EVC vs. LFTO: Customer Ramp, Revenue Equivalence, and Valuation

Executive Summary

Entravision Communications Corporation's Advertising Technology & Services (ATS) business has undergone a genuine multi-quarter acceleration, not a one-quarter anomaly. The large Hong Kong gaming customer first appeared in EVC's third-quarter 2025 disclosures, continued ramping in the fourth quarter, and then expanded sharply in the first quarter of 2026. At the same time, the rest of ATS also grew substantially: excluding the largest customer, estimated Q1 2026 ATS revenue was still approximately 64% above Q1 2025.The comparison with Liftoff Mobile (LFTO) requires an important accounting adjustment. LFTO acts as an agent in digital advertising transactions and reports revenue net of publisher costs. EVC acts as principal and reports digital advertising on a gross basis, with media inventory and publisher payments recorded in cost of revenue. Despite EVC labeling its top line "Net Revenue," its digital-advertising revenue is economically closer to gross advertiser billings.The nearest apples-to-apples measure is therefore:

• LFTO reported revenue, which is already net of publisher costs.
• EVC ATS revenue less ATS cost of revenue, which approximates EVC's net take or value added after purchasing media.

On that basis, LFTO generated $205.6 million of Q1 2026 net revenue versus approximately $58.0 million for EVC ATS. LFTO was about 3.55 times larger, while its $120.1 million of adjusted EBITDA was about 3.50 times EVC ATS's $34.3 million of segment operating profit. The resulting operating economics were strikingly similar: approximately 58% profit margins on comparable net revenue for both businesses, subject to differences in the profit definitions.Using market prices and capital structures as of July 21, 2026, LFTO's enterprise value was approximately 4.8 times EVC's. Relative to the roughly 3.5 times difference in core ad-tech scale and profit, this implies an LFTO quality premium of approximately 35% to 40%—material, but much smaller than a raw EV/reported-revenue comparison suggests.

Key Conclusions

1. The Hong Kong customer has been ramping since Q3 2025. It did not suddenly appear in Q1 2026. However, the ramp accelerated sharply in Q1.

1. The customer is now highly material. It represented 9% of consolidated 2025 revenue but 36% of Q1 2026 consolidated revenue.

1. Underlying ATS growth remains strong without the customer. Estimated ATS revenue excluding the largest customer grew approximately 64% year over year in Q1 2026.

1. EVC and LFTO use different revenue accounting. LFTO reports net of publisher costs; EVC reports digital advertising gross and records media purchases in cost of revenue.

1. EVC ATS revenue less cost of revenue is the best available LFTO-equivalent revenue measure. In Q1 2026, this was approximately $58.0 million for EVC ATS versus $205.6 million for LFTO.

1. Core operating economics look surprisingly similar. LFTO's adjusted EBITDA margin on net revenue was 58.4%; EVC ATS segment operating profit was approximately 59.2% of ATS revenue after cost of revenue.

1. LFTO's direct core-ad-tech premium is approximately 35% to 40%, not more than 100%. A larger apparent premium results from comparing LFTO's net revenue with EVC's gross digital-advertising revenue or with a denominator that mixes EVC ATS and Media.

1. At the consolidated-company level, EVC is not obviously cheaper on EBITDA. EVC's Media losses and corporate expense consume much of the ATS discount, leaving consolidated annualized EBITDA valued at roughly the same multiple as LFTO.

The Large Customer Ramp

Quarterly ATS progression

Period	ATS revenue	Sequential development	Customer context
Q1 2025	$50.9M	—	Customer not present; no advertiser exceeded 5% of consolidated revenue
Q2 2025	Approximately $55.3M	Approximately +9%	Broader growth in customers and spending
Q3 2025	$76.1M	Approximately +38%	First disclosure of a "large new customer" recently acquired
Q4 2025	Approximately $88.6M	Approximately +16%	More customers and higher spend per customer; continued ramp
Q1 2026	$154.6M	Approximately +74%	Largest Hong Kong customer reached 36% of consolidated revenue

The Q2 2025 and Q4 2025 values are derived from EVC's disclosed nine-month and full-year ATS totals and may differ slightly due to rounding.The sequence supports a gradual initial ramp followed by a large Q1 2026 step-up. EVC disclosed in its Q3 2025 10-Q that the increase in ATS revenue included a "large new customer that was acquired recently." The 2025 10-K then identified a recently acquired Hong Kong customer as EVC's single largest customer and warned that its loss could materially affect results and cash flow.

