Q4 2023 DoubleVerify Holdings Inc Earnings Call

[music].

Greetings and welcome to the double verify fourth quarter and full year 2023 financial results Conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad and as a reminder, this conference is.

Unknown Executive: Time Good afternoon, and welcome to Doubleverify's fourth quarter and full year 2023 Earnings Conference Call. With us today are Mark Zagorski, CEO, and Nicola Allais, 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 and 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 annual report on Form 10-K. In addition, our discussion today will include references to certain supplemental non-GAAP financial measures, which should be considered in addition to and not as a substitute for our GAAP results.

Being recorded.

It is now my pleasure to introduce to you tasteful Engman investor It was Investor relations. Thank you tasteful you may begin.

Good afternoon, and welcome to double verify sport culture full year 2023 earnings conference call with US today are Mark Sikorsky Cu and Nicole at least CFO.

Today's press release and this call may contain forward looking statements that are subject to inherent risks uncertainties and changes in respect of college expectations and information currently available to us and our actual results could differ materially.

Information please refer to the risk factors in our recent SEC filings, including our annual report or Form 10-K.

In addition, our discussion today will include references to certain supplemental non-GAAP financial measures should be considered in addition to and not as a substitute for our GAAP results.

Unknown Executive: Reconciliations to the most comparable GAAP measures are available in today's earnings press release, which is available on our investor relations website at ir.doubleverify.com. Also, during the call today, we'll be referring to the slide deck posted on our website. With that, I'll turn it over to Marm. Thanks, Tejal. And good afternoon, everyone.

Reconciliations to the most comparable GAAP measures are available in today's earnings press release, which is available on our Investor Relations website at IR <unk> doubled verify dot com also during the call today will be referring to the slide deck Pesnell website with that I'll tennis event tomorrow.

Thanks, Dale and good afternoon, everyone 2023 was Dd's third year as a public company and one where we continue to deliver industry, leading revenue and profitability growth fueled by AI powered product innovations that drove a higher ROI for our customers and accelerate <unk> global client expansion trajectory and market.

Mark S. Zagorski: 2023 was DV's third year as a public company, and one where we continue to deliver industry-leading revenue and profitability growth, fueled by AI-powered product innovations that drove a higher ROI for our customers and accelerated DV's global client expansion trajectory and market share gains. In 2023, we grew total revenue by 27% year over year to $572.5 million. And our platform measured over 7 trillion billable media transactions across a growing number of digital media properties, formats, and devices.

Share gains.

In 'twenty to 'twenty three we grew total revenue by 27% year over year to $572.5 million and our platform measured over seven trillion billable media transactions across a growing number of digital media properties formats and devices.

Mark S. Zagorski: DV's continued expansion into new global markets and media environments fueled over $120 million of incremental revenue during the year and established our scale as not only a market differentiator but also a springboard for future revenue growth, especially internationally, where our measurement business grew over 40% last year. Our focus on top-line growth in 2023 was matched by our commitment to profitability and cash flow generation. Our business generated a 33% adjusted EBITDA margin and approximately $120 million of net cash from operating activities in 2023, an increase of 26%, even as we invested in growing our global workforce, expanding our premium solution set, and integrating a new acquisition, SciBids AI. In the fourth quarter, we ended the year with a revenue growth rate of 29% and adjusted EBITDA margins of 38%.

It is continued expansion into new global markets and media environments fueled over a $120 million of incremental revenue during the year and established our scale is not only a market differentiator, but also a springboard for future revenue growth, especially internationally, where our measurement business grew over 40% last year.

Our focus on top line growth in 2023 was matched by our commitment to profitability and cash flow generation.

Our business generated a 33% adjusted EBITDA margin and approximately $120 million of net cash from operating activities in 2023, an increase of 26% even as we invested in growing our global workforce, expanding our premium solution set and integrating our new acquisition.

Cyber is AI.

In the fourth quarter, we ended the year with a revenue growth rate of 29% and adjusted EBITDA margins of 38%.

