DSP — Q2 2026 Financial Report Analysis

Overview

Viant Technology (NASDAQ: DSP) runs a demand-side platform: software that advertisers and agencies use to buy ad space automatically ("programmatic" buying), increasingly on connected TV (CTV, i.e. streaming TV apps). In the second quarter of 2026 (April–June), revenue grew 34% to $104.3 million, the fastest growth in the period's comparisons and above the top of management's own guidance range. Yet the company swung from a $1.8 million net profit to a $1.8 million net loss, because the cost of buying media for clients, stock-based pay and deal costs from the May acquisition of TVision all grew faster than revenue. The 10-Q says the revenue jump came "primarily due to a 67% increase in revenue from marketers in the healthcare, public services, and travel industry verticals, while revenue attributable to marketers across our remaining industry verticals increased 19%."

Key figures

Two industry-specific measures matter most here:

• TAC (traffic acquisition costs) is what Viant pays media sellers when it charges a client a fixed price per thousand ad impressions (its "fixed CPM" pricing option), or under certain percentage-of-spend deals. In those deals Viant books the client's full payment as revenue, so revenue can grow quickly without much more money staying with Viant.
• Contribution ex-TAC is revenue minus TAC: the money Viant actually keeps to run the company. Management steers by it, and it is the cleaner growth figure.

Where the growth came from, and where it went

Revenue. Growth was concentrated. Advertisers in healthcare, public services and travel lifted their spending with Viant by 67%. Every other industry vertical combined grew 19%. Over the half year the 10-Q names a slightly different trio (healthcare, financial services and business services, +75%) against +14% for the rest. Either way, a handful of verticals is carrying most of the acceleration. That is good news while those advertisers keep spending, and a concentration risk if they pull back. The earnings release adds that CTV spend rose "nearly 50%" and is now over half of all advertiser spend on the platform. Over 80% of CTV spend now runs through Direct Access, Viant's direct connections to publishers, up from over 50% in Q1.

TAC grew twice as fast as the money Viant keeps. TAC rose $14.6 million (+49%) against revenue's $26.4 million increase. So more than half of each extra revenue dollar went to media sellers, and the share of revenue Viant keeps (contribution ex-TAC as a % of revenue) fell from 62.1% to 57.7%. The 10-Q describes TAC as "a variable function of revenue related to our fixed CPM pricing option". The read: more of the growth came through fixed-CPM-style deals, which inflate reported revenue relative to the economics underneath. This is mainly a pricing-mix effect, not a sign Viant is discounting its fee. The figure to follow is the 24% contribution ex-TAC growth, not the 34% headline.

Operating costs rose 39%, faster than revenue. Excluding TAC, the main drivers per the MD&A were:

• Sales and marketing +32% ($5.0M): $2.1M more personnel cost and $1.5M more stock-based compensation.
• Technology and development +41% ($3.1M): $1.4M more stock pay and $1.2M more personnel.
• General and administrative +42% ($5.4M): $2.2M more "accounting, legal, and consulting expenses associated with general corporate, compliance, and transaction-related matters," $1.7M personnel, $0.7M stock pay and $0.7M more bad-debt expense.

Total stock-based compensation was $9.95M, up 57% from $6.34M and equal to 9.5% of revenue. Together with $2.5M of acquisition and restructuring costs, these two items ($12.5M) more than explain the $3.9M operating loss.

The TVision acquisition

On May 1, 2026 Viant closed its purchase of TVision Insights, which measures whether viewers are actually watching the screen when an ad plays ("attention" data). Estimated purchase consideration is about $37.5 million: $16.2M in cash, $18.9M in Viant Class A stock, and a $4.2M holdback for post-closing adjustments and possible indemnification claims. The deal added $13.4M of goodwill and lifted intangible assets from $2.9M to $14.5M at the half-year mark. The 10-Q says TVision's results "were not material" to consolidated results, so the revenue growth this quarter is organic. Management says integration is "pacing well ahead of initial expectations" and that it has begun testing TVision's attention data for pre-bid targeting on CTV inventory, i.e. choosing which ads to buy based on attention before bidding. No revenue figure is attached to that yet.