Customer concentration math

EVC's 2025 consolidated revenue was $447.6 million. The largest advertiser represented 9%, implying approximately:

• $447.6M × 9% = approximately $40.3M of 2025 revenue.

Because the customer was acquired during the second half of 2025, this approximately $40.3 million was generated over only part of the year.In Q1 2026:

• Consolidated revenue was $197.0M.
• The largest advertiser represented 36%.
• $197.0M × 36% = approximately $70.9M.

The customer therefore generated roughly $70.9 million in Q1 2026 alone, versus approximately $40.3 million during the portion of 2025 in which it was active. EVC also reported $75.9 million of Q1 revenue from Asia, consistent with the Hong Kong customer accounting for nearly all of the new Asian revenue.

Growth excluding the customer

Q1 2026 ATS revenue was $154.6 million. Subtracting the approximately $70.9 million attributable to the largest customer gives estimated ATS revenue excluding that customer of:

• $154.6M − $70.9M = approximately $83.6M.

Q1 2025 ATS revenue was $50.9 million and the customer was not present. Therefore:

• ($83.6M ÷ $50.9M) − 1 = approximately 64% year-over-year growth excluding the largest customer.

This calculation is important. The customer explains a large portion of the headline 204% ATS growth, but the remaining ATS business was also growing rapidly. Investments in AI capabilities, sales coverage, engineering, and customer operations appear to have driven broader growth in monthly active advertisers and spending per advertiser.

Revenue Accounting: EVC Versus LFTO

LFTO: agent and net presentation

LFTO facilitates advertisers' purchases of publisher-owned ad inventory. It concluded that it does not control the inventory and is not primarily responsible for the publisher's fulfillment. LFTO therefore acts as an agent.LFTO reports revenue after subtracting consideration payable to publishers and other parties providing access to publisher inventory. Its reported revenue is effectively the company's net take from advertiser spending.Conceptually:LFTO reported revenue = advertiser consideration − publisher costsLFTO then records platform delivery, infrastructure, personnel, hosting, and related expenses separately as cost of revenue and operating expenses.

EVC: principal and gross presentation

EVC concluded that it is the principal in digital-advertising transactions because it is responsible for fulfillment, has pricing discretion, and carries inventory risk. It therefore reports advertiser consideration as revenue and records media purchases as cost of revenue.Conceptually:EVC reported digital-ad revenue = gross advertiser billingsEVC value after media cost = reported revenue − cost of revenueAlthough EVC labels its income-statement top line "Net Revenue," its digital-advertising presentation is gross under the principal-versus-agent accounting analysis. The label should not be interpreted as equivalent to LFTO's net presentation.

Closest equivalent measure

For a direct comparison:

• Use LFTO reported revenue.
• Use EVC ATS revenue less ATS cost of revenue.

This is not perfectly identical because EVC's cost-of-revenue classification may contain items beyond publisher or inventory spending, and company-level operating classifications differ. It is nevertheless substantially more informative than comparing the reported top lines.

Q1 2026 Equivalent Revenue Bridge

Q1 2026	LFTO	EVC ATS
Gross advertiser spending	Not disclosed	$154.6M
Publisher/media cost	Deducted before reported revenue	$(96.6)M
Equivalent net revenue / net take	$205.6M	$58.0M
Cost of revenue after net presentation	$(28.0)M	Included differently
Operating cash-profit measure	$120.1M adjusted EBITDA	$34.3M segment operating profit
Profit/equivalent revenue	58.4%	59.2%

The close relationship between scale and profit is notable:

• LFTO equivalent net revenue / EVC ATS equivalent net revenue: approximately 3.55 times.
• LFTO adjusted EBITDA / EVC ATS operating profit: approximately 3.50 times.