Mark S. Zagorski: This rare and winning combination of growth and profitability allows us to continue to invest in AI and automation, which in turn helps drive our global scale and connectivity and fuel market-leading product innovation. These are DV's core differentiators and the engines of our long-term growth. Before I discuss the numerous drivers of our strong performance and market share gains in the quarter and the year in detail, let me highlight the two growth areas I'm most excited about for 2024 and beyond: Social Media Solutions and Sybiz AI.

This rare and winning combination of growth and profitability allows us to continue to invest in AI and automation, which in turn helps drive our global scale and connectivity and fuel market, leading product innovation. These are dd's core differentiators and the engines of our long term growth.

Before I discuss the numerous drivers of our strong performance and market share gains in the quarter and the year in detail, let me to highlight the two growth areas I'm most excited about for 2024 and beyond.

Social media solutions inside this AI.

Mark S. Zagorski: DB's social media verification solutions continue to add unique value in challenging advertiser environments and will only become more essential during the upcoming election season. We grew our top 700 customers' adoption of DV social measurement solutions by 10 percentage points in 2023 to 54%, helping propel the sector's revenue growth to nearly 50% for the year. In addition, we grew fourth-quarter social measurement revenue by 21% sequentially, and all of our new measurement wins in the fourth quarter signed up for social coverage. As social media gains a larger share of advertiser wallets, our position as one of the few companies scaled to operate independently across this media puts TV in a unique and differentiated position. Saibot's AI, which we acquired in the second half of 2023, has generated an incredible amount of excitement with current and prospective clients. We've integrated sales functions into our commercial organization and started connecting its platform to our core solutions. Essentially, leveraging Cybiz AI to transform the entire verification category.

D be social media verification solutions continued to add unique value and challenging advertising environment and will only become more essential during the upcoming election season.

We grew our top 700 customers adoption of DD, social measurement solutions by 10 percentage points in 2023% to 54%, helping propel the sector's revenue growth to nearly 50% for the year in.

In addition, we grew fourth quarter, social measurement revenue by 21% sequentially.

All of our new measurement wins in the fourth quarter signed up for social coverage.

As social media gains a larger share of advertiser wallets, our position as one of the few companies scale to operate independently across this media puts <unk> in a unique and differentiated position.

So I did say high which we acquired in the second half of 2023 has generated an incredible amount of excitement with current and prospective clients with.

We've integrated sales functions into our commercial org and started connecting its platform to our core solutions essentially leveraging <unk> to transform the entire verification category with.

Mark S. Zagorski: With SciBids, DD has a unique value proposition that allows advertisers to protect their brand equity and reduce media waste while simultaneously improving core performance KPIs, such as lower CPMs and higher reach. This seamless achievement of both protection and performance is a differentiator that is helping DV win new deals. In fact, 40% of our large new logo wins since the beginning of this year have been actively testing CYBADS-AI.

With sided Didi has a unique value proposition that allows advertisers to protect their brand equity and reduced media waste, while simultaneously improving core performance kpis, such as lower CPM and higher reach.

This seamless achievement of both protection and performance is a differentiator that is helping dv win new deals.

In fact, 40% of our large new logo wins since the beginning of this year are actively testing cyber Jr.

Mark S. Zagorski: With expanding cyber coverage across key programmatic DSPs and major social media platforms, our customer adoption scale will allow DV to unlock an entirely new performance marketing talent. Speaking of wins, we're pleased to have delivered a banner fourth quarter for new customer wins with strong continued win momentum year to date. In the fourth quarter, we've won several iconic and category-leading enterprise logos, including Pepsi, Walgreens, and Halion.

With expanding <unk> coverage across key programmatic, DSP and major social media platforms or customer adoption and scale rollout DVD unlock an entirely new performance marketing Tam.

Speaking of wins, we're pleased to have delivered a banner fourth quarter for new customer wins with strong continued win momentum year to date.

Fourth quarter to date, we've won several iconic and category, leading enterprise logos, including Pepsi Walgreens and Haley on.

