MNTN Inc.
11/10/2026 | Press release | Distributed by Public on 11/10/2026 08:04
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations is intended to help the reader understand our Company, business, operations and present business environment and is provided as a supplement to, and should be read in conjunction with, our condensed consolidated financial statements and the related notes to those statements included elsewhere in this Form 10-Q and our audited consolidated financial statements and related notes thereto for the year ended December 31, 2025, and the discussion under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" which can be found in our 2025 Annual Report. Some of the numbers included herein have been rounded for the convenience of presentation. Some of the information included in this discussion and analysis or set forth elsewhere in this Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Cautionary Note Regarding Forward-Looking Statements and Summary Risk Factors" and "Risk Factors" sections of this Form 10-Q for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
MNTN is on a mission to transform CTV into a next-generation performance marketing channel.
Our revolutionary PTV software platform allows marketers to combine the powerful storytelling format of TV advertising with the targeting and measurement capabilities of paid search and social advertising. Our self-serve software enables marketers to precisely target audiences and then directly tie each view to a purchase or other action. Marketers set performance goals, such as ROAS, and our algorithms continuously optimize a campaign around key metrics to drive higher performance. Since we launched our PTV platform, our company has experienced continued growth due to the robust performance our platform delivers to our customers.
From emerging companies to large brands, marketers can easily manage CTV campaigns with minimal dedicated resources. Our self-serve platform provides a single user interface across campaign setup, audience targeting, programmatic bidding, ad serving, attribution and reporting.
We set out to help marketers target households with performance display advertisements across desktop, mobile and other devices. In 2018, we saw an opportunity in CTV, and we began developing purpose-built CTV technologies leveraging our existing audience targeting and measurement expertise. Since the launch of our PTV offering, we have quickly advanced our key technological capabilities (e.g., data integration, algorithms, user interface, reporting, etc.).
Business Model
Customers use our PTV software platform to drive performance marketing outcomes measured by ROAS. Customers set the parameters of their campaign, including budget, duration and desired performance goals, and our platform automatically executes the campaign using proprietary algorithms based on the parameters defined by our customers. Our leading PTV technology and business model help drive our ability to efficiently attract new customers to our platform, retain them, and increase their ad spend. We expect our revenue to continue to increase as CTV adoption expands and more brands increase their PTV spend.
We generate and grow our revenue primarily by driving new customers to our platform and through existing customers increasing their spend on our platform. Our initial focus was on mid-sized businesses, and subsequently, we began expanding our focus to small businesses, many of whom have never advertised on TV before.
Over the last several years, we made significant investments in our long-term growth. We invested in technology, development and operations to enhance platform features in our infrastructure, including our information technology, financial and administrative systems and controls, to support our operations, and in sales and marketing to acquire new customers and grow usage by existing customers. We believe the initial benefits of these investments were realized in our financial results to date. We plan to continue to invest in the long-term growth of the Company, including development of cutting-edge technology, as well as continued investment in customer acquisition and customer growth. Given the operating leverage in our business and the investments that we have made, we expect to continue to improve our Adjusted EBITDA margin in the long term as our revenue continues to scale.
Key Performance Indicator and Non-GAAP Financial Measures
In addition to the measures presented in our condensed consolidated financial statements, we use the following key performance indicator and non-GAAP financial measures to evaluate the health of our business, measure our performance, identify trends affecting our growth, formulate goals and objectives and make strategic decisions. Accordingly, we believe
our key performance indicator and non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management team. Our key performance indicator and non-GAAP financial measures are presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP and may be different from similarly titled metrics or measures presented by other companies.
PTV Customers
PTV Customers refers to the aggregate number of unique customers that use our PTV platform as part of their CTV campaigns in the twelve-month period preceding the date indicated. We believe the number of PTV Customers is an important key performance indicator for investors because it helps assess the reach of our PTV platform as well as our brand awareness.
The following table summarizes our key performance indicator for each period presented below:
|
Twelve Months Ended September 30,
|
|||||||||||
| 2026 | 2025 | ||||||||||
|
PTV Customers
|
4,373 | 3,316 | |||||||||
Since 2019, our PTV Customers increased from 142 to 4,373 in the twelve months ended September 30, 2026. Our PTV Customers increased 31.9% in the twelve months ended September 30, 2026 from the twelve months ended September 30, 2025. We attribute this growth to new customer acquisitions due to continued customer adoption of PTV and our continued expansion of our overall SMB footprint, including small businesses.
Adjusted EBITDA and Adjusted EBITDA Margin
The following table sets forth Adjusted EBITDA and Adjusted EBITDA margin for the periods set forth below and their most directly comparable GAAP measures:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income (loss) (in thousands) | $ | 7,669 | $ | 6,436 | $ | 23,151 | $ | (40,903) | |||||||||||||||
|
Adjusted EBITDA (in thousands)(1)
|
$ | 19,898 | $ | 15,985 | $ | 57,738 | $ | 39,857 | |||||||||||||||
| Net income (loss) margin | 9.6 | % | 9.2 | % | 9.8 | % | (20.1) | % | |||||||||||||||
|
Adjusted EBITDA margin(1)
|
24.8 | % | 22.8 | % | 24.4 | % | 19.6 | % | |||||||||||||||
(1) See section "Non-GAAP Financial Measures" for more information and a reconciliation to the most directly comparable GAAP financial measure.
Non-GAAP Financial Measures
In this Form 10-Q, we use certain non-GAAP financial measures, including EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin. EBITDA is defined as net income (loss) adjusted to exclude depreciation and amortization expense, interest income, net and income tax provision. Adjusted EBITDA is defined as EBITDA as further adjusted to exclude stock-based compensation expense, fair value adjustments on outstanding warrants, contingent liabilities, embedded derivatives and convertible debt, acquisition costs including legal costs associated with prior acquisitions, legal and regulatory settlements and reserves, restructuring costs, and loss on debt extinguishment, which are items that we believe are not indicative of our core operating performance. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue.
