Roku (ROKU) 2 Nov 222022 Q3 Earnings call transcript

Hello, thank you for standing by. And welcome to the Third Quarter 2022 Roku Earnings Conference Call. [Operator instructions] Please be advised that today's conference may be recorded.

I would now like to hand the conference over to your speaker today, Conrad Grodd, Vice President of Investor Relations. Please go ahead.

operator. you, Thank Good afternoon. quarter third earnings Roku’s call. XXXX to welcome And Roku’s, joined and CEO, by Wood, today Anthony Founder Steve and I'm Louden, our CFO. our shareholder be of available relations details results management roku.com/investor. additional Full commentary website in at our on letter, found can which our investor and are

conditions are to as projections involve obligation we'll and views predictions, uncertainties. on Please to market strategy, which other our information. this uncertainty to statements call, update based making future economic financial on and reflect as responses refer to and forward-looking our actual cause events, risks results are and only, our comments future forecasts our outlook, from headwinds questions forward-looking periodic on information this macro today materially Our and for call statements and shareholder about SEC our current filings such we assumptions factors These and be statements business statements. this operating inflationary or your management's of our could disclaim these any pressures. [indiscernible] our expenses, expectations, differ On that environment and investments,

shareholder financial We'll are Reconciliations to GAAP certain today's provided on call. also most comparable in non-GAAP discuss the financial measures letter. our measures

this Finally, XXXX. the against comparable unless call period comparisons otherwise stated, our all on of be will results of

like I'd to Now, hand the Anthony. call to over

business macro streaming Roku's I to the provide like environment, joining and some conviction would And thoughts Conrad. us. all level on you opportunity. Thanks, the for thank our platform high in model, ongoing

remained high. by spending, were pressured uncertainty and pulled inflation overall on advertisers economic back consumers QX, In further

likely We and to expect these QX. are continue will worsen conditions in

OpEx is reduce temporary bounce are to to we'll and Although our take back, expected steps these ad continue the market to growth. factors

sharpening growth enhance addition, our will the the leadership drive focus most that our position. and spending we on projects are In

intact and ad Our platform very despite a remains opportunity streaming TV large is bag. current as pull

grew accounts active more improve. and market not both million added above than net adds Roku streaming was on for in We the Channel X.X in The idly waiting And QX, ad hours are XXXX we to year-over-year. which We XX% XXXX. by

good milestone meaningful We’re in launched a have the results internationally, Mexico. result that Mexico, the demonstrated in Last and we is channel built Roku our engagement that in the of making three month there scale in past we years. progress by

continued to attract industry talent. We competitive and market our to build assets leading top

As Consumer Gidon the that, by of Collier, President addition President Katz, Media; demonstrated recent Charlie and Experience. of as our of before

market us return stronger positions this returns. the of to to ad All growth revenue when

month, connected days. early home services, device to continue home software new we Last smart the will and We build launched by products streams. innovate new execute. it's but and every We to revenue be service in believe still

example, only about U.S. households For have cameras. XX% IT of

to and the use. experiences smart difficult Additionally, home fragmented existing

have selling one OS launched to one smart number services the number distribution America's retail that we As Walmart, We U.S., this strong in delightful. home technology smart deliver a and the at hardware, the is expertise in powerful TV retailer. with and and simple, category in ecosystem software,

by brand smart X,XXX space the shelf locations. Roku is nearly home now number one Walmart in

will become to streaming we which a As very we home market. smart business TV with build through services, our our monetize with and expect model, large devices scale

design spent in to streaming building have ecosystem. TV years business We a benefit everyone the

strategy and way we growth both ahead, opportunity to to the and look confident are the business as we to extending our maximize and remain best model ecosystem our our investors. We are profitability that deliver

Louden, with years role that Roku, Finally, in we to after us announced eight after a nearly Steve helping leave XXXX his earlier recruit and will today transition successor.