This suggests that, at least in Q1 2026, EVC ATS's operating economics after media purchases were broadly comparable to LFTO's.The profit measures are not identical. LFTO's adjusted EBITDA excludes depreciation and amortization, stock-based compensation, and several other adjustments. EVC segment operating profit is calculated before corporate expenses and certain company-level items but may include costs that LFTO excludes. The comparison should therefore be treated as directional rather than exact.

What the Large Customer Contributes Economically

The approximately $70.9 million attributed to EVC's largest customer is gross digital-advertising revenue. It is not the amount retained by EVC after buying media.EVC ATS's average Q1 2026 take rate was:

• ATS revenue: $154.6M.
• Less ATS cost of revenue: $96.6M.
• Revenue after media cost: $58.0M.
• $58.0M ÷ $154.6M = approximately 37.5%.

If the large customer had the same average take rate, its illustrative equivalent net revenue would be:

• $70.9M × 37.5% = approximately $26.6M.

This is only an illustration. The customer-level take rate, cost of media, and operating contribution are not disclosed. Large customers may receive different pricing and could carry a lower take rate than smaller accounts. Consequently:

• The customer is 36% of reported consolidated revenue.
• It is likely a smaller percentage of EVC's economic value added.
• Its exact contribution to ATS operating profit cannot be determined from current disclosures.

Q1 trade-receivable concentration provides some reassurance but does not remove the risk. The customer represented 24% of trade receivables at March 31, 2026 and was described as paying on a current basis. Contract durability, budget stability, customer game performance, geographic enforcement risk, and customer-specific take rate remain open questions.

Valuation Implications

Market inputs as of July 21, 2026

Item	LFTO	EVC
Reference price	$23.27	$10.81
Approximate diluted shares	179.6M	96.4M
Approximate diluted equity value	$4.18B	$1.04B
Approximate net debt	$1.25B	$0.09B
Approximate enterprise value	$5.43B	$1.13B

Core ad-tech valuation

Using Q1 annualized:

Multiple	LFTO	EVC core ATS
EV / equivalent net revenue	Approximately 6.6×	Approximately 4.9×
EV / core operating-profit measure	Approximately 11.3×	Approximately 8.3×

On these measures, LFTO trades at approximately a 35% to 40% premium to EVC ATS.This premium can be rationalized by:

• LFTO's substantially broader customer diversification.
• LFTO's integrated demand-side and supply-side platform.
• LFTO's 130% LTM Core Advertising net-dollar retention.
• LFTO's 97% top-100 advertiser retention and 100% top-100 publisher retention.
• LFTO's cleaner pure-play identity and absence of a legacy broadcast segment.
• More transparent evidence of sustained sequential growth.
• Lower dependence on one gaming customer and one geography.

EVC's potential offsets include:

• Much lower financial leverage.
• A rapidly scaling proprietary DSP in Smadex.
• Strong Q1 operating leverage.
• Growth of the ATS business excluding the largest customer.
• Possible value in Media assets, spectrum, and political-advertising optionality.
• Potential sum-of-the-parts upside if Media losses and corporate costs are reduced.

Consolidated-company valuation

The apparent EVC discount narrows sharply when Media and corporate expenses are included. In Q1 2026:

• ATS operating profit: $34.3M.
• Media operating loss: $(5.2)M.
• Consolidated segment operating profit: $29.1M.
• Corporate expense: approximately $(7.2)M.
• Consolidated operating income: $20.7M.
• Consolidated EBITDA before further adjustments: approximately $23.7M.

Annualizing approximately $23.7 million implies about $94.7 million of consolidated EBITDA. EVC's approximately $1.13 billion enterprise value is therefore roughly 12 times annualized Q1 consolidated EBITDA—close to LFTO's approximately 11 times Q1 annualized adjusted EBITDA.This leads to two different conclusions:

• Core ATS or sum-of-the-parts view: EVC looks cheaper than LFTO.
• Consolidated operating-company view: EVC and LFTO trade at broadly similar Q1 run-rate earnings multiples.

