PubMatic, Inc. (PUBM) Earnings Call Transcript & Summary

Okay, everybody. Thanks for joining us here for a fireside chat with PubMatic. So we have Rajeev Goel, Chief Executive Officer and Co-Founder; and Steve Pantelick Chief Financial Officer. And PubMatic is I think sitting in a very interesting place right now in the industry exposed to so many of the secular trends that are important in terms of growth of CTV, growth of programmatic and a leadership position in SSP and a lot of thoughts around what's happening with Google and antitrust.

But to start off with Rajeev and Steve, if you could -- just give us your sense of what is the investment case for PubMatic. Why should investors be interested right here right now in your company?

Yes. Great. Thank you, Barton, and great to be here with the group. So we're a global leading platform for digital advertising focused on connecting 4 key commercial stakeholders: content creators, so publishers; ad buyers, that's advertisers and agencies; data owners; and then commerce media participants, and we're doing that on our owned and operated infrastructure so that they can grow their ad businesses. And as you've highlighted, we started narrowly as an SSP, sell-side platform, just focused on the needs of publishers many years ago. And after doing that for a number of years in the last 5-or-so years, we've really broadened the platform to facilitate transactions between all of these key stakeholders. We have a number of unique capabilities. I'm sure we'll get into that later in the call. But we've seen and are continuing to see great growth in key secular areas of the business like CTV, commerce media, sell-side targeting, supply path optimization. So I think really all the areas where digital advertising ecosystem is shifting towards performance. And as a result, targeting and activation is moving to the sell side of the ecosystem away from DSPs. We also have a strong financial profile. The second quarter was our 37th consecutive quarter of adjusted EBITDA profitability, and we generated healthy free cash flow. And I think that's really important in this industry because it means we have an ability to invest in ongoing innovation, which given the pace of change in digital advertising is really key to long-term growth. And then two potentially significant catalysts in the near term, I wanted to call out and I know we'll get into it a little bit later. Number one is -- both of them are related to Google. The first is remedies. So we do expect to see some movement towards remedies, particularly behavioral remedies versus structural in 2026. And so we think that's on the horizon. And then second is civil action. So we saw a private SSP file a civil action lawsuit against Google maybe 3 or 4 weeks ago, and we have not ruled everything out. I think all the options are on the table. And so I think that can be a significant catalyst for investors as well.

Okay. So I think that's a great table setting and maybe to kind of continue down this kind of just understanding your position. So PubMatic, you're credited with being the second largest non-Google SSP with about 4% share after Magnite was about 6% and Google with 60%, which was deemed to be achieved through monopoly practices. So competing against a monopolist, competing against Magnite. What is it that pub and others -- what is it that PubMatic has done well to achieve this kind of share position?

Yes. I think there's a couple of factors. First, it's about the performance that our platform offers and the value that our clients get from using PubMatic. So that's why we've been able to scale and grow the way that we have for nearly 2 decades. And second, we really continue to innovate and build for the future of digital advertising. So as I mentioned at the outset, we've transformed our business from an SSP or publisher-only platform to an end-to-end platform, where we are serving the needs of the 4 major stakeholders in the ecosystem. And so our business and our focus has been on not standing still, but really how do we leverage our own and operated infrastructure, invest, be agile in our approach and recognize where the growth and opportunities are coming from. And so an example of this is how we build solutions around data targeting and curation. So we saw early on that the ecosystem was shifting towards performance. We recognize the importance for publishers and data owners to maintain control of their data and also the opportunity to meet privacy regulation requirements. And so we've seen this structural shift where now agencies are working on our platform to set up campaigns, do the targeting look at the scale data that exists on the sell-side ecosystem in contrast to the demand side or the buy side of the ecosystem. And so I think that innovative DNA and focus is really one of the main things that's propelled us to the position we're in.

