All right, we are going to get started. Thank you all for joining us today. I'm Matt Weber, Vice President on the Internet Equity Research Team here at Canaccord Genuity. It's my pleasure to introduce Chris Innes, Chief Operating Officer of Mountain, a Performance TV company that just recently completed an IPO on the New York Stock Exchange. Chris, thanks so much for joining us today. Thanks for having me. You pronounced my name right, too. All right. I practice it a lot. Maybe just to start us off, since some investors might be getting more familiar with your story, could you give us an overview of Mountain, the services you provide, and how you're differentiated in the ecosystem? Yeah, at Mountain, we provide brands with a platform that marries the storyboarding and storytelling of television with the performance and measurability of paid search and paid social. We help brands like Build.com find new consumers, new visitors, and new purchases. Through our platform, they can use our targeting software to find those exact consumers. We have tools to help them build TV commercials and services, as well as be able to track the performance of every campaign all the way down to the order ID. It's pretty comprehensive. The company just recently reported its first quarter as a public company. Q2 results, they were strong. Could you maybe just walk us through some of the key highlights from the print? Yeah, a strong first quarter for us. We grew on Performance TV 35% to $67.8 million. In terms of gross margin, improvements to 77% and adjusted EBITDA at $14.5 million. All right, that's impressive. One unique aspect of the Mountain business model is you're focused on the SMBs. Yep. Can you talk a little bit about why this market segment is attractive? How should we think about the TAM here? Yeah, it's a big market. If you look at Meta's business as an example, who's targeting very similar brands, they have 7 million advertisers in the U.S. We think for us, 1.5 million brands in the U.S. are potential customers of Mountain. We ended last year with just a few thousand. We're at the very, very tip of the iceberg. If you look at those brands and you know if they can spend $30,000 - $40,000 a year in marketing, you apply that to us, that's $60 billion - $120 billion in terms of potential, a very, very big market. That's pretty healthy. Any color you can share on your vertical exposure as it stands? Yeah, we don't have, you know, first off, I'll say in terms of SMB, that represents what, 92% of our revenue. We have a little bit of revenue from enterprise, you know, 7% or 8%. In terms of the verticals we're strong on, it's really a wide bucket of any type of D2C brand. We've become larger lately in geolocal, the Orange Theories of the world, retail, e-commerce, you name it. It's a very, very wide range. Got it. Let's dive into the Performance TV platform a little bit more. One of the key principles of your platform is bringing search-based marketing principles to connected TV. Could you talk a little bit about what that means and the Mountain Matched technology that underpins it? Yeah, to be a performance platform, you have to be able to drive return on ad spend and have a really good targeting engine. That's what Mountain Matched, or sorry, that's what that targeting system is. As you think about that system, we're, one, acquiring a large bucket of retail media data. That is purchase habits, behaviors of individuals that we use to target on similar brands. All that data goes into a giant database. Large language models then break that into keywords. As a performance marketer, I would log into Mountain's platform. I would be suggested what keywords to use to target on a campaign. I can say yes or no to any of those keywords. I'm essentially shown how large the audience is, et cetera. It's a new way of targeting that makes it really, really easy on the marketer because they don't have to think about anything except for what keywords represent my business. Do most marketers accept the keywords that you propose? I would say that's a good question. I would say no one accepts it all at 100%. They're always making changes and adjustments. That's also part of our AI philosophy. We're not trying to automate everything. We want the marketer to make decisions, to be involved. I'd say about 80% of marketers are making some type of adjustment, but they're using a mixture of the keywords we suggest and the keywords they want to add. Got it. Got it. If we think about the inventory you're serving ads across, Mountain focuses on what I believe you coined living room quality inventory. Yes. Why don't you define that for us? Yeah, so living room quality is the type of inventory that we target. It's 15 or 30-second TV commercials. These are unskippable and episodic. Episodic meaning, you know, we're serving TV commercials where you'd normally, you're watching a TV program. We're not doing like cowboy westerns or anything like that. Typically, this inventory is the inventory you would have found on cable a few years ago. We want it to be premium. We want it to be somewhere that, you know, most Americans are, they shape their living room around where they're watching that TV. It's a very premium content. OK. How do you go about accessing that inventory? Is it mostly like direct deals or with? It is. We have more than 80% is direct deals with the TV networks themselves. This is, you know, NBC, Disney, on and on. We do work with some SSPs. They're more the middleman if you have to have an ad server involved. Most is direct to the TV network itself. Okaty, got it. Are there any networks or publishers you don't currently have access to where you're looking to have a