Adjusted EBITDA and Adjusted EBITDA margin are supplemental measures of our performance, are not defined by or presented in accordance with GAAP and should not be considered in isolation or as an alternative to net income (loss), net income (loss) margin or any other performance measure prepared in accordance with GAAP. Adjusted EBITDA and Adjusted EBITDA margin are presented because we believe that they provide useful supplemental information to investors, analysts, and rating agencies regarding our operating performance and our capacity to incur and service debt and are frequently used by these parties in evaluating companies in our industry. By presenting Adjusted EBITDA and Adjusted EBITDA margin, we provide a basis for comparison of our business operations between periods by excluding items that we do not believe are indicative of our core operating performance. We believe that investors' understanding of our performance is enhanced by including these non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations. Additionally, management uses Adjusted EBITDA and Adjusted EBITDA margin as supplemental measures of our performance because they assist us in comparing the operating performance of our business on a consistent basis between periods, as described above.
Although we use Adjusted EBITDA and Adjusted EBITDA margin as described above, Adjusted EBITDA and Adjusted EBITDA margin have significant limitations as analytical tools. Some of these limitations include:
• such measures do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;
• such measures do not reflect changes in, or cash requirements for, our working capital needs;
• such measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
• such measures do not reflect our tax expense or the cash requirements to pay our taxes;
• although amortization is a non-cash charge, the assets being amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and
• other companies in our industry may calculate such measures differently than we do, thereby further limiting their usefulness as comparative measures.
Due to these limitations, Adjusted EBITDA and Adjusted EBITDA margin should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP measures only supplementally. As noted in the table below, Adjusted EBITDA and Adjusted EBITDA margin includes adjustments for items that we believe are not indicative of our core operating performance. It is reasonable to expect that these items will occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period-to-period, do not directly relate to the ongoing operations of our business and complicate comparisons of our internal operating results between periods and with the operating results of other companies over time. Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation table below help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations. Nevertheless, because of the limitations described above, management does not view Adjusted EBITDA and Adjusted EBITDA margin in isolation and also uses other measures, such as revenue, operating income and net income (loss), to measure operating performance.
The following table reconciles Adjusted EBITDA and Adjusted EBITDA margin to the most directly comparable GAAP financial performance measure, which is net income (loss):
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income (loss) | $ | 7,669 | $ | 6,436 | $ | 23,151 | $ | (40,903) | |||||||||||||||
| Interest income, net | (2,643) | (1,991) | (6,566) | (1,544) | |||||||||||||||||||
|
Income tax provision
|
3,709 | 1,946 | 9,003 | (377) | |||||||||||||||||||
| Amortization expense | 3,038 | 2,480 | 9,658 | 7,282 | |||||||||||||||||||
| EBITDA | 11,773 | 8,871 | 35,246 | (35,542) | |||||||||||||||||||
| Stock-based compensation expense | 6,306 | 5,558 | 18,933 | 27,242 | |||||||||||||||||||
| Fair value adjustments | - | 1,138 | (166) | 19,902 | |||||||||||||||||||
| Acquisition costs | 1,076 | 408 | 1,491 | 1,749 | |||||||||||||||||||
| Legal and regulatory settlements and reserves | 743 | 10 | 743 | 70 | |||||||||||||||||||
| Restructuring costs | - | - | 1,491 | - | |||||||||||||||||||
| Loss on debt extinguishment | - | - | - | 26,436 | |||||||||||||||||||
| Adjusted EBITDA | $ | 19,898 | $ | 15,985 | $ | 57,738 | $ | 39,857 | |||||||||||||||
| Revenue | $ | 80,251 | $ | 70,023 | $ | 236,461 | $ | 202,995 | |||||||||||||||
| Net income (loss) | 7,669 | 6,436 | 23,151 | (40,903) | |||||||||||||||||||
| Net income (loss) margin | 9.6 | % | 9.2 | % | 9.8 | % | (20.1) | % | |||||||||||||||
| Revenue | $ | 80,251 | $ | 70,023 | $ | 236,461 | $ | 202,995 | |||||||||||||||
| Adjusted EBITDA | 19,898 | 15,985 | 57,738 | 39,857 | |||||||||||||||||||
| Adjusted EBITDA margin | 24.8 | % | 22.8 | % | 24.4 | % | 19.6 | % | |||||||||||||||
Factors Affecting Our Performance
Growth of the CTV Ad Market and Marketers Using CTV as a Performance Marketing Channel
Our growth and operating results will be impacted by the overall growth of the CTV ad market, which relies upon the continued consumer adoption of CTV and the proliferation of marketing budgets for TV. CTV has grown rapidly in recent years, and we expect that any acceleration, or deceleration, of this trend may affect demand for our platform.
Our success also depends on marketers using CTV as a performance marketing channel. As the first brand-direct performance marketing platform for TV, we believe we are defining the PTV market and are uniquely positioned to benefit from this transition. We anticipate our market opportunity will expand over time as our outcome-based platform attracts performance marketers to TV for the first time.