Okay. And that's an interesting thought. The idea of the dynamic between the SSP, sell side and the demand side. And we want to talk about that a bit more, but I want to step back and just kind of level set. So I think underlying a lot of the focus on you and I think your group broadly is just this idea that there is a secular change of ad dollars flowing from just traditional television in one respect to connected television towards programmatic away from non-programmatic. How would -- do you see that? Is that a secular tailwind for you? And what would be your thoughts about the growth and the impact of that on your business right now?

Yes. We absolutely see that. And I would say we believe that, that would be the case years ago when we really focused our business on our platform towards where we expected the growth to happen, which would be in programmatic advertising. And I'll give a couple of examples of that. But ultimately, it's about advertisers looking for performance, transparency and control. So first of all, we can talk about CTV. We built that business from $0, a few years ago to now approximately 20% of our revenue, we built that organically, right? And so we're working with 26 of the top 30 streamers globally. So these are companies like NBC, Roku, Paramount, LG, Samsung and so on. That growth rate continues to be quite high. We shared that in Q2, it's over 50% year-over-year. And we continue to see growth here as budgets move from linear TV to streaming TV. But where the growth opportunities are in the future is also shifting. So the first leg of that growth over the last couple of years was in the head of the market, a big advertiser, like a CPG advertiser, automotive or financial service moving to where the eyeballs are, right, meaning from linear to streaming. But now we see a lot of growth with small, medium businesses. So we've highlighted growth from partners like Mountain, which is a CTV performance ad platform for SMBs, Similarly, tvScientific, China-based DSPs. So we're seeing a lot of growth in that mid-market orientation, mid-market performance particularly around CTV. But commerce media is another area. So we just announced PayPal as a customer, adding to other marquee customers like Intuit, Instacart, Klarna, where we have very unique data sets and inventory sets that are available on our platform. And that commerce media growth is almost entirely in programmatic advertising. So I think that's where we see a lot of the growth opportunity. The final one I'd highlight is supply path optimization, or SPO. The SPO is a process by which buyers consolidate their ad spend onto a subset of SSPs rather than spending on 10, 20 different SSPs. They're consolidating spend on to 1 or 2. SPO is now 55% of our business, up from 35% just a few years ago. And as we build deeper relationships with buyers and they consolidate their ad spend, we're also able to get greater visibility into revenue and stickiness into revenue and deliver on that value proposition of programmatic, which is more performance, more transparency and more control.

Okay. So we've talked about the things, many of these kind of broad kind of tailwinds for you. Now I want to talk for a minute about some of the winds blowing in the other reduction, at least from an investor perspective and get your perspective on it. So one is all this talk about the large language models impacting search and click-through rates to publisher websites. What are you seeing? What do you expect? What's your exposure, would you say?

Yes. So we really are not seeing that be a headwind for us, and I'll kind of take you through why that's the case. And it's not something we're particularly worried about. So about 40-ish percent of our business is mobile app in CTV, which is unaffected by search. The remaining portion of the business is browser-based. Now industry data shows that roughly 15% of a publisher's traffic is search referral traffic, the rest of the traffic coming from either direct navigation or social sharing. Now given that we work with the head of the market, so top publishers rather than the long tail, I would expect that, that search share is even lower, right? So people go to ESPN or Wall Street Journal either by typing it in or it's a bookmark as opposed to navigating their primarily via search. And so if you multiply that out, less than 15% on 60% of the business and that 60%, again, that's browser-based shrinking as a portion of the total is mobile app and CTV are growing much faster. We're talking about a single-digit headwind to our business. And when I think about a lot of our publishers, they've already been affected in that search queries have been delivering less traffic to them over time. If you think about doing a weather search or search on sports scores for 5, 7, 8 years now, those search results have not taken you to publisher website, you just get the answer directly in the search result. So that, I would say, is all on the defensive side, but I think there's also actually a lot of offensive opportunity, right? All of the AI search platforms, they're going to have ad-driven business models, right? They just have to given the kind of the cost economics in their business. And then second, I see a lot of opportunity for, let's say, an AI bot that might be in a commerce website or that's embedded in a game. These are going to be new canvases for ad opportunities where consumers are spending more time. So we think there's actually a lot of upside opportunity in the medium to long term around building advertising products. that go into these AI environments and deliver incremental yield, but also monetize from an advertiser's perspective, monetize where attention is going.