relationship? Netflix is the only one. It's a combination of two things. They're still getting their tech together, and their pricing is a little on the high side, very much on the high side. I think that'll be resolved by the end of the year. OK, that's good to hear. Is any inventory purchased upfront or is it all? No, we do no upfronts whatsoever, nor are we holding any inventory. We essentially, you know, the entire system is about finding a specific consumer. We essentially will bid on that exact consumer in real time and serve that TV commercial, typically a few minutes after the bid. OK, shifting gears here, you know, another important part of this is attribution, of course. Yeah. There are obviously a lot of challenges in connected TV. Could you walk us through your attribution model and how it addresses some of those challenges that we've seen? Yeah, in performance marketing, you know, a lot of platforms use clicks. They track clicks. You can't click on a TV. We built an attribution model for television. We call it Verified Visits. How Verified Visits work, we serve a streaming TV commercial into the home. We know the IP address, all the device IDs of that home. If we see a visit from another device in that home after the TV impression within a window of time defined by the brand, we'll count that as a visit. Any corresponding conversion will count as well. It's human verified. The advertiser can validate these conversions using our lift data or by validating the order ID itself. What's the window of time? It's typically set to whatever the sales cycle is of that brand. If you're tshirts.com, that's an impulse buy. That's probably going to be a couple of hours. If you were an automobile company, I would imagine you'd probably want to have that be a couple of weeks. Got it. That makes a lot of sense. Are there any areas of your attribution model that you're actively investing in or looking to bolster? You know, partnerships. A lot of people purchase on Amazon, as an example, kind of offsite. We're working through integrating all those solutions. OK, got it. Switching gears a little bit to your creative capabilities, a few years ago the company acquired Maximum Effort, a creative company that was founded by George Dewey and Ryan Reynolds. You recently sold that back to Ryan. Could you talk about, walk us through the strategic rationale for that transaction? Yeah, so Maximum Effort for Mountain has never been about building TV commercials. It's been about leading our brand and really brand marketing. Ryan's team still does that, mainly driven by George. Really, the change we made was just on paper, as you know, George and Ryan didn't want the scrutiny of working at a publicly traded company. They're still providing all of our brand marketing. One big thing they do for us, we use our own product to grow our business. We take the email addresses of future customers, upload that to our platform, and we put TV commercials of Mountain directly in the living rooms of performance marketers. Those TV commercials will typically feature Ryan and his team. That drives a large wave of demand that powers our go-to-market, and that hasn't changed at all and will remain centered to our go-to-market strategy. Okay. Good to know. Could you just maybe, how do we, how should we think about like the creative capabilities that you provide more broadly, just given most of your advertisers haven't advertised on TV? Yeah, so 97% of our customers have never been on TV prior. They need TV commercials. Now they all have video. These are marketers that are typically working on Instagram or Meta. We have two different paths we can help them with TV commercials. Both are through QuickFrame. QuickFrame is a company we acquired a couple of years ago. QuickFrame is a marketplace of content creators that can do voiceovers or a shoot or anything like that. Essentially, we have that marketplace that is doing a lot of editing and building for the customer base. We have a set of AI tools within QuickFrame that we've been testing. It's essentially a Photoshop of building TV commercials, totally end-to-end. Our belief is that over time, the marketplace will continue to use our AI tools. Really, a performance marketer doesn't want to build a TV commercial, they'll automate that or outsource that to someone else. QuickFrame today is building TV commercials for a little bit over 60% of the customer base. That's impressive. You obviously don't have any, you know, you have plenty of demand. How should we think about the supply side of QuickFrame? Do you have enough? Supply side, absolutely. I think right now we have 5,600 content creators. We really don't have any challenges with supply. I do think the AI tools will, one, draw a new supply. We'll be creating new jobs out of that. I think at the same time, you can build a TV commercial much faster in QuickFrame AI than you can, you know, using humans. Right. Yeah, I was going to ask about that next. How has your, you know, video generation AI capabilities sort of changed over the last six months? I feel like in the last three months with Google's Veo 3, we've seen like a lot of, you know, momentum, even more so. Yeah, we've not done a full release yet. We've built TV commercials for 811 brands so far. We're somewhere between 18,000 hours and 20,000 hours of video. We're really just working on refining and training makers on how to use the tool, et cetera. Okay, got it. Got it. Shifting gears a little bit, if we think about your go-to-market framework, I believe Mountain recently lowered its minimum spend requirements, which has in part contributed to some of the robust active client growth you guys have been seeing. I think Mark