Takeaway: The 34% revenue headline overstates the improvement. The money Viant actually keeps (contribution ex-TAC) grew 24%, and stock pay plus TVision deal costs grew even faster, which is why a quarter with record revenue still produced a GAAP loss. The business is growing well and is cash-generative. The open question is whether margins widen from here, and management's Q3 guide says it expects them to.

What the headline numbers hide

• Cash conversion is good, but flattered by seasonality. Operating cash flow was $31.3M in H1 2026 (vs. $16.5M in H1 2025) against a $4.0M net loss. Non-cash add-backs did most of the work: $16.5M stock comp and $11.0M depreciation and amortization. Working capital also helped. Accounts receivable fell $32.0M from year-end as seasonally heavy Q4 billings were collected, partly offset by a $19.9M drop in accounts payable. After $8.8M of capitalized software and $1.0M of equipment purchases, H1 free cash flow was about $21.5M (our own calculation from the cash flow statement, not a figure the filing states). Do not annualize it: the receivables release will reverse as billings build into Q4.
• The GAAP vs. adjusted gap is wide and almost all stock pay. Non-GAAP net income was $9.9M against a GAAP loss of $1.8M. The $11.7M difference is $9.95M stock comp plus $2.5M acquisition and restructuring costs, less a $0.8M tax effect. Acquisition costs are a reasonable one-off to exclude (TVision closed this quarter). Stock compensation is a recurring cost of paying staff, and it rose 57% YoY, so adjusted EBITDA growth of 26% flatters the economics that reach shareholders.
• One-offs in either year: $2.5M of acquisition and restructuring costs this quarter (vs. $0.4M). The prior-year half included a $0.3M remeasurement charge on the Tax Receivable Agreement (TRA) liability, an obligation from the IPO to pay pre-IPO owners part of certain tax savings. Nothing similar this year.
• Bad debts edged up. The provision for doubtful accounts was $1.0M in H1 vs. $0.4M a year ago, with $0.7M more bad-debt expense in Q2 alone. It is still small relative to $145M of receivables, but rising.
• Why the EPS lines diverge. Net loss attributable to Class A shareholders was only $0.1M, because most of the loss belongs to the holders of Viant Technology LLC units (Class B, shown as "noncontrolling interests"). Basic EPS was −$0.01. Diluted EPS of −$0.03 assumes those units are exchanged into Class A stock (65.2M diluted shares vs. 19.7M basic), so the full consolidated loss lands on Class A.
• Buybacks are no longer helping per-share figures. Viant spent $1.0M on repurchases in H1 2026 vs. $28.1M in H1 2025, while issuing $18.9M of stock for TVision. Basic Class A shares rose from 16.0M to 19.7M YoY. Non-GAAP EPS growth of 33% came from operations, despite a higher share count. $39.4M remains under the repurchase authorization.
• Lower interest income: net interest income fell to $1.3M from $1.5M because of lower rates and lower money-market balances. It is a minor drag.
• Balance sheet: $193.1M of cash, no debt, and $74.1M of undrawn availability under a $75M revolving credit facility. Deferred tax assets rose to $34.1M from $17.5M at year-end. The company released its tax valuation allowance at December 31, 2025, which is why it now books tax benefits on its losses.

Outlook

For Q3 2026 management guides to (from the earnings release):

The guidance implies operating leverage, meaning profit growing faster than the business itself. Contribution ex-TAC is guided up roughly $5–7M from Q2 while non-GAAP operating expenses rise only about $1M, lifting adjusted EBITDA by a third sequentially. At the midpoints, adjusted EBITDA would be about 29% of contribution ex-TAC, up from 24% in Q2. Management beat its own Q2 range on revenue and adjusted EBITDA, and landed near the top on contribution ex-TAC, so the guide has some credibility. Our view: watch three things in the Q3 report (due around early-to-mid November).

1. Whether contribution ex-TAC keeps pace with revenue, or TAC keeps absorbing the growth.
2. Whether the healthcare, public-services and travel surge broadens into the other verticals, which grew only 19%.
3. Whether stock-based compensation, up 57% this quarter, slows. Without that, GAAP profitability will lag the adjusted figures however well the platform grows.