Q2 2021 Comscore Inc Earnings Call
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Good day, and thank you for standing by welcome to the Comscore of second quarter 'twenty, 1.2021 financial results conference call.
At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask the question. During the session you will need the press star 1 on your telephone please.
The advice that today's conference is being recorded.
And you require any further assistance. Please press star zero and I would now like to hand, the conference over to your speaker of today, John Seeker, you may begin.
Thank you operator, before we begin and remarks I'd like to remind all of you of the following discussion and.
Forward looking statements. These forward looking statements and comments about our plans expectations and prospects.
Based on our view as of today, what was the 19th 2000 and flex of law.
The same any duty or obligation to update our forward looking statements to reflect the new information out of the baseball will be discussing non-GAAP measures during the school, which can provide the reconciliations in today's press release and on the website actual results and future periods may differ materially from those currently expected because of the number of risks and uncertainties, including those related to COVID-19.
And the economic impact these risks and uncertainties and food those outlined in our 10-K 10-Q and other filings with the SEC and you can find out of our web site or at Www SEC G O D.
And outside of the Coca Cola and the Trop 2 pumps of <unk> Chief Executive Officer The Olympics. So.
Bill.
Thank you John and thank you everyone for joining us today.
With me are Greg <unk>, our CFO and other members of management and for.
For the first half of 2021 and it represented a turning point per Comscore is the completion of the recapitalization transaction was a critical milestone for us.
With this transaction behind US we are now able to focus on growing our business and investing in new products and ways that we have been constrained over the past few years.
That said I am proud of the contract signing the accomplishments and the quarter.
Some of the contract signings have taken longer than anticipated, but we expect that they will produce revenue later this year and into 2022.
Before I discuss the quarter I would like to share with use of the landscape. The comscore is measuring and why we believe we have of world class of platform that measures the weight of media.
And the way our clients are demanding and today.
We recently ran and op, Ed piece and media post that discuss this topic and quite a bit of detail and that op. Ed piece. We've discussed how comscore is lee of fundamental change and how media is measured and transacted and 21st century.
We are healthy and the market.
And with measurement that includes 6 critical considerations first measurement needs to be passive and impression based impressions are the common language across media and inventory.
Second medium progressions needs to be properly the duplicated so advertisers can measure the true and applying frequency managements of their messaging.
Third.
Modern measurement and must be built by accompany grounded and technology research and big data management.
Fourth we believe monitor and measurement is about audiences not age and gender demos.
Monitor and measurement requires a high focus on privacy lash.
Lastly, and most importantly, we believe that the company he and his deep experience and digital TV and movie measurement.
This required today and Comscore has more than 20 years of modern experience as the technology measurement and research company.
Now, let me discuss the quarter.
We continue to feel some of the effects of the pandemic on some of our products and to our bottom line.
However, we are pleased to have a higher amount of total contract value year over year and the quarter.
Signing of new and expanded the bringing this can take time, but we're beginning to see the momentum increase and we believe these new agreements will generate higher revenue and the coming quarters and expand our margin.
With our current operating cost structure in place, we believe our new and expanded client relationships and combination with the strategic debt investments and partnerships that we have announced like by brand and our new partnerships like the Google announcement that we made this morning.
Which I will discuss shortly should bear fruit and the second half of 2021, as we transition back to growth.
I am also proud of our success and our activation business, where revenue was up 65% euro per year.
Now, let me turn to our other recent successes starting with National TV, and we signed 6 new accounts, including Octagon Sports marketing agency debt will be exclusively relying on comscore and measurement the plan and buy as wellness and expanded agreement per box.
And our national TV measurement currency, as we announced last week.
Announcement is just flanks of the Viacom CBS announcement that I have discussed and our first quarter earnings call.
Local TV measurement and continues to be of core strength of Comscore, we believe the scale and the stability of our service puts comscore and unique position as the future of measurement and the local marketplace.
And the second quarter, we executed agreements with the capital broadcasting and tightened the cheesecake and signed renewals with leading companies such as standard media group and the news is that.
Additionally, our marketplace prominence was further enhanced with the integration and the squad media of course research platform for national and local television buys.
Looking to the future, we anticipate building non Comscore TD 1000 stations and delivering strong results across the 200 plus markets that we measure of local lab.
Lastly, spectrum reach recently announced that is now of transitioning to use of comscore debt preferred local metro and in source, which we believe will help us sign more agencies and media companies to use us to conduct training for their ad business.
We also and we remained very focused on our agency marketplace and the second quarter. We continued to see key growth with agency holding companies and Dentsu international with the expanded their use of our advanced their advanced audiences tied the comscore data sets for the quick service.
Restaurant and retail client base.
We believe this is a large opportunity and been placed and important resources and this area.
With our syndicated digital products. We are pleased that we have signed many new customers, including Australia and media.
Fish and 92 rap and minute media, along with channel and factory.
We are excited to see more returning clients such as the jellyfish agency and the U K.
We are encouraged by the new business and the positive trend in the renewables.
I am very proud of and this call to announce a major accomplishment for our advertising business suite with the expansion of our integration by other Google and data halls, or what they call Ath and.
And that we announced this morning, this integration and will add connected television impressions across Youtube and Youtube TV and to our cross platform advertising measurement currency.
Comscore campaign ratings for CCR will be the source.
This accomplishment arcs to milestones 1 for a cheapening the duplicated audience reach measurement across desktop mobile and CTV with Google and 2 the integration will be foundations for the next generation of Youtube measurement of <unk>.
<unk> CTD without third party and pixels.
These milestones will the NDA comscore to provide marketers with the unmatched deduplication reach and frequency of audiences and add exposure across linear TV and desktops mobile and connected television.
The new capability will allow advertisers and agencies the understand co viewing for Youtube and Youtube TV and CTV.
As well as the true incremental reach over there of linear TV box, providing total cross platform and measured.
The addition of Youtube and Youtube TV expanse Comscore campaign ratings to include the coverage of 1 of the largest advertising destinations and enabling comprehensive cross platform measured.
CCR measurement, including Youtube and Youtube TV will be available to our buy side clients for their AD campaigns and <unk>.
Excited about the expansion of our cross platform AD measurement and we expect it will have an impact on our top line fairly quick.
We continue to drive innovation through our next generation of Cookie free targeting per gaming audiences with our recent partnership expansion with the Spike track.
This latest expansion of Leverages <unk> deep experience.
The experience and enables new tomorrow.
The market segments for advertisers to reach and audiences throughout the programmatic ecosystem.
