology shifts, making future results difficult to predict[302](index=302&type=chunk) - The company may need additional capital for growth, platform enhancements, and infrastructure, potentially through equity or debt financing, which could dilute existing stockholders or impose restrictive covenants[304](index=304&type=chunk)[305](index=305&type=chunk) - The revolving credit agreement contains covenants (e.g., minimum fixed charge coverage ratio) that may restrict operations, financing, and business strategies, with potential for default if not met[308](index=308&type=chunk)[309](index=309&type=chunk) - Seasonal fluctuations in advertising activity, particularly higher spending in Q4 and lower in Q1, can materially impact revenue, cash flow, and operating results[311](index=311&type=chunk) [Risks Related to Class A Common Stock Ownership](index=66&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Class%20A%20Common%20Stock) This section discusses risks associated with the volatility of Class A common stock, the influence of the 'controlled company' status, and charter provisions that could deter changes in control - The market price of Class A common stock has been and may continue to be volatile, influenced by industry trends, market sentiment, and sales of substantial blocks of stock by insiders[312](index=312&type=chunk)[313](index=313&type=chunk) - The company is a "controlled company" due to the Vanderhook Parties holding a majority of voting power (**71%** as of June 30, 2023), allowing them to influence key decisions and potentially deter change of control[314](index=314&type=chunk)[315](index=315&type=chunk) - Charter documents and Delaware law include provisions that could delay or prevent a change in control, such as a classified board, super-majority voting for amendments, and limitations on stockholder actions[316](index=316&type=chunk)[317](index=317&type=chunk) - An exclusive forum clause in the certificate of incorporation designates Delaware courts for corporate claims and federal district courts for Securities Act claims, potentially limiting stockholders' choice of judicial forum[318](index=318&type=chunk) [General Risk Factors](index=68&type=section&id=General%20Risk%20Factors) This section covers broad risks including evolving laws and regulations, reduced reporting requirements as an 'emerging growth company,' internal control failures, and analyst coverage impacts - The business is subject to a wide range of evolving laws and regulations (employment, consumer protection, anti-bribery, securities, tax, environmental, social), with non-compliance potentially leading to investigations, fines, and adverse effects[321](index=321&type=chunk) - As an "emerging growth company" and "smaller reporting company," the company benefits from reduced reporting and disclosure requirements, which might make its stock less attractive to some investors[322](index=322&type=chunk)[323](index=323&type=chunk) - Failure to maintain effective internal controls could lead to inaccurate or untimely financial reporting, fraud, restatements, and negative impact on stock price and Nasdaq listing[324](index=324&type=chunk)[325](index=325&type=chunk)[327](index=327&type=chunk) - Lack of research or unfavorable reports from securities or industry analysts could cause the share price and trading volume to decline[328](index=328&type=chunk)[329](index=329&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities and no repurchases of Class A common stock during the quarter ended June 30, 2023 - No unregistered sales of equity securities were reported[330](index=330&type=chunk) - No repurchases of Class A common stock were made during the quarter ended June 30, 2023[331](index=331&type=chunk) [Defaults Upon Senior Securities](index=67&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - No defaults upon senior securities were reported[332](index=332&type=chunk) [Mine Safety Disclosures](index=67&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable[333](index=333&type=chunk) [Other Information](index=67&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this item - No other information was reported[334](index=334&type=chunk) [Exhibits](index=68&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including corporate governance documents, credit agreements, certifications, and XBRL data files - Key exhibits include the Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, Sixth Amendment to the Revolving Credit and Security Agreement, and various certifications (302 and 906)[337](index=337&type=chunk) - The report also includes Inline XBRL Instance, Schema, Calculation, Definition, Label, and Presentation Linkbase Documents, and the Cover Page Interactive Data File[337](index=337&type=chunk) [Signatures](index=69&type=section&id=Signatures) This section provides the official signatures of the Chief Executive Officer and Chief Financial Officer, certifying the report - The report is signed by Tim Vanderhook, Chief Executive Officer and Chairman, and Larry Madden, Chief Financial Officer, on August 7, 2023[340](index=340&type=chunk)

Viant Technology Inc. (NASDAQ:DSP) Q1 2023 Results Conference Call May 8, 2023 5:00 PM ET Company Participants Nicole Kunzman - IR, The Blueshirt Group Tim Vanderhook - Co-Founder and Chief Executive Officer Chris Vanderhook - Co-Founder and Chief Operating Officer Larry Madden - Chief Financial Officer Conference Call Participants Maria Ripps - Canaccord Laura Martin – Needham Andrew Boone - JMP Andrew Marok - Raymond James Jason Kreyer - Craig Hallum Chris Kuntarich - UBS Operator Hello, everyone. And wel ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from_______to_______ Commission File Number: 001-40015 _______________________________________________________________________________________________________________________ ...