Q3 2021 DoubleVerify Holdings Inc Earnings Call
Ladies and gentlemen, thank you for your patience. Please remain on the line. Your conference will begin momentarily again, we do appreciate your patience. Please remain on the line your conference will begin shortly thank you.
[music].
Good day, ladies and gentlemen, and welcome to the double verify third quarter 2021 financial results conference call.
All lines have been placed in a listen only mode and the floor will be opened for questions and comments following the presentation.
If you should require assistance.
Throughout this conference. Please press star zero on your telephone keypad to reach a live operator.
It is now my pleasure to turn the floor over to your host Michelle England Investor Relations.
Yeah.
Good afternoon, and welcome to double birth by third quarter 2021 earnings conference call with US today are Mark Sikorsky.
And Nicola our life CFO.
Today's press release and this call may contain forward looking statements that are subject to inherent risks uncertainties and changes and reflect our current expectations. The information currently available to us and our actual results could differ materially for more information. Please refer to the risk factors in our recent SEC filings, including our S. One registration.
Statements. In addition, our discussion today will include references to certain supplemental non-GAAP financial measures and should be considered in addition to you and nothing to substitute for our GAAP results reconciliations to the most comparable GAAP measures are available in today's earnings press release, which is available on our Investor Relations web.
Site at IR dot doubled verify dot com.
Also during the call today, we will be referring to a slide deck posted on our website with that I'll turn it to you bet Mark.
Thanks, Dale and good afternoon, everyone. We're excited to share with you our third quarter results expectations for the full year and additional detail on our recent strategic investments we've made.
We grew the third quarter revenue by 36% to $83 $1 million, achieving the top end of our revenue guidance range. We grew third quarter adjusted EBITDA by 82% to $26 $4 million, representing 32% EBITDA margin and exceeding the top end of our guidance range.
Advertiser programmatic advertiser direct and supply side revenue all delivered double digit year over year growth.
Our core revenue growth continues to be driven by our product success fast growing sectors, such as programmatic social in C. G D and a global expansion strategy, that's winning large enterprise clients and a growing number of international markets.
Is that a great year, so far revenue in the first nine months of 2021 grew 37% year over year.
Adjusted EBITDA grew 52% year over year.
We were not impacted by Apple's app tracking transparency changes, because our measurement and pre bid targeting solutions do not rely on cookies or individual identifiers. Additionally, because we verify target and measure nearly everywhere. The digital AD spend is dollars are spent we are largely insulated from platform specific.
Fly and demand fluctuations are fixed fee solutions follow this span.
In addition to generating strong core revenue growth. We are focused on investing in long term strategic initiatives that expand our product leadership and deepen our coverage in fast growing sectors.
In doing so we not only increase our potential Tam and create broader upsell opportunities with current clients, but we also further enhanced our ability to optimize their advertising outcomes.
On that front, we're excited to announce our second strategic investment of the year. The acquisition of open slate, having just completed our acquisition of metrics in the third quarter.
I'd like to spend a few minutes on how both of these transactions enhance T v's customer value proposition and cement our market leadership.
Why are the open slate will help us drive better outcomes for advertisers by providing pre campaign targeting and brand suitability solutions that integrate with our measurement tools and increase our total coverage across key CTV and social platforms.
Open slates pre campaign solutions perfectly complement Dd's post campaign measurement capabilities on CTV, and social platform, such as Youtube Facebook and Tic Toc.
Integrating the two provides advertisers with unparalleled end to end brand safety suitability and contextual optimization.
No other company will be able to deliver a fully owned and integrated solution across these leading social and CTV walled gardens.
We've seen the power of integrating pre bid and postpaid solutions on the open internet with the success of these programmatic tools, including authentic brand suitability.
Vacancy in driving powerful outcomes by connecting prepaid and postpaid capabilities has driven stickier client relationships and expanded our revenue opportunities.
Today, nearly all of our top 100 customers you D V for both pre bid programmatic targeting and postpaid quality measurement for their media buys on the open Internet and half of our total revenue now comes from our prepaid solutions.