he Roku three relocated decided years ago Steve that Seattle. previously recall You to leave when may to

lead until team, the for I'm his him building world-class and And continue leadership Steve. all departure. grateful which a stay. decided to his for to we onset you, the of With well. he pandemic, wish he Thank will

in the grow, both X.X million. adding appreciate Roku I accounts XXXX This by million with sales active driven was to kind active U.S. with the Anthony. primarily TV growth markets, above continues which level, retention. was the and both in QX, account XX.X ending international Thanks quarter improved works. XXXX and along

an insulate XX% remained Meanwhile, streamed outperform to viewing continue as X% higher levels our Roku Roku we year-over-year users as account the continue TV. above selling of player year-over-year, unit cost XX.X and hours sales the in we prioritize average pre-COVID price acquisition. decreased increase from quarter, of to growth traditional to billion consumers

revenue revenue. increased net was Platform year-over-year up XX% $XXX representing to QX, XX% million. year-over-year million, In XX% revenue $XXX to total total of

came advertising the business revenue overall difficult forecast to the beginning our slowly more and a environment, current was of platform in the continues weakness and ad expectations year macro due above the our given market TV While grow particular. the market than in in ad to positive scatter

mix while a Player to toward price on year-over-year was X% Player unit due revenue sales down units. down basis, were a lower shift sell-in X%

gross points reflects greater down margin market This margin sequentially, and mix video XXXX of weakness in advertising QX compared growth period. ago nine year-over-year. was but XX% the year Total in the quarter. stable a to XX% a was in Platform scatter QX of ad

streaming comp significant tough content and launch XXXX drove of QX the was M&E which to growth new a services, due higher-margin distribution. also of

XXX negative to In SVOD adjustments lower a industry expectations. recognized QX we XXXX, due

for adjustment And impact our to Platform similar XXX the quarters. reminder, due Roku sales in a player profit QX and a both gross was the macro unit respective in driven on by As lower TV had environment. their our expectations

year-over-year. down QX roughly points Player margin XX%, was negative was which four

acquisitions The year-over-year and growth the pressures. we resulted margins Player caused and to disruptions supply compression year-over-year from chain costs of in net As consumers revenue. account inflationary prioritize year-over-year X% total profit by and growth higher versus in in Platform negative continue insulate XX%

QX negative we more of quarter adjusted EBITDA and $X million billion was cash. the with than ended $XX

negative including of holiday season $XXX pressures million, million negatively expect Let will $XXX profit and inflationary further for of different. fourth macro be pressures with the the but particularly market. the to gross revenue me uncertainties budgets, impact on and this XX% turn The we typically spend to ad of our and net companies, period of gross for million. Total margin is most outlook consumer adjusted EBITDA strongest quarter. season these discretionary continue will scatter weigh We Roku, that to advertising $XXX believe

temporary, We or is difficult expect to will these conditions to but stabilize be when it predict they rebound.

be that traditional our For and promotional to sales we will anticipate due Player lower primarily business, sequentially, year-over-year lower pricing. holiday margins significantly

business For anticipate slightly be platform pressures basis. that will macro the as revenue result on sequential with a will ordinarily these our our offset and seasonal tailwinds, Platform we down

typically reduces our and Player which revenue further QX is back-end In loaded, in Platform our visibility. addition,

continuing last headcount will penetration of make the expense long-term growth in and we in our our project continue platform that As indicated we and quarter, customer to strategic value. environment, to while response the macro disciplined investments to most will slow increase market operating both

headwinds, to near-term continue the to and believe innovation towards invest which continue in Despite driving both growth our the moving consumers in long-term. way forward, we investors capitalizing best streaming. position by profitability Roku leadership opportunity progress our to over on will created advertisers to make to deliver is the and we

becoming be it’s been an a a TV and platform. part as a to streaming leading note, incredible from public to personal pre-IPO, a of privilege company and Roku’s success On journey

on successor in our look execute I year. mission In As is the forward place sometime Anthony meantime, next noted, in still team. I continuing here my working will terrific to our to be with

With let's Operator? that, questions. take

[Operator Justin Instructions] first from Capital you. KeyBanc Our comes you Thank question Markets, with Patterson may proceed.