Ability to Acquire New Customers and Increase Sales to Existing Customers
We focus our new customer acquisition primarily on SMB companies that currently engage in performance marketing through paid search and social channels, many of whom have never advertised on TV before, as well as existing TV marketers seeking greater targeting, attribution and reporting capabilities. We also leverage relationships with agencies and other partners to bring additional marketers onto the platform. We gain new customers primarily through our direct sales and marketing efforts. Our ability to add new customers is dependent upon our ability to reach and message future customers through our PTV platform. Our ability to add new customers is also dependent upon our ability to optimize our sales process. These efforts have led to significant growth of our PTV Customers. We believe we have significant growth opportunity as we continue to expand our overall SMB footprint, including small businesses. We are continuously focusing on driving innovation to improve the performance of our platform, the customer experience, and their success on our platform to drive increased spend.
Our success depends on our ability to achieve and maintain customers' ROAS and other campaign goals and increase incremental usage and spend on our platform. We seek to increase our share of advertising spend from existing customers by increasing the value our platform provides them, driving larger and more frequent campaigns through our platform. We plan to continue to invest in research and development to introduce new products and features to enhance our platform and to acquire additional sources of data that further accelerate our methodologies.
Investment in Innovation
We believe our commitment to product innovation is a key driver to building and deepening relationships with our customers and fueling growth. We have in the past invested, and plan to continue to invest, substantially in our platform to maintain our market-leading position in PTV by continuing to improve our targeting, usability of data, measurement, attribution and campaign optimization capabilities, refine our algorithms and increase automation. We continuously introduce new features, functionalities and integrations to enhance our platform's value to customers and our overall competitiveness. Our ability to successfully innovate and integrate new technologies by assessing customer needs, industry trends, and competitors' alternatives is critical to our success.
Investment in Talent
As of September 30, 2026, we had 471 full-time team members. Hiring productive and diverse talent is a key driver of our success and we expect to strategically grow headcount as our business scales. We plan to further invest in research and development to extend our data and technology lead and to enhance our platform. We also expect to incur additional sales and marketing and general and administrative expenses to support our growth. Our headcount may increase through direct hires or through acquisitions of companies or teams.
Seasonality
We experience seasonal fluctuations in revenue due to increased customer spend during the fourth quarter holiday season and around notable consumer viewing events and reduced customer spend during the first quarter, immediately after the holiday season. This trend is especially relevant for direct-to-consumer and e-commerce brands, many of which use our platform to advertise on TV. Fourth quarter revenue comprised 30.0% and 30.9% of our revenue for the years ended December 31, 2025 and 2024, respectively. First quarter revenue comprised 22.2% and 19.4% of our revenue for the years ended December 31, 2025 and 2024, respectively. We expect revenue to fluctuate in the future based on seasonal and event-driven factors; however, historical trends may not be indicative of future results given evolving industry dynamics, changes to consumer spending patterns, expansion of our customer base into new verticals, or potential changes to our business model.
Macroeconomic factors
Macroeconomic factors, such as labor shortages, inflation, interest rate volatility, changes in foreign currency exchange rates, instability in the global financial system, supply chain disruptions, increased tariffs and other trade barriers, uncertainty about economic recovery or growth, and instability in political or market conditions generally have affected, and continue to have an effect, on our markets and industry. Any worsening of macroeconomic conditions in future periods could have a negative effect on our financial results.
Components of Our Results of Operations
We have one primary business activity and operate in one operating and reportable segment.
Revenue
Our revenue is primarily generated through usage-based fees from customers based on their level of ad spend on our platform, net of amounts paid to suppliers for the cost of advertising inventory. We expect our revenue to continue to increase as CTV adoption expands and more brands increase their PTV ad spend. Additionally, we generate revenue through QuickFrame's ad production services provided to our customers, and generated revenue through Maximum Effort Marketing's creative services prior to its divestiture on April 1, 2025.
Cost of Revenues
Cost of revenues consists primarily of hosting costs, data costs, third-party service fees, production costs from contracts in which we act as the principal, and personnel costs. Personnel costs included in cost of revenues include salaries, benefits, bonuses, and stock-based compensation and are primarily attributable to personnel who support our platform and who design and manage the production of video ads. We capitalize costs associated with software that is developed or obtained for internal use and amortize the costs associated with our revenue-producing platform in cost of revenues over their estimated useful lives. Certain costs are relatively fixed in nature and do not necessarily fluctuate directly with the level of revenue in a given period. Although we expect that the long-term cost of revenues will remain relatively consistent as a percentage of revenues, it may fluctuate from period-to-period as a result of the level and timing of costs to support our platform.
Technology and Development Expense
Technology and development expense consists of personnel-related costs (including salaries, bonuses, benefits and stock-based compensation) and SaaS and other tools related to the development and operation of our platform. Technology and development costs are expensed as incurred, except to the extent that such costs are associated with software development that qualifies for capitalization, which are then recorded as capitalized software development costs included in internal use software, net on our consolidated balance sheets. We expect that our technology and development expense will increase in absolute dollars as our business grows and we continue to invest in optimization and feature expansion of our platform as well as technology improvements to support and drive efficiency in our operations.
Sales and Marketing Expense
Sales and marketing expense consists of personnel-related costs (including salaries, commissions, bonuses, benefits, stock-based compensation), as well as costs related to promotional activities such as online advertising, branding products and trade shows, fees paid to third parties for marketing and product research, and commissions paid to certain advertising agencies. Commission costs are expensed as incurred. We expect sales and marketing expenses to grow in absolute dollars as we add personnel to increase the number of customers and expand their adoption of our platform. Sales and marketing expense as a percentage of revenue may fluctuate from period-to-period based on revenue levels and the timing of our investments, which may be impacted by the revenue seasonality in our industry and business as described further above.