Mark S. Zagorski: We maintained an 80% plus win rate across all new opportunities in 2023, with 62% of our full year and 59% of our fourth quarter wins being greenfield, which we define as wins where the advertiser wasn't using third-party tools for the business that DV won. These great Q4 wins add to the powerful roster of new deals we closed in 2023, which included Air France, Uber, Ulta Beauty, General Motors, Total Energy, NFL, Rolex, Sam's Club, Pizza Hut, Revlon, and Liberty Mutual. We work with approximately half of the world's top 1000 advertisers and continue to acquire large new enterprise logos. Leading brands choose TV not based on price but because we offer proprietary and market-leading technology, unrivaled brand equity protection, and tangible ROI improvement.

We maintain an 80% plus win rate across all new opportunities in 2023, with 62% of our full year and 59% of our fourth quarter wins being Greenfield, which we define as wins, where the advertiser wasn't using third party tools for the business at TV one.

These great Q4 wins add to the powerful roster of new deals. We closed in 2023, which included air France, Uber Ulta Beauty General Motors total energy NFL, Rolex Sams club Pizza Hut, Revlon and Liberty mutual.

We work with approximately half of the world's top 1000 advertisers and continue to acquire large new enterprise logos, leading brands choose DB not based on price, but because we offer proprietary and market leading technology unrivaled brand equity protection.

And tangible ROI improvement.

We also have the ability to significantly expand within the nearly 450 top advertisers that we currently do business with as Dv's fees comprised less than half a percent of this cohorts digital AD spend in 2023.

Mark S. Zagorski: We also have the ability to significantly expand within the nearly 450 top advertisers that we currently do business with, as DV's fees comprised less than half a percent of this cohort's digital ad spend in 2023. We expect to double our share of their media spend over time as we, one, expand these valued customer relationships across geographies and media environments, and two, upsell them our broader integrated product suite of activation and measurement solutions. As mentioned last quarter, over half of our top 700 customers use less than four of DD's seven core products, and that does not include side bids, creating a vast expansion opportunity within our existing customer base.

We expect to double our share of their media spend over time as we one expand these valued customer relationships across geographies and media environments and to up sell them, our broader integrated product suite of activation and measurement solutions as.

As mentioned last quarter over half of our top 700 customers use less than for a didi seven core products and that does not include side, that's creating a vast expansion opportunity within our existing customer base.

Mark S. Zagorski: In addition, we've leaned into our customer acquisition and retention plan of building higher-value, more strategic customer engagements that leverage our real-time data to drive superior outcomes and ROI. Over the last four years, DV has more than doubled the number of customers and revenue while increasing our overall MTF and expanding the bundle of solutions our customers use from us. As media performance joins media quality protection as a core part of our superior value proposition, closed-loose optimization, leveraging data partnerships like we have with Attain, fueled by data insights from SciBids AI, and activated via proprietary solutions like ABS, will help us to further enhance our premium value position in the marketplace, elevate and differentiate the level of our customer engagements, and set DV up for continued future market share growth.

In addition, we've leaned into our customer acquisition and retention plan of building higher value more strategic customer engagements that leverage our real time data to drive superior outcomes and ROI.

Over the last four years <unk> has more than doubled the number of customers and revenue, while increasing our overall MTS and expanding the bundled solutions our customers use from us.

As media performance joins media quality protection as a core part of our superior value proposition.

Closed loop optimization, leveraging data partnerships like we have with attain fueled by data insights from <unk> AI and activated the proprietary solutions like ABS will help us to further enhance our premium value position in the marketplace elevate and differentiate the level of our customer engagements.

And set divi up for continued future market share growth.

Mark S. Zagorski: Clients like Lexis have used Doubleverify premium solutions to reduce media waste, increase safety, and drive site traffic by 3.5% DD maintains and will continue to maintain our strong pricing and margin profile based on these higher levels of strategic customer engagement driven by the measurable ROI that our premium solutions deliver. In the fourth quarter and early this year, we achieved product and platform expansion milestones that we expect will fuel our growth in 2024 and beyond across all major media environments. Social, CTV, Retail Media Networks, and The Open Web.