We expect the acquisition of open slate will help expand our existing social and C. D D coverage and customer base open slate has the most sophisticated contextual targeting technology and the widest coverage across Youtube and tick talk in the industry.
DB has achieved exponential growth in social and CTV revenue since 2018, with our postpaid measurement solutions, our Youtube revenues have increased more than six fold, while our Facebook revenues have increased five fold over the last four years.
Youtube and Facebook are expected to represent nearly 15% of our total 2021 revenue on a combined basis.
Adding pre campaign targeting via open slate only increases our revenue growth potential from these and other fast growing CTV and social platforms.
Opens late has won the trust of the leading agency holding companies and over 200 large global brands, including Procter and Gamble Coca Cola, Kimberly Clark Nestle, Sony Unilever and Volkswagen.
We see significant revenue opportunities to cross sell open slate and DB solutions across our combined customer base offering advertisers a unique integrated solution that drives better advertising outcomes.
Open slate also aligns with Bd's core value of providing unbiased objective third party measurement that is independent of the media transaction. Additionally, neither company relies on persistent tracking technologies, such as third party cookies or mobile device Ids like apples idea FA.
These shared principles market, leading technology and deep social on CTV coverage make opens late a strong strategic fit for D. V. We're excited to unlock meaningful new growth opportunities that will be created by bringing businesses together.
Our other recent strategic investment was the acquisition of matrix, a leading European AD verification company metrics provides double their fire with a strong operating platform and experienced sales product and engineering teams as well as the opportunity to scale existing customer relationships through access to <unk> global capabilities.
Global revenue growth continues to be a focus for D V. As we see ample opportunities for market share expansion outside of the Americas.
As we continue to execute our global expansion strategy, we grew third quarter EMEA revenues by 44% year over year, and APAC revenues by 96% year over year.
In the third quarter, we won the global business mandates of key European advertisers, including Bearberry protect Felipe and HR a pharma as we continue to see our investments in international markets deliver results other key expansions and new logo wins include Facebook now known as meta Sony Japan Disney.
These studios T J X American family insurance, Dropbox after pay ANZ and peloton global.
This exceptional number of Q3 deals further position us for growth in 2022.
The addressable market for DB solutions remains significant and approximately 64% of the new enterprise logos that we've won in Q3 were greenfield.
Direct revenue outside of the Americas grew 60% year over year in the third quarter, representing approximately 25% of direct revenue and exemplify the expanding opportunity for our solutions in markets around the globe.
The market penetration of our social solutions remained a highlight for D V. In the third quarter as we grew social volume by 83% year over year.
A recent milestone in our social coverage was the launch of our partnership with Tic Toc to measure view ability fraud, and NGO impressions across the Tic Toc platform.
This development combined with the new solutions, we gain through the acquisition of open slate will position <unk> as the only company to offer brand safety controls and comprehensive quality measurement coverage across Tic Toc.
We believe there is significant growth potential for our solutions as advertisers continue to invest in it take top platform, which is expected to expand beyond 1 billion users each month.
Turning to CTV, our products continue to gain traction in one of the fastest growing segments of the advertising market double verify grew third quarter CTV volumes by 41% year over year, driven by Dv video complete which remains the only solution that allows brands to effectively block brand suitability and <unk>.
Rod violations on CTV.
D V remains the most MRC accredited verification platform for CTV.
As the cost per advertising impression remains high on CTV compared to other formats, it's increasingly attracting fry a challenge to the industry and an area, where we are committed to addressing.
In August our fraud lab uncovered and neutralize smoke screen advertising fraud scheme, which caused screensavers to hijack CTV devices and generate AD impressions, even when the screen was off while DD neutralized smoke screen for our clients and partners, helping them avoid wasted investment the scheme remains active on unprotected CTD.
Platforms trading up to 10 million fraudulent requests per day, and costing unprotected advertisers millions of dollars per month.
Switching our focus to programmatic revenue growth.
