MNTN Bets on AI to Power TV Growth

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00:00We've grown an average of 39% year-over-year for the last six quarters.

00:04We had record adjusted EBITDA margins, our first quarter in four years of gap profitability

00:11and gross margins approaching 80%.

00:14So I think the company is growing quickly.

00:16It's very healthy.

00:17When you look at kind of price targets, one thing to keep in mind, there have been some

00:21adjustments to price targets.

00:22They've been adjusted to, I think, in a range of the stock growing 80% to 120%.

00:29So the average consensus is the stock price is going to double over the next couple of

00:34quarters.

00:35I think macro kind of valuations have adjusted a little bit, so the price targets have adjusted.

00:42But basically, analysts are saying this is an incredible buy.

00:45And I think when you look at our growth, we feel very, very confident.

00:49Where are you squeezing the incremental dollar from in that record revenue growth?

00:53Is it getting more market share, or are the customers just willing to spend more with bigger

00:57budgets?

00:58Well, both.

00:58So Mountain created the space we're in.

01:00So we created this concept of performance television, allowing any size business, small

01:05and medium-sized business, to come to TV and use it, streaming TV specifically, and

01:11use it like they do performance marketing on Meta or they do it on Google.

01:16And to really give you a...

01:17Basically aiming the ads at the people to whom they're most relevant.

01:20Yeah.

01:20I mean, it's really simple.

01:21When you think of advertising as brand advertising, as performance advertising.

01:25Brand means you want awareness.

01:27Performance advertising means you want money.

01:30It's that simple.

01:32And so the biggest market for advertising is performance advertising.

01:35I search social now performance TV.

01:38We created the space with the fastest growing company and connected television, expanding

01:44margins.

01:44So I think the market will catch up.

01:46It's...

01:47Right now, it's an incredible buy.

01:49And I think people...

01:50I'm hearing that from people, actually.

01:52Well, I wonder if people think maybe the company is a buy.

01:55I mean, you have this really cool new product, Quick Frame AI, which we're going to talk about.

01:59Yeah.

01:59What I hear is that, you know, the MAG-7, these guys have so much money.

02:03We hear they're doing deals without even having bankers and lawyers involved because they want

02:06to get it out there.

02:07Yeah.

02:07Are people calling you and saying, like, why don't we just take your company over?

02:13Well, I have a lot of partnership discussions.

02:15I'm not in any M&A discussions, I can tell you that.

02:17But we are partnering across the industry, both with our performance TV platform, and

02:23especially now with our AI, our creative AI platform that we just made.

02:27Yeah, Quick Frame.

02:27We just...

02:28Explain it.

02:29Explain it to us.

02:29It's really simple.

02:30If you want to create a full professional quality 30-second commercial, you actually can't

02:35use a single AI model.

02:37You have to orchestrate multiple models together.

02:40So our generation times are not like 40 seconds.

02:44They're 10 minutes to orchestrate often like 10 to 20 steps.

02:48But you get incredible quality video.

02:51Why that's so important?

02:5297% of our customers have never advertised on TV before.

02:56So they need commercials.

02:58They need them to cost an order magnitude less to create than it used to before AI.

03:04And we've introduced tools that allow them to do that.

03:06And the quality is actually incredible.

03:08We're partnering with Google, 11 Labs, and other companies on it.

03:12And when we show them what we're doing with their own generative models, I think even they

03:16are kind of blown away.

03:18What's the moat then?

03:19What's stopping Google, Adobe, Meta, any of these companies from just replicating the

03:24same thing you are with their in-house AI power?

03:26Well, actually, I have no problem with them doing that.

03:29Our goal is to make sure our customers have access to inexpensive, very high-quality, full

03:3730-second quality videos.

03:40And that's why we're partnered with them.

03:42But again, if one of them can do everything we're doing to orchestrate models across, like

03:48we're using Sora, NVO, and 11 Labs in a single video, plus many other models that are not

03:55as well-known.

03:56If any one of them can do that, great.

03:58As long as our customers get the 97% of our customers get the solution they want.

04:03But we decide to take a leadership role in creating our own environment.

04:07We've traditionally always taken on the creative challenge because it's such a big part of

04:12our business.

04:13Let me get your take on this, you know, the AI promise.

04:17And will it deliver in terms of ROI, right?

04:19You've been around.

04:20You've started a number of companies.

04:22You worked for Oracle.

04:23And Larry Ellison's done pretty well with this.

04:28Is it worth the trillions that we're talking about investing?

04:31Are we going to get the return soon?

04:33Or is it going to be like a 1999-2000 thing where it takes years and years for us to make

04:37this money?

04:38I mean, it's probably somewhere in the middle.

04:40I think they, you know, every investor in the world does invest trillions and everyone

04:44gets a return.

04:45There's ultimately winners and losers.

04:48But obviously, AI is having a vast impact on everyone's life already.

04:54You know, even on my earnings call yesterday, I have to, like, assume some investors are

04:59going to read the AI summary of the transcript of the voice call.

05:04So you have to take all this in account.

05:06It's having a vast impact on our life.

05:08But I think...

05:09What about for you?

05:09I mean, you're a coder.

05:11Yeah.

05:12Are you using it?

05:13Yeah, we are.

05:14We're using it across the company.

05:15So it turns half...

05:17One out of every two people in Mountain is a software engineer.

05:20So it turns...

05:21So half the company's headcount.

05:23So it makes it like actually the whole company is software engineers because it more than doubles

05:27their productivity.

05:28It's really critical.

05:30We're using it also in our products.

05:31So we've talked about the creative AI.

05:33Also, how do we...

05:35The key thing we do is we match consumers with brands they're going to love.

05:39And they see these brands they're going to love on the big screen in their home,

05:43on their television.

05:44And so we're using AI for the targeting, all the models to figure out who's the right

05:48consumer to see the ad, which is really hard for smaller businesses.

05:53We're using it in the creative.

05:54We're using it in deciding where the ad should be placed.

05:57So across our entire business, as well as our own use in sales, marketing.

06:02So it's just kind of across everything.

06:04We're a creator of technology and we're adopting technology.

06:07I just want to know if any actors or film directors have called you upset that you're

06:11taking their jobs.

06:12You know that Ryan Reynolds is their creative director.

06:14Why is he not upset?

06:15He's literally taking his people's jobs.

06:18Well, I think actually the AI is creating more actors because you don't have to be a

06:24good actor.

06:25We can take an image of you and turn you into a great actor.

06:29Got it.

06:30So you just need to look the part now.

06:31Yeah, but the way more to look at it is that when you lower the cost of creative, you actually

06:36create more demands.

06:38And so we have a network of creators that use quick frame.

06:42We call it quick frame marketplace.

06:43And we're actually creating more demand for their services because they are often involved.

06:48When you want to create, you decide today you want a TV commercial.

06:51You still have a busy schedule all day.

06:53You'd rather still pay someone.

06:55Can you do this for me?

06:56But rather than spending, you know, thousands of dollars, now you can spend hundreds to get

07:01that creative using a platform like quick frame and using Mount.

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