recently commented, for the broader audience, Mark is your Co-founder and CEO. You said that, or he said that there has been increasing interest from larger advertisers post going public. How should we think about the optimal mix over time? Yeah, I think for us, our core focus is the M of SMB, the mid-market brand. I don't see that necessarily changing. I see the IPOs definitely draw on some larger mid-market brands. That'll continue to be our focus. You know, as I mentioned before, 92% of our revenue is SMB, and I think that's going to remain somewhat the same. We will drive more Ss over time, and we're kind of controlling that throttle. I don't see immediate impacts to the business from that. As we think about, you have an expansive TAM already, as you outlined at the beginning. As we think about the rise of more like solopreneurs and one-to-five-person businesses, do you think over time, those people could become, or those companies could become your clients as well? I think it's possible. As we look at the TAM of the 1.5 million businesses I was outlining prior, we never really thought about going lower than those businesses in terms of the S because of mainly creative. With QuickFrame AI, it's totally possible that it could change that TAM and approach. Are there any specific investments you need to make today to continue to hone in on the M part of the SMB, or is it? The two main investments we're making in the business are, one, marketing. As you know, we're putting TV commercials in the living rooms of future customers. You've got to buy a TV commercial to essentially do that. The other investment we're making in the business is engineering. We're almost at a place of 40% of the company being engineering, and that percentage will continue to grow as we focus on the product. What about Salesforce? Are you growing your sales force? Yes and no. We're not growing the sales force in terms of humans. We've not hired anyone in the sales force in the last two or three years. We've used both the Maximum Effort team to increase the inbound leads and demand, as well as AI. A big portion of our sales team now is totally automated from conversations, SDRs, reach out, et cetera. We'll continue to make some small investments there, but probably not in terms of human capital. Got it. Could you just maybe dive a little deeper on how you actually go about acquiring customers, getting into B2B? Yeah, yeah. I outlined it a little bit earlier. We take the email addresses of future customers, upload that to our product, which matches to their household. We take TV commercials of product demos, case studies, how to generate return on ad spend, and put those directly in the living rooms of marketers. That creates a wave of demand. Before we started doing that, 3% of our revenue came from inbound leads. That number is now 77%. That's also how we've not had to increase headcount in the sales team. What's great about that is if we want to grow into new verticals like geolocal, et cetera, we just acquire those email addresses and start using our product. That makes a lot of sense. I have a few questions on financials. Maybe I'll pause here to see if our audience has any questions. Yes, absolutely. We think of those as performance agencies. There are 7,000 of them in the U.S. We started a program in March of this year to basically do an agency partner program where these agencies, based on their media spend, receive credits. Those credits, or Mountain credits, can be used for a rev share or to receive a TV commercial. We have 150-ish agencies that we're working with. 42 have signed up and are part of the program and are essentially dedicated to selling Mountain. I think we're just at the tip of the iceberg of that growth opportunity. There is a lot of opportunity in the future there. Anybody else? Given your focus on SMBs, would that be strange to say that you essentially compete with Meta? I guess related to that, how do you convince small businesses to give you like parts of their advertising budgets? Yeah, so we do kind of compete with Meta to address that part of your topic. What I mean by that is we're competing for budget to power return on ad spend. What a Mountain customer will typically do is they will start off their first month taking budget from Meta. They'll essentially balance both budgets side by side for a period of time. At the beginning of the second year of their relationship, they'll create a new budget. To answer your direct question, it's pretty easy to convince a performance marketer to try something. They're used to trials. Performance marketers typically have a test budget laying around $25,000 a month where they will try anything. There's not a lot of friction or convincing. It's basically, here's the Mountain platform. We can generate return on ad spend. Here's a case study. That brand will immediately try it. Anybody else? All right, I guess we can, I think we could move on to financials. You just guided to 23.5% year-over-year revenue growth in Q3. That reflects a high single-digit impact from the Maximum Effort sales. I believe, you know, Performance TV implies Performance TV growth of the low 30%s. Could you just talk about some of the assumptions underpinning that outlook? Yeah, we, as you think about some of the assumptions pinning that, we are driving a lot of customers. Those customers are signing up, they're growing and expanding just as we expect them to. We're at the tip of the iceberg in terms of our potential growth. 