Okay. I want to pause for a minute. So for everyone listening [Operator Instructions] So moving ahead, I want to talk for a minute about the second quarter earnings report. So your earnings report post-close on August 11. The results were better than guided, the headline results. Your sales were up 6% actual or 19% core. And -- but there was this third quarter guidance that brought out an issue with a reset at a major DSP partner, where after 19% core growth, you were looking at down 8% to 15% in the third quarter, maybe a portion of that was political headwinds, 7 percentage points. But still the big growth core was being impacted by a DSP partner that was resetting. And I was wondering if you could talk about what's happening with that partner. And any thoughts about how long this continues to be a headwind? And why are you guys seeing this? And why haven't we heard about this from the other major publicly traded SSP out there Magnite.

Sure. Yes. So let me talk about the DSP impact, and then I can turn it over to Steve, to get into some of the factors around our guidance. So beginning in July, as you said, we called out that we saw a headwind emerge from a top DSP buyer, which recently shifted a significant number of its clients to a new platform, and that platform evaluates inventory differently than its old platform. And so one of the features of an SSP is that we are doing what's called traffic shaping, which has processed about 900 billion daily ad impressions. We do not send all of those ad impressions to every DSP because most DSPs can't handle that volume from us and other SSPs. And so we send a subset of that inventory to each DSP. And so we have to determine using machine learning algorithms which inventory is that DSP likely to bid on and which inventory to send. So the parameters of how they evaluate inventory have changed. And so we are working to optimize the inventory that we send this DSP. And we're working, of course, very hard on this, and we think it will take some time to play out. I would say some of the SPO partners that we work with advertisers and agencies were also surprised by the shift. So they did not realize until after the changes were made that their SPO strategies were no longer implemented in the DSP and so they had to go back in and work through that process to reimplement their SPO strategies. And so that is also taking some time. So we saw a notable drop in activity from this DSP in July, which has stabilized in August. And I think it's going to take us some time, given the scale and complexity of our platform to -- really to optimize the traffic that we send to this DSP. So while we are doing this, I think a top priority for us is to also accelerate the diversification of ad spend on our platform away from legacy DSPs. So we've been making progress, but we plan to accelerate our strategy. And I think that strategy will also play out over time, but ultimately lead to significant benefits. So in Q2, we expanded the share of spending from DSPs outside of the top 5 with performance marketers and mid-tier DSPs growing 20% plus year-over-year. So some of the names that we talked about earlier, Mountain, tvScientific, some China-based DSPs. Another great example is Amazon, which is a significant relationship for us, both as an inventory provider as well as a DSP buyer. So we've been scaling very nicely with them in June and July, for instance, our Amazon revenues grew very healthy double digits. So our focus is really on expanding that cohort where we think ad budgets are growing faster and where we can not only grow our business but also diversify as it's clear that the concentration of our legacy DSP relationships is a significant factor constraining our growth, and we intend to address that head on. Now let me turn it over to Steve now to talk about some of the factors and guidance.

