How the Money Moves with Nick Carrabbia, EVP at OAREX

In this episode of the State of Streaming podcast, host Tim Rowe welcomes Nick Carrabbia, EVP at OAREX, a firm that provides on-demand liquidity for the digital ad ecosystem. Their conversation explores the critical mechanics of how money moves through the advertising supply chain from advertiser to agency to publisher and the growing challenge of late payments. They discuss the macroeconomic factors tightening credit, the red flags hidden behind high CPMs, and how publishers can unlock cash flow to compound growth.

Here are three key takeaways from their conversation that illuminate the financial state of the streaming and publishing industry:

The State of Pay: Record Late Payments and Supply Chain Friction

Nick Carrabbia reveals unexpected data from the first half of 2025, noting that late payments have hit a record high. He breaks down the macroeconomic "vacuum" created by COVID-19 and inflation, and explains how the multiple "hops" between DSPs, SSPs, and publishers exacerbate payment delays.

• 03:10 - Record high: Why 58% of all tracked payments were late in H1 2025
• 04:16 - The economic vacuum: How COVID liquidity and inflation shaped current credit terms
• 05:15 - The "hops" effect: How money moves from Advertiser to DSP to SSP to Publisher

The Solution: Converting Invoices into Growth and Liquidity

Nick explains how OAREX solves liquidity issues by allowing publishers to trade invoices for immediate capital, and defines critical financial metrics like DSO (Daily Sales Outstanding) and DPO (Daily Payables Outstanding) that every publisher should track.

• 09:24 - How OAREX provides non-dilutive liquidity to the ecosystem
• 10:39 - Opportunity costs: The hidden price of waiting 60+ days for payment
• 16:01 - Defining DSOs (Daily Sales Outstanding) and DPOs (Daily Payables Outstanding)

The Risk: Red Flags, High CPMs, and Top Payers

Nick warns against chasing revenue without considering credit risk. He highlights specific "red flags", such as abnormally low CPMs coupled with late payments, that indicate a partner may be in trouble. He highlights the "Top Payers" are who consistently pay within three days.

• 11:03 - The "Top Payers" report: Who is paying on time and why it matters
• 12:28 - The shrinking list of consistent payers
• 13:30 - The "Red Flag" warning: When low CPMs are actually a sign of distress

Connect with Nick Carrabbia on LinkedIn here

Learn more about OAREX at OAREX.com 

And get the report discussed in today's episode here

Transcript

Tim Rowe 0:00

Call it a cost of doing business. Late payments have always been a point of friction in advertising. Publishers want to get paid today. Advertisers want to pay after the product advertised is still delivered. But did you know that in the first half of 2025, 58% of all payments tracked were late? That's a new record high according to today's guest. Welcome back to this data streaming podcast. I'm your host Tim Rowe, and today we're catching up with Nick Carabia, PvP at Orex. Forex provides sellers with on-demand liquidity designed for the digital ad ecosystem. And in today's conversation, we'll be learning about how the money really moves. How does it go from advertiser to agency to DSP to SSP, and finally to the publisher? What is the red flag that could be lurking behind the low CPMs? What does it really mean? What could it mean? What questions should you ask? And how are the fastest growing companies reinvesting revenue immediately to grab more market share and compound their growth even faster? Enjoy. Nick, we've been having a conversation that I'm excited to tie the audience into about the most important piece of our business, how the money moves, how people get paid. Orex is a company that helps people get paid. Can you give us a brief description on who Orex is, who the customers are that you solve problems for, and how you create value?

SPEAKER_01 1:26

Yeah. So Orex, it stands for the online ad revenue exchange. We are the most flexible finance partner in the space, and we provide non-dilutive, flexible capital to supply partners throughout the entire advertising and media ecosystem. So supply partners downstream from a brand or advertiser are potential clients that are waiting to get paid, and we provide them with immediate liquidity so that they can scale and grow their businesses.

Tim Rowe 1:53

Everyone's favorite part. And we're going to talk about some of the limitations to supply partners today as it relates to payments, to how that's impacting their businesses and ability to scale. You started releasing a publishing payment performance report back in 2018. And we're going to talk about the first half of 2025 here in this conversation. But take us back. Why did you start publishing this data? Why make this available in the first place?