Clinic brand suitability or ABS grew 64% year over year, driven by its continued adoption on major buying platforms, most notably Googles G D 360, and the trade desk.
And although still nascent our newest programmatic prepaid solution DB custom contextual saw a 60% sequential increase in the number of advertisers using the products since last quarter. We are encouraged by its early growth trajectory and continued adoption of platforms like the trade desk and Amazon.
In summary, Q3 was another strong quarter for D V. Our core revenue growth continues to be driven by advertiser demand to solve the fundamental challenge of optimizing AD spend while protecting brand integrity and an increasingly complex digital ad ecosystem.
Double verify supports this imperative across the fastest growing channels geographies and platforms the acquisitions of matrix and open slate will expand our ability to drive better advertising outcomes on a broader scale.
Differentiating our platform and making double thereby solutions, even more central for our customers. We couldnt be more excited about the growth opportunities ahead with that I'll turn it over to Nicola.
Thank you Mark and good afternoon, everyone.
Let me begin with a review of our quarterly performance before discussing our 2021 outlook and providing additional color on the open slate acquisition.
Our revenue performance in the third quarter reflects continued broad based strength in advertiser platform and publisher demand for <unk> products.
Each revenue type grew sequentially from the second quarter to the third quarter, which is seasonally weaker for.
For the third quarter, our revenues were $83 $1 million up $22 1 million or 36% year over year.
On a sequential basis third quarter revenue grew nearly 9% and outperformed the 7% sequential growth we delivered in 2019.
Revenue was driven by strong volume or MTM growth for both direct and programmatic gross revenue retention remained above 95%.
Advertisers programmatic revenue grew 49% in the third quarter year over year, primarily driven by continued ABS adoption, particularly on <unk> hundred 60.
As Mark mentioned ABS delivered 64% year over year revenue growth in the border and now represents over 50% of programmatic revenue.
To date, we have been successful at selling this premium product to our existing customers and we're now focused on making a b S. The cornerstone of every RFP for prospective enterprise clients as well.
Advertiser direct revenue grew 23% year over year, driven in part by large existing enterprise clients, including Unilever and Amazon expanding DVS coverage to international markets. We also benefited from newly signed clients, including Airbnb target and Sony ramping up their business with us.
On the supply side, we recognized new revenue from low pub tabbouleh in tremor in the third quarter as we continued to expand partnerships with key platforms and publishers.
Shifting to expenses, our cost of revenue increased by $4 $4 million year over year in the third quarter, primarily due to an increase in costs from revenue sharing arrangement with our programmatic partners as programmatic revenue grew as a percentage of total revenue.
In addition, we continue and intend to accelerate our investments in cloud based hosting solution to provide the scale and flexibility necessary to support our geographic expansion.
Our product development costs increased by $3 $3 million, while sales marketing and customer support expenses increased by $2 $8 million year over year in the third quarter.
Following a period of strong organic hiring and investments in the first part of the year. We're now focused on integrating engineering product and sales talent from our recently completed acquisition of metrics and from our pending acquisition of open slate.
While we anticipate realizing synergies by eliminating duplicative costs over time, we expect operating expenses to trend higher in the fourth quarter, which is reflected in our fourth quarter EBITDA guidance.
Third quarter 2021, adjusted EBITDA was $26 $4 million up 82% year over year, and representing a 32% adjusted EBITDA margin.
Excluding the impact of $1 $4 million of bad debt recoveries in the quarter adjusted EBITDA would have been $25 million, representing a 30% margin.
And finally, we delivered $7 9 million of net income up 37% year over year.
In terms of cash flow and balance sheet, we generated $58 $4 million in cash from operating activities through the third quarter of 2021 as compared to $17 8 million through the third quarter of 2020.
We had approximately $320 million of cash at the end of the quarter, even after paying for the matrix acquisition and cash and we continue to have zero debt on the balance sheet. We are acquiring open slates debt free and expect to fund the $125 million cash portion of the acquisition with cash on hand.