Sure. Now with respect to our outlook, we shared a range of $61 million to $66 million in terms of Q3. And the way that we form the lower end of the ranges, take a look at the latest data we had from July. And as Rajeev pointed out, the spend trends from the DSP that we saw in July stabilized. So the low end of the range assumes that stabilization is about where it is today, meaning it's flattish through the end of the quarter. And we also saw a little bit of softness in terms of a couple of consumer discretionary verticals. So we were being prudent in terms of coming up with a range, probably broader than we would normally. And I think the way to think about how we're working through it is a couple of things. One, Rajeev commented on all the things we're doing to influence the trajectory on the DSP affected. We also, as a reminder to those who are not familiar with PubMatic, we have a very diverse set of ad verticals, over 20-plus ad verticals, and they're pretty well proportioned across those ad verticals. And we saw a strength in a number of those in the second quarter and in July. There was some of that softness. But I think for the consumer is discretionary, but it absolutely wasn't, I'll call sort of a notable decline. So it's something that we're paying attention to. So to the extent to which we are able to continue to make efforts progress against the DSP impact. We would be approaching the upper end of the range. And if there is no, I'd call continuing macro effect, that's materially negative, then I think we're going to be at the upper end. So we got puts and takes. From my perspective, when you step back, we built a business over the long run to focus on the secular growth areas. And those are doing quite well. Rajeev shared some of that data but it's really worth underscoring. Today, over 40% of our business is a high-value video, the foundation of that is CTV, which is growing over 50%. And that was -- this past quarter was the sixth straight quarter, which we did that. Our emerging revenue is doubling. So we feel, as a business, we're putting our wood behind the greatest opportunities and where we can double down on making those grow even faster. And so we're going through an optimization effort in terms of making sure we have all of our resources in the right area. And to execute against the game plan that Rajeev described, diversifying our DSPs, putting more effort and focus on the fastest-growing areas and then ultimately continue to innovate. We've been very successful in incorporating AI initiatives a couple of years ago in the back end in terms of engineering, and that now has come into the front into the product portfolio, which we think will have long-term gains for us as a business. So we think as a business, we're quite healthy, and we're going to work through. We're confident we're going to work through this DSP impact.

Okay. So I appreciate that elaboration. Now one thing that was a little bit just, I guess, unfortunately, from a timing perspective is that this second DSP issue hit right as you were working through an issue from another DSP. This was -- the second quarter was the last quarter of a headwind from one DSP switching from, I think, a second auction to a first auction capability that was $40 million-ish or so, I think, headwind to your revenues when you back out some of the things that you've disclosed. But is that now -- we have expected that to be behind you by the second quarter. Is that fully behind you? Is there's no more impact from that to come?

Yes. From our perspective, when that change occurred mid-2024, there was a drop, and we anticipated based upon all of our efforts that we'll be able to stabilize that, which we did. And we actually were able to grow spend from that DSP in July. So right after the full year anniversary. So we feel that, that's unfolded the way that we had anticipated, reflecting the various efforts that we had deployed. So in our perspective, that change is behind us. Now it's incumbent upon us to continue to drive that business. So we've been working with that DSP in a lot of new areas, and we are hopeful and anticipate continued growth out of that DSP in the quarters to come.

Okay. So now you're -- as we started off, I mean, you guys are a leading -- leader in your field. I mean you've been one of the strongest players. And yet you've had these two situations with one DSP last year and another DSP starting in July that we haven't heard the other publicly traded comparable, which is Magnite say they've been impacted by these issues, although I think they're industry-wide. Why would there be a difference in the impact to one leading player that's a little bit bigger than you guys, but not that much bigger and you guys? Why would there be that difference there, do you think?

Yes, I can take that. So yes, our clear understanding is that these impacts are industry-wide. So I don't think we're the only ones that are absorbing this impact although, to your point, of course, Barton, the other public SSP did not call them out. So I think perhaps we have a higher concentration with these two DSPs or it could be a function of concentration in a particular ad format, like display and mobile, where we saw the effect. We know that multiple market participants were surprised by this latest one in July, given advertisers and agencies have their SPO settings in the DSP removed and had to reimplement them and we were on the front lines of educating them about this. So I think it is an industry-wide impact, as you mentioned. So I think all of this highlights for us the importance of what we talked about earlier, which is that it's critical for us to diversify our spend away from the handful of top legacy DSPs. And I think the good news there is that independent of our own desire to do that, when we step back and look at the market over the last couple of years, what we are seeing is that the mid-market of advertisers is growing at a significantly faster rate than the, let's call it, the Fortune 250 advertisers. But I think there's a couple of reasons for that, record new business formation during the pandemic, lot of online businesses, you have AI, streamlining workflows and making it a lot easier for small advertisers to get into advertising, you have with the shift of TV consumption from linear to streaming, entirely new and robust canvas for advertisers. So all of these things are making it such that the mid-market of advertisers is growing at a much faster rate than they had. And the platforms that the mid-market uses are very different than the legacy top DSPs. And so as we called out 20% plus growth in the mid-tier DSPs on our platform in Q2, 30% in July. And that is not only adding incremental revenue growth to our platform, but also the diversification that we think is going to be critically important for us.