We understand there are significant opportunities for our expanding our predictive audience measurement beyond North America.
This global expansion includes the partnerships in Europe, and Latin America with that square and further European of location based targets as well as re target late for the other Latin America and audiences. Additionally, comscore and commerce signal of bear risk financial service business.
And the leading provider for omni channel payment from marketers announced an expansion to begin developing next generation contextual audiences for AD targeting across digital and mobile and CTV ad inventory.
The collaboration per commerce signals and advanced payment analytics with Comscore is the predictive audience detectable targeting solutions to create and innovative audience not available and warehouse by combining the commerce signal retailing shopping data.
And that can differentiate in store versus online purchases with.
With Comscore as media consumption of information advertisers will better be able to understand the high value audiences and of privacy compliant way.
With all of these new and exciting products and partnerships. We believe the activation revenue should continue its fast growing trends and pick up even more and momentum.
As we discussed last quarter, we are also and the early stages of out of home measure.
This year, we've already signed the top 3 digital out of home advertising companies, including an agreement with GST D to measure video <unk>.
Their gas station network GSP is the national video and network, which delivers target audiences at scale across tens of thousands of fueling the retailers the.
And the agreement will build on our last quarter announcements with the outdoor advertising Association of America.
And the digital place based advertising Association.
Given the wins from the last quarter with like box and with the third quarter with cash debate and additionally, with 1 of the largest nation's retailers and we expect this new product offerings that generate revenue of later this year with momentum building into next year.
With respect of movies, we experienced the rebound in revenue as U S theaters reopen debt scale, while countries such as the UK, Ireland, and France reopened and the middle of the second quarter.
The movie industry is now firmly positioning itself and the recovery mode, and we expect box office revenue to return to pre pandemic levels over the next year.
Over the last few weeks, we have expanded our relationships with multi year deals with 2 major studios for both leaders and the.
At Triple and stream.
We continue to focus on measuring Lucy the consumption wherever curves these agreements and combination with recent box office numbers are giving us confidence the industry of C&I.
As such we expect a tailwind and the future quarters.
As you have heard we are encouraged by the results, we're seeing and customer acquisitions and contract closings and our confidence and the second half of 2021 will serve as the runway for our evolution into the best modern measurement service for the future of the meal.
Before we discuss our financials in greater detail I'd like to address the recently announced plans of departure of our Chief Financial Officer, Gregg and <unk>.
First and foremost and wanted to extend my deepest gratitude to Greg.
For his many contributions and his leadership during the time at Comscore.
Greg came to the Comscore during the most difficult period and a fleet of most critical role and putting those challenges behind the company.
Helping to rebuild our controls and our processes.
And <unk> aligned our cost structure, he implemented a new ERP system and it put us on 2 of paths of growth.
On behalf of everyone at Comscore.
Including the entire management team, our board of directors and and myself I want to thank Greg for all of his hard work and wish him well on this next endeavor with that said I'd like to turn the call over to Brad to review our financial details Greg.
Thank you Bill today, we reported second quarter revenue of $87.7 million down from $88.6 million and the second quarter of last year.
Revenue from ratings and planning of the second quarter was $62.4 million down from $63.8 million reported and the second quarter of last year.
The decrease compared to the same period and the prior year with the result of lower syndicated digital revenue offset by increases and CE.
TV continued to experience higher revenue compared to the prior year of new and expanded partnerships.
Syndicated digital revenue was lower compared to the prior year quarter, primarily from lower international business.
For the second quarter TV revenue comprised 43% of our ratings and planning revenue compared to 40% last year, while syndicated digital revenue comprised 46% of a range of planning revenue compared to 48% and the second quarter of 2020.
Revenue from analytics and optimization of the second quarter of $17.8 million up from $16.9 million and the second quarter of last year the.
The increase was due to higher local survey of revenue compared to the second quarter of last year and increased activation revenue, which was up 65% year over year and 27% sequential.
Moving to reporting and analytics revenue and the second quarter was $7.5 million compared to 7.9 million and the prior year quarter, but up 10% sequentially.
And the Ada of reopening and began in earnest the major U S cities and the first quarter and in Europe, and the second we believe revenue from our movie business the bottom and we should see revenue increase from this level of continuing throughout 2021.
Turning to operating costs, our core operating expenses, which include the cost of revenue sales and marketing R&D and G&A increased $7.8 million year over year and the second quarter.
Cost of revenues increased by $6.4 million and the second quarter compared to the year ago quarter due primarily to an increase of $3.5 billion and data costs. We do expect cost of revenues to be higher in 2021 as compared to 2020, primarily from these data costs. However, we expect the.
Margins to improve over the course of the year as revenue increases.
Selling and marketing expense increased slightly compared to the year ago quarter from overall lower expenses last year.
R&D and G&A expense were relatively flat compared to the prior year quarter.
We do expect our operating expenses to rise slightly from these levels of.
And we invest and new product offerings and should lead to higher revenue later this year.
And the second quarter, we reported a net loss of $18.5 million compared to a net loss of $10.4 million and the same period last year.
For the second quarter of 2021, adjusted EBITDA was <unk> 6 million compared to $9.2 million from the same period last year.
Adjusted EBITDA for the second quarter was impacted by higher data costs as well as the second quarter of 2020 steady spending from a temporary reduction in operating expenses at the start of the pin debit.
We ended the second quarter with total cash of $17.7 million compared to $57 million at December 31 the.
The decrease in cash primarily reflects a few large items, which total approximately $35 million, including the repayment of the term note transaction costs associated with the completion of the recapitalization and a dividend payment of the preferred stock.
Looking forward based on current trends and expectations. We believe full year 2021 revenue and adjusted EBITDA margin will be at the lower and of the previously announced reagents.
Those ranges estimated the revenue increase of between 3% or 5% over 2020 and adjusted EBIT margin of 6% to 8%.
And you signed many new customers and expanded relationships with current customers, which Phil described earlier on the call. However, while we expect these new and expanded contracts and generate higher revenue over the long term the timing of these agreements for results and a lower impact to 2021 and revenue than we had originally contemplated.
Lastly, I want to think of it and the things Bill and the <unk>.
The higher costs for organization.
All of the support over the last 40 years, while also recognizing a terrific finance.
Now, let me turn it back of the operator to take questions.
As a reminder to ask the question you will need depressed power 1 on your telephone and again that is star then the number 1 on your telephone keypad until the draw your question press the pound key.
The standby, while we compile the Q&A roster.