Now turning to guidance, we expect fourth quarter revenue in the range of $98 million to $103 million, which at the midpoint implies revenues of $105 million and growth of 28% year over year.
We expect fourth quarter adjusted EBITDA in the range of $34 million to $36 million, which at the midpoint implies an increase of 27% year over year and an adjusted EBITDA margin of 35%.
The prudence in our fourth quarter outlook reflects the supply chain uncertainty and its impact on AD spend that some of our large CPG and auto customers have shared with us.
Following our strong year to date performance, we are reiterating our full year 2021 revenue guidance range of $3 $25 million to $330 million a year over year increase of 34% at the midpoint. We also continue to expect adjusted EBITDA in the range of 103 to 105 million.
A year over year increase of 42% and an adjusted EBITDA margin of 32% at the midpoint.
Finally, we expect our fourth quarter weighted average diluted shares outstanding to range between 166 and 169 million shares.
Turning to open slate as the acquisition has not yet closed we do not expect to open say drive a material financial impact on our 2021 results.
And while we're not providing 2022 guidance here. We currently expect open slate to contribute between 15 and $18 million of revenue in 2022.
The company is near breakeven today, and we expect to streamline operational costs over time by integrating the smaller scale operation into our broader global infrastructure.
And with that we will open the line for questions. Operator. Please go ahead.
Thank you the floor is now open for questions. If you do have a question you May press star one on your telephone keypad at this time. If your question has been answered you could remove yourself from the queue by pressing one again, ladies and channel minutes Star one and all.
First question comes from around <unk>.
Tia from William Blair go ahead.
Yes, thank you very much.
I wanted to start maybe just with the open access.
Can you just give us a sense for maybe the customer overlap that you have with.
Yeah.
Obviously, the technology theme.
Complementary to how many.
If you can quantify it anyway.
Customers and then I would love to hear maybe just some commentary on the build versus buy.
Prior to the acquisition makes sense.
It's difficult.
Difficult to talk about the technology itself.
Acquisition attractive thank you.
Yes, thanks, Thanks, Raj and great Great question, I mean, it's pretty clear hopefully that through the script that we're super excited about the open slate acquisition.
It is a differentiator in the market allows us to be the only platform was really end to end prepaid and postpaid measurement.
In verification across platforms like tick tock and Youtube.
It really does expand our coverage footprint.
Give us.
Unrivaled coverage across obviously, the hottest platforms that are out there today.
And you know.
It allows us to further.
Live our story of the single platform through which advertisers can come to you and be confident that their investments are going to be protected and it will be delivered across our brand suitable and.
You know verified environment, specifically around customers, that's where we can get more excited whereas.
The open slate technology is really awesome they've had.
Yeah.
Relatively subscale company the ability to to sell to a lot of enterprise clients has just been.
It's been a long time coming.
Right now we have about client overlap of around 60 customers and when you think about.
Double verify working with over 1000 brands worldwide. The way I look at it is we've got 940 more customers to sell to you, which is a pretty awesome opportunity for us.
There is some customer overlap, but it's really minimal and for us. It's all about Upselling and we've had a really solid track record of Upselling new solutions to current clients. So that's super exciting.
On the on the aspect of build versus buy I.
I think.
There's obviously a lot of considerations here and one of which is.
Time to market and with specific time to market timeliness to market.
And we know that platforms like tick tock and Youtube are are just booming and since the pandemic started the engagement on those platforms has only gotten greater so the ability to move very quickly with a solution that complements our post.
Postpaid measurement solution and helps optimize outcomes for advertisers and do that without having to go through a build and wait for a time to build over while those.
Platform scale I think that was the real the real selling point for US, which was moving quickly into market to take advantage of those growth getting stickier with our current clients when they're going to be making those decisions.
And trying to leverage and use some of that dry powder that we have in a way that can really grow it exponentially over time.
Awesome, that's great to hear and that's very helpful color Marc.
One more question if I can just tick tock.
Obviously, there's a lot of exciting things happening there are you have any partnership.
Open play that gives you kind of a unique way to capture share there.