Why gave comments much. I of space Anthony, international do into you very you on smart this on from the focus versus I appreciate Roku's can. you large What category return strengthening see Thank it's the tech? competitors. a investing expansion investment? crowded some and this if Two ad home, however, Great. deeper type with

into it's comments. to and on margin you. as And of Steve, been Thank flow pleasure of then against working XXXX? revenue Wanted time with about you growth OpEx preservation to right going out that to QX for through. I thinking and you. But for say, OpEx of we are realize some growth level your into take how a the head double-click it's

for Thanks question. and on the it home Steve over I to question will the then turn for Justin. Hey, answer smart OpEx.

a business us a Roku's few be some it's the of for different natural to for ecosystem and just reasons let a them. I home business extension So that smart the And think of in. way highlight about is natural me

devices. all, device of Roku TVs smart active has first XX build to of smart accounts expanding So smart terms consisting of home great other million is with in a around the on which

have So start. an we early

of, are device homes if the not today. in home smart one probably popular most We

way too way big home lot is But a competitors it's it's and I example, homes more got the today it's also have for opportunity. existing thinking than XX% smart U.S. the then complicated. about days, early the and it. It's early about still are potential experience mean a camera. smart of whole a complicated And

it's things for to just that something big that's area. Roku another be at. opportunity I And excels so an think successful complicated And us here. simple Making really is

way Another us successful. be for to

apply good devices things all and smart great assets usable we're all the business. very we building you the directly home It if services, think software those have, about to at also, at and we're of and simple services,

natural need. So we of it's have built I our extension a – we've and a very we the brand mean, pieces already lot

big be – our market opportunity, going be finally of services. to terms then, to And the in there Home is a going for Smart it's

to long the over it's revenue then practically, through value low way out our to think new cost term, those if service it model business at monetize for of build model that you level, is revenues. kind a a smart it's service streams. our customers and are then high great And devices So us for margin business and devices, sell at

just, is this again, natural a extension. So

other obviously devices our the service also ecosystem their revenue existing of our extending increasing should allowing building our the customers to customers as well will have of Also, retention streams. as – by account benefit add to

done. because leveraging So big what particularly investment already of a not a – lot and we've for us we're it's

and high but so that big And – return. very on a be it's something could very an yes, option

why home. It's opportunity. a And great so we're smart that's doing

then you the And talk OpEx did about Steve, question? want to

you've for Justin, I been this tracking kind think on the taking over just time. hey Yes, a just step but a of Sure. – while, here I back know trend

Before profit the and back reinvesting growth high gross been performing revenue market recent gross that consistent into business. the and we've ad well, profit downturn,

us. out about, opportunity talked As significant of ahead Anthony a there there's

of ahead the we kind what off substantial uncertainty When curtailed get of the through pandemic made. greatly that would is investments and effectively the way, the to growth the go invest deferred and in try when pushed was some hit, have at deferred the pandemic. that we disruptions, that time OpEx we some we did thought in we've world during And again started to of that pandemic-related moving those a out more we've given business otherwise investments

we the headcount is so our invest new innovation map. in in, up ramped hiring, work way And additional road which and we on primary project

kind issues the we inflation, in high of confluence ad uncertainty, market and Ukraine. energy When saw around the was downturn war of that really in economic the geopolitical QX

relative, immediately And QX. So in levels significantly to we OpEx pulled steps we're continuing to that at manifested on growth. basically ways back OpEx take flat headcount That lower look growth. itself the in to

result the is growth increases rate but OpEx still year. year hiring of that last notably, late year-over-year But the early this high that's and largely

So that on focusing then and to lead our potential sequential And that further investment projects bolster the leadership high to we're making on rate growth remaining the going OpEx sure our we're growth down. further focused position. driving are we're

Got it. Thank both. you

tough that add just and for successful others. well opportunity are market, transition current And especially huge us streaming as small cycle. streaming of I'll impacting the a in is certainly us. large-scale the a by But Justin, the I – to as number it's mean these of changed platform ad economic not the And times, creation

growth, we're being growth, very to money market account turns that's when around. us focus continuing where the about spend engagement well on we for positioning So why but strong our disciplined strong

we're mistake back don't building I profitable think out pull a so start becoming at and We large disciplined that with it pillars and want key of our be very we're very impacting very goal much would the although we're – OpEx carefully. a that we company. to looking being definitely

you. Thank

you. Thank questions. moment One for

Our next Raymond Kessler with question Aaron James. comes from

may You proceed.

Thank you.

you by the as I can came of that you terms of revenues, seeing where revenue the just throughout maybe discuss upside well. the you. of ad linearity mean kind any verticals In Thank QX kind well? to thoughts on as quarter are ad upside from, the just

to the want I QX you do ad about performance? Steve, question on take talk market. the can

Yes, sure.