SPEAKER_01 2:21

So we were sitting on a wealth of first-party data that we collect, because we collect payments from what I say, demand partners or debtors, I'll use those terms interchangeably throughout the entire ecosystem. And we felt that it was our responsibility to be transparent with that data to all of our partners to help them make more informed decisions. And so back then in 2018, we started with quarterly payment reports. Somewhere around 2021, we pivoted to H1 and H2. And so we released back then it was hundreds of demand partners and now it's thousands. And so we release all of that payment information to the public. And since then, we've also added other reports that have been very helpful, you know, our top payers report and you know revenue reports. So yeah, we're just here to help.

Tim Rowe 3:10

I appreciate that. And we will talk about the top payers report as well. It's not just doom and gloom, but we are going to talk specifically about that H1 report that showed 58% of all payments that you're tracking were late, which is a record high for your platform. What's driving that increase? What what does that mean to publishers?

SPEAKER_01 3:32

So that's correct. 58% is a record high. Nearly six in 10 payments are late. We take the view that it's very top-down, and that the macroeconomic factors are really the master pulling restraints. And so you see that credit has tightened over the last several years, and you start to see that ripple out through up the pay trends in the space.

Tim Rowe 4:00

So if we're looking at it from the perspective economically, things are tight. COVID created this vacuum effect that you talked about. Can you paint that picture? What has taken place over the last few years that's led us to where we are now?

SPEAKER_01 4:16

COVID created this vacuum, as you say, in the early half where there was so much liquidity available that it went hyperbolic. You see record MA activity, liquidity is everywhere. It's you know, pushing, pushing, pushing, and then inflation gets to a point where it's so problematic that we have to tighten. You know, it was extremely quick tightening historically. So as that happens, liquidity becomes scarce and difficult to find. And so you see demand partners start paying longer or later, and you see all sorts of credit risk to manifest. There was you know several bankruptcies that were notable, uh 2022, 2023. And then, you know, there was a lot of resulting sequential liability and offset risk that flowed throughout the ecosystem. And so we tend to view that that is the overarching puppet master pulling the strings.

Tim Rowe 5:15

Yeah, I think it's important to be aware of, and we're certainly experiencing it in the consumer economy. We feel it in our in our own lives and see it, obviously, in the in the news and the trades, but now we're talking specifically about how it impacts our businesses. And surely this is something that isn't a surprise, and folks are feeling. What does it mean to a publisher who's hearing 58% of the payments are late when we really get into how late are the payments, what are sort of the the systemic causes for the multiple hops and payments being late? Can we talk about those factors? It's not just the money's late, but there's factors that lead to the money being late, I think that are important for publishers to consider.

SPEAKER_01 5:58

We've always had this view that late payments are endemic. They're just a cost of doing business in the space. Function of the business. Yeah, but there's ebbs and flows to that, right? And so it's important to monitor what is historical payment activity. You know, are these partners common? And then monitor is that late growing. So one of the things that we've noticed that is interesting beyond the fact that nearly 60% of all payments were late, which is a record high, we also see payments greater than five days late hit a record high at 32% of the entire portfolio. And then payments greater than 15 days late also hit a record high at 18%. We've always taken the view that you know there is some fluctuation, but when you start to see trends and payment delays greater than two weeks, that tends to be more indicative of an issue, right? And so as that payment gap widens, you're gonna see that manifest in many other ways. And then to your question about the hops, you know, you have, for example, let's say in programmatic space, it's fairly common, say net 60 is roughly the standard on pay terms, but then publishers that are say moving, trying to go the SPO route, go more direct or through agencies, those payment delays are much longer. Terms may say 75. We frequently see that they're actually paying net 120 or sometimes upwards of net 150. And so making that jump from net 60 roughly consistently to even 75 is a massive difference between what your DSO and DPOs were prior, right? And that gap. And so that's a heavy burden. And so publishers, every uh hop in the supply chain deals with something similar. It all boils down to liquidity, but publishers may be paying for traffic and they may be expecting to pay net 30, they may have net 60 to net 30 somewhere coming in on the DSO side. So payments coming into them, inflows and outflows. But then as you move up, they may be connected to an SSP. That SSP may be connected to a DSP, and then the DSP, you know, they're expected to pay on 60 typically, but they're probably waiting net 75, net 90, net 120. And so that burden in that cash flow cap becomes significant. And then each partner downstream is feeling that pressure in a similar way.