The investment thesis depends on whether EVC can preserve ATS growth while shrinking the Media and corporate drag.

Risks and Open Questions

Customer durability

• How long is the commercial relationship with the Hong Kong customer?
• Are minimum spending commitments present?
• Is the customer's budget linked to one game or a broader portfolio?
• What is the customer's actual take rate and contribution margin?
• How volatile are its advertising budgets across quarters?
• Can EVC enforce its rights effectively in Hong Kong or China?

Revenue quality

• How much of ATS growth reflects advertiser billings versus growth in EVC's retained take?
• Is the large customer's take rate below the ATS average?
• Does EVC's revenue-after-media-cost continue growing alongside gross billings?
• Are payment terms and working-capital requirements changing with scale?

Broader ATS growth

• Does ATS excluding the largest customer sustain the approximately 64% Q1 growth rate?
• Are monthly active advertisers and spending per advertiser continuing to rise?
• Does Adwake remain a material independent growth contributor?
• Can EVC diversify away from gaming and its largest account?

Margin sustainability

EVC warned that advertisers increasingly demand efficiency and lower intermediary costs, leading to lower product and service margins that may persist or become permanent. Future monitoring should focus on:

• ATS revenue less cost of revenue.
• ATS segment operating profit.
• Take rate.
• Cloud and infrastructure costs.
• Sales compensation.
• Working-capital intensity.
• Customer concentration.

Media and corporate drag

Even strong ATS results may not translate into consolidated value unless EVC:

• Reduces continuing Media losses.
• Limits corporate expense.
• Monetizes or restructures underperforming assets.
• Uses free cash flow for debt reduction or shareholder returns.
• Avoids reinvesting ATS profits into structurally declining operations without adequate returns.

Monitoring Framework

For each future EVC quarter, update the following table:

Metric	Why it matters
ATS gross revenue	Measures customer billings and platform activity
ATS cost of revenue	Captures media-purchase and publisher costs
ATS revenue after cost of revenue	Closest LFTO-equivalent net revenue
ATS segment operating profit	Measures retained economics before corporate drag
Largest-customer revenue percentage	Tracks concentration and ramp
Asia revenue	Useful proxy for the Hong Kong customer's scale
Receivable concentration	Tracks collection and counterparty exposure
ATS revenue excluding largest customer	Measures underlying platform growth
Media operating profit/loss	Determines how much ATS value reaches shareholders
Corporate expense	Measures holding-company leakage
Operating cash flow and working capital	Tests whether reported growth converts to cash
Debt and cash	Tracks balance-sheet optionality

Bottom Line

The large EVC customer has been ramping since Q3 2025, with a particularly large acceleration in Q1 2026. The customer concentration is material and deserves a valuation discount, but the rest of ATS also appears to be growing rapidly.The revenue-accounting difference with LFTO is essential. LFTO reports net of publisher costs; EVC reports digital advertising gross. After normalizing EVC ATS revenue by subtracting cost of revenue, EVC's core operating economics look substantially closer to LFTO's than reported revenue multiples suggest.The most defensible current conclusion is:

• LFTO is the larger, cleaner, more diversified ad-tech business.
• EVC ATS appears to have comparable Q1 economics on a net-revenue basis.
• LFTO's direct core-business premium is approximately 35% to 40%.
• EVC's consolidated valuation loses much of that apparent discount because of Media losses and corporate overhead.
• The next key evidence is whether the Hong Kong customer remains stable, ATS excluding that customer continues growing, and EVC converts gross advertiser spending into durable net take and cash flow.

Primary Sources

1. EVC Q3 2025 Form 10-Q
2. EVC 2025 Form 10-K
3. EVC Q1 2026 Form 10-Q
4. EVC Q1 2026 earnings release
5. LFTO June 2026 prospectus