OpEx of starting our That's in nature, to the greater terms general off back scatter level performance, mean, saw more in QX then uncertainty easy back get market better, Just of and of that, turn the to When get mid-QX, its to ad kind ad I businesses react in pulling certainly, something things was on. turn easy TV and by on we impacted. QX, by is comfortable. including businesses

are just materializing. given But headwinds. performance we So was was that with that placed QX trend a time at the happy outlook where

we the like slightly looked of as So as being traditional terms – connected performing market feel outperforming in above the so we've well SMI. external at at data well ad market. been us some It ad or showed from TV TV we

we've So well in last pretty we the the time we I perform results despite headwinds. really call. think And come at did seen relative continue where to these uncertain all earnings to that's outlook

than you better initially Got – kind end of things guidance gave it. September July? August, when were of

Yes.

lot uncertainty. within quarter. the specific on Certainly, a of there's commented haven't We trends really the

been think, verticals. verticals. been very kind a mean around of down vertical I or weakness some seen look of down when strength you lot so ad the changes, I but especially they're the levels. of certain you the of And at spend We've pretty wide is questions mentioned the impact. a there's every of different much the distribution There's

that verticals. by an And landscape so ever-shifting I it's think been

so the really statement of kind a to about it's hard trends. make And global overall

Got thank you. it, great,

This is Anthony.

telecom, are a happen mean say hard exactly insurance. QX It's signs there's in telemarketers of we're even is worse are – their we lot spend of We're categories, on planning back QX going uncertainty. seeing market Steve the that to reducing of to what's big seeing be pull said, to terms I in QX. in lots we than going seeing ad but QX, seeing So like was,

they're typically season period not. lot I for think strongest or traditionally, recession because back companies, including be pulling Roku. holiday is the budgets will there companies a QX is if a ad their are very – But the uncertain a of

QX a so ad And lot are being canceled. campaigns of

this of And the is given different season, so probably holiday typical that's set season. why – be to so holiday going characteristics, I and unique the think than environments

Yes, thank so much.

questions. moment you. One for Thank

question comes with from next Khajuria Our Shweta Evercore.

You may proceed.

Hello. Can me? you hear

ahead. Go Yes.

has you thanks Okay, you and been Steve, One try please. much distribution? video changed of segments to over have have from the how lot. how So Player have to questions across asked year? visibility let about sorry as I'm if you that to sit revenue ads course is, do visibility how the me talk content two, M&E a could but today, much my your you

the Anthony, Roku enhancing initiatives, of then, changed the environment with terms in prioritizing? process your also you thinking the how And Has the thought a lot. are prioritizing and about platform user to Thanks in Channel different whether system and it the to change you're macro the experience ad how operating international? is

do Steve, Sure. want you start? to

talked business consumer Shweta. amount question, there, the increased on the ad spend. to scatter as that is for advertising its by is Thanks sure. in well out in tends nature Certainly, about – Yes, has clearly the on of is Most both be briefly. the there the market with uncertainty visibility we and – as quarter side uncommitted, side, pronounced diminished out the economy. The

started that we that level disruptions, good quarter. bookings of continued verticals, of what's mentioned in and had there's a of example And out all depending disruptions prior before had based on days window what what's good Those before the whether big there's that. points about so uncertainty, I terms of tremendous curves on pullback, there's quarter kind happened, certain shift during are And our that pretty on the curve the in the pipeline, experience percentage the ad we as pipeline years of where supply especially over the before a chain the sort uncertainty. handle question, a these is historical thrown the largely kind of on at

the expectations in on SVOD visibility industry shifted And updates industry by we the certainly, term to so expectations And modeling that in obviously, and based that, made most XXX in the as QX. the market made ad we in scatter had like around changes have we've impacted size our been change there some business, longer well. things out has although QX,

So in you've moderate that issues term got – call other most got the to some of, moving kind changes this world at just given expectations is you've short-term it, then and point. way the visibility let's pronounced, near-term

how priorities And then really about Shweta, given environment. not your our question think the mean I not have we on current macro – have priorities changed.

