Prepared remarks
Hello and welcome to the MNTN Second Quarter 2026 Results Webcast. Operator instructions were provided. I will now hand the conference over to Brinlea Johnson. Please go ahead.
Good afternoon. Thank you for joining us for MNTN's Second Quarter 2026 Earnings Call. With me today is Mark Douglas, CEO, and Patrick Pohlen, CFO. Just to remind everyone, today's call includes forward-looking statements that are subject to risks and uncertainties, and actual results could materially differ from those anticipated in these forward-looking statements. For the risks and uncertainties that may affect future results, please see our most recently filed periodic report, which is also available on our website. We will also discuss non-GAAP financial measures on today's call. Reconciliations of these measures are available in our earnings materials on our website. With that, I'll turn the call over to Mark.
Thank you for joining us today. MNTN delivered a strong second quarter with revenue of $82.5 million, representing 21% year-over-year growth, and adjusted EBITDA of $21.5 million, representing 48% year-over-year growth. Both of these metrics finished at the high end of our guidance. We're pleased with the quarter and are reiterating our 2026 full year outlook. Before I get into the details, I want to talk about our strategy. Performance TV is about giving businesses that historically haven't had access to television a way to reach specific consumers across premium streaming inventory and measure whether that advertising is driving revenue. MNTN created this category, and now we're seeing Performance TV move from an early adopter market toward a mainstream part of the marketing mix. To capture that move, MNTN began expanding our sales organization in Q4 2025, strengthening our leadership in sales and increasing our investment in marketing. For the next stage of growth, MNTN is focused on three main priorities: expanding our products and continuing to invest in AI, broadening access to premium television, and strengthening our go-to-market organization. This isn't a change in strategy or a new story for MNTN. It's the same opportunity we've been building towards over the past year, now with products and go-to-market structure ready to execute at greater scale. Turning to our product suite, I've said many times that half of the company's headcount is in engineering, and they've been building products. We released new versions of MNTN's Performance TV platform that create distinct versions for small business, mid-market, and upper mid-market. We found that different sized businesses need different levels of features and complexity, so we've divided the platform into three main tiers: Express, Pro, and Premium. MNTN Express was launched on April 1. Express is specifically built for small business, distinct from mid-size advertisers. Brands can get live in minutes and do so from any device. We've had over 7,000 signups for Express in the first 120 days since we launched. Importantly, hundreds of those signups have become paying customers, and momentum continues. The revenue contribution from Express is small today in comparison to MNTN's overall business, but it's growing quickly and I believe it will be a meaningful contributor to growth as we enter 2027. For mid-sized customers, we've added significant agentic AI technology into the platform that gives our customers even more automation and greater performance. We surround them with AI technology to give our customers control of the daily decision-making. We're leveraging AI across the organization, especially within engineering, where we're AI-native, using AI to build faster while embedding AI throughout our product suite. We've talked about QuickFrame AI a number of times and its importance for enabling the SMB opportunity in Connected TV. QuickFrame AI is doing exactly what we planned: lowering creative barriers, increasing launch rates, and making it easier for businesses to create television-ready advertising. We've had over 37,000 QuickFrame AI signups in Q2, bringing us to over 73,000 signups year-to-date. We're seeing an incredibly diverse set of businesses across retail, financial services, health care, technology, education, and many other industries successfully leverage the technology to create their ads. There is broad interest in AI creative, and it's critical for Performance TV. We've always believed that MNTN customers should have access to and the ability to specify ad placement alongside the same premium television inventory as the world's largest brands. In January this year, we doubled down on premium inventory as part of our platform. Today, our customers have the ability to insert their ads alongside nearly every major sports league, in addition to the premium streaming shows on our network of partners. As a result of that focus on super premium content, we have many customers who advertise during the FIFA World Cup games, March Madness, and on MLB, NBA, NHL, and soon the NFL. For the first time, any size business can consistently get guaranteed access to television's biggest moments and make that part of their ad strategy. To fuel the growth of new customers, we are strengthening our go-to-market organization. The first half of this year has been focused on construction with additional leadership adding sales, marketing, and business development. We built vertical teams that understand the economics, objectives, creative needs, and customer acquisition dynamics of specific industries. That knowledge makes our sales process and the customer experience more effective. In summary, we expect the benefits of our strategic investments to contribute to stronger growth in the second half of the year and meaningfully in 2027 as the core business accelerates, complemented by new revenue streams from Express and Premium. Our focus remains simple: help more businesses advertise on television than ever before, while continuing to grow efficiently, profitably, and strengthen the category we created. Now, I'll turn it over to Patrick.
