Omar Dessouky

Omar Dessouky of Bank of America asked about Magnite's expected contribution from Netflix in 2026, given Netflix's projection to double its ad business, and how this might affect Magnite's overall take rate. He also inquired about the expectation for CTV Contribution ex-TAC growth acceleration through 2026, considering recent trends and upsell opportunities with Netflix.

Answer

Michael Barrett, CEO, confirmed Netflix as a top partner, anticipating a bigger year for them, and stated that while take rates vary by services provided, Netflix's growth is not expected to significantly impact Magnite's blended overall take rate. David Day, CFO, added that blended CTV take rates have stabilized, with a significant influx of premium inventory at lower take rate tiers. He expects take rates to bottom out and sees future opportunities to grow them through additional services, but no huge inflection in the average take rate in the near term.

Omar Dessouky of Bank of America inquired about Magnite's expectations for Netflix's contribution in 2026, given Netflix's projection to double its ad business, and how this might affect Magnite's overall take rate. He also asked about the outlook for CTV Contribution ex-TAC growth through 2026, considering recent acceleration and potential for upsell with Netflix's expansion.

Answer

Michael Barrett (President and CEO, Magnite) confirmed Netflix as a "terrific partner" and anticipated it to be one of Magnite's top partners, expecting a bigger year in 2026 without a significant impact on Magnite's blended take rate. David Day (CFO, Magnite) added that blended CTV take rates have "shallowed out" and are stable, despite an influx of premium inventory at lower tiers. He sees opportunities to grow take rates in the future by offering additional demand-side services.

Omar Dessouky asked about the economics of the extended Disney partnership and for an update on Magnite's perspective regarding the Google antitrust trial.

Answer

CFO David Day noted that while specific economics are confidential, the Disney deal includes opportunities for Magnite to source demand at more attractive take rates, positioning Disney as a future growth driver. CEO Michael Barrett commented on the Google trial, stating that while the outcome is years away, any remedy that levels the playing field in DV+ would be a significant long-term positive for Magnite.

Omar Dessouky inquired about the economics of the extended Disney partnership, specifically regarding take rates, and asked for an update on Magnite's perspective on recent regulatory decisions concerning Google.

Answer

CFO David Day explained that while core Disney take rates are similar to other premier clients, the partnership's expansion creates new opportunities for Magnite to source demand at more attractive take rates. CEO Michael Barrett added that while the Google legal situation will take years to resolve, any outcome that levels the playing field in DV+ would be a significant positive for Magnite's growth prospects.

Omar Dessouky inquired about the long-term impact (3-5 years) of natural language-based agents (LLMs) on AppLovin's business and how casual mobile game developers might adapt their content to compete with sophisticated chatbots.

Answer

Adam Foroughi believes LLMs will dramatically lower content creation costs, leading to an explosion of content and making discovery platforms like AppLovin's more valuable. He doesn't foresee a decline in mobile gamers, especially for casual, relaxing games, and suggests increased productivity from LLMs could free up more leisure time, benefiting the gaming ecosystem and AppLovin's advertising solutions.

Omar Dessouky asked about the long-term impact (3-5 years) of natural language-based agents (LLMs) on AppLovin's business and how mobile game developers might adapt.

Answer

Co-Founder, CEO, and Chairperson Adam Foroughi projected that LLMs would dramatically lower content creation costs, leading to an explosion of content. This, in turn, would make discovery platforms like AppLovin's more valuable as content becomes abundant and commoditized. He argued that casual mobile gaming serves a distinct human need (quick, relaxing, often older/female audience) that is unlikely to be replaced by chatbots, and increased productivity from LLMs could even free up more time for such entertainment outlets.

Omar Dessouky asked about supply growth, specifically if MAX publisher revenue growth is expected to accelerate with e-commerce, and which factors (ad load, mobile game engagement, MAX improvements) would be most important.

Answer

Adam Foroughi, Co-Founder, CEO, and Chairperson, AppLovin, stated that the MAX platform ecosystem is growing quickly due to higher quality ads (more content diversity), increased user retention, and the potential to unlock monetization for in-app purchasing publishers. Model improvements also enable publishers to acquire more retained users.

Omar Dessouky inquired about Adam Foroughi's comments on substantially higher conversion rates, and if this implies less need for significant impression growth to absorb more e-commerce advertisers. He also asked about the expected acceleration of MAX publisher revenue growth as e-commerce ramps, and the primary drivers of supply.

Answer

Adam Foroughi, Co-Founder, CEO, and Chairperson, AppLovin, confirmed that increasing conversion rate is the biggest growth lever, driven by model enhancements, expanding advertiser density for better personalization, and generative AI-based creatives. He added that MAX platform growth is a combination of higher quality ads (e-commerce diversity), unlocking in-app purchasing publishers, and improved models enabling publishers to acquire more retained users.