on the And first pillar internationally, scale built of recap so room to just of business our lots active grow kind And domestically. but of – accounts. accounts there's is big of to a also still course, the active of those,

for area us. first continued the of that's investment so And

So TV selling the super built computing one – expensive, operating has States purpose-built expensive. be of super system, Roku our the on not super number been We're TV for the effective, which operating system that sorry, We're platform. would things in United strength like program, our effective. TV TV purpose-built

those to don't here. And who strategy again, just know recap our for

winners. you of platforms Roku with and on like it one get iOS – businesses. And And saw a the platform. Windows happened streaming then TV on of that with to phones, or number initial we OS And and about If was of down emerge, And a handful Mac then when TVs, lot contenders is you small consolidate PCs, new on think computing legacy handful Android. PCs. they

products. new drive that both domestically signing and to So markets, up by creating more continuing internationally more innovative partners, entering

grew and good big progress domestically. So the made in million, us. TVs and program accounts quarter. from a the is X.X both players Active thing internationally for Roku TV And we and

TV accounts So active Roku for growing program.

for another value the then is big of area a of us increasing And investment customer.

more the the over a been mission also of finer experience customers. adding customers customers. And But have consumer increase lots which focus on led and our of those Katz. last we the putting year, keep team, by Gidon we've value we we that's So of can

in and UI – in the well. there what overall increases the UI, And engagement in investing they're engagement that things as is in our engagement platform so

And of the to terms And our helping of building so going we a levers interface platform lot find of using all progress that. platform building the watch making our and in – UI just out the customer control user well, a value ways that's effective and effective to for of content – making in been consumers lot monetization and user because interface do there's the available more options the there. us more by

progress. And then continues accounts, – we sorry. a Mexico big of international, the be highlighted selling I a making another TV two And on number our mean of course, Mexico successes area We're I'm area – the and shareholder then in number for in is in big active sorry, Mexico we're in now. platform we're good letter. of – to us two OS focus

We to TV add continue more partners.

pass We in them have but we think one like passing the of currently a just They're can other U.S. number markets. we goal and Samsung. I did

we kind the steps market. the been one Roku scale in And of because the of building our Channel, the we've in which making in platform progress in is monetizing launched Mexico,

active to so on grow expansion increase the global So focus accounts continuing engagement. a – value of customer,

of is the of we the ways the do one And through that And Channel. Roku then across monetization finally, platform. course, there’s key

that continue for Channel to us continues big invest to So the Roku success a we an in. and be area

spend becoming Roku of to terms the And originals. with size and rev industry we’re player But is appropriate the content commensurate we’re business scale a focus getting all area has done bigger then an obviously the in licensing us. that of – content model. And that Channel of and in for share,

some the that’s think we’re of I focused – on. areas So that so

of customer increasing basically of overall. and a growing innovation the value and just So platform, it’s scale the competitiveness

Thanks, Anthony. Steve. Thanks, Okay.

Thank moment you. for One questions.

Cannonball comes with Research. question Vasily next Our Karasyov from

proceed. You may

by please? Thank the to how growth Maybe with you. I the component, quarter. Steve, impressions you ask platform unpack tell us grew ad in much monetized can revenue your

by did used the You rank grow that rates, if to M&E And possible? and distribution give and growth order out then metric. revenue maybe grow

about due more ad the platform quarter, give we some segment scatter happy is saw disaggregation talked We XXX to to you what obviously, we Vasily, But disaggregate obviously market don’t challenged. color. issue. that this

a driver been significant slowing growth in platform overall. the And of so that’s

had to standpoint, we that and M&E streaming year, M&E, last we last it’s continues some from by distribution had to growth. comp a growth to services the hour late is that year. grow tough a content But And and active compared launched driven where high margin. had account mid

the consumer changing SVOD some industry based some up behaviour that well. has notwithstanding expectations in future expectations as our So of held on and

its ad story So the mix general, moving billion been the year, have over largely here a $X is upfront the main the that. or commitments year, and to driven – reminder strong exposure on growth with market. this has segment our of that the scatter Platform our towards scatter each upfront by upfront. been Again, In trend to ad

industry. a kind there’s term, with the upfront well as challenged pulling short-term, as scatter trend market certainly, long-term of for good same things disconnect so at pullback well. on the here. ad significantly the short And But committed back like very The M&E performing the – time,

much. Thank Okay. you very

Sure.