Give us a sense of how you are positioned to grow in the tick tock opportunity.
If there is any way you can help us frame the.
Potential contribution over the next year or so now that you have some of these pieces in place to really attack that opportunity.
That would be super helpful.
Yeah. So if you think about kind of the way that the products are lining up we recently announced the launch of our view ability and.
Fraud solutions across tick tock.
Open slate was one of the first partners in on brand safety. So we've kind of got all the basis covered there with regard to pre bid brand safety and posted measurement and verification on the on the visibility side. So when we look at the completeness of solution. It's really exciting there when we think about that platform in particular.
And if you just kind of do some back of the envelope math.
It's about a third the size of a Facebook now and active users in the Americas.
Now between Facebook and Youtube are they make up about 15% of our total revenue so take half of that or so for.
For Facebook gives you about seven 5% if you say they are a third of Facebook.
You could see potentially this business being anywhere from <unk>.
3% to 4% of our total revenue after time, so I think when we look at the opportunity on that specific platform. We think there is a con.
Comparable opportunity that we've seen with platforms like Facebook or Youtube is based on the scale of user engagement and the demand that we're seeing from our advertisers.
That's very helpful. Thank you very much and congrats on the.
Acquisitions in the quarter.
Great. Thanks.
And our next question comes from Andrew Boone from JMP Securities Co Andrea.
Hi, good afternoon, and thanks for taking my questions. So question number one first on custom contextual customers growing 6% quarter over quarter. It seems like a very good omen for 2022. So can you talk a little about the drivers behind the ads and how do you move those customers from more test budgets and does something thats.
That's more persistent or is it more persistent today.
Yeah, Thanks, Andrew for the question.
We like the traction the products getting and.
Like all of our pre bid or pre filtering products. So.
On the programmatic side, what we've just done with open slate and now contextual customer contextual a ties really nicely to our postpaid measurement building. This kind of optimization cycle over time. So we know that once people start using those pre bid solutions it helps fortify and leverage.
Our hosted solutions as well so it creates this virtuous cycle. So on the contextual side, we've seen a lot of client uptake we know that.
First takes here is the uptake and then the volume after that so as we see the number of clients using an increase as we saw last quarter, 60% sequentially. We know that puts us in a good position for 2022.
Yeah, I mean, we've we've been pretty upfront about saying that we think there's a good amount of white space in the international markets. You know it was one of the reasons why we acquired matrix you know and can include that deal in Q3, 50% of our 55% excuse me of our our new hire so far this.
Here are outside of the U S and 40 per cent of our head counts outside of the U S. Right now so it's a commitment we've made and the reason why we've done so is for both of the reasons that you noted our global clients are getting bigger and by that meeting, they're moving towards enterprise Singleplatform solutions and they <unk>.
Want those solutions to work wherever they are so whether it's easy labor a model is there.
They were looking for a solution that can be leveraged in every market, where they buy and sell advertising. So our ability to have people on the ground to have support and do you have you know resources that can help uhm optimize their spend of those markets is really critical so a.
As we look at our international investments, it's to continue to further support our enterprise clients.
But we get this <unk>.
Nice a residual impact as well as when we put those people on the ground. What we're able to do is sell through a significant number of local brands as well. So we get both <unk> both prongs, both parts of that our problems and our tax strategy strategy. So you know.
We cover the global clients Uhm 13 that we called <unk>, which is focused on you know enterprise clients around the world and then we attack the local clients through uhm that the teams on the ground it and market and if you think about some of the names that we measured.
Are we mentioned in a call that they're the big guys that are international city.
You know the the Facebooks in the Disney Studios et cetera, but then there's folks that are like you know that are local so.
<unk> <unk>, which is and obviously French brand you know the Afterpay ends in a N Z, which is in New Zealand and Australia. So we look at and Sony Japan. Another great. One like you know we look at local brands as being an offshoot of of of what our enterprise client relationships.
Enable us to do in those local markets.
[noise] great. Thanks parks.
Sure.