1.5 million brands are in our TAM and have a very positive outlook. What does the ramp in spend from a client typically look like? Yeah, so typically, a performance marketer will start off with a budget of $25,000. Even with us lowering minimums, I think right now the average trial is about $28,000 a month. They'll come out of that trial spending somewhere typically around 3x of what the trial was. From there, it's a 10-month period of they'll slowly increase. They'll look at the results, slowly increase, look at the results. I say 10 months as that's just the average of what we're seeing in the customer base today. It sounds like the results speak for themselves. Yeah. It's very much, you know, these performance marketers are managing portfolios. The portfolios are different performance platforms and return on ad spend. They're moving money around slowly based on the results they're getting. They'll just continue to increase until they find that curve. I know you haven't provided longer-term targets. How should we think about the growth trajectory of the business over, say, the next three to five years? I go back to the TAM. The TAM, the 1.5 million brands, and we're just on the tip of the iceberg. I think we have a lot of growth ahead of us. OK. If we're switching gears to margins, I believe you have long-term EBITDA margin targets of 35% - 40%. What are some of the key levers of operating leverage on that? Number one is just really, really good execution and having a lot of rigor and process around what we invest in, how we invest, and just keeping our costs where we need to. Patrick and I, our CFO, partner very, very well together on that. I think on top of that, there's some movement we can make in gross margin. Some stuff we're working on that goes into that as well. Okay. Okay. Makes a lot of sense. Could you touch on your capital allocation philosophy? Yeah, I mean, right now we're reinvesting back into the business into engineering and marketing. From a capital standpoint, I don't think we have any immediate things we're looking at. Okay. We have a few minutes left here. Is there anything we didn't cover today? Anything that you think investors might not fully understand or grasp about your platform, the opportunity, anything that you'd like to? We get asked quite often a lot about The Trade Desk and how we're different essentially from The Trade Desk. We do not compete with The Trade Desk at all. In fact, we track our sales opportunities, and that never comes up. The Trade Desk is focused on reach and frequency campaigns at very, very large brands. We're focused on driving conversions for SMBs across America. Are there any other platforms outside of Meta that you would say you compete with? Definitely Google. If thinking about most of our brands will take budget from Meta to start on our platform, Google is number two behind that. We don't compete with Amazon yet. I have to imagine sometime in the future, they'll invest more in CTV. They could potentially become a competitor. Looks like we have another question. Targeting is a massive one. Mountain Matched, our targeting engine, leverages AI. It's a keywords-based system. As we rolled that out within the last year, for that segment of customers that adopted it immediately, they raised their budgets by somewhere around the 40% range. That's made a very, very big impact. We have a recommendation system that also is powered by AI in the product, as well as the creative tools. From an operational standpoint, our teams use AI a lot to automate tasks and really keep our people investment low. On the targeting side, it's more about data acquisition than anything and acquiring retail media data, you know, the Walmarts, the Ramblers of the world, et cetera, and more niche data for niche verticals and businesses. Inventory onto the platform, and it sounds like you sound pretty positive around that. Would that be a growth driver for your business? Or do you feel like you are not limited by supply at any point? It's a good question. I don't think today we're not really limited by supply. I think Netflix would just look good on a logo slide and good in our UI. All of those consumers we can target and find outside of Netflix. We're reaching 131 million households a month. I think maybe over time, if I hear Netflix is going to create custom ad units, maybe that could be a growth driver. I think our own business, targeting and attribution and what we're doing are bigger growth drivers than anything that could be. Got it. Thank you. Looks like we have just, sorry, go ahead. Yeah, with your SMB focus, do you measure growth? We do. I don't have the numbers off the top of my mind, but I'll say on the S, it's not much different than the M. We are, you know, on a net retention basis, seeing stronger performance from our smaller customers than we are mid-market. All right. It looks like maybe I'll ask one more just because we have about a minute left here. Any specific advertiser trends by vertical that you'd like to call out for the remainder of the year? Anything that, as we think about tariffs potentially impacting prices in the back half of the year, you're seeing? I think the main thing I'm seeing right now is more adoption of segmented, personalized TV commercials. You know, the old way of linear television, a Super Bowl ad as an example, everyone sees the exact same TV commercial. There's no variations of that. We're seeing businesses like Build.com. They're running 36 unique TV commercials to 36 unique audiences. That's never happened in TV before. You typically see that in social with Meta and a lot of their A/B testing tools. That’s a big trend that we're super excited about. With QuickFrame, AI can help power more of the creation of those TV commercials. Makes a lot of sense. Yeah. I think we're just at about time. Thanks, Chris. Great discussion. Awesome. Thank you. Thank you. Yeah.