General and Administrative Expense
General and administrative expense consists of personnel-related costs (including salaries, bonuses, benefits, stock-based compensation) related to our executive, finance and accounting, human resources and administrative departments. General and administrative expense also includes fees for third-party professional services, including consulting, legal and accounting services, merchant service fees, charitable contributions and other employee-related costs. We expect that our general and administrative expense will increase in absolute dollars as we invest in corporate infrastructure and incur additional expenses associated with our operations as a public company, including increased legal and accounting costs, investor relations costs, higher insurance premiums and compliance costs associated with developing the requisite infrastructure required for sufficient internal controls.
Amortization of Acquired Intangibles
Amortization of acquired intangibles consists of the amortization expense associated with the intangible assets purchased through our prior acquisitions.
Other Income (Expense):
Interest Income, Net. Interest expense is incurred on any borrowings on our Revolving Credit Facility, and prior to the IPO, on the outstanding borrowings on our 2023 Convertible Notes. We earn interest income on our cash and cash equivalents, notes receivable, and partial recourse promissory notes as they are repaid.
Other (Expense) Income, Net. Other (Expense) Income, Net primarily consists of non-operating gains or losses, including fair value adjustments related to outstanding warrants, embedded derivative liabilities, convertible debt and contingent liabilities, and gains or losses on debt extinguishment.
Income Tax Provision
Our income tax provision primarily consists of U.S. federal and state income taxes, adjusted for allowable credits, deductions, and valuation allowance against deferred tax assets. Our effective tax rate is affected by tax rates in the jurisdictions in which we operate and the relative amounts of income we earn in those jurisdictions, as well as non-deductible expenses, such as share-based compensation, and changes in our valuation allowance against deferred tax assets.
Results of Operations for the Three Months Ended September 30, 2026, Compared with the Three Months Ended September 30, 2025
The following table sets forth our condensed consolidated results of operations for the periods presented:
|
Three Months Ended September 30, |
Change
|
||||||||||||||||||||||
|
(dollars in thousands)
|
2026 | 2025 |
$
|
%
|
|||||||||||||||||||
| Revenue | $ | 80,251 | $ | 70,023 | $ | 10,228 | 14.6 | % | |||||||||||||||
| Cost of revenues | 16,997 | 14,789 | 2,208 | 14.9 | % | ||||||||||||||||||
| Gross profit | 63,254 | 55,234 | 8,020 | 14.5 | % | ||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Technology and development | 17,460 | 13,714 | 3,746 | 27.3 | % | ||||||||||||||||||
| Sales and marketing | 23,818 | 21,353 | 2,465 | 11.5 | % | ||||||||||||||||||
| General and administrative | 12,583 | 11,980 | 603 | 5.0 | % | ||||||||||||||||||
| Amortization of acquired intangibles | 658 | 657 | 1 | 0.2 | % | ||||||||||||||||||
| Total operating expenses | 54,519 | 47,704 | 6,815 | 14.3 | % | ||||||||||||||||||
| Operating income | 8,735 | 7,530 | 1,205 | 16.0 | % | ||||||||||||||||||
|
Other income (expense):
|
|||||||||||||||||||||||
| Interest income, net | 2,643 | 1,991 | 652 | 32.7 | % | ||||||||||||||||||
| Other expense, net | - | (1,139) | 1,139 | (100.0) | % | ||||||||||||||||||
| Total other income | 2,643 | 852 | 1,791 | 210.2 | % | ||||||||||||||||||
| Income before income tax provision | 11,378 | 8,382 | 2,996 | 35.7 | % | ||||||||||||||||||
| Income tax provision | 3,709 | 1,946 | 1,763 | 90.6 | % | ||||||||||||||||||
| Net income | $ | 7,669 | $ | 6,436 | $ | 1,233 | 19.2 | % | |||||||||||||||
The following table sets forth our condensed consolidated results of operations for the specified periods as a percentage of our revenue for those periods presented:
|
Three Months Ended September 30, |
|||||||||||
| 2026 | 2025 | ||||||||||
| Revenue | 100.0 | % | 100.0 | % | |||||||
| Cost of revenues | 21.2 | 21.1 | |||||||||
| Gross profit | 78.8 | 78.9 | |||||||||
| Operating expenses: | |||||||||||
| Technology and development | 21.8 | 19.6 | |||||||||
| Sales and marketing | 29.7 | 30.5 | |||||||||
| General and administrative | 15.7 | 17.1 | |||||||||
| Amortization of acquired intangibles | 0.8 | 0.9 | |||||||||
| Total operating expenses | 67.9 | 68.1 | |||||||||
| Operating income | 10.9 | 10.8 | |||||||||
|
Other income (expense):
|
|||||||||||
| Interest income, net | 3.3 | 2.8 | |||||||||
| Other expense, net | - | (1.6) | |||||||||
| Total other income | 3.3 | 1.2 | |||||||||
| Income before income tax provision | 14.2 | 12.0 | |||||||||
| Income tax provision | 4.6 | 2.8 | |||||||||
| Net income | 9.6 | % | 9.2 | % | |||||||
Revenue
Revenue increased $10.2 million, or 14.6%, to $80.3 million for the three months ended September 30, 2026, compared to $70.0 million for the three months ended September 30, 2025. The increase was due primarily to an increase of $10.3 million in revenue generated from PTV. Active PTV customers increased 12% between the periods in comparison, with average revenue per customer remaining relatively flat period over period. Included within the increase in PTV revenue was a decrease in commissions paid to certain agencies and a decrease in creative costs, as we changed the nature of certain relationships during the year.
Cost of Revenues
Cost of revenues increased $2.2 million, or 14.9%, to $17.0 million for the three months ended September 30, 2026, compared to $14.8 million for the three months ended September 30, 2025. The increase was primarily due to a $1.4 million increase in hosting fees, a $0.6 million increase in database fees, and an increase of $0.6 million in amortization for internal use software. In addition, production expenses associated with contracts in which we act as the principal in the transaction increased by $1.1 million between the periods in comparison. Offsetting these increases were decreases in personnel costs of $0.6 million driven by a 38% decrease in headcount between the periods in comparison as a result of the strategic restructuring plan, platform fees of $0.4 million, and data processing fees of $0.2 million.