Okay. And I think you flagged that one DSP, if you can call them a DSP, which is MNTN has been on a particular growth trajectory with you, and they're very focused on that category.

Yes, exactly. So Mountain is an ad platform for mid-market SMB performance CTV buyers. And so we called out a strong relationship that we built with them in our earnings call. And obviously, they're growing very nicely, newly public company, so you can see their numbers. But they are just one example of several alongside tvScientific and others that are in that mid-market CTV bucket where we see really strong growth.

Yes. Now you guys -- you've flagged a little bit earlier, supply path optimization, which I think has been an effort for you for a number of quarters now, and there's now a majority of your sales mix. And then you've got a new effort within that. Could you talk a little bit about what's been driving the growth there? And also answer this question. I guess the idea is that if there's more of the optimization that's really done on the sell side, that would seem to argue for SSPs having a faster growth potential than DSPs, but we're not necessarily seeing that in the public company reports at this time. So is there something that you assume yet to fall that would drive a difference in the growth rates there, if you can explain that?

Sure. Yes. Let's start with what is SPO and then we can get into what we might see in terms of growth. So supply path optimization is a process we pioneered maybe 5, 6 years ago, where prior to SPO advertiser agency would make a decision on what DSP they want to use. And then that DSP would bid across dozens of different SSPs or exchanges. And the buyer didn't really look past the DSP decision in that programmatic value chain. With SPO, what we've done is we've gone to the buyers and make the case to say, hey, just as you do work to choose and consolidate your spend down to a couple of DSPs typically, you ought to do the same on the SSP front as well. Don't leave it to the DSP to just spread your ad budget indiscriminately, you ought to consolidate your ad budget, consolidate it onto our SSP. And the reason to do that is typically around the value proposition of greater ROI and return on ad spend. And that can be from data, it can be from workflow, some sort of technology integration. It can also be from commercial incentives. So a package of different things that is tailored based on the needs of that advertiser or agency that give it more performance or more return on ad spend, more control over their ad budget and more transparency. And so we've grown SPO now from 0, 5, 6 years ago to now 55% of our business, and we see that continuing to grow in share. It's up from about 35% just a couple of years ago. We're now going after mid-tier agencies and working directly with advertisers with our SPO initiatives. And a further extension of that is our Activate product, which is buyers doing the buying and transacting directly within our SSP platform where instead of using a DSP and an SSP, they're using a single technology platform inside of PubMatic to be able to buy inventory directly, and that has a number of different performance and efficiency advantages. AI is another reason why we're able to grow SPO. So we've launched industry-leading technology solutions for buyers that allow the buyer to use a simple text prompt to do audience targeting, to set up a new private marketplace deal, to optimize that deal. So to do all the things that they would normally do after learning a new user interface, now they can use AI to engage without the high overhead. So I think what we see there is tremendous opportunity to grow. I do think Barton, we're at the early stages of a trend around sell-side targeting, which is -- I think we touched on it a little bit earlier, but with privacy regulations, with the need for greater performance or efficiency in the buy, with the need for greater transparency with data being sustainable on the sell-side of the ecosystem. It's where the consumer gives consent to the publisher as opposed to in the DSP, we are seeing buyers move their targeting to the sell side of the ecosystem. And so we expect to be a major beneficiary of that. In terms of when that shows up in terms of growth rates relative to the DSPs, I mean, I think one way to look at what's happening in the last year or so is that DSPs are driving their revenue growth through increased take rates, right? Some of this migration to new platforms is being driven by take rate increases. I've seen some analysts estimate that some revenue growth is being fueled, greater proportion of it is take rate increase as opposed to ad spend increase. So I think we're going to see growth rates on the sell side start to look better than they are on the demand side in the not-too-distant future.

