MNTN, Inc. 2026 Q2 Earnings Call

Thank you for joining us for MNTN's second quarter 2026 earnings call. With me today is Mark Douglas, CEO, and Patrick Pohlen, CFO. To remind everyone, today's call includes forward-looking statements that are subject to risks and uncertainties. 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.

Please go ahead. Thank you for joining us today.

MNTN delivered a strong second quarter with revenue of $82.5 million, representing 21% year-over-year growth. Adjusted EBITDA of $21.5 million, representing 48% year-over-year growth. Both of these metrics finished at the high end of our guidance. 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. Measure whether that advertising is driving revenue. MNTN created this category. 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 3 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 from 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. 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 3 main tiers: Express, Pro, and Premium. MNTN Express was launched on April 1st.

Express is specifically built for small business distinct from midsize 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 will be a meaningful contributor to growth as we enter 2027. For our midsize customers, we've added significant agentic AI technology into the platform that gives our customers even more automation and more performance. We surround them with AI tech 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, healthcare, technology, education, and many other industries successfully leverage the technology to create their ads. There's 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 added in 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 ended the quarter at $237 million in cash and cash equivalents with no borrowings outstanding. We ended the quarter with 74.2 million shares outstanding.

As of August 3rd, 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 5th, 2027. We think the stock represents a compelling value. 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 and $89 million, representing 25% year-over-year growth at the midpoint of $87.5 million. We expect adjusted EBITDA to be between $22 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.