MNTN (NYSE:MNTN) reported third-quarter revenue and adjusted earnings below its guidance and lowered its full-year outlook, as newly appointed CEO Tony Weisman attributed the shortfall to sales force disruption rather than weaker demand or competition.
Revenue rose 15% year over year to $80.3 million, below the company’s forecast of $86 million to $89 million. Adjusted EBITDA increased 24% to $19.9 million, but also fell short of the projected $22 million to $25 million.
Sales changes hit new customer acquisition
Lead Independent Director Joe Kaiser said the board appointed Weisman because it wanted to bring more operational rigor to the business. Weisman, who joined MNTN’s board earlier this year, previously led Digitas and served as chief marketing officer at Dunkin’.
Weisman said his review of the business led him to conclude that the problem was “exclusively go-to-market execution.” He pointed to a sales compensation model inspired by larger platforms, along with a poorly executed shift toward organizing the sales team by industry vertical.
Changes included moving incentives from revenue to activity and altering how frequently sellers were paid, Weisman said. The changes were communicated in late second quarter and took effect at the beginning of the third quarter. Some sellers felt their earning opportunities had diminished, he said.
The company has corrected its compensation plans and hired 16 sellers, with the first new-hire class set to start later in November. Weisman cautioned that the new sellers will take time to reach full productivity.
The “overwhelming impact” of the attrition was on new customers, he said, while many existing customers stayed and expanded their spending. The greatest effect was on opportunities generated by salespeople rather than self-service sign-ups. MNTN plans to continue both approaches, he said.
Leadership changes and operating priorities
Weisman said Lynn Knaak, formerly of Salesforce, has joined to lead direct sales to marketers, while Frank Lee, formerly of Snap, will lead agency sales. Both report to him. Anna Sayre, who previously led marketing at The Trade Desk, joined as chief marketing officer.
Chris Innes and Garland Hill are no longer with MNTN, Weisman said.
The CEO said he plans to monitor pipeline growth, conversion of demonstrations into paying customers and starting budgets, while judging progress by whether those improvements lead to sustained customer spending and revenue. He also said the company is putting common dashboards in place to improve accountability and transparency.
Asked about competition, Weisman said MNTN was winning head-to-head pitches at the same rate as before, but had too few new opportunities. He also clarified that the new “brand sales” leadership role refers to direct sales to marketers, not a shift away from performance advertising toward traditional top-of-funnel or awareness advertising.
Profit rose despite revenue miss
Third-quarter gross margin was 79%, unchanged from a year earlier. Net income rose to $7.7 million, or $0.10 per share, from $6.4 million, or $0.09 per share, in the prior-year period.
Adjusted EBITDA margin increased to 24.8% from 22.8%. Operating expenses fell $4.7 million sequentially to $54.5 million, primarily reflecting lower personnel costs following a second-quarter reduction in force and a one-time stock-based compensation award recorded in that earlier quarter, CFO Patrick Pohlen said.
Pohlen said the company’s expansion rate, which compares spending by existing customers with their spending a year earlier, remained “well north of 115%.” He said MNTN does not use net revenue retention internally and noted that small-business customers churn more than the mid-sized customers at the core of its business.
MNTN ended the quarter with $252 million in cash and cash equivalents and no borrowings outstanding. Pohlen said the company expects sales and marketing expenses to rise approximately 10% sequentially as it adds salespeople.
Lower outlook reflects continued disruption
For the fourth quarter, MNTN expects revenue of $75 million to $78 million and adjusted EBITDA of $8 million to $10 million. The outlook includes additional nonrecurring general and administrative expenses related to executive personnel changes.
For full-year 2026, the company lowered its revenue forecast to $311 million to $314 million and expects adjusted EBITDA of $66 million to $68 million. Pohlen said the revenue midpoint represents 10% year-over-year growth excluding the effect of the Maximum Effort divestiture.
Weisman said MNTN will provide its 2027 operating plan and outlook, along with measures for assessing progress, when it reports fourth-quarter results.
About MNTN (NYSE:MNTN)
MNTN, Inc is an advertising technology company that provides software for planning, launching, measuring and optimizing connected television (CTV) advertising campaigns. Its platform is designed to help businesses use television advertising with the targeting, automation and performance measurement capabilities commonly associated with digital marketing.
The company’s products support campaign creation, audience targeting, media buying and analytics across streaming television environments.