Clients like Lexis have used double verified premium solutions to reduce media waste increased safety and drive site traffic by three five X.

<unk> maintained and will continue to maintain our strong pricing and margin profile based on these higher levels of strategic customer engagement driven by measurable ROI that our premium solutions deliver.

In the fourth quarter and early this year, we achieved product and platform expansion milestones that we expect will fuel our growth in 2024 and beyond across all major media environments, social CTV retail media networks and the open web.

Let me discuss each of these in the context of our core differentiators, namely our rapidly growing global scale and connectivity.

Mark S. Zagorski: Let me discuss each of these in the context of our core differentiators, namely, our rapidly growing global scale and connectivity and our market-defining innovation, both of which are powered by our advancements in AI and automation. Beginning with social, we increased social measurement revenue by 62% year over year in the fourth quarter and by 48% for the full year, significantly outperforming our competitors, as well as the growth rate of the broader social ad sector. During 2023 and the beginning of 2024, we meaningfully expanded our measurement coverage across key social platforms, widening our global scale and connectivity across this vital media environment. According to MagnaGlobal, social media advertising made up more than 60% of digital ad spend x search in 2023, yet only 15% of DV's total revenue was attributable to social measurement in 2023.

Our market defining innovation, both of which are powered by our advancements in AI and automation.

Beginning with social we increased social measurement revenue by 62% year over year in the fourth quarter and by 48% for the full year significantly outperforming our competitors as well as the growth rate of the broader social ad sector.

During 2023, and the beginning of 'twenty 'twenty four we meaningfully expanded our measurement coverage across key social platforms widening our global scale and connectivity across this vital media environment.

According to Magna global social media advertising made up more than 60% of digital AD spend X search in 2023 had only 15% of <unk> total revenue was attributable to social measurement in 2023.

Mark S. Zagorski: As we continue to expand our product coverage across key social platforms, we expect customer adoption of DV solutions across social media to fuel revenue growth for years to come. On Meta, we're pleased to announce that following our successful beta tests in the fourth quarter, we launched DV's brand safety and suitability measurement on Facebook and Instagram feeds and reels in the first quarter of 2024. This release is in general availability.

As we continue to expand our product coverage across key social platforms, we expect customer adoption of DB solutions across social media to fuel revenue growth for years to come.

And we're pleased to announce that following our successful beta test in the fourth quarter, we launched Dd's brand safety and suitability measurement on Facebook and Instagram feeds in Reals and the first quarter of 2024.

This release is in general availability.

Mark S. Zagorski: For the first time, global advertisers are able to activate DV's AI-powered classification technology to protect their brand equity and comprehensively measure media quality on Facebook and Instagram feeds and reels, creating greater transparency across some of the most engaging user-generated content environments in the world. To date, customers have reacted enthusiastically to this launch, and impression volumes on Meta have increased by 51% in the first eight weeks of 2024 compared to the same prior year period. On YouTube, following our launch of viewability and invalid traffic across YouTube Shorts in the third quarter of 2023, we launched brand safety and suitability measurement capabilities across YouTube Shorts inventory in the fourth quarter, providing media measurement across a greater volume of ad impressions on YouTube.

For the first time global advertisers are able to activate DVS AI powered classification technology to protect their brand equity and comprehensively measure media quality on Facebook and Instagram feeds in reals, creating greater transparency across some of the most engaging user generated.

It environments in the world.

To date customers have reacted enthusiastically to this launch an impression volumes on meta has increased by 51% in the first eight weeks of 2024 compared to the same prior year period.

On Youtube following our launch of view ability and invalid traffic across Youtube shorts in the third quarter of 2023, we launched brand safety and suitability measurement capabilities across Youtube shorts inventory in the fourth quarter, providing media measurement across a greater volume of AD impressions on Youtube.