Thank you, Mark. We reported strong second quarter results exceeding the midpoint of both our revenue and adjusted EBITDA guidance. Our solid performance reflects continued customer adoption of Performance TV, particularly by companies that had not previously advertised on television. Our second quarter revenue increased to $82.5 million, up 21% year-over-year. Second quarter gross margins improved to 80%, up 350 basis points over the prior year period. As you can see from the table in our earnings release, at the end of the second quarter, we had 4,225 active PTV customers when measured over their trailing 12 months. On a year-over-year basis, this represents growth of approximately 40%. As a reminder, the number of active PTV customers we add to the platform is largely within our control and is primarily driven by how aggressively we choose to invest in sales and marketing. We continually assess and calibrate that approach to ensure that we are onboarding customers with a strong product-market fit and a high probability of succeeding on our platform. As we adjust the pace of that expansion over time, the number of customers added is expected to fluctuate from quarter to quarter. Our expansion rate, which measures the spend of our current customers as compared to those same customers' spend a year ago, remains quite healthy and is still well north of 115%, further demonstrating that when our customers achieve their desired returns on advertising spend, they continue to increase their budgets with us. Total operating expenses for the second quarter were $59.2 million. For the second quarter, we achieved positive net income of $6.7 million for a GAAP EPS of $0.09. Adjusted EBITDA for the quarter increased to $21.5 million, up from $14.5 million in Q2 of 2025, an increase of 48%. The company's adjusted EBITDA margin grew to 26.1%, up 490 basis points compared to 21.2% in Q2 of 2025. The improvement reflects the combination of higher revenue and expanding gross margins, further underscoring the operating leverage built into our business model. While we remain focused on steadily improving profitability over time, our top priority continues to be investing behind growth rather than optimizing near-term adjusted EBITDA margins. To capitalize on this significant opportunity in this early-stage market, we plan on continuing to make disciplined but aggressive investments in sales and marketing to drive broader customer adoption. Our balance sheet remains strong, and we entered the quarter at $237.3 million in cash and cash equivalents with no borrowings outstanding. We ended the quarter with 74.2 million shares outstanding. As of August 3, 2026, MNTN's board of directors has authorized a stock repurchase program of up to $100 million worth of its Class A common stock through August 5, 2027. We think the stock represents a compelling value, and we believe this action signals our confidence in the company's long-term trajectory and further solidifies our commitment to providing value to our shareholders. Looking ahead, we remain confident in our momentum and the underlying health of our business as we progress through 2026 and beyond. For Q3 2026, we expect revenue to be between $86 million and $89 million, representing 25% year-over-year growth at the midpoint of $87.5 million. We expect adjusted EBITDA to be between $22 million and $25 million, reflecting continued leverage as we scale the business while continuing to remain disciplined in our investments. For the full year 2026, we are reiterating our revenue guidance range of $347 million to $357 million, representing over 24% year-over-year growth at the midpoint of $352 million, excluding the impact of the Maximum Effort divestiture. We also continue to expect adjusted EBITDA to be between $96 million and $101 million. To wrap up, we delivered another solid quarter and believe MNTN will continue to gain market share in the massive performance television market. We are confident that our future growth initiatives and the strength of our operating model will position MNTN to drive continued growth and profitability. With that, we'll open the line for questions.
Questions and answers
Operator instructions were provided. Your first question comes from the line of Shyam Patil with Susquehanna.
I had a couple of questions for you, Mark. In your prepared remarks, you talked about the go-to-market investments, and you talked about Express and Premium and the impact that you expect to see. I'm wondering if you could just talk a little bit more about this and how you think about the impact on revenue growth over the course of this year and next year. And then second question, there's been some consolidation in the industry recently. I was wondering if you could just talk about this and perhaps what kind of impact it could be having on the PTV opportunity and any opportunities that it may be creating for you guys?