And our next question comes from Chaucer Peterson Fry Keybank go ahead Justin.
Oh, great. Thank you very much.
Oh, one slice of girls out of a b S I needed without the E. S. P additions during the quarter would love to hear more about.
Yes, it's growth author.
Or the end of the square you are in terms of client adopt shatter.
Products. So that's a question on the wall and I'm, calling from <unk>, there's a lot of pets.
Okay. So right now I understand that.
Not necessarily a headline for your profiles, but I'm curious.
I'm, calling from what's going on.
A R C is creating opportunities for business. Thank you.
Great Great questions, just let me take on the Avs when first I think that you can kind of you know put this in a baseball analogy what inning are we in with with Amy Yes, I think in the Americas as far as platform adoption, we're probably like in the seventh inning right. We've got the big.
As we've got Google, We've got trade desk and Amazon All you know sign up with a b S. So I think in the Americas, we're probably on the platform side uhm well into the game on the scale side. However, there's a I think we think there's a significant amount of upsides still to be made out of a b S. Just by volume of new client Adele.
Option on those platforms. So we've kind of got the showrooms open and now we're filling it with you know with cars and people coming into the showroom. So I think.
We're probably still well into the early part of the game as far as how big Big Val volume to get on those platform and then one of the consideration choose you know our next level of penetration Ibs platform perspective ties into the question Andrew just laid out which is on a global perspective, we've got local D. S. P's.
That <unk>, we would call them local here, but they're pretty dominant in the market center in whether that's in APAC or or a <unk> no parts is of eastern Europe or the middle East there are significant platforms in those areas that that we still need to get distribution across I think they can help those local clients.
Too so that's still early going so so net net uhm, we think there's a good amount of growth.
For a b S. Both in a volume perspective, and then outside of the U S from platform distribution perspective.
And in regards to your second question I mean, how much time do we have because we could we would love to talk all day about this and I think that you know you bring up some great points around <unk>, what's going on in the measurement space and everything from you know the the decline of efficacy and panels two.
The last the loss of accreditation on you know major major platforms to the real questioning of whether or not uhm single platform antiquated currencies have a future I mean, all of those things haven't have thrown the measurement and performance market count up for grabs.
I think we're in a really good place to take advantage of that because at the end of the day. What advertisers are looking for is a proxy for an outcome right and they've always use reach and frequency for that you know in the olden days of linear television.
They are looking for new proxies that can help them drive those outcomes.
Double verify supplies those proxies and whether we start with a base of evaluating media <unk> Alrighty, and saying Hey, This is actually a safe place for you to be that's the first part of actually delivering a result, which is saying, let's take the crap off the table I'm asleep with good media out there you know.
You can buy against.
Q then moving up you know up stream to doing things like ensuring that they are targeting against the rate contextual elements uhm moving into new metrics like the watch for authentic attention solution, you're going to hear a lot about attention over the next few quarters because advertisers are waking up to say what are those other proxies.
We want to have besides just knowing that this is a male and there's 50000 males watching my show I want to know how engaged they are and how that relates to selling a product and I think that this all comes back down to is what are those things that I can measure what are those indicators of performance that will help me drive the outcome of selling a product and if you can.
Tell you at like we are Super enthusiastic about the role that we can play we think there is a huge amount of of the market. That's up for grabs and you know our investments in companies like open slate and our continued investments in products like authentic attention, which will launch and C. T. V. Early next year are are places where we.
We're gonna take a bigger piece of that pie.
Great. Thank you.
Alright.
And our next question comes from micro craft room kind of course go ahead in my cough.
Thank you open slate sounds exciting just a comment maybe on how long you think it'll take to integrate that into you know into the products that and then.
Mark just on the guidance and you know sort of the impact from a supply chain with some of the N. A C. P G advertisers.
And did you think this is coming at a time, you know sort of towards the end of the year. When we're setting budgets for next year. Like are you are you worried about that for for budgets for next year are you hearing from the advertisers that you know they think a lot of us will be behind them by the time, we sort of get into the new calendar year, just any any high level comments you have there would be helpful.