Technology and Development Expense
Technology and development expense increased $3.7 million, or 27.3%, to $17.5 million for the three months ended September 30, 2026, compared to $13.7 million for the three months ended September 30, 2025. The increase was primarily due to an increase in personnel costs of $2.7 million attributable to increased headcount to maintain and support further development of our platform. Technology and development headcount increased by 4% between the periods in comparison as we continued to grow our engineering team to support the growth of our product. The remaining increase was driven by investment in incremental tools to support the development of our platform.
Sales and Marketing Expense
Sales and marketing expense increased $2.5 million, or 11.5%, to $23.8 million for the three months ended September 30, 2026, compared to $21.4 million for the three months ended September 30, 2025. This was primarily due to an increase in stock-based compensation of $2.0 million driven by a marketing services agreement entered into during the year with a contractor and an increase in partnership commissions of $2.0 million. These increases were partially offset by a decrease in
marketing spend of $0.8 million and a decrease in personnel costs of $0.8 million due to headcount decreasing by 9% between the periods in comparison.
General and Administrative Expense
General and administrative expense increased $0.6 million, or 5.0%, to $12.6 million for the three months ended September 30, 2026, compared to $12.0 million for the three months ended September 30, 2025. The increase was primarily driven by an increase of $1.8 million in legal fees and $0.7 million recognized as a sales tax contingency accrual. These increases were partially offset by a $1.1 million decrease in stock-based compensation due to the full vesting of options granted in 2021 and a decrease in bonus expense of $1.2 million related to current year performance-based cash bonuses.
Amortization of Acquired Intangibles
Amortization of acquired intangibles remained flat at $0.7 million for both the three months ended September 30, 2026 and September 30, 2025 as there were no changes to acquired intangibles period over period.
Interest Income, Net
Interest income, net increased by $0.7 million, or 32.7%, to $2.6 million for the three months ended September 30, 2026, compared to $2.0 million for the three months ended September 30, 2025 due to a higher interest bearing cash balance, which increased as a result of the IPO proceeds and increase in operating cash.
Other Expense, Net
Other expense, net primarily consists of fair value adjustments on our warrants, embedded derivatives, convertible debt and contingent liabilities, as well as a loss on the extinguishment of debt. During the three months ended September 30, 2025, we recognized a $3.2 million loss due to the increase in fair value of our common stock warrants, partially offset by a $2.0 million gain due to the decrease in fair value of contingent liabilities.
Income Tax Provision
Income tax provision increased by $1.8 million to $3.7 million during the three months ended September 30, 2026, compared to $1.9 million for the three months ended September 30, 2025 due to an increase in the annual effective tax rate as a result of projected taxable income, primarily driven by an increase in full-year projected pre-tax book income.
Results of Operations for the Nine Months Ended September 30, 2026, Compared with the Nine Months Ended September 30, 2025
The following table sets forth our condensed consolidated results of operations for the periods presented:
|
Nine Months Ended September 30, |
Change
|
||||||||||||||||||||||
|
(dollars in thousands)
|
2026 | 2025 |
$
|
%
|
|||||||||||||||||||
| Revenue | $ | 236,461 | $ | 202,995 | $ | 33,466 | 16.5 | % | |||||||||||||||
| Cost of revenues | 46,891 | 50,523 | (3,632) | (7.2) | % | ||||||||||||||||||
| Gross profit | 189,570 | 152,472 | 37,098 | 24.3 | % | ||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Technology and development | 48,425 | 34,054 | 14,371 | 42.2 | % | ||||||||||||||||||
| Sales and marketing | 76,082 | 67,335 | 8,747 | 13.0 | % | ||||||||||||||||||
| General and administrative | 37,660 | 45,588 | (7,928) | (17.4) | % | ||||||||||||||||||
| Amortization of acquired intangibles | 1,973 | 1,973 | - | - | % | ||||||||||||||||||
| Total operating expenses | 164,140 | 148,950 | 15,190 | 10.2 | % | ||||||||||||||||||
| Operating income | 25,430 | 3,522 | 21,908 | 622.0 | % | ||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest income, net | 6,566 | 1,544 | 5,022 | 325.3 | % | ||||||||||||||||||
| Other income (expense), net | 158 | (46,346) | 46,504 | (100.3) | % | ||||||||||||||||||
| Total other income (expense) | 6,724 | (44,802) | 51,526 | (115.0) | % | ||||||||||||||||||
| Income (loss) before income tax provision | 32,154 | (41,280) | 73,434 | (177.9) | % | ||||||||||||||||||
| Income tax provision | 9,003 | (377) | 9,380 | (2488.1) | % | ||||||||||||||||||
| Net income (loss) | $ | 23,151 | $ | (40,903) | $ | 64,054 | (156.6) | % | |||||||||||||||
The following table sets forth our condensed consolidated results of operations for the specified periods as a percentage of our revenue for those periods presented:
|
Nine Months Ended September 30, |
|||||||||||
| 2026 | 2025 | ||||||||||
| Revenue | 100.0 | % | 100.0 | % | |||||||
| Cost of revenues | 19.8 | 24.9 | |||||||||
| Gross profit | 80.2 | 75.1 | |||||||||
| Operating expenses: | |||||||||||
| Technology and development | 20.5 | 16.8 | |||||||||
| Sales and marketing | 32.2 | 33.2 | |||||||||
| General and administrative | 15.9 | 22.5 | |||||||||
| Amortization of acquired intangibles | 0.8 | 1.0 | |||||||||
| Total operating expenses | 69.4 | 73.4 | |||||||||
| Operating income | 10.8 | 1.7 | |||||||||
|
Other income (expense):
|
|||||||||||
| Interest income, net | 2.8 | 0.8 | |||||||||
| Other income (expense), net | 0.1 | (22.8) | |||||||||
| Total other income (expense) | 2.8 | (22.1) | |||||||||
| Income (loss) before income tax provision | 13.6 | (20.3) | |||||||||
| Income tax provision | 3.8 | (0.2) | |||||||||
| Net income (loss) | 9.8 | % | (20.1) | % | |||||||
Revenue
Revenue increased $33.5 million, or 16.5%, to $236.5 million for the nine months ended September 30, 2026, compared to $203.0 million for the nine months ended September 30, 2025. The increase was due primarily to an increase of $39.6 million in revenue generated from PTV. Active PTV customers increased 23% between the periods in comparison while average
revenue per customer remained relatively flat. Included within the increase in revenue from PTV was $1.7 million in revenue recognized during the nine months ended September 30, 2026 related to the expiration of unused creative credits associated with amended contracts in the period. Also included within the increase in PTV revenue was a decrease in commissions paid to certain agencies and a decrease in certain creative costs due to a change in the nature of the relationship. Offsetting the increase in PTV revenue were decreases in creative and production revenues of $4.3 million and $2.0 million, respectively, primarily due to the divestiture of Maximum Effort Marketing on April 1, 2025.