Thanks, Shyam. I'll take both of those questions. So the first one is about Express and Premium and the impact this year and next year. As I said in the opening remarks, we felt we needed to create versions of our product that were purpose-built for the overall SMB market and for different segments. Each tier—small business, mid-size, and larger—has unique needs in terms of usability. We are really confident and happy with what we've delivered, especially for small business. That's something we've been focused on for a while, and we're pleased to see the adoption. In terms of the impact this year and next year, they're definitely contributing. I think for next year, we see a really big opportunity because they're small now but growing very quickly. You should look to 2027 to start to see the larger impact coming from these two segments of the overall SMB opportunity. Regarding consolidation in the industry and the impact on the CTV opportunity, we are seeing that too. We're purpose-built for the SMB portion of that market and we believe we're very differentiated. We essentially established the concept of Performance TV and using streaming for small and mid-sized businesses. The consolidation is validating the opportunity. Some of the consolidation is making the market more aware of the opportunity and creating more green space for MNTN to execute. We're pleased with the consolidation that is occurring and the larger opportunity and greater green space that creates for the company.
Your next question comes from the line of Andrew Boone with Citizens. Your line is open. Please go ahead.
I wanted to also ask on SMB. If we think about the go-to-market strategy for SMB and the difference of that versus a mid-market customer, is there any change that we should expect for sales, marketing, or any other aspects of the organizational strategy or cost structure that we should be thinking about with this change? And then, Mark, just a big picture question. You mentioned sports in your prepared remarks. Can you just talk about the benefit of the World Cup? What did that bring for you guys in the quarter? And then talk about the sports opportunity more largely. Understood that's always been a draw, but how has that changed the conversation?
Sure. Happy to answer those. In terms of go-to-market for SMB, we've been very focused since Q4 of last year on expanding the sales team and investing in marketing. The key thing is that we created an early adopter market and that market is now becoming mainstream. More companies that previously had no access to television are now aware that they can be on TV and are starting to expect to be on TV. We wanted to invest more in sales and marketing to capture more of that opportunity. We did that by strengthening our leadership, investing more in marketing, and leveraging our own platform for much of our marketing. We stream TV ads into the homes of our future customers and also use social media. There's an interesting dynamic in performance marketing where everyone uses each other's platforms, so we uncover customers wherever they are. For Express customers, our smallest customers, we lean on our own platform and on social. For mid-market, the techniques are similar but the investment is a little different. We're pleased with how that's going and expect to continue to expand our investment there. Regarding sports, it's not just sports—it's also reality television and home improvement content. We want to give our customers the ability to appear in the biggest television moments. For events like the World Cup, advertisers must be named and approved by the rights holders, so enabling small and mid-sized businesses to get into that level of sporting events required partnership conversations with the largest media companies in the world who hold those rights. We were able to do that. The benefit to our customers is that this inventory performs very well. There are often multiple viewers watching a game, like the World Cup or NFL, which creates an interesting dynamic for performance. It also validates MNTN as the market leader in this space because we're not putting customers on remnant inventory; they're on premium content to get the best performance in Performance Television. That is why it's so important to us and why our customers see it as a differentiator.
Your next question comes from the line of Robert Coolbrith with Evercore ISI. Your line is open. Please go ahead.
I just wanted to ask on QuickFrame AI. We had previously thought of that as just enabling technology. But given this very strong early traction that you're seeing, I wanted to ask you on a couple of topics related to that. Number one, are you thinking about this now as a standalone opportunity? We've certainly seen some other entrants in this space grow very large businesses very quickly in the past few months. Is that part of the ambition here, given what you're seeing early? Secondly, I wanted to ask a little bit about the gross margin profile of that product. Anything you could tell us there? And then third, maybe also the funnel that QuickFrame AI can create for the core PTV business, given the amount of signups that are coming in. Are you seeing an ability to cross-sell or attach PTV once people have their creatives up and running?