brought up. Vasily, media is who and entertainment – and content which that’s drive for M&E was engagement platform. and those know, let don’t our and add, with across subscriptions helping business, viewership just M&E our is that me –

lot the and for we built that drive terms very we’ve expertise very understand purpose-built an tools platform as and that in that. invested of we’re our around. of we’ve building TV It’s into good needed And TV, at we business capabilities out to it. the the And an built area And area a well course, a platform. tools in, the of advertising lot right of it’s

are important still all build and and we’re trying churn think to content, reduce our ads, of made. seeing built and people their can those grow as engagement. ad services can an to M&E the like engagement a advertising to obviously, Disney a for more them has ads business. more more starting of the I lot companies, into that And new get And that the watch big for trying But that into Netflix they even it’s as mean, add some streaming accounts, be their opportunity. more I to lot money watch tiers business have services. the they that obviously, because, we services or area becomes there’s also – so And soon of

as good think so at. our that engagement I as drive companies help And that on tools that third-party lot services is to area. those And services using our something we know very M&E them we’re a in well can

So and or decide our talked they – Gidon interface. also watch. viewers to on A when of watch become consumer that our M&E our relevant and driving big what viewers which is related helping to I working partner feature our business, or like user to to for also, trusted universal more consumers, free a about them is things experience. in more part I mean around ways how to can we’re we our our use search

exclusively. But that’s can our that that a our into content to that us do we find and big platform we as generate integrating is both something UI, drive advantage business for the consumers our then that help platform revenue is owner – profit both UI partners. engagement core way to of can and using our And the is ways M&E and for viewership and our subscriptions partners in our help

you. Thank

moment One you. for Thank questions.

Our from Oppenheimer. comes Jason next question with Helfstein

proceed. You may

kind Anthony, with parts. of Thanks. question big few picture a

shareholders your tell, third-party to the on what other think a let inventories. by mistake making I of TRC majority you’re strategic from can DSPs and refusing So bid

decision? view he And change his three, decision? right given you the you possible Charlie’s the the think is this is position that why it is this this on running do in what’s think And still Thanks. position you the Two, Advertising? do now is business? one, right So

DSPs. Jason thanks on for that question

come touch well, second, to Charlie a kind DSP. me of on just in let So but I’ll

have which the our our platform, OneView, we optimized TV our highly advantage Platform. taking So our of streaming of buy is and It’s DSP Roku the all, to built and across inventory data into technology for way platform. we first own best

a for us. big focus So that’s obviously

one that on terms ways diversifying we’ve revenue the focusing In upfront. the of is been our streams, of doing

every This And that mix the becoming the no year, growing. on been us. the the with and in comes started dollars that’s through commitments, has passed that out last of we from for coming billion we the which upfront. platform comes so our So – $X upfront important increasingly upfront revenue year,

terms third-party – We we I tech with for marketing program of in long But with example, work the platforms. with including all, of work Roku We’ve first do do mean and DSPs. shopper and sell-side ad we actual buy of program DSPs, stream. partners, with measurement with dozens Kroger revenue? There could are DSPs worked partners generate ways be. there ways incremental that’s or XX-plus increase revenue companies. the looking to to Measurement to we’re Partner work at other our And And with work we definitely with – might

that’s looking at. that So something we’re

FOX, which In where experience about Roku. don’t that before was of does is know of I he Charlie, But DSP advertisers, terms got lot he’s Charlie thinks at working both a he platforms, IOs with what DSPs. traditionally through something and also through

we’ll in a see. that advertising strategy content, he’s I Charlie in But a a lot media of programming is the very picture around company. with and big just senior the So experience executive think and running of in media

large a media our take we why a and us potential so business, got be built And business. can next very more it But much big Charlie a to we to bigger. it’s recruited And that’s to business the help lot level.

sure insights to weren’t to love and to and thinking bring happens. what before the working forward him looking ways we media and I’m I’m business. thinking he’ll grow with see strategies some that of So new But

Appreciate color. Thanks. the

questions. moment for Thank One you.

Blair. Schackart from comes question with next William Our Ralph

may proceed. You

to big acceleration perspective Maybe to the back some I give talked perspective And you you’ve talk the it given clarify question. of we’re in maybe the something. seeing on seen wanted or you quarter-to-date Steve, some think way to pulled like the categories quantify what of taking in for telecom. sort the Just ad I’m us Thanks can But Great. I on more QX about guide. pullback? pullback. any sort what – just guessing Anthony,

I sequentially think in you said QX. will you said that platform be – I revenue think down

correct. If that’s indeed you. Thank confirm you could

business. ad our – outlook. as what But has few mean, some I mean our Yes. about – well and that on words can I on – maybe a comments I then we’re the guidance in something Steve say seeing