Omar Dessouky asked about the potential use of 'game engine data' for ad targeting, referencing a competitor's plans, and questioned whether Applovin has access to similar data and if it's a critical factor for success.

Answer

Co-Founder, CEO & Chairperson Adam Foroughi responded that while he couldn't speak to a competitor's specific data, Applovin's models are already cutting-edge and utilize extensive behavioral data from their high market penetration in gaming. He emphasized that the more significant opportunity lies in expanding outside of gaming. Gaining visibility into broader consumer spending will provide a much richer dataset, making their models more predictive across all categories, including gaming.

Omar Dessouky from Bank of America asked about the potential use of game engine data for ad targeting, referencing a competitor's plans, and questioned if Applovin has access to similar data and whether it is a significant factor for performance.

Answer

CEO Adam Foroughi stated he couldn't speak to 'game engine data' specifically but emphasized that Applovin's models are already cutting-edge, using extensive behavioral data from its vast market penetration. He argued the more significant future opportunity lies in expanding into non-gaming categories, which will provide broader consumer behavior data and make the models even more predictive across all verticals.

Omar Dessouky from Bank of America asked for an update on churn among e-commerce advertisers and trends in spend per advertiser. He also questioned if the 'net revenue per install' metric includes actions from e-commerce advertisers.

Answer

Executive Adam Foroughi disclosed a low churn rate of sub-3% for web advertisers spending over $250,000 annually, while noting the product is still in its early stages. He stated the company's goal is to achieve the near-zero churn seen in its gaming segment. Executive Jason Bazinet clarified that the net revenue per install metric does include revenue from web advertisers, but the denominator only includes mobile installs, which drives the metric higher.

Omar Dessouky asked if the current AXON pixel technology is sufficient to serve all e-commerce advertisers and if non-gaming app installs will become a new growth segment in 2025 due to the AI's proven efficacy.

Answer

CEO Adam Foroughi responded that while the current pixel works for websites, the technology is not yet mature, and they are continuously developing more tools. He clarified that fully supporting non-gaming apps is on the development roadmap for this year and beyond, but it's part of an ongoing evolution rather than a specific 2025 inflection point.

Omar Dessouky from Bank of America Corporation asked if the timeline for the e-commerce solution's general availability had changed and requested more specificity on go-to-market partners. He also asked for an educational explanation on why AppLovin's DSP ecosystem uses an arbitrage model rather than a percentage-of-spend model common in the open web.

Answer

CEO Adam Foroughi confirmed the e-commerce timeline remains on track for a self-service launch next year. While not disclosing partners, he noted that customers are independently generating buzz on social media due to strong results. He explained their business model is different from peers like The Trade Desk because they target direct-response advertisers who value automated, performance-based outcomes to a revenue goal, where AppLovin takes on the media risk to deliver those results.

Omar Dessouky from Bank of America asked about Roblox's approach to dilution and stock-based compensation (SBC) in 2026, given a significantly lower stock price. He also questioned how SBC flexibility aids long-term strategic investments and what higher ROI investments, beyond headcount, would utilize this cash.

Answer

David Baszucki, CEO, stated that Roblox internally runs a multi-year model for stock-based compensation and dilution across a wide range of stock prices to ensure comfortable business operations. Naveen Chopra, CFO, added that the company views dilution from a long-term horizon, expecting it to decrease over time as shareholder value is created through operating results, which is their primary focus.

Omar Dessouky from Bank of America asked about Roblox's approach to dilution and stock-based compensation in 2026, given the lower stock price, and how flexibility in stock-based compensation supports long-term strategic investments beyond headcount.

Answer

Co-founder and CEO David Baszucki stated that Roblox models stock-based compensation and dilution over multi-year horizons across various stock price scenarios. Chief Financial Officer Naveen Chopra added that the company maintains a long-term perspective on dilution, believing that strong operating results will ultimately address dilution concerns over time.

Omar Dessouky asked for a framework on how Roblox plans to achieve its goal of capturing 10% of the video game market, questioning which tiers of game production value its developers would need to emulate to take share.

Answer

CEO David Baszucki clarified the goal is for creators to build on Roblox, not necessarily take share from others. He outlined a genre-by-genre strategy, emphasizing technical innovations like 3D streaming to support complex games like battle royale on both low-end mobile and high-end PCs. This technical roadmap is complemented by improved economics for developers and direct collaboration with high-end studios to bring them onto the platform.

Omar Dessouky asked about a potential direct revenue model for Roblox's foundational AI model, beyond simply providing it as a tool for developers.

Answer

CEO David Baszucki clarified that the strategy is not to create a direct revenue model for its AI. Instead, the goal is to build and run proprietary AI models at massive scale and low cost, integrating them into the platform for creation and gameplay. Monetization is indirect, driven by the resulting increase in experience quality, user retention, and innovation, which strengthens the core business.