Tim Rowe 8:33

It's a lot to consider, right? Especially as a publisher, a smaller independent publisher for sure, where I want to sell direct business. I probably want to have that business trafficked programmatically. I may want to realize programmatic revenue via the open exchange. There's a lot to this, more than just, hey, where does my money come from and who's giving it to me? There's a lot to consider with how that money is actually flowing into my business. And will I be able to continue doing what I'm doing today six months from now if I'm waiting on money from all of these partners? How do you how do you simplify that? How do you make it easier for the partner with us? Um I think that's a that's a fair answer. All right. So what does that mean? What does it actually look like to partner with Orex?

SPEAKER_01 9:24

Uh well, it's very simple. It's extremely easy. You know, we provide that non-diluted liquidity because we know the space, we can be much more flexible than other partners. But, you know, let's just say that a partner comes on, they have the freedom to choose what they sell through us, you know. They trade in those invoices as they want, and they basically turn that into instant on-demand liquidity. So effectively, they take control of their cash flow instead of sit on their hands for 60 days hoping that the payment's actually going to arrive.

Tim Rowe 9:58

Okay, good. Because the yeah, the alternative of the hoping and the forecasting, and that's that's a lot versus yes, I have an invoice and here it is, and I'd like to collect against it.

SPEAKER_01 10:07

To even take that further, you know, so much of it's opportunity costs, they could have an invoice, right, that they're waiting to get paid on, and suddenly an opportunity comes up. They can't just say, you know, let's pause and wait 30 days and bring that opportunity back to me. They need to be able to take advantage of it now, right? And so ultimately, cash is king in that scenario, and either you have a liquidity or you don't. Whereas they could take advantage of the revenue that they're waiting to get paid and turn that into more revenue now.

Tim Rowe 10:38

Great. Thank you for adding that. I think that is a very important consideration. Everything is opportunity costs, isn't it? Yeah. On the flip side, you have a top payers report. It's not all doom and gloom. It's not, it's not all 60 days late. There's some great partners, Magnite, Amazon, Triple Lift. What are those companies doing differently? Talk to us about the top payers report and what makes these companies unique.

SPEAKER_01 11:03

So we started uh releasing that because in tandem with the pay study, we we wanted to highlight those partners that pay you know exceedingly well, at least consistent, right? They're a consistent source of on-time payments for their partners, and those supply partners know what to expect and they can plan accordingly. And so these partners are those that pay within consistently within three business days. Those payments are arriving, they're not extremely late, and they're always on time. They know this is when I'm going to be paid relatively within a couple days for processing, and I can count on that revenue so that I can plan for future specs.

Tim Rowe 11:42

Those are great partners. We'll we'll be sure to highlight that so folks can easily access that.

SPEAKER_01 11:47

I will say though, we did just come from an all-time high of 30 top payers, which was nearly halved, falling to 17 in total.

Tim Rowe 11:58

So say the trend is there are fewer top payers making the report.

SPEAKER_01 12:03

I wouldn't say that that's a trend because the trend was upward, but the most recent data shows at least some sort of revision. We'll see, you know, what H2 has to say.

Tim Rowe 12:14

Well, thank you for the segue. Let's talk a little bit about H2. It's almost coming to a close here. And uh curious, what are you seeing compared to H1? Can you tease us any insights that you're seeing?

SPEAKER_01 12:27

I don't have any uh anything noteworthy to say. Uh all right, fair. We did, I will say, we did experience a cut of 25 bips, right? So I think that there is a lot of concerning macro trends in terms of labor and inflation ticking back up a bit, which I was expecting with a cut, but you know, even a small cut like that could have some positive impacts on spend. So I'm hopeful that, you know, especially Q4 will tick back up to probably not what we've seen historically, but relatively positive numbers and and uh and a bump in ad spend.