Cost of Revenues
Cost of revenues decreased $3.6 million, or 7.2%, to $46.9 million for the nine months ended September 30, 2026, compared to $50.5 million for the nine months ended September 30, 2025. The decrease was primarily due to a $4.1 million decrease in personnel costs driven by a 42% decrease in headcount between the periods in comparison due to the divestiture of Maximum Effort Marketing on April 1, 2025 as well as the strategic restructuring plan. Additionally, hosting expense decreased by $1.3 million primarily due to changes in vendors coupled with a decrease in platform fees of $1.6 million. Offsetting these decreases was a $2.5 million increase in amortization for internal use software due to increased disposals of obsolete internal use software in the current period as well as increased additions to capitalized software as we continued to improve our technology and a $1.4 million increase in production expenses associated with contracts in which we act as the principal in the transaction.
Technology and Development Expense
Technology and development expense increased $14.4 million, or 42.2%, to $48.4 million for the nine months ended September 30, 2026, compared to $34.1 million for the nine months ended September 30, 2025. The increase was primarily due to an increase in personnel costs of $11.2 million attributable to increased headcount to maintain and support further development of our platform. Technology and development headcount increased by 13% between the periods in comparison as we continued to grow our engineering team to support the growth of our product. Additionally, investment in incremental tools to support the development of our platform increased by $2.4 million.
Sales and Marketing Expense
Sales and marketing expense increased $8.7 million, or 13.0%, to $76.1 million for the nine months ended September 30, 2026, compared to $67.3 million for the nine months ended September 30, 2025. This was primarily due to an increase in stock-based compensation of $5.0 million mainly driven by a marketing services agreement entered into during the period with a contractor, an increase in partnership commissions of $3.7 million, generative AI costs associated with creative offerings to drive new business of $1.1 million, increased brand marketing spend of $0.8 million, and a $1.1 million increase in SaaS tools to support the growth of the business. Partially offsetting these increases was a decrease in personnel costs of $1.0 million driven by a decrease in average headcount of 4% period over period, a decline in sponsorships of $1.4 million, lower events and trade show costs of $0.4 million and video production costs of $0.4 million.
General and Administrative Expense
General and administrative expense decreased $7.9 million, or 17.4%, to $37.7 million for the nine months ended September 30, 2026, compared to $45.6 million for the nine months ended September 30, 2025. The decrease was primarily driven by a $13.5 million decrease in stock-based compensation due to the full vesting of options granted in 2021 and the forgiveness of partial recourse promissory notes with executive officers that were issued to facilitate the early exercise of stock options during the nine months ended September 30, 2025. These decreases were partially offset by increases of $2.9 million in legal fees primarily related to ongoing litigation, $0.7 million recognized as a sales tax contingency accrual, $0.6 million in professional fees and $0.5 million in insurance costs. In addition, uncollectible accounts expense increased by $0.3 million and credit card merchant fees increased by $0.6 million.
Amortization of Acquired Intangibles
Amortization of acquired intangibles remained flat at $2.0 million for both the nine months ended September 30, 2026 and September 30, 2025 as there were no changes to acquired intangibles quarter-over-quarter.
Interest Income, Net
Interest income, net increased by $5.0 million, or 325.3%, to $6.6 million for the nine months ended September 30, 2026, compared to $1.5 million for the nine months ended September 30, 2025. The increase was primarily due to a $2.9 million increase in interest income due to a higher interest bearing cash balance, which increased as a result of the IPO proceeds and increase in operating cash. Additionally, the prior period included $2.0 million of interest expense relating to the Convertible Notes which were settled on May 23, 2025, resulting in no interest expense for the nine months ended September 30, 2026.