Mark S. Zagorski: In addition, we continue to expand TikTok brand safety and suitability measurement across the most important markets in Latin America and Europe and have further widened our TikTok APEC market coverage. We currently support brand safety and suitability across 32 markets, which cover 91% of global digital ad spend x China and India. Our scale and recent product innovations across social media and short form video are powered by DV's universal content intelligence, a proprietary AI classification engine that enables us to verify video content faster, more accurately, and more cost effectively than any of our competitors, having a direct positive impact on our gross margins as we scale. By using predictive AI versus the more basic frame by frame process others use, we are able to lower video analysis costs and scale faster.

In addition, we continue to expand Tictoc brand safety and suitability measurement across the most important markets in Latin America, and Europe, and further widened our tictoc APAC market coverage.

We currently support brand safety and suitability across 32 markets, which cover 91% of global digital AD spend ex China and India.

Our scale and recent product innovations across social media and short form video are powered by Dd's Universal content intelligence, our proprietary AI classification engine that enables us to verify video content faster more accurately and more cost effectively than any of our competitors.

Having a direct positive impact on our gross margins as we scale.

By using predictive AI versus the more basic frame by frame process, others use we're able to lower video analysis cost and scale faster.

Mark S. Zagorski: Our solution most recently enabled the rapid rollout of new social markets and suitability categories, as exemplified by this month's launch of TikTok brand suitability in Japan, as well as our first to market release of suitability categories by IndustryVer. This advanced capability provides DV with a strong comparative advantage in social media content analysis, where video comprised a whopping 67% of all social content in 2023, according to MagnaGlobal, and which we exhibited our speed to market leadership with the Meta News Feed brand safety launch early this year. Turning now to CTV, where ad-supported streaming continues to gain momentum, DV grew its CTV measurement volumes by 34% in the fourth quarter and by 33% for the full year 2023, significantly outperforming 2023 CTV ad spend growth of 16%, according to MagnaGlobal estimates. CTV comprised approximately 5% of our total impression volume in 2023, in line with its nearly 5% share of digital ad spend. Building on DE's existing CTV solutions that allow verification at the app level, we will soon be providing advertisers with more granular content-level transparency down to the show level, including program genre, ratings, classifications, and more.

Our solution. Most recently enabled the rapid rollout of new social markets and suitability categories as exemplified by this month's launch of tick Tock brand suitability in Japan, as well as our first to market release of suitability categories by industry verticals.

This advanced capability provides <unk> with a strong comparative advantage in social media content analysis, where video comprised a whopping 67% of all social content in 2023, According to Magna global.

And in which we exhibited our speed to market leadership on the met a news feed brand safety launch early this year.

Turning now to CTV, where AD supported streaming continues to gain momentum DD grew its CTV measurement volumes by 34% in the fourth quarter and by 33% for the full year 2023 significantly outperforming 2023, CTV AD spend growth of <unk>.

16% According to Magna global estimates.

CTV comprised approximately 5% of our total impression volume in 2023 in line with its nearly 5% share of digital AD spend X search.

Building on these existing CTV solutions that allow verification at the App level, we will soon be providing advertisers with more granular content level transparency down to the show level, including program genre ratings classifications and more.

Mark S. Zagorski: We are in advanced dialogue with three of the top 10 streaming platforms to provide brand safety and suitability measurement and content performance insights at the program level across OTT campaigns. We believe content level transparency at scale across major CTV platforms will be a catalyst for mass adoption of brand suitability measurement on CTV, enabling DV to enhance the long-term value we deliver to and can extract from this high-CPM media environment. And we continue to protect our customers' CTV media investments from fraud by leveraging DV's industry-leading Fraud Lab and extensive CTV platform integration. This week, in conjunction with Roku, we announced the discovery and mitigation of a new CTV fraud scheme we're calling Cyclone Bot, due to its scale, aggression, and velocity. We estimate CycloneBot is generating 250 million false ad requests per day across 1.5 million devices, largely eluding traditional fraud detection methodologies.