Tim Rowe 13:08

Well, I think that's good news. That's something that that everyone likes to hear, right?

SPEAKER_01 13:12

Yeah. We'll see. I've been wrong before. Hopefully, not this time.

Tim Rowe 13:16

Well, we all hope that you're right this time. Thank you for breaking that down. If you had to summarize everything that we've talked about today in kind of one line from a publisher perspective, what would it be?

SPEAKER_01 13:30

It's hard to boil this all down into considering credit risk and to considering opportunity cost, but you know, I think that there are solutions to your liquidity challenges. And you know, don't overlook the credit risk that's very real in the space. We've had many clients in the past that they tend to prioritize opportunity over risk, and you know, everything's fine until it isn't. So just be mindful of it. We publish some information to help keep an eye out. Like uh there's a byline we did called the uh five red flags. And so, you know, frequently we'll see publishers come up and say, Oh, these CPMs, they're they're phenomenal. We've never seen anything like this. They're great. I want you why won't you buy them? And um, that's not always a good sign. It's also not always a bad indicator. But if you suddenly out of nowhere see a publisher paying late, maybe abnormally late, and then suddenly they're paying abnormally great CPMs, our ears perk up when we see that. Because sometimes the case is that they're trying to sell their way out of a hole, right? So it's not sustainable. They're offering phenomenal CPMs, hoping that sales will booby the ship, and inevitably it could take three months, six months, twelve months, inevitably that craters, right? And so just be mindful of it and be mindful of the fact that cost of capital isn't everything. You know, if you're gonna lead bowlers on the table, having somebody, a partner like Orex, who is well versed in the risk space and the side of that to help you navigate the credit risks while also providing you, you know, the max available amount of liquidity so that you can scale with ease. Polisher partners, like for example, where it's programmatic, they can access daily payouts. They don't even have to wait till the end of the month. So they can access yesterday's revenue today. And what we frequently see with many of those partners, they 20, 30, 50x what they would have otherwise done. Because typically, at least historically, Q4 is all about opportunity. And so don't leave money on the table.

Tim Rowe 15:46

That's good. Daily payouts. And that reminds me, I just want to make sure that we include it. DSOs, DPOs. In case we didn't define it, what are those key terms? How does that relate to the whole getting paid daily, daily pay cycle impact of all this?

SPEAKER_01 16:01

Yeah, DSOs are daily sales outstanding, DPOs, uh, daily payrolls outstanding. It's really just cash inflows and outflows and navigating that cash flow gap, right? Even a few days of waiting has drastic impact on your revenue, right? So being able to take control and plan accordingly, have a partner like us where you can say, all right, I'm gonna be able to max spend every day and incrementally compound my ROAS by end of year. You know, I don't know how you put a value on something like that.

Tim Rowe 16:36

It's the eighth grade wonder, right? Like the ability to compound money is a superpower we should all seek to express. So, Nick, thank you for giving us this lesson today. We'll look forward to that H2 report. We'll publish all of the surrounding content. We'll publish the H1 report, we'll publish the top payers report with this, and it won't be too long before that H2 report hits. So we'll look forward to that. Nick, thank you again for folks that want to get in touch, want to learn more about ORAX, where should they go?

SPEAKER_01 17:06

Yeah, they can just reach out directly to me. There's a there's plenty of information on our site. Um, they could do some contact partner forums if they would like, but uh yeah, hit me up at nick at orex.com and um you know we'll we'll follow up and see how we can help.

Tim Rowe 17:21

Sounds great. We'll make sure that is easy to find. And Nick, I can't thank you enough. Thanks for for teaching us about this important topic.

SPEAKER_01 17:27

Yeah, thank you, Tim, for having us on and um for everything that you provide to the industry. It's very exciting.

Tim Rowe 17:34

I appreciate that. If you found this conversation to be helpful, please share it with a colleague or a client. Start a conversation today. We'll see y'all next time.