And your next question I mean, your first question will come from Laura Martin we'd need to have your line is open.
Hi, there can you hear me, Okay, Bill and Greg we can Laura Thank you.
Okay, Great Yeah, Hi, a couple from me.
Announcements today on the <unk> can you talk about how that drive long term revenue growth. Please the announcements you made today.
Thank you Laura.
Look its for Youtube and Youtube TV and reported as many of you know who follow the industry more people watch the nicely newscast from network on Youtube and.
And then they do on linear and CTV, therefore of lot of advertisers use Google as an advertising mechanism, but the tone now.
With what.
Comscore is actually providing with our comps gear can obtain ratings, it's being able to validate the true reach that those campaigns on Youtube and Youtube TV.
The core versus linear TV and look at the undo Placative range. So if an advertiser or a certain brand is running and AD campaigns through their AD agency and the AD agency is held accountable for a total reach bowls. They can validate this now through comscore.
So our customers here are going to be the AD agencies, and the brands who want to validate what their campaigns are actually reaching in addition to linear TV and so we talked about for a long time, how CTV and linear TV works together I think this is.
A major example of how we're going to earn revenue out of the combination of the true.
Okay, and then I wanted to stay and my follow up would be still on costs and content costs and youre paying Comcast a ton of money and now Youtube to basically make the measurement product better.
And I don't see growth in the topline. So my worry of my question to you and how would you respond to investor.
Oh pushback that we get whether youre paying of fortune for linear ratings, which are becoming less valuable every day cause.
Tumors and moving from linear to the screening.
Well, we are not paying Google for this this the survey that kind.
Great and I'm talking about from them.
Sure.
And.
Yeah.
Our investment that we've made with the operators people book, We think we'll continue to watch linear TV for a long time, but the true value is our linear TV and over the top and connected Tvs sport and permanent they are now working alone. So as we all know that.
The magic here of that Comscore brings to this dynamic is what is the total audience. How do you verify that across all of these different platforms now as we stayed and our earnings.
Script, our prepared remarks, we had and great contracts timing and the second quarter, but they did not result in revenue and the second quarter that will be later this year and then.
And 'twenty 2 and we believe the investments that we've made with the operators will bear fruit for the shareholders.
Okay. Thank you very much.
Thank you Laura.
Our next question will come from Jason Jason <unk> with Craig Hallum. Your line is open.
Alright, thanks, guys.
Wanted to see if you could spend a little bit of the time talking and some more detail about the spectrum reach agreement.
Kind of some details on what doors that opened up for you and potentially how that changes your competitive position and the market.
And thank you that's a break the question 1 of the reasons that charter Kingdon and this and Investor was there a goal to move the whole industry to and impression based measurement. So that the inventory that is out there on linear and connected TV channel.
Finally, and be used with the standard of impressions and Comscore is doing just that and again the Youtube announcement Youtube TV is another validation of those impressions. So as spectrum reach starts rolling out their markets, where they're using us as their.
<unk> service given that the 1 of the largest and providers within local markets. We believe that will encourage the local AD agencies, the switch to us and switch to us as the primary source for their exclusive source and it will encourage television stations to do the.
And we think that is the start of an industry trend and spectrum are each being 1 of the largest providers in the markets are rolling it out and starting from the southeast region throughout the United States, and we'll be announcing more of the effects of that and coming quarters.
Perfect. Thank you and then.
Understood the obvious.
The some of the new deal flow doesn't give you full year contribution and I get all of that stuff curious is there any way to quantify any potential revenue benefit yeah. I know you mentioned T. C V. Just wondering if theres another way to look at what the opportunities of the the deals that you've landed and then in conjunction with that if there.
Any any sense of the cadence on how the back of the the back half of the year looks just curious if Q3 looks a little more of like Q2, and we get a big year and ramp or if it's a little bit more linear than that thank you.
Greg would you like to take that sure thanks, Jason and I appreciate that.
As I say timing matters, right and facilities contracts that we signed obviously will have an impact and the back half weighted.
Spot and believe that if they had happened sooner than it would obviously add impacts of the second quarter, which would have improved the.
2021 total revenue.
We did keep the low end of our guidance, we didn't move the guidance. So we still expect the back half to be as we always have higher than the first half and we expect the cadence to begin the feed ads.
The benefiting starting in Q3 as we move forward. So I think when we try to highlight and I'm going to have 4 things here 1 is.
And we highlighted in our prepared remarks, we're seeing higher renewal rates we closed.
The contract value year over year, we continue to see the transaction.
And this is such as the activation significantly above year over year levels and.
And now we're seeing that improvement and movies and so all 4 of those and combination of <unk>.
Should begin to increase the bottom line and the top line of course first.
And the coming quarters at a cadence that will get us to where we laid out per guidance today.
Good day.
Alright, Thank you guys.
Thank you.
Yeah.
Our next question will come from Surinder think with Jefferies. Your line is open.
Thank you for taking my questions.
Just following up and at an earlier question any color on maybe why it took a little longer to sign some of the contracts that you did.
And then I'm assuming that.
Of those who have been signed at this point.
And your outlook for 2022 should theoretically be unchanged is that right.
Well, we're not giving guidance, but let me address why it takes longer.
All of you and listened to our immediate customer returns costs and they're having great top line.
The AD markets recovered, but everyone is very cautious about spending.
So I mean, we.
We are not immune to that dynamic and it take longer but as we said and our prepared remarks, we had very good contract signings in the quarter, but they did not result in revenue.
Understood.
I guess, maybe any additional color that you can provide in terms of just the conversations you are having about visibility with your clients and and how that maybe impacts you guys. This is <unk>.
The building.
And just a lot of consideration around how dynamic.
I guess the question is more around your comfort level.
And.
Additional kind of macro chatter around COVID-19 and some of the Delta variant and so forth.
Well the everyone's concern, but I also believe that customers have got back the business, let's remember that most companies do budget since September of every day or so let's go back to September of last year.
Net political disruption and election that and not yet happened and we didn't have a vaccine.
So the companies put in and the cost structure that was assuming a very different environment that actually happened the.
The AD market has recovered.
But the recovery and spending is not completely happen sort of decisions are in fact, taking longer but we are encouraged by what we see and in our market segment look at the announcement that we made on Fox P.
And for our service.
I think that is significant that our customers want a stable predictable and a modern and measurement service.
That's helpful and then maybe turning to the movie business.
If I heard the commentary right.
And the anticipation that.
And we will return to kind of.
Full revenues at some point of time.
Pre pandemic revenue levels at some point in time and I think the commentary was also.
Theaters are generally about 90% open.
Any kind of color on the.
That dynamic.
Or if there's other structural changes and the marketplace that maybe we're not going to quite get back to the full run rate revenues pre pandemic.
We have said that we will return the pre pandemic levels with our revenue, but please don't confuse the windows that have permanently changed with the need for our service. Our service is not tied to the box office receipts and our services tied to theaters being open now.
And the theatrical experience provides a breakdown of the profit for the mood the companies all of them, Okay and they rely on our service now that that environment is open.
There are deciding on different windows, depending on Covid and the spending on their screen and service so for our movie business as our moving business. Today, we believe that we will return to pre pandemic levels and the work that we're doing and measuring movies everywhere. We think we will.
The additional revenue and so the future, but we're not predicting that at this point.
And we're working on those products, we're working on those services, but debt.
And that business is and a recovery mode.
Got it that's it from my 2 questions. Thank you.
Thank you.
Your next question will come from Matthew Thornton with 2 of Securities. Your line is open.
Hey, good afternoon, and Bill and Greg and Greg the apps.
The best of luck in the future Adventures.
And maybe a couple of couple of if I could I guess, maybe just starting on the on the activation or excuse me and the analytics and optimization segment.
You talked about activation being up I think lift of survey were up.
If we take the step back and look at that segment I'm wondering if you'd be willing to size activation at this point and then maybe just talk a little about what the.
The the puts or whats kind of in decline and that segment. Just so we can kind of see the puts and takes there.
And then just secondly, I guess over at the at digital.
I'm wondering if you could talk a little bit about what percentage of international is at that point and then maybe compare and contrast, the growth trend youre seeing international versus versus domestic and that and that segment. Thanks guys.
Great.
Thanks, Matt and the.
Thanks for those kind of words, let me, let me talk about a little bit about.
The M&A area. So we did talk about activation and you did talk about lifting and survey of the other big thing Thats in there as customers.
Over the years, we've talked about customers is 1 of those areas that can be a little bit lumpy.
And we had we had a really good first quarter and custom as we talked about at year and some of those projects got pushed out and they've got delivered in Q1, so sometimes that customer can move up or down something given example of inland and.
And it gets delivered on July 1 as both of the June 30, right and this is the quarter. So.
From from that standpoint that was a little harder to predict.
From a from a cup of perspective.
Different quarters.
Have different lumpiness, although the fourth quarter generally and the highest quarter, where we have a lot of custom projects and as we've talked about over the last few years, we dialed back some of those custom projects that were profitable.
But now that we've got our cost structure in place, we're going after and more of those custom projects because they are profitable at least putting more dollars to the bottom line and our adjusted EBITDA. So we're very focused on debt.
Haven't given an exact number 4 per activation as it grows of that and something that we're thinking about as we move through.
The third quarter and as we move to here and as far as being able to break that out from a product level.
Revenue items within the book.
The M&A and M&A space and.
And you should hear more of that and into other quarters.
Yes, the question about digital.
And it's not something we break breakout.
And we haven't provided that historically.
Digital is a.
And those markets.
We do think that there's still opportunity there and we're going after that and some of our win backs this quarter were and the international market.
We're actually positive on that and go highlighted.
1 of his prepared remarks, and the U K, So I think thats an area, where it has shrunk over time.
Some of it by our own choosing but we're very focused on winning back the customers and we saw some good wins in the quarter.
Great maybe I could just sneak 1 more in there and maybe this is free for you Greg just the cash balance and just how youre feeling of what the balance of your right. Now I think you guys have got a.
Credit of small credit facility outstanding, but I'm, just kind of curious how youre feeling about cash levels such as the guide just to operate the business kind of looking at looking forward of any color there would be great. Thanks, guys.
Yes, I mean I highlighted the fact that we had to get through the first half we had 3 large.
The needs of cash those are now behind us.
From our standpoint, we do expect revenue to increase and talk about that that should help our cash balances and move forward and our cash flow. So I think we obviously ended the quarter.
Substantially down from where we ended the year and.
But we did.
The dividend.
The transaction costs, and we did pay off the term loan. So we feel good about where we're headed in the back half of the year.
Yeah.
That's it from me thanks, guys.
Thank you.
Again, if you would like to ask the question that is star 1 on your telephone keypad.
And your next question will come from Alan Gould and.
Loop capital.
Thank you and good afternoon, the Bill and Greg and I would like to also extend my best wishes to you Greg I've got 3 questions first on streaming the press release talked about 2 studios signing for both theatrical and streaming.
And in addition to Youtube and these 2 studios can you give us some idea of where you are on measuring TV screen and more streaming overall.
Right.
Well screening that is AD supported is extremely important to us and every with every company we have a slightly different strategy, but the objective is to measure and campaigns on all of the spring and services sort of like what we announced with Google that we can do everywhere.
To have a holistic platform and in future calls and on our Investor day, we will be drilling and did that a lot more.
Okay, and then Greg can you give us some sense of backlog type of number.
We do we do disclose the backlog number.
And our filings I don't have it in front of me rates of your al but we do publish that I think sometimes that can be a little bit.
The tricky given that the accounting for that requires that backlog. These were contracts that are in excess of a year.
And so depending on where certain contracts are of that number can move around and tends to be the highest.
As of fourth quarter of every year, and then kind of where the list way down.
But if it can be kind of in our filings of having to follow up with you. After the call if you'd like more information around that.
Okay, that's fine.
And the last question.
And I know you used to of a deal with you have to deal with the arbitrage the Nielsen audio, which I think goes through September of Nate. Your deal is that still necessary helpful required of you replace debt per year and.
Measurement services.
Great question.
And obviously knew that that was happening and.
And we have a plan in place we will be announcing shortly what it is there'll be seamless for our customers that utilize it and we have and improved the process that is based on our strengths and non about a small panel. So we're pretty excited about what we've developed.
And we look forward the sharing of very shortly.
Okay. That's it from me thanks for taking the question.
Thank you Alan.
Yeah.
Again, if you would like to ask the question that is star 1 on your telephone keypad.
Excuse me the speakers I'm showing no further questions at this time you may continue.
Thank you operator, and thank you all for attending today and we remain excited about the future and I am very pleased with the project and and the progress that we've made with contract signings and the second quarter as we returned to growth and the second half of this year. Thank you for joining us.
Today, and we look forward to talking with you next quarter.
This concludes today's conference call. Thank you for participating you may now disconnect speakers. Please standby for your post conference.
Thank you Greg Greg Johnson.
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Good day, and thank you for standing by and walk them through the Comscore of second quarter 'twenty, 1.2021 financial results conference call.
The time, all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session. The ask the question. During the session you will need the press star 1 on your telephone. Please be advised that today's conference is being recorded if you require any further assistance. Please press star zero and I would now like to hand, the conference over to you.
Our speaker today, John Seeker, you may begin.
Thank you operator, before we begin and the bonds. Unlike from buying all of the following the discussion and all of these statements.
Forward looking statements and from clients.
And that our plan expectations.
Based on our view of the state 92000, the tax law and the same.
And any future obligations paid up for the statements to reflect the information out of today's call, we'll discuss non-GAAP measure the strengths of what's being provided reconciliations in today's press release, and our website actual results and future.
As of May differ materially from those expected because of the.
The number of risks and uncertainties, including.
Including those related to COVID-19.
And again.
These risks and uncertainties the outline.
And thank you and other filings with the SEC and find out of our website or at www.
The U S.
I'll now turn the fallout of the trough, Jim Palm Chief Executive Officer Bill of it.
Thank you John and thank you everyone for joining us today with me are Greg <unk>, our CFO and other members of management for.
For the first half of 2021 and represented a turning point per comscore as the currency.
Of the recapitalization transaction was a critical milestone for us.
With this transaction behind US we are now able to focus on growing our business and invest the new products and ways that we have been and spreads over the past few years that said I am proud of the contract signing and accomplished and the quarter.
Some of the contract signings and taken longer than anticipated, but we expect that they will produce revenue later this year and into 2022.
Before I discuss the quarter I would like to share with you the landscape and Comscore, it's measuring and why we believe we have of world class platform that measures the way media and the.
The way our clients are demanding and today.
We recently ran and op Ed piece and the post that discuss this topic and quite a bit of detail and the op. Ed piece, we discussed how comscore is lee of fundamental change and how the media's measure and transact.
The <unk> century.
We are healthy and the market.
And with measurement day 6 critical considerations.
Measurement needs to be passive and impression base and impressions are the common language of cross media inventory second medium impressions needed to be properly the duplicated so advertisers and measure their true and of <unk>.
Client frequency of management, each other and messaging.
Third modern measurement and must be built by accompany grounded and technology research and big data management.
Fourth we believe monitor and measurement is about audiences not age and gender demos.
The modern measurement and requires a high focus on privacy.
Lastly, and most importantly, we believe that the company the deep experience and digital TV and movie measure of net orders required today and Comscore has more than 20 years of modern experience and technology measurement and research company.
Now, let me discuss the quarter, we continue to feel some of the effects of the pandemic and some of our products and to our bottom line. However, we are pleased to have a higher amount of total contract value year over year and the quarter.
Signing of new and expanded the written that can take time, but we're beginning to see the momentum.
And we believe these new agreements will generate higher revenue and the coming quarters and expand our margin.
With our current operating cost structure in place, we believe our new and expanded client relationships in combination with the strategic debt investments and partnerships that we have announced like by brand and our new partnerships like the Google announcement that we made this morning.
Which I will discuss shortly should bear fruit and the second half of 2021, as we transition back to growth.
I am also proud of our success and our activation business, where revenue was up 65% euro per year.
Now, let me turn to our other recent successes starting with National TV, and we signed 6 new accounts, including Octagon Sports marketing agency note will be exclusively relying on comscore and measurement the <unk>.
Land and buy as well as an expanded the box, where our national TV measurement currency as we announced last week.
The announcement is just like the Viacom CBS announcement that I discussed and our first quarter earnings call.
Local TV measurement and continues to be a core strength of Comscore, we believe the scale and the stability of our service, what's the comscore and unique position as the future of measurement and the law.
And the marketplace.
And the second quarter, we executed agreements with the capital broadcasting and tightened the cheesecake and signed renewals with leading companies such as standard media group and the news of is that.
Additionally, our marketplace prominence was further enhanced with the integration and the squad media cost research platform for national and local TV box.
Looking to the future, we anticipate building non Comscore TD 1000 stations and delivering strong results across our 200 plus markets that we measure of local.
Lastly, the spectrum reach recently announced that is now transitioning to use of comscore the as preferred.
Local metro and and source, which we believe will help us sign more agencies and media companies to use us to conduct trading for their ad business.
We also and we remained very focused on our agency marketplace and the second quarter. We continued to see key growth with agency holding companies tends to international what are the expanded their use of our advanced their advanced audiences tied the comscore data sets for the quick service.
The restaurant and retail client base. We believe this is a large opportunity and been placed and important resources and this area.
With our syndicated huge both product and we're pleased that we have signed many new customers, including Australia and media.
Fitch and 92.
And the net media along with channel and Stanford.
We are excited to see more returning clients such as the jellyfish agency and the U K.
We're encouraged by the new business and the positive trend and frameworks.
I am very proud of and as Paul to.
To announce a major accomplishment for our advertising business suite with the expansion of our integration via Google and data halls, or what they call the age and.
Of that we announced this morning, this integration and while and connected television impressions across Youtube and Youtube keep the 2 are cross platform advertising measurement currency.
Comscore campaign ratings or CCR will be the show us this accomplishment arcs to milestones and 1 for achieving the duplicated audience reach measurement across desktop mobile and CTV with Google and 2 the integration will be a foundation for the <unk>.
Next generation of Youtube Nash or net across CTV without third party picks us the.
These milestones will NDA comscore to provide marketers with the unmatched deduplication and reach and frequency of audiences and add exposure across linear TV and desktops mobile and connected television.
The new capability will allow advertisers and agencies the understand quote new lead free Youtube and Youtube TB and CTV as.
As well as the true incremental reach over there of linear TV box.
The total cross platform and measure.
The addition of Youtube and Youtube TV and expanse Comscore campaign ratings to include the coverage of 1 of the largest advertising destinations, enabling comprehensive cross platform measured.
CCR measurement, including Youtube and Youtube TV will be available to our buy side clients for their AD campaigns and.
I'm excited about the expansion of our cross platform AD measurement and we expect it will have an impact on our top line fairly quickly.
We continue to drive the innovation through our next generation Cookie free targeting pertaining audiences with our recent partnership expansion with the Spike trap.
This latest expansion of Leverages <unk> deep.
And the experience and enables new.
Market segments for advertisers to reach audiences throughout the programmatic ecosystem.
We understand there are significant opportunities for our standing and our predictive audience measurement beyond North America.
This global expansion includes the partnerships in Europe, and Latin America with that square and further European of location based targets as well as re target.
Or are there of Latin America, and audiences. Additionally, comscore and commerce signal of bear the risk financial service business and the leading provider for omni channel payment from marketers announced an expansion to begin developing next generation and tangible audit.
And since our AD targeting across digital and mobile and CTV AD inventory the.
The collaboration per commerce signals and advance payment analytics with Comscore is the predictive of audience contextual targeting solutions to create and innovative audience not the available and warehouse by combining commerce signal retailing and shopping data.
It can differentiate in the store versus online purchases.
The Comscore is the media consumption of information advertisers will better be able to understand the high value audiences and of privacy compliant way.
With all of these new and exciting products and partnerships. We believe the activation revenue should continue its fast growing trends and picks up and even more momentum.
And as we've discussed last quarter. We are also and the early stages of out of home measure.
This year, we've already signed the top 3 digital out of home and advertising and complex, including an agreement with GST D to measure video <unk>.
And their gas station network GSP is the national video and network, which delivers target audiences at scale across tens of thousands of fueling the retailers and the.
The agreement, we will build on our last quarter of announcements with the outdoor advertising The association of America.
And the digital place based advertising Association.
Given the wins from the last quarter with like box and when the third quarter with cash debate and.
Additionally, with 1 of the largest nation's retailers and we expect this new product offerings and generate revenue later this year with momentum building into next year.
With respect of movies, we experienced a rebound and revenue as USD theirs reopened at scale, while countries such as the UK, Ireland, and France reopened and the middle of the second quarter.
The movie industry is now firmly positioning itself and the recovery mode, and we expect box office revenue to return to pre pandemic levels over the next year.
Over the last few weeks, we have expanded our relationships with multi year deals with 2 major studios, who are both leaders and the.
The actual coal and stream.
We continue to focus on measuring lucid and <unk>.
Function wherever curves these agreements and combination with recent box office numbers are giving us confidence the industry has seen.
And as such we would expect tailwind and the future quarters.
As you have heard we are encouraged by the results, we're seeing customer acquisitions and contract closings and are confident the second half of 2021 will serve us runway for our evolution into the best monitor and measurement service for the future of media.
Before we discuss our financials in greater detail I'd like to address the recently announced planned departure of our Chief Financial Officer right.
First and foremost I wanted to extend my deepest gratitude to Greg.
And for his many contributions and his leadership during that time at Comscore.
Greg can't the Comscore during the most difficult period and he played of most critical role and putting those challenges behind the company helping.
Helping to rebuild our controls and our processes.
And it aligns our cost structure, he implemented a new ERP system and it put us onto a path of growth.
On behalf of everyone at Comscore.
Including the entire management team, our board of directors and and myself I want to thank Greg for all of his hard work and wish him well on this next endeavor with that said I'd like to turn the call over to Brad to review our financial details Greg.
Thank you Bill today, we reported second quarter revenue of $87.7 million down from $88.6 million and the second quarter of last year.
Revenue from ratings and planning of the second quarter was $72.4 million down from $63.8 million reported and the second quarter of last year.
The decrease compared to the same period and the prior year with the.
The result of lower syndicated digital revenue offset by increase in PV.
TV continued to experience higher revenue compared to the prior year of new and expanded partnerships.
Syndicated digital revenue was lower compared to the prior year quarter, primarily from lower international business.
For the second quarter TV revenue comprised 43% of our ratings and planning revenue compared to 40% last year, while syndicated digital revenue comprised 46% of our range of complaining revenue compared to 48% and the second quarter of 2020.
Revenue from analytics and optimization and the second quarter of $17.8 million up from $16.9 million and the second quarter of last year the.
The increase was due to higher rents and survey revenue compared to the second quarter of last year and increased activation revenue, which was up 65% year over year and 27% sequential.
Moving to reporting and analytics revenue and the second quarter was $7.5 million compared to 7.9 million and the prior year quarter, but up 10.
Sequentially.
The Ada of reopening the unit Ernest Major U S cities and the <unk>.
First quarter and in Europe, and the second we believe revenue from our moving business has bottomed and we should.
The revenue increased from this level of continuing throughout 2021.
Turning to operating costs, our core operating expenses, which include the cost of revenue sales and marketing R&D and G&A increased $7.8 million year over year and the second quarter.
Cost of revenues increased by $6.4 million and the second quarter compared to the year ago quarter, due primarily to an increase of $3.5 million of Datacom.
We do expect cost of revenues and higher in 2021 as compared between 20 and primarily from these data costs. However, we expect margins to improve over the course of the year as revenue increases.
Selling and marketing expense increased slightly compared to the year ago quarter from overall lower expenses last year.
R&D and G&A expense were relatively flat compared to the prior year quarter.
We do expect our operating expenses to rise slightly from these levels as we invest and new product offerings and should lead to higher revenue later this year.
And the second quarter, we reported a net loss of $18.5 million compared to the net loss of 10.4 million and the same period last year.
For the second quarter of 2021, adjusted EBITDA was $6 million compared to $9.2 million from the same period last year.
And EBITDA for the second quarter was impacted by higher data costs as well as the second quarter of 2020 study moving from a temporary reduction in operating expenses at the start of the pandemic.
We ended the second quarter with total cash of $17.7 million compared of $57 million at December 31.
The decrease in cash primarily reflects a few large items, which total approximately $35 million, including the repayment of the term note transaction costs associated with the completion of the recapitalization and a dividend payment of the per bird stock.
Looking forward based on current trends and expectations. We believe full year 2021 revenue and adjusted EBITDA margin will be and the lower and of the previously announced reagents.
Those ranges estimated and the revenue increased from 3%, 5% over 2020 and adjusted the EBITDA margin of 6% to 8%.
You signed many new customers and expanded relationships with current customers, which build described earlier on the call. However, while we expect these new and expanded contracts and generate higher revenue over the long term. The timing of these agreements will result, and a lower impact to 2021 revenue and we had originally contemplated.
Yes.
Lastly, I want to think of many of the things Bill and the entire growth for organization, where all of the support over the last 40 years, while also recognizing a terrific finance.
Now, let me turn it back of the operator the question.
As a reminder to ask the question you will need to price our 1 on your telephone and again that Istar and then the number 1 on your telephone keypad total withdraw your question press the pound key.
Please standby, while we compile the Q&A roster.
And your next question I mean, your first question will come from Laura Martin with need half of your line is open.
Hi, there can you hear me, Okay zone, and Greg we can Laura Thank you.
Okay, Great Yeah, Hi, a couple from me and you have couple of.
Announcements today on the Utica can you talk about how that drive long term revenue growth. Please the announcements you made today.
Thank you Laura.
Look its for Youtube and Youtube TV and reported as many of you know who follow the industry more people watch the nicely newscast from network and Youtube and.
And they do on linear and CTV, therefore of lot of advertisers use Google ads and advertising mechanism, but the tone now.
With what.
Comscore is actually provide with our comps here campaign ratings is being able to validate the true reach that those campaigns on Youtube and Youtube TV.
Core versus linear TV and look at the and duplicate range. So.
So if an advertiser of her certain brand is running and AD campaigns through their AD agency and the AD agency is held accountable for a total reach folds. They can validate this now through comscore. So our customers here are going to be the AD agencies and the brands who want.
To validate what their campaigns are actually reaching in addition, the linear television. So we talked about and for a long time, how CTV and linear TV works together I think this is a major example of how we're going to earn revenue out of the combination of the true.
Okay, and then I wanted to stay and my follow up would be still on the costs and content costs and youre paying Comcast a ton of money and now Youtube to basically make your measurement product better.
Well don't see growth and the top line. So my worry of my question to you and how would you respond to investor.
Non pushback that we get whether youre paying of fortune for linear ratings, which are becoming less valuable every day because consumers are moving from linear to streaming.
Well, we are not pay and Google for this this is the service that integrate and still have some of our us yes.
And.
Thanks.
Yeah.
Our investment that we've made with the operators people. We think we will continue to watch linear TV for a long time, but the true value is how linear TV and over the top and connected television sports and the permanent they are now working alone. So as we all know that.
And the magic here that Comscore brings to this dynamic is what is the total audience I think of verified that across all of these different platforms now as we stayed and our earnings.
Spread the prepared remarks, we had a great contract signing and the second quarter, but they did not result in revenue from the second quarter that will be later this year and and.
And 'twenty 2 and we believe the investments that we've made with the operators will bear fruit for the shareholders.
Okay. Thank you very much.
And too long.
Our next question will come from Jason Jason <unk> with Craig Hallum. Your line is open.
Alright. Thanks, guys just wanted to see if you could spend a little bit of the time talking and some more detail about the spectrum reach agreement.
And what kind of some details on what doors that opens up for you and potentially how that changes your competitive position and the market.
And thank you that's a great question 1 of the reasons that charter came Memphis and Investor was there a goal to move the whole.
The industry, 2 and impression based measurement. So the inventory that is out there on linear and connected TV can finally be used with the standard of impressions and Comscore is doing just that and again the Youtube and.
Smith Youtube TV is another validation of those impressions, so as spectrum and reach starts rolling out their markets, where there you've seen us as the principal service given that the 1 of the largest and providers within local markets. We believe the.
That will encourage the local AD agencies, the switch to us and switched the west as their primary source for their exclusive source and it will encourage television stations and do the same we think of that as the start of and industry trends and.
And spectrum reach being 1 of the largest providers in the markets are rolling it out starting from the southeast region throughout the United States, and we'll be announcing more of the effects of that and coming quarters.
Perfect. Thank you and then.
Understood.
Obviously some of the new deal flow doesn't give you full year contribution and I get all of that stuff curious is there any way to quantify any potential revenue benefit I know you mentioned T. TV just wondering if there is another way to look at what the opportunity is of the the deals that you've landed and then and in conjunction with that.
And if theres any any sense of the cadence on how the back of the the back half of the year looks just curious if Q3 looks a little more like Q2, and we get a big year and ramp or if it's a little bit more linear than that thank you.
Greg the until I can take that sure thanks, Jason and I appreciate that book.
As I say timing matters range facilities contracts that we signed obviously will have an impact and the back half weighted.
Spud and believe that if they had happened sooner than it would obviously add impacts of the second quarter, which would have improved.
2021 total revenue.
We did keep the low end of our guidance, we didn't move the guidance. So we still expect the back half of B as we always have higher than the first half and we expect the cadence to begin the feed ads.
Benefiting starting in Q3 as you move forward. So I think when we try to highlight and I'm going to have 4 things here..1 is we have highlighted in our prepared remarks, we're seeing higher renewal rates.
Closed higher contract value year over year, we continue to see the transaction businesses, such as the activation significantly above year over year levels.
And now we're seeing the improvement in movies and so all 4 of those and combination.
And should begin to increase the bottom line and the top line of course first.
And the coming quarters at a cadence that will get us to where we laid out per guidance today.
Good day.
Alright, Thank you guys.
Thank you.
Our next question will come from Surinder think could Jefferies. Your line is open.
Thank you for taking my questions.
Bill just following up and at an earlier question any color on maybe why it took a little bit longer to sign some of the contracts that you did.
And then I am assuming that.
Most of those have been signed at this point.
Your outlook for 2022 should theoretically be unchanged is that range.
Well, we're not giving guidance, but let me address why it takes longer.
All of you listened to our media customers earnings calls and they're having a great top line.
And markets recover but everyone is very cautious about spending.
So.
We are not immune to that dynamic and it take longer but as we said and our prepared remarks, we had very good contract signings in the quarter, but they did not result in revenue.
Understood.
I guess, maybe any additional color that you can provide in terms of just the conversations you're having about the visibility with your clients and how that maybe impacts you guys is the visibility.
And just a lot of consideration around how dynamic.
I guess the question is more around your comfort level.
The.
Additional kind of macro chatter around COVID-19 and the Delta variant and so forth.
Everyone's concern, but I also believe that customers have got back the business, let's remember that most companies do budget since September of every day or so let's go back to September of last year.
The political disruption and election that and not yet happened and we didn't have a vaccine.
So the companies put in the cost structure that was assuming a very different environment that actually happened the.
The AD market has recovered.
But the recovery on spending is not completely happen sort of decisions are in fact, taking longer but we are encouraged by what we see and our market segment and look at the announcement that we made on Fox TV of course.
For our service.
I think that is significant and that our customers want a stable predictable and a modern measurement service.
That's helpful and then maybe turning to the movie business.
If I heard the commentary right.
Is the anticipation that.
We will return to kind of.
Full revenues at some point of time.
Pre pandemic revenue levels at some point in time I think the commentary was also theatres are drilling of about 90% open but.
Any kind of color on it.
That that dynamic.
Or if there's other structural changes and the marketplace that maybe we're not kind of quite get back to the full run rate revenues pre pandemic.
We have said that we will return to the pre pandemic levels with our revenue, but please don't confuse the windows that have permanent the change with the need for our service. Our service is not tied to the box office receipts are services tied to theaters being open now.
And the theatrical experience provides a great deal of profit or the most of the companies all of them, Okay and they rely on our service now that that environment is open.
There are deciding on different windows, depending on Covid and the spending under the streaming service and so for our moving business as our moving business is today, we believe that we will return to pre pandemic levels and the work that we're doing on measuring the movies everywhere, we think we will.
And additional revenue to the future, but we're not predicting that at this point.
We're working on those products, we're working on those services, but the.
That business is and a recovery mode.
Got it that's it from my 2 questions. Thank you.
Okay.
Your next question will come from Matthew Thornton with 2 of Securities. Your line is open.
Hey, good afternoon, and Bill and Greg and Greg of.
And the absolute best of luck in the future Adventures.
And maybe a couple of couple if I could I guess, maybe just starting on the on the activation or excuse me and the analytics and optimization segment.
You talked about activation and being up I think lift and survey were up.
And if we take the step back and look at that segment I'm wondering if you'd be willing to size activation of at this point and then maybe just talk a little about what the the the.
The puts or whats kind of in decline and that segment. Just so we can kind of see the puts and takes there.
And then just secondly, I guess over at the at digital.
I'm wondering if you could talk a little bit about what percentage of international is at that point and then maybe compare and contrast, the growth trends, you're seeing international versus versus domestic and that and that segment. Thanks guys.
Right.
Thanks, Matt and the.
Thanks for those kind of words, let me, let me talk about a little bit about.
The M&A area. So we did talk about activation and you did talk about what the survey of the other big thing Thats in there as customers.
And over the years, we've talked about customers is 1 of those areas that can be a little bit lumpy.
And we had we had a really good first quarter and custom as we talked about at year and some of those projects got pushed out and they've got delivered in Q1. So there are sometimes that cup and could move up or down something giving the example, it gets delivered on July 1 as of June 30 range and this is the quarter. So.
From from that standpoint that was a little harder to predict.
From a from a cup of perspective.
Different quarters.
Have different lumpiness, although the fourth quarter generally and of the highest quarter, where we have a lot of custom projects and as we've talked about over the last few years, we dialed back some of those projects that were profitable.
But now that we've got our cost structure in place, we're going after and more of those custom projects because they are profitable at least putting more dollars to the bottom line and our adjusted EBITDA. So we're very focused on debt.
We haven't given an exact number for for activation as it grows of that and something that we're thinking about as we move through.
The third quarter, and those will move to here and as far as being able to break that out from a product level revenue items within the book.
The M&A and M&A space.
And you should hear more of that and another quarters.
Yes, the question about digital.
And it's not something we break breakout.
And provided that historically.
Digital is a.
Pretty much of U S centric and story I don't want to say that international and a bit but and over the last few years again similar to cost of where we've had international locations that were profitable and we exited those markets we.
We do think that there's still opportunity there and we're going after that and some of our wind back this quarter were and the international markets.
So we're actually positive on that and the bill highlighted.
1 of his prepared remarks, and the U K, So I think thats, an area, where it has shrunk overtime.
Some of it by our own choosing but we're very focused on winning back book customers and we saw some good wins in the quarter.
Okay, maybe I can just sneak 1 more and there are and maybe this is for you Greg just the cash balance and just how youre feeling of of the balance sheet right. Now I think you guys have got.
A small credit facility outstanding, but I'm, just kind of curious how youre feeling about cash levels such as the again just to operate the business kind of looking looking forward of any color there would be great. Thanks, guys.
Yes.
And I highlighted the fact that we have to get through the first half and 3 large.
The use of cash those are now behind the 4.
Of our standpoint, we do expect revenue to increase from talk about that that should help our cash balances and move forward and our cash flow. So I think we obviously ended the quarter.
Substantially down from where we ended the year and.
But we did pay the dividend cover the transaction costs and we did pay off the term loans. So we feel good about where we're headed in the back half of the year.
That's it from me thanks, guys.
Thank you.
Again, if you would like to ask the question and that is star 1 on your telephone keypad.
And your next question will come from Alan Gould with loop capital.
Thank you and good afternoon, the billing, Greg and I'd like to also extend my best wishes to you Greg.
And I've got 3 questions first on streaming the press release talks about 2 studios signing for both theatrical and the streaming and.
In addition to Youtube and these 2 studios can you give us some idea of where you are on measuring the TV premium large streaming overall.
Right.
The screening that is AD supported is extremely important to us and every with every company we have a slightly different strategy, but the objective is to measure and campaigns on all of the streaming services sort of like what we announced with Google debt, we could do everywhere to have.
Holistic platform and.
And in future calls and on our Investor day, we will be drilling and did that a lot more.
Okay, and then Greg can you give us some sense of backlog type of number.
We do we do disclose the backlog number.
And our filings I don't have it in front of me rates of your al but.
We do publish that I think sometimes that can be a little bit.
The tricky given that the accounting for that requires that backlog the for contracts that are in excess of the year.
And so depending on where certain contracts are of that number can move around and tends to be the highest.
The fourth quarter of every year, and then kind of whittle its way down.
But if it can be found in our filings of having to follow up with you. After the call if you'd like more information around that.
Okay, that's fine.
And the last question.
I know you said the deal with you have to deal with the arbitrage the Nielsen audio, which I think goes through September of Nate. Your deal is that still necessary helpful required of you replace debt per year, alright, and measurement services.
Great question, we obviously knew that that was happening and we have a plan in place we'll be announcing shortly what it is it will be seamless.
There are customers that utilize it and we have and improved the process that is based on our strength and non about a small and so we're pretty excited about what we've developed and we look forward the sharing of very shortly.
Okay. That's it from me thanks for taking the question.
Alan.
Again, if you would like to ask the question that is star 1 on your telephone keypad.
Excuse me the speakers I'm showing no further questions at this time you may continue.
Thank you operator, and thank you all for attending today, we remain excited about the future and I am very pleased with the project and the progress that we made with contract signings and the second quarter as we returned to growth and the second half of this year. Thank you for joining us.
Today, and we look forward to talking with you next quarter.
This concludes today's conference call. Thank you for participating you may now disconnect.