Sure. I'll take those one at a time. In terms of standalone opportunity, it was always my belief that we had to build QuickFrame AI not just to be a feature of the MNTN Performance TV platform, but to be successful in its own right. The importance of that is that unless you build it to have standalone value, you won't keep up in feature functionality if people see value in it separate from Performance TV. The QuickFrame product supports MNTN Performance TV, it supports YouTube ads, and it supports social ads, so it's certainly a standalone opportunity in terms of usage. In terms of monetization, we're looking at that. There is an opportunity, but at this moment we are making it available at no charge. We are closely monitoring usage and engagement to ensure people are actively using it and getting value. Stay tuned on monetization. Regarding gross margin, there are some gross margin costs tied to the AI models, but the overall effect to the business is pretty neutral because we're able to improve gross margin efficiency in our hosting environment, which makes room for our use of the AI models that QuickFrame orchestrates to create TV-quality, YouTube-quality, and social-quality ads. So it's essentially gross margin neutral at this point. On the funnel for core PTV, the answer is yes: QuickFrame users create an opportunity for them to learn about Performance TV. Keep in mind that many QuickFrame users are creators and not necessarily the marketers who buy media, so it creates a cross-sell opportunity where a creator using QuickFrame for social might realize they can also create TV assets. Often it's fun for them because they haven't ever created a TV ad. There are definitely cross-sell opportunities, and all of that is being closely looked at and pursued as part of the growth of the QuickFrame AI product.
Your next question comes from the line of Matt Weber with Canaccord. Your line is open. Please go ahead.
On the strengthened measurement and activation ecosystem that now features partnerships with HubSpot, Northbeam, and Upwave, could you just update us on if those are premium add-ons that advertisers pay for, or if they're still part of the core platform? And then how do the economics of those partnerships work? Is there any impact to gross margin or other areas of the P&L as adoption scales?
It depends on the partnership. For some partnerships, like those that are broadly used across our entire customer base, we integrate them at no cost to our customers. We use our buying power similarly to how we use our buying power with networks to secure advantageous pricing for our customers. For other partnerships, where a customer chooses a specific third-party attribution partner, that customer has a direct relationship with that third party. For example, with an attribution partner like Northbeam, we build the integration to ensure our customers get the best possible experience in both MNTN's platform and the partner's platform, but the customer maintains a separate direct relationship with that partner. In all cases, as we scale our business and grow revenue, we gain leverage in our gross margins and can, when appropriate, absorb costs rather than passing them through. We want our customers to have an experience where there is one primary cost to using MNTN—the cost of media—and they are not nickel-and-dimed with small additional charges, which is more common in the enterprise market. We believe in the SMB market you should pay one price and get everything you need to be successful.
Your next question comes from the line of Andrew Marok with Raymond James. Your line is open. Please go ahead.
Maybe two for me please. Can you talk a bit about what to maybe expect in the second half from the flood of political spend that's coming down the pipe? I mean, not for MNTN specifically directly, but maybe more in terms of effect on the volatility of CPMs in the space and what that leads then into the ROAS calculations for your customers? And then second, on QuickFrame, with it now in market for a full quarter in 3.0, how has that feedback been and maybe what sort of features might be on the roadmap as a result of that feedback?
Sure. On second-half political spending, MNTN is purpose-built for the SMB market and we traditionally have not participated in any significant way in political spending. Political spend tends to be dominated by larger agencies and enterprise clients, so it doesn't have much direct impact on MNTN. Regarding volatility in CPMs, that typically affects the open market. MNTN operates with direct deals with nearly all major ad-supported media companies, and those deals include pre-negotiated pricing commitments for our continued volume. So Q4 spikes or political spikes generally don't affect our negotiated pricing because our pricing is secured with networks for the volume we bring through the SMB market. Inventory left over in the open market can see price volatility and margin volatility, but that primarily affects participants who are dependent on the open market, which we are not. We're predominantly in private marketplace deals. In terms of QuickFrame 3.0 feedback, we are releasing updates frequently—often weekly or multiple times a week. We have a team focused on iteration of the AI models that QuickFrame orchestrates scene by scene. We're getting customer feedback and watching usage closely. We're emphasizing very fast use cases, such as taking an existing ad and reinventing it as a new ad with the same characters—really fast paths to executing specific use cases. When a user comes into the product and finds exactly what they need, engagement increases. There are a lot of features coming, and the QuickFrame team is iterating at AI speed with multiple releases per week.
Operator instructions were provided. I see no further questions at this time. I'll now turn the call back to management for closing remarks.
I just want to say thanks for everyone's time, and we're looking forward to Q3 and the second half of the year. We'll, I'm sure, talk further before then and on our next earnings call. Thank you.
This concludes today's call. Thank you for attending. You may now disconnect.