Sure. Thanks for the questions Michael Uhm, so on the on the integration process for open slate the the nice part about the the acquisition is that there's really no redundant functionality, so where do we don't have to rip anything out or rebuild anything that we've <unk>.
Already created to you know to work with open slate. So we look at that integration will probably be over the next year so different levels of of.
Platform functionality integration, a light integration first which you eyes will probably be shared.
Clients will be engaged with together from from an operational perspective, but you know you're probably looking at a year for full kind of system integration and I think over that time will be working with our customers to ensure that the product that we put together between pre and post is something that.
It actually helps them drive better results so at more to come there on that front.
With regard to the guide and I will talk about this from a qualitative perspective, and maybe Nicole can jump in on a quantitative perspective, but uhm.
We we have a good roster of CPG clients, they make up a decent chunk of our of our client base, but as we said before we don't have it you know a heavy concentration in any one area and we had talked I think a few quarters ago about travel and leisure and entertainment. The nice part is we've seen.
Those industries I'll come back in Q3, Q for him and he you know we'd provided some caution around whether or not they'd come back and be seen a nice balance back there CPG as is the latest poster child for no cause pandemic challenges, but the reality of it is you bring up a great point as we think this is pretty short lived as a matter of fact, we know it's short lived the M.
Occasions that we're getting his early next year, they think they're going to shake off the supply chain issues and we'll be ready to move on so we don't see this as a as an ongoing dragging any way you saw it as a you know a relatively light temporal issue that we want to be cognizant of and we're not over concerned about.
Put it but we want it.
And certainly be aware of it and make sure that you know.
We're updating everybody around that Nicole anything like the only thing I would add is <unk>.
What what what Mark said is like and what we did which is you know we we took a modest change to the fourth quarter revenue guidance just to be to be cautious based on what we heard from from our customers right. So does not just just just a macro considerations really what the CPG customers are telling us and we're seeing it happening in October <unk>.
You know the guidance that we've put out there through assumes that that will continue not deteriorate for the rest of the quarter and as Mark said, we were not hearing or into the being discontinued to 2022.
Okay. Thank you guys.
Thanks.
Thank you and our next question comes from that Heidelberg from RBC capital markets go ahead, Matt.
Sure. Thanks for taking my question goes congrats on the on the results Uhm Mark you know I I have a question for you in terms of you know I'm thinking more like reopening and people getting out and traveling and whatnot.
You think that has an impact I'm I'm thinking from like your sales perspective, you know.
Building pipeline, perhaps on the new customers you guys. If I was doing a good job on new customers throughout the pandemic that kind of curious on your on your views as we as anything 42022 and debit Barbara reopening clothes.
Yeah. It's yeah. It's a great question, Thanks, Matt and it's one that we live every day you know one of the things that we noted it in script is that two three we closed more new logos than we have any time of the year right and a lot of those clothes are still being done <unk>.
<unk> right. These are brand new clients many of which we've we've never met before in person and we're still closing deals so a.
Interesting how quickly the industry has adopted to buying and selling virtually uhm at because they know they're they're they're they're spend is only increasing digitally so they they need to have that security and they need to have that performance drivers. So.
Two I think when we look at the end of the market opening up a bit.
Not that we need that to happen to drive pipeline, because we don't obviously this year with close to 108, so far 108, new logos. This year brand, new and that's that's pretty exceptional for for our client.
And you know I think that.
We look at next year.
You certainly want to do better and we think we have the opportunity to do better with having people on the road.
But we'll see I I don't think that's gonna be the deciding factor we're going into the 2022 with a really strong pipeline, we're super happy with where we sit today I would say you know I've only been here less than 18 months, but it's the best pipeline I've ever seen going into a new year. So that is that that is an absolute.
<unk> I can make and and we feel good about it.
That is the best way to get her to your voice and congrats for me an open place seems like a really really nice complement to what is obviously a very very diverse platform alrighty. Thanks. Thanks, a lot guys. Congrats again.