Okay, cool. Now I wanted to really touch on two things here. So I know you talked about Google antitrust at the beginning, and I do want to leave some good time for that. I wanted to spend just 1 minute talking about your in-house kind of approach to infrastructure. and what that means to your margin opportunity, both in a growth revenue environment and also as you work through kind of a setback with the DSP like you're having to deal with right now. So maybe we can start with that and then move on to Google antitrust.

Sure. Let me take that. From our perspective, the owned and operated infrastructure, our private cloud, as you described it, has been very valuable to us as a business. It's something that we've honed over a decade in terms of managing our own private cloud, and it's resulted in improved performance for our partners as well as great economics for us as a business. And the basic approach is to make sure that we hone the cost down through efficiencies, optimizations and then continue to process more and more impressions have an opportunity to generate incremental revenue. And just as a frame of reference for investors, over the last 3 years alone, just today versus 3 years ago, we've increased the number of impressions that we've processed by about 130%, 140%. Same time frame, our GAAP cost of revenue has increased less than 50%. And so you can see from that metric, that single metric that we're getting a lot of leverage in terms of what is the goal or what we're trying to accomplish. And so when we step back, whenever we've met or beat our revenue expectations to marginal profitability in that kind of leveraged environment, is quite significant. Sometimes it's over 90% and 100%. Now in an environment where we are working through right now, it does work against us in the short term, but it certainly doesn't influence sort of the logic and the long-term compelling advantage that gives us. Because as a business, historically, we've been able to generate 70% plus gross margins in the fourth quarter, a 40% and in several years, approaching 40% or higher margins. And so we feel that having our own private cloud is absolutely an essential ingredient and it's going to continue to be a tailwind of profitability going forward.

Okay. All right. So let's now talk about Google antitrust. So you've set it up at a level that is interesting, right? So you've talked about $50 million to $75 million of revenue potential for each percentage point share shift. The contribution of that is like 80%. So let's say we take 80% at the midpoint, that's about $50 million of EBITDA for each percentage point share shift. For a company that did, I think you reported a little over $90 million of EBITDA last year. So share shift could be very impactful to your cash flow, but that has to happen. So what in your minds are the remedies that need to come out that could actually shift share so that this is something that really drives a change in the market versus all talk and no substance.

Yes. So the DOJ has proposed a number of behavioral remedies and structural remedies. Easy way to think about it is structural is divestment of core assets, DFP and AdX prime among them for Google. And then behavioral is prior to that happening, making a change in behavior that should hopefully cure a lot of that, but where the structural remedy would ensure that there can be no ongoing harm. So I think one of the key, and I think imminently executable behavioral remedies is for Google's demand side, which is DV360 and AdWords, these are kind of two different parts of Google's demand business, to bid in a non-biased fashion across SSPs and exchanges. So today, what the court found is that Google demand biases, AdX and DFP and pushes in disproportionate share of spend over to the Google ad tech stack. And so one of the behavioral remedies that the DOJ has proposed is that Google no longer do that, and they bid fairly without discrimination across market participants. If we think about the market share, right? So we're 4% and basically the 40% of the market that Google doesn't own. So that's about a 10% share of the market. So if we were to apply that 10% to the aggregate, that would take our share from 4% to 10%. So there's reason to believe that we wouldn't get that full allocation within Google. Well, it's only behavioral, but I think we can make a significant movement towards that without having to go through all of the structural remedies, which, of course, could take quite some time. So that's one piece. And then the other piece, as I mentioned, is the is the civil action component. So we think both of these have potential in the not-too-distant future.