We are in advanced dialogue with three of the top 10 streaming platforms provide brand safety and suitability measurement and content performance insights at the program level across OTT campaigns.

We believe the content level transparency at scale across major CTV platforms will be a catalyst for mass adoption of brand suitability measurement on CTV, enabling DD to enhance the long term value, we deliver to and can extract from this high CPM media environment.

And we continue to protect our customers' CTV media investments from fraud by leveraging <unk> industry, leading fraud lab and extensive CTV platform integrations.

This week in conjunction with Roku, we announced the discovery and mitigation of a new CTV fraud scheme, we're calling cyclone by due to its scale aggression and velocity.

We estimate cyclone bot is generating 250 million false AD requests per day across $1 5 million devices, largely alluding traditional fraud detection methodology.

Mark S. Zagorski: Roku's proprietary watermark technology provided a crucial element in helping identify and mitigate the attacks, saving our combined customers millions in wasted ad revenue. Fraud is still a challenge for CTV buyers, and DV is still the leader in protecting our clients from sophisticated fraud schemes. Turning to retail media, we generated approximately $23 million in retail media revenue across all three business lines in 2023, achieving 60% year-over-year growth and significantly outpacing the sector's 15% growth rate as reported by MagnaGlobal. Our global scale and connectivity across retail media continues to expand, with DV's measurement tags now accepted on 75 of the key global retail media networks and sites, including 14 of the top retail media platforms and 62 major retailers. DV has a strong value proposition for both on-site or owned and operated retail media, as well as off-site or audience extension. Invalid traffic is still significantly higher on owned and operated retail media sites than on traditional media due to an abundance of traffic from competitive price grades. While overall violation rates are 129% higher on off-site retail media inventory than on owned and operated.

Brokers proprietary watermark technology provided a crucial element in helping identify and mitigate the attacks seeding our combined customers millions and wasted ad spend.

Fraud is still a challenge for CTV buyers and DB is still the leader in protecting our clients from sophisticated fraud schemes.

Turning to retail media, we generated approximately $23 million of retail media revenue across all three business lines in 2023, achieving 60% year over year growth and significantly outpacing the sector's, 15% growth rate as reported by Magna Global.

Our global scale in our connectivity across retail media continues to expand with Tvs measurement tags now accepted on 75 of the key global retail media networks and sites, including 14 of the top retail media platforms and 62 major retailers.

TD has a strong value proposition for both onsite or owned and operated retail media as well as off site or audience extensions.

Invalid traffic is still significantly higher on owned and operated retail media sites than our traditional media due to an abundance of traffic from competitive price scrapers, while overall violation rates are 129% higher on Offsite retail media inventory that on owned and operated sites.

Mark S. Zagorski: On the product innovation front, we are working with Criteo to provide an industry-leading solution that measures on-site quality metrics for retail media. Through this upcoming integration, DV will provide invalid traffic, brand suitability, and viewability measurement on Criteo's network of retail media partners, ensuring that marketers are maximizing engagement across this critical channel. Finally, on the open web, our innovations advancing our brand suitability solutions continue to be a key market differentiator, as exemplified by our most premium price solution, Authentic Brand Suitability. ABS grew by 48% in 2023 and contributed $182 million to our top line for the full year. In Q3 23, we launched an industry-first made for advertising or MFA solution to provide our advertisers with the ability to identify and avoid MFA content, which has exploded since the launch of the easily accessible generative AI tool.

On the product innovation front, we are working with <unk> to provide an industry leading solution that measures onsite quality metrics for retail media.

Through this upcoming integration DB will provide invalid traffic brand suitability and view ability measurement and <unk> network of retail media partners, ensuring that marketers are maximizing engagement across this critical channel.

Finally on the open web or innovation advancing our brand suitability solutions continue to be a key market differentiator as exemplified by our most premium priced solution authentic brand suitability.

ABS grew by 48% in 2023 and contributed $182 million to our top line for the full year.