Omar Dessouky asked about the addressable portion of Take-Two's app store distribution fees through third-party solutions (like Unity's e-commerce) to reduce fees, whether these are mutually exclusive with Take-Two's direct-to-consumer channel, potential savings, and implementation timelines.

Answer

President Karl Slatoff stated that Take-Two primarily handles its direct-to-consumer efforts in-house and would not comment on specific third-party solutions, though he acknowledged they could be helpful. He noted that the direct-to-consumer initiative is still early, with many games yet to implement DTC components, indicating significant growth potential. Slatoff reiterated that DTC improves margins and benefits from a favorable legislative environment.

Omar Dessouky asked about the addressable distribution fees (app store fees) through third-party solutions, outside of Take-Two's direct-to-consumer channel, and potential savings or implementation timelines.

Answer

President Karl Slatoff declined to comment on specific third-party solutions, stating that Take-Two's direct-to-consumer (DTC) efforts are primarily in-house. He noted that DTC is still early, not all large games have DTC components yet, but there's significant growth potential as it improves margins and benefits from a favorable legislative environment.

Omar Dessouky asked for a framework to think about the potential size of the reactivated player base for Grand Theft Auto VI, given the franchise's intergenerational appeal.

Answer

CEO Strauss Zelnick declined to provide specific unit predictions, stating the company's focus is on perfecting the product rather than forecasting outcomes. He pointed to GTA V's enduring success and the company's large consumer database (1 billion records) as tools for marketing, but emphasized that delivering a quality experience is the key to success.

Omar Dessouky asked if management's confidence in its long-term growth trajectory has increased and whether the methodology for building guidance has changed recently.

Answer

CEO Mark Zagorski stated that while not providing multi-year guidance, confidence has increased in the factors DV controls, such as product launches and AI investments, which build resilience. CFO Nicola Allais added that the guidance methodology itself has not changed, but the company is factoring in the heightened macroeconomic uncertainty that has characterized recent quarters.

Omar Dessouky asked how price competition among DSPs affects DoubleVerify, whether different DSP features impact DV product usage, and if the addressable market for CTV verification is expanding to mid-market advertisers.

Answer

CEO Mark Zagorski explained that DV is largely indifferent to DSP competition as its pricing is customer-based. He noted that while DSPs without embedded verification tools may offer a better sales opportunity, brands ultimately direct the use of DV's data. He confirmed that the CTV market is expanding to smaller advertisers as buying tools become more accessible, which in turn grows DV's addressable market.

Omar Dessouky noted the strong performance of the supply-side business, which grew 34% in the quarter, and asked about expectations for a normalized, long-term growth rate for this segment.

Answer

CEO Mark Zagorski attributed the recent success to securing numerous new platform deals, some from former Moat clients, which creates a step-up in recurring revenue. He stated that while the segment is highly profitable and growing well, it is not expected to become much larger than its current 10% share of the total revenue mix.

Omar Dessouky asked for details on the investment ramp for the mid-market sales team, its ultimate size, and the nature of its sales cycle compared to that for larger enterprise clients.

Answer

CEO Lisa Utzschneider described the mid-market strategy as a thoughtful, multi-quarter ramp of a lower-touch, inside sales team. She explained that the investment is tied to the revenue the team generates. The sales cycle is faster and simpler, catering to performance-based clients who prefer self-serve activation and automated products that drive immediate ROI.

Omar Dessouky posed a strategic question, asking why it makes sense to be a first-mover with activation solutions in a two-player market, rather than a more capital-efficient fast follower.

Answer

CEO Lisa Utzschneider described IAS's approach as a 'test and learn' culture, where products are developed and iterated upon with client feedback over time. She cited the Total Visibility product as an example of a long-term development that is now seeing rapid adoption. While being a first-mover isn't always the goal, she noted that with opportunities like the Meta partnership, seizing the first-to-market advantage was a clear strategic imperative.

Omar Dessouky sought to understand the timing of the advertiser spending slowdown in Q3, asking whether the dip was abrupt or a gradual trend throughout the quarter.

Answer

CFO Tania Secor clarified that the slowdown in volume growth began in the middle of the third quarter. She specified that August was unusually soft, driven by budget reductions from CPG and retail clients, and the typical seasonal uptick in September did not materialize as expected. She declined to provide specific intra-quarter growth figures.

Omar Dessouky from Bank of America inquired about the company's current perspective on hybrid monetization and whether its strategic view on in-game advertising has evolved.

Answer

CFO Craig Abrahams responded that Playtika's portfolio remains predominantly focused on in-app purchases. He acknowledged that some titles, like 'Animals & Coins', natively include advertising, but affirmed there are no plans for a broader strategic shift toward hybrid monetization.