Other Income (Expense), Net
Other income (expense), net primarily consists of fair value adjustments on our warrants, embedded derivatives, convertible debt and contingent liabilities, and a loss on extinguishment of debt. Other income (expense), net changed by $46.5 million to other income, net of $0.2 million for the nine months ended September 30, 2026, compared to other expense, net $46.3 million for the nine months ended September 30, 2025. We recognized $0.2 million in income during the nine months ended September 30, 2026, due to the decrease in fair value of contingent liabilities. During the nine months ended September 30, 2025, we recognized $16.6 million in losses due to fair value adjustments of our embedded derivative liabilities, $2.9 million in losses due to the increase in fair value of our contingent liabilities, $4.4 million due to losses due to the increase in fair value of our convertible notes, and $3.9 million in losses due to the increase in fair value of our common stock warrants. This was offset by a $7.9 million decrease in the fair value of the Series D Warrants, which were marked to fair value immediately prior to extinguishment upon the IPO. Additionally, we recognized a $26.4 million loss on the extinguishment of the Convertible Notes when they were modified on April 1, 2025.
Income Tax Provision
Income tax expense was $9.0 million for the nine months ended September 30, 2026, compared to an income tax benefit of $0.4 million for the nine months ended September 30, 2025. The change was due to the pre-tax loss generated during the nine months ended September 30, 2025, which generated income tax benefit, compared to pre-tax income generated during the nine months ended September 30, 2026, which generated income tax expense. The annual effective tax rate has increased in the current period as a result of projected taxable income, primarily driven by an increase in full-year projected pre-tax book income and estimated non-deductible officers' compensation.
Liquidity and Capital Resources
Overview
Since inception, we have financed operations to date primarily through cash flow from operating activities, net proceeds received from sales of equity securities, borrowings under our Revolving Credit Facility and other indebtedness. We have an accumulated deficit of $238.0 million as of September 30, 2026. As of September 30, 2026, we had cash and cash equivalents of $252.3 million, no borrowings outstanding under our Revolving Credit Facility and up to $44.9 million of borrowing capacity available thereunder.
We believe that our existing cash and cash equivalents, together with cash flow from operations and borrowings under our Revolving Credit Facility, will be sufficient to support our working capital requirements for at least the next 12 months. We utilize Insured Cash Sweep services to reduce exposure of our cash and cash equivalents balances that exceed FDIC limits at any one financial institution. Our long-term cash requirements will depend on many factors, including our revenue growth, the timing and extent of product development efforts and other investments to support our growth (including through acquisitions), the expansion of sales and marketing activities, stock repurchasing activity and increases in general and administrative costs. To the extent our current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our stockholders. The incurrence of additional debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. There can be no assurances that we will be able to raise additional capital. In the event additional financing is required from outside sources, we may not be able to negotiate terms acceptable to us or at all. In particular, the recent global macroeconomic trends have caused disruption in the global financial markets, which could reduce our ability to access capital and negatively affect our liquidity in the future. If we are unable to raise additional capital when required, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations, financial condition, and cash flows would be adversely affected.
Revolving Credit Facility
On August 7, 2026, we amended an existing Amended and Restated Business Financing Agreement (as amended from time to time, the "Revolving Credit Agreement") with Western Alliance Bank. The Revolving Credit Agreement provides for a senior secured asset-based revolving credit facility (the "Revolving Credit Facility"), pursuant to which we may initially incur up to $50.0 million aggregate principal amount of revolver borrowings and have the option to request from time to time up to an additional $30.0 million in borrowings. The Revolving Credit Facility matures on May 28, 2029. The amount of borrowing availability under the Revolving Credit Facility is based on our accounts receivable balance, reduced by reserves. As of September 30, 2026 and December 31, 2025, we had no outstanding borrowings under the Revolving Credit Facility and up to $44.9 million of borrowings available.
Borrowings under the Revolving Credit Facility bear interest at a floating per annum rate equal to the Secured Overnight Financing Rate ("SOFR") plus 3.00%, with a floor of 1.00%. Interest is payable on the revolving borrowings on a monthly basis.
The Revolving Credit Facility contains customary conditions to borrowings, events of default and covenants, including, without limitation, covenants that restrict our ability to sell assets, engage in mergers or acquisitions, incur, assume or permit to exist additional indebtedness and guarantees, create or permit to exist liens, pay dividends, make distributions or redeem or repurchase capital stock, other than repurchases of our publicly traded capital stock not to exceed $100.0 million through August 31, 2027, or make other investments, engage in transactions with affiliates and make payments in respect of subordinated debt. The Revolving Credit Facility also requires us to maintain compliance with an Adjusted Quick Ratio (defined as unrestricted cash maintained with the lender plus eligible receivables divided by the sum of outstanding loans plus accounts payable aged over 60 days from the invoice date) covenant at least 1.35 to 1.00 if the unrestricted cash balance with the lender is less than $35.0 million and there are outstanding borrowings. Such covenant will be tested as of the last day of the most recently completed fiscal period for which financial statements have been delivered and for each fiscal period thereafter until the unrestricted cash balance is above $35.0 million and there are outstanding borrowings. We are also required to maintain $75.0 million of depository and operating accounts with Western Alliance Bank, subject to certain exceptions. Our obligations under the Revolving Credit Facility are collateralized by a pledge of substantially all of our assets, including accounts receivable, deposit accounts, intellectual property, investment property and equipment. See Note 6, "Debt" to our condensed consolidated financial statements included elsewhere in this Form 10-Q.
Stock Repurchase Program
In August 2026, our board of directors authorized a stock repurchase program of up to $100.0 million shares of the Company's Class A common stock through August 5, 2027. Repurchases may be made at management's discretion in the open market pursuant to one or more trading plans adopted in accordance with Rule 10b5-1 and in compliance with Rule 10b-18. The timing and amount will depend on market conditions, price and liquidity, applicable legal requirements, available capital, and other considerations. The stock repurchase program does not obligate the Company to repurchase any minimum number or dollar amount of Class A common stock and may be modified, suspended, or discontinued at any time. As of September 30, 2026, there is $100.0 million remaining under this program.