In Q3, 'twenty three we launched an industry first made for advertising or MFA solution to provide our advertisers with the ability to identify and avoid MFA content, which has exploded since the launch of easily accessible generative AI tools.

Mark S. Zagorski: This quarter, we advance that tool by leveraging AI-based auditing to launch a more granular, tiered, made-for-advertising measurement and pre-bid avoidance solution. This second-generation solution addresses MFA in a more surgical and brand-specific way, giving advertisers more control over balancing quality, performance, and reach. DV continues to have the only solution in the market today that can be enabled directly by a customer and their brand safety and suitability profile for measurement and connected to pre-bid avoidance via ABS.

This quarter, we advance that tool by leveraging AI based auditing to launch a more granular tiered made for advertising measurement and <unk> avoided solution.

This second generation solution addresses MFA and a more surgical and brand specific way, giving advertisers more control over balancing quality performance and reach DD continues to have the only solution in market today that can be enabled directly by our customer and their brand safety.

And suitability profile for measurement and connected to pre bid avoidance via ABS.

Mark S. Zagorski: It's another great example of DB's innovation leadership, and customer adoption is increasing steadily. TV's brand suitability tools are more valuable than ever during election years, when advertisers need to closely monitor challenging political content globally and in real time. DV's Election Task Force has been providing actionable data insights and analysis to protect brand equity and safeguard media investments since 2022, giving DV a differentiated, deep set of experience to deliver real value for our customers seeking to navigate an evolving media landscape. We're also pleased to be expanding our industry-leading universal attention segments to Amazon and Viance DSPs. Our attention pre-bid segments are gaining early momentum, and our attention measurement business is now growing steadily, with 2023 delivering over 180% growth and impression balling.

It's another Great example of DVS innovation leadership and customer adoption is increasing steadily.

Dd's brand suitability tools are more valuable than ever during election years, when advertisers need to closely monitor challenging political content globally and in real time.

<unk> election task force has been providing actionable data insights and analysis to protect our brand equity and safeguard media investments since 2022, getting didi differentiated deep set of experience to deliver real value for our customers seeking to navigate an evolving media landscape.

We're also pleased to be expanding our industry, leading universal attention segments to Amazon and <unk> DSP.

Our attention pre bid segments are gaining early momentum and our attention measurement business is now growing steadily with 2023 delivering over 180% growth in impression volumes.

Mark S. Zagorski: Before I wrap up and Nicola shares details on our strong 2023 financial results and 2024 outlook, let me conclude with three key takeaways from my remarks today. First, DV continues to significantly outgrow the digital advertising industry and is gaining market share across every digital media environment, including social, CTV, retail media, and the open web. Second, DV will continue to win because of the customer value we create through our unmatched global scale and connectivity and our market-defining product innovation, both of which are powered by a proprietary AI that allows the most efficient analysis of vast amounts of data. Every day, DV analyzes 1.3 billion minutes of video, close to 275 million social posts, approximately 8 million web pages, and over 22 million hours of audio content.

Before I wrap up and Nikola shares details on our strong 2023 financial results and 2024 outlook. Let me conclude with three key takeaways for my remarks today.

<unk> DD continues to significantly outgrow the digital advertising industry and is gaining market share across every digital media environment, social CTV retail media and the open web second DB will continue to win because the customer value we create through our unmatched.

Global scale and connectivity and our market defining product innovation, both which are powered by our proprietary AI that allows the most efficient analysis of vast amounts of data.

Everyday Dv analyzes one 3 billion minutes of video close to 275 million social posts approximately $8 million webpage.

And over 22 million hours of audio content.

Mark S. Zagorski: Finally, we remain focused on growing and realizing our solid pipeline of new and expansionary deals and becoming more engaged with our current customer base, which will further drive our market share and create an even stronger long-term trajectory. The fundamental drivers that have powered our growth over the last three years remain strong and intractable. With that, I will hand the call over to Nicole. Thank you, Mark. And good afternoon, everyone.