So There’s in economy. consumers a a before, on not be I recession back are rates, of not tremendous to there’s the think continue, in that season. will of so the – of creating things this Fed will will a like I interest all amount holiday a How uncertainty is And lot uncertainty normal said going holiday there’s it is or uncertainty pulling season. around it, when spending. mean stop – normal when a these this when around, turn much raising I

are cancel seeing one – the of uncertainty in budgets. and ad their of companies face the they we is first things And such do

seeing spending And so a why outlook. just are we us. that are from the in is the spend because not But not hard big trends not the advertisers second business of QX. our put spending that’s have, quarter. not they’re this driver we ad our that core market information we of quarter half anyone. comes That’s They’re down. spending get the with of in predict very lot traditionally the in kind best we’re It’s with to the of But

definitely I said like it’s temporary. before, And

in has back that add did to certainty turn and the start about Assuming you And is happen come market heading. people want doesn’t again. – anything? economy to economy where have around. people’s more What cause to spending there minds it doesn’t to is needs the the Steve, to will in be

we as question, the of that down pop against of we QX sequentially, would so forces in well just market driving decline. yes, remarks scatter did basically effectively the be mention revenue platform the counteracting sequential and your economy make that specifically traditional that, on because that to the a because so in holiday We that is as and year-over-year season. the that Ralph, think are outlook significant on get the weighing down sequentially the will that sort of is the in the and contemplated sure. of specific that revenue sequential ad consumers enough kind pullback Yes, advertisers

Anthony. Okay. Thanks, Thanks, Steve.

for One you. Thank moment questions.

comes with question next Citi. Our Jason Bazinet from

proceed. may You

they some advertisers, is revenue that on faced that or cut of other sort Do you dynamics connected this like thing sophistication you habit simply I Or actually. That’s don’t look still a of think traditional of of sort the Thanks. of, In we’ve more of when recession, same of during terms words, that a TVs upfront in the know, with as the question you first of therefore TV? think of your they’re in seen the do period lack the that next it’s plus have advertising part sort function view pullback a see basic do question. where the you’ll the and of about sort dramatic I sort uncertainty? they retrenchment scatter think recession, it’s experimental mix? the next or

Thanks. Hi, Jason. an interesting That’s question.

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Okay. Thank you.

moment One for questions. you. Thank

comes question Rich Partners. Greenfield with Our next LightShed from

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Hey, question. Rich, was a complicated that

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it’s Steve. Rich, Hey,

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you. question, last moment please. Thank And our one

Crockett question last Barton from with be Our will Rosenblatt Securities.

You may proceed.

was Okay. big is Thanks One I upfront, in a which fourth about start when two wanted in. me was the some things kind guess $X increment, on. to was flow you quarter. And for of billion get to getting talked color I just that the presumably

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in with and This Steve the terms of account related to QX start is that Anthony. of how then much one. active take up-fronts the can maybe the question I'll is see. Let's that and

the normal So ads active things. accounts so and accounts, were million driven by up active $X.X net was new it

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are I our us of – sort way accounts. was where – think terms are normal normal that going in for things of those

if Steve, know have you then don't to add about I up-fronts? And anything the

Yes.

the the through terms QX up-fronts of in end go mid- up-front of following you're start right, year. the the In QX to and they

the of the commits October. we're earnings discussed on deals that that So as last talking we called about and start billion $X plus

We haven't seen significant cancel rates.

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Okay.

Yes.

when a but are maybe you our – way, market and basically the getting plan reduction [indiscernible] just large percent So they're impacts bigger, such and in a of becoming to upfront another definitely see on ad bigger that yes, just it add dramatic growth. bigger scatter it

advertisers traditional TV, kind not you scatter we touched market, in back? you're that of smaller digital cutting talking are on terms you as the of who's big what much when And players as saying you're is the see

ahead [Indiscernible]. Anthony. Yes. Go

we scatter anything say in the we that's upfront. mean when not Scatter,

all of it's So it. the not budget's but TV the big of upfront in advertisers, some

right. All you. Thank Okay.

for would back further to over turn the Wood like call to you. I remarks. now Thank any Anthony

want and customers, just in environment. very and thank operating commitment our partners a to their difficult employees, I for focus

to We the expect current advertising a and ever. in position than better emerge downturn from stronger

you. thank So

for you today's This participating. Thank concludes you. conference call. Thank

You may now disconnect.