Okay. So I want to talk about a little bit more about the idea of a remedy. So the judge will have a trial that starts on September 22, it's the current scheduling to talk about remedies. And the decision on remedies could be relatively quickly after that. Now I think so many investors look at core proceedings and they say, "Well, yes, this could be appealed and pushed back beyond an investable time horizon." You seem to have confidence or hope some level that there can be behavioral changes embraced by the judge that can begin to impact the market as early as next year. Why do you think that? I mean, certainly, Google is kind of appeal? I mean, why do you think that there could be impacts as early as next year?

Yes. I mean I think the behavioral remedies are relatively straightforward for the court to implement. And should Google appeal and be successful in that appeal those behavioral remedies could be just as quickly rolled back. And so I think based on that, it stands to reason that given the guilty verdict, the court would be within its power to move forward with those behavioral remedies even while the appeals process plays out.

Okay. So it would be within its power, but is there anything you've heard from the court that suggests to you that they would be inclined to implement behavioral remedies while an appeal is pending.

I'm given -- I'm not a lawyer, and I want to make sure I don't say the wrong thing here. I won't provide anything that -- I think the court has said that speaks to that specifically.

Okay. All right. But certainly, your legal counsel is behind your confidence that this is something you can talk about today as a...

Yes. Correct.

And now you talked a little bit about civil litigation. So just so people kind of understand my understanding of civil litigation is, in a case like this, you start with it basically taken as a given by the court, if a company has been found by the suit brought by the DOJ to have committed an antitrust violation that there is, in fact, an antitrust violation. So you start off halfway down the road in terms of being able to get something out of civil litigation. Is that generally how you see it?

Yes, that's right. I mean, basically, the court has said, hey, you Google were running in a legal monopoly here, and there's a period of time over which there was harm, and we were named alongside other SSPs as a specific company that was harmed by Google's actions, even laying out -- government laid out specific algorithms and quantified the harm. So our understanding is that really the only question here is a question of fact as to the magnitude of damages. And that obviously would need to be heard by a court to determine our view versus what might be Google's view. But that is the question as opposed to, was there any harm done? Or was there any legal monopoly being run here.

Yes. And my understanding is that the damages would be essentially what you would have made, but for the anticompetitive behavior. Is that your understanding?

That is my understanding, yes.

Yes. And then there is also within this function to look over not just 1 year, but multiple years of damages, and what the troubling kind of implication is that basically correct?

Yes, that is correct. So there's a question as to the period of time. There's a statute of limitations, but that statute only begins, that time frame only begins once market participants are aware. And so I think there's a question of when was anybody aware of all of these harms. And so I think that's a question in terms of what is the -- how far back, let's say, does the harm period go? And then, yes, my understanding is that I believe it's the Clayton Act, there's a tripling of damages as a punitive measure to discourage others from operating legal monopolies.

Yes. So you're saying right now, it's something that you look at, you consider seriously. What needs to happen for you to be able to make a final decision about whether this is something to pursue?

Yes. I mean, I think for us, it's a matter of evaluating the merits, the cost, the time frame, right, all of the things that go into taking such an effort forward. And then determining where do we see the balance playing out in terms of the pros and cons and then making a decision to move forward.

Okay. And then as part of that, I would imagine it's typical in suits for there to be some discussion about a settlement potentially. Is there anything you can say about the potential for you to have those type of discussions? Anything you can say about that?

Nothing to comment on at this point.

Okay. All right. Well, that's fair. So I think we're down to our last minute. There's one last second if anyone wants to put a question in another one. Otherwise, I think we're very close to the end. So Rajeev, Steve, thank you guys very, very much. I really appreciate it.

Great. Thank you for having us, Barton.

Yes. Thank you.