Finally, we remain focused on growing and realizing our solid pipeline of new and expansionary deals and becoming more engaged with our current customer base that.

And that will further drive our market share and create an even stronger long term trajectory.

The fundamental drivers that have powered our growth over the last three years remained strong and intractable with that let me hand, the call over to Nicole.

Thank you Mark and good afternoon, everyone DB delivered industry, leading four quarter and full year 2023 revenue growth and profitability demonstrated continued strong operational execution through a year challenged by geopolitical and macroeconomic uncertainty.

Nicola T. Allais: DB delivered industry-leading fourth quarter and full year 2023 revenue growth and profitability, demonstrating continued strong operational execution through a year challenged by geopolitical and macroeconomic uncertainty. Fourth quarter total revenue growth of 29% was driven by 32% growth in activation, 30% growth in measurement, and 5% growth in the supply side. Our activation and measurement businesses, which are driven by advertisers, were a combined 93% of our total fourth-quarter revenue. Advertiser revenue grew 31% in the fourth quarter, driven by 25% growth in volume or MTM and 5% growth in pricing or MTF on a year over year basis. In addition, CIBITS performed in line with our expectations.

Fourth quarter total revenue growth of 29% was driven by 32% growth in activation, 30% growth in measurement and 5% growth in supply side, our activation and measurement businesses, which are driven by advertisers were a combined 93% of our total fourth quarter revenue.

Advertiser revenue grew 31% in the fourth quarter, driven by 25% growth in volume or MTM, and 5% growth in pricing or MTS on a year over year basis.

In addition, <unk> performed in line with our expectations.

Nicola T. Allais: MTF growth accelerated sequentially from 2% in the third quarter to 5% in the fourth quarter due to a continued mixed shift towards premium price solutions, followed by the impact of the ABS display and video price bifurcation, which was completed across all major DSPs in the third quarter. ABS revenue grew 45% year over year in the fourth quarter, driven by volume growth of 34% and MTF growth of 9% year over year. Approximately two-thirds of the year over year growth in ABS came from existing ABS customers expanding their usage of more brands and to more markets, while a third of the growth came from customers who activated the solutions for the first time. Fourth quarter measurement revenue grew 30% driven by social revenue growth of 62% International measurement revenue grew 43% in the quarter, with EMEA growth of 45% and APAC growth of 39% year over year. International revenue comprised 29% of measurement revenue, up from 26% in the fourth quarter of 2022.

T F growth accelerated sequentially from 2% in the third quarter of two 5% in the fourth quarter due to a continued mix shift towards premium priced solutions, followed by the impact of the ABS display and video price bifurcation, which was completed across all major DSP in the third quarter.

ABS revenue grew 45% year over year in the fourth quarter, driven by volume growth of 34% and MTF growth of 9% year over year.

Approximately two thirds of the year over year growth in ABS came from existing ABS customers expanding their usage to more brands and two more markets. While the third of the growth came from customers, who activated solutions for the first time.

Fourth quarter measurement revenue grew 30% driven by social revenue growth of 62%.

International measurement revenue grew 43% in the quarter with EMEA growth of 45% and APAC growth of 39% year over year.

International revenue comprised 29% of measurement revenue up from 26% in the fourth quarter of 2022.

Nicola T. Allais: Supply-side revenue grew 5%, largely driven by growth in new publisher customers in the fourth quarter. [inaudible] For full year 2023, revenue growth of 27% was driven by activation revenue growth of 31% and measurement revenue growth of 25%. Social revenue grew 48% in 2023 and comprised 43% of our measurement revenue, up from 37% in the prior year. With spend on social platforms expected to continue to represent approximately 60% of digital ad budget X search in 2024, our social measurement revenue continues to have a long runway for growth. Supply side revenue growth of 5% was driven by increased publisher revenue.

Supply side revenue grew 5% largely driven by growth in new publisher customers in the fourth quarter.

For full year 2023 revenue growth of 27% was driven by activation revenue growth of 31% and measurement revenue growth of 25%.

Social