In its second quarterly earnings call since shedding its buy-side business and subsequent rebrand, Telaria today (February 26) posted continued notable revenue growth and significantly reduced losses compared to 12 months earlier, with chief executive Mark Zagorski crediting its clear-cut offering for the ongoing turnaround.
Although the results fell just short of some analysts’ earlier expectations with revenues of $15m for the December quarter, representing a 45% year-over-year increase, and full-year 2017 revenues of $43.8m, up 50%. This resulted in the sell-side platform’s overall losses for the period (its first full quarter as Telaria) coming in at $0.1m, a 98% reduction compared to 12 months earlier.
In prepared remarks, Zagorski noted how revenues from connected TV (CTV) contributed nearly 16% of total revenue as of December, compared to just 2% at the beginning of 2017, adding that this and over-the-top (OTT) made for the fastest growing part of Telaria’s business.
Among the reporting period included the addition of a host of tier-one publishers to the platform including broadcasters such as Fox, Channel 9 in Australia, plus Global TV in Brazil, as well as video streaming service Sony Crackle.
On the company’s subsequent earnings call, Telaria’s leadership noted how its “conflict-free” business model – Telaria parted ways with its buy-side Tremor Video operations in August with a $50m sale to Taptica – was winning over potential partners.
He further explained that the Telaria’s preferred positioning is now as a “technology partner, as opposed to a market-maker” due to client concerns over potential conflicts of interest for companies that operate both buy- and sell-side operations.
“I think that’s an important place to be, particularly as we focus on our position as as single SSP,” he told financial analysts.
“They [media owners] get increasingly concerned about conflict may occur with any platform they may be using… and that’s why our position as a conflict-free platform has resonated so strongly.”
With over 37% of all TV viewing from millennial audiences now on non-linear viewing formats, according to joint research from the SSP and Hulu, private marketplaces (PMPs) are now an increasingly important part of the Telaria offering, with the majority of transactions performed on the platform now implemented in such a manner.
Zagorski added: “Over the last six months, our conversations with publishers haven’t changed that much, but there is a different flavor to them. There’s definitely more of a focus on how they deliver their advanced TV products through our platform.”
This is important as many of its earlier desktop partners, and startup publishers focus their energies on monetizing content via larger screens, according to Telaria’s leadership, who noted that a lot of such companies now want to transact in a style that’s much more akin to how linear TV is monetized.
Telaria chief financial officer John Rego, further forecast that the company’s revenue growth for the first quarter would come in between $8.5m-to-$10m for the first quarter of 2018, and that full-year revenue would be in the region of $58-to-$62m.
“When we look at commission rates, we also look at CPMs [of CTV buys] and those have some of the highest CPMs out there for us,” he added.
Zagorski went on to tell financial analysts that Telaria’s continued focus on transparency was helped garner publishers’ willingness to allow them to sell their inventory, adding that 95% of the domains it represents are now ads.txt enabled.
“We’re also working with the industry to maintain our leadership in the areas of transparency, brand safety and fraud prevention,” said Zagorski.
“First we prioritize the adoption of ads.txt by our publisher partners. This is a standardized method certified by the IAB which provides publishers with a simple way to list which companies are allowed to sell their inventory, thus reducing fraud and unauthorized reselling.”