Contractual Commitment
The Company has a non-cancellable commitment with our cloud-based hosting service provider. As of September 30, 2026, the Company had a remaining commitment of $52.6 million, of which $23.0 million is payable within 12 months, and the remainder thereafter.
Cash Flows
The following table summarizes our cash flows for the periods presented:
|
Nine Months Ended September 30, |
|||||||||||
|
(dollars in thousands)
|
2026 | 2025 | |||||||||
| Net cash provided by operating activities | $ | 43,531 | $ | 26,920 | |||||||
| Net cash used in investing activities | (9,354) | (18,813) | |||||||||
| Net cash provided by financing activities | 7,985 | 88,503 | |||||||||
| Net increase in cash and cash equivalents | $ | 42,162 | $ | 96,610 | |||||||
Operating Activities
Net cash provided by operating activities consists of net income (loss) adjusted for certain non-cash items and changes in operating assets and liabilities. Our cash flows from operating activities are primarily impacted by growth in our operations, increases or decreases in collections from our customers and related payments to third parties for ad inventory and data. Our collection and payment cycles can vary from period-to-period.
Net cash provided by operating activities was $43.5 million for the nine months ended September 30, 2026, as compared to $26.9 million for the nine months ended September 30, 2025. The increase in cash provided of $16.6 million was primarily due to a $64.1 million increase in net income (loss) partially offset by decreases in stock-based compensation of $8.3 million, changes in fair value of financial liabilities of $20.1 million, $26.4 million related to loss on extinguishment of convertible debt during the nine months ended September 30, 2025, a $4.5 million change in deferred taxes and $1.6 million related to changes in operating assets and liabilities.
Investing Activities
Net cash used in investing activities consisted of investments in capitalized internal use software costs to develop our technology platform and other investment activities. As our business grows, we expect our investments in our platform development to increase as needed to support our platform.
Net cash used in investing activities was $9.4 million for the nine months ended September 30, 2026, as compared to $18.8 million for the nine months ended September 30, 2025. The decrease in cash used was due to the issuance of $9.6 million in notes receivable during the nine months ended September 30, 2025, partially offset by an $0.2 million increase in costs capitalized for internal use software during the nine months ended September 30, 2026.
Financing Activities
During the nine months ended September 30, 2026 and 2025, net cash provided by financing activities consisted of activity related to stock-based compensation plans, proceeds from the repayment of a partial recourse promissory note, and proceeds from the IPO, offset by payments of IPO costs, settlement of convertible debt and the repurchase of common stock.
Net cash provided by financing activities was $8.0 million for the nine months ended September 30, 2026 compared to $88.5 million for the nine months ended September 30, 2025. The decrease of $80.5 million was primarily due to $125.3 million of proceeds from the IPO, partially offset by $24.0 million of payments on the settlement of the Convertible Notes, $10.0 million for the repurchase of Class A common stock for the settlement of the Convertible Notes and $5.4 million of payments on initial public offering costs during the nine months ended September 30, 2025. In addition, the Company received $1.2 million from the issuance of common stock under the ESPP and $6.6 million from the repayment of a partial recourse promissory note during the nine months ended September 30, 2026.
Critical Accounting Estimates
Critical accounting estimates are those that we believe are both significant and require us to make difficult, subjective or complex judgments, often because we need to estimate the effect of inherently uncertain matters. We base our estimates and judgments on historical experiences and various other factors that we believe to be appropriate under the circumstances. Actual results may differ from these estimates, and the estimates included in our financial statements might be impacted if we used different assumptions or conditions. Other than the following, there have been no material changes to our critical accounting estimates as compared to those described in our 2025 Annual Report, in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates."
Revenue Recognition
We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers. We generate revenue by charging our customers a variable fee based on the level of ad spend and through charging fees for various ad production activities. We also offer customers incentive programs where the customers can earn rebates or creative services based on achieving certain levels of ad spend during the contract term. We recognize revenue through the following steps:
•identification of the contract, or contracts, with a customer;
•identification of the performance obligations in the contract;
•determination of the transaction price;
•allocation of the transaction price to the performance obligations in the contract; and
•recognition of revenue when, or as, the performance obligations are satisfied.
The determination as to whether revenue should be reported gross of amounts billed to customers (gross basis) or net of payments to suppliers (net basis) requires significant judgment and is based on our assessment of whether we are acting as the principal or an agent in the transaction. We have determined that we do not act as the principal in the purchase and sale of digital advertising inventory because we do not control the advertising inventory and we do not set the price which is the result of an auction within the marketplace. Based on these and other factors, we report revenue from the sale of advertising inventory on our platform on a net basis, which represents gross billings net of amounts we pay suppliers for the cost of advertising inventory and net of consideration we pay to certain advertising agencies that meet the definition of customers under ASC 606. For our ad production activities where we have control over the specified good, are primarily responsible for the performance of third-party services, can redirect those services to fulfill other contracts, carry inventory risk, and set the price of services used in the production activities, we report revenue from those transactions on a gross basis. For the ad production activities where we facilitate and therefore do not have complete control over the specified goods, are not primarily responsible for the performance of third-party services, cannot redirect those services to fulfill other contracts, do
not carry inventory risk, and do not set the price of third-party services used in the production activities, we report revenue from those transactions on a net basis.
Our accounts receivable are recorded at the amount of gross billings to customers, net of allowance, for the amounts we are responsible to collect, and our accounts payable are recorded at the amounts payable to suppliers. Accordingly, both accounts receivable and accounts payable appear large in relation to revenue reported on a net basis.
Recently Issued Accounting Pronouncements
For information regarding recent accounting pronouncements, refer to Note 1 "Business and Basis of Presentation" to our condensed consolidated financial statements included in this Form 10-Q.
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