Got it.
Thank you and our next question comes from Mark Murphy from J P. Morgan go ahead bark.
Hello. Thank you hate this pendulum can I get for Mark Congrats on the corner of most of my questions up it outside but one quick question on competition.
<unk> double verify is obviously strengthening its position with some of these acquisitions open save the matrix and what's what's left of your <unk>. What are you seeing with respect to the competitive dynamics. How are they how are you a <unk> competitors kind of reciprocating or or looking at you kind of come in okay.
Becoming becoming the leader in the market.
Yeah. It's great question. We are we are laser focused on you know be the you know having the broadest verification across the most platforms in the most markets across you know the most media the acquisition of an open slate confused.
Down that journey and you know our focus on be independent free of the media transaction and ensuring that where the company that not only is the largest but the the least encumbered by any bias is a big deal for us and I think we're we're well on that way when you look at it.
<unk>, that's resonating with with the people that were talking to both our current clients and new clients. When we look at the the competitive takeaways.
That we've been able to do it it's been pretty extraordinary right I think we shared some stats in the past about the last 18 months I think we've won something like that over 80% of our competitive tenders.
Look at some of the names we mentioned on this call. So T D Bank and Sony Japan Disney Studios in American family Insurance and drop box and Merck. These are all competitive steals their competitive takeaways. So no I think from a competition perspective, we know that.
That we haven't lost a top 100 client and you know in the last 12 months Uhm, we continue to take clients away from our competitors and we continue to live that mission of having an unbiased independent take with the most complete most complete.
Coverage across the most platforms with any other <unk> any other system out there so.
You feel good about where we stand against competition and.
And it's not just about feeling good it's about delivering results for delivering results too.
That's that's great to hear Nikola one quick clarification, I think I said 16 to 18 million from open sleep next year.
Is there any contribution from open slate all even matrix in queue for those.
For 2021, no. We we haven't even close the open slate acquisition. So we're not went out banking on that at all and matrixes is not material.
Got it thank you.
And our next question comes from your <unk> from tourists security is go ahead.
Yeah, Hi, this isn't that crowded in on for yourself. Thanks for taking my question.
Uhm. So volume has been the primary driver of girls for you and is there you're looking pricing particular is the medium mixed <unk> towards higher priced T. Tiffany in other formats.
Should we think about your ability to charge more per validate impression.
Yeah, So you're you're right. The MTM has been the main driver of our growth by volume is what's being the main driver of our of our revenue generation. The fee part of our business. We have up until now look to stay on the 16th model.
Because that allows our customers to not think of us as part of their decision of where to verify or not uhm and that has allowed us to basically continue to grow with the volume now well on the upsell opportunity. We are able to upcharge. When we have premium products, which is what we were able to do with a b S and that overall has.
An impact that increases the N T F. R media transaction fee that we that we charge your point around cpm's being higher and lower or our ability to charge more on a higher C. P. M that opportunity remains we we know it's available and we obviously tracking but at this point.
We are so uhm focused on being able to measure more and more of the volume you up but you will remain there as more impressions need to <unk> opportunities.
Upsell opportunity for US is still really large right is mark mentioned being able to upsell two ABS, which the premium price product that opportunity is to large custom contextual will behave the same way now that we deacquisition I'm open slate and we will be able to add on more services to the same impression that we measure.
So we feel a lot of opportunity that way to increase the MTF.
Got it that's helpful. Thank you.
And there are no further questions I would now like to turn the floor back over the C E O Marc Sikorsky for closing remarks.
Thanks, everybody for your questions you can't tell the team here D V as extremely enthusiastic about what the future holds for US we've continued to deliver strong revenue growth and profitability, while executing key strategic initiatives expand product leadership, deepen our coverage and fast growing sectors and grow our global footprint, we expect.
Fewer longterm growth trajectory and deliver better business outcomes for D V customers by driving the quality and performance everywhere. We appreciate your time and attention today I look forward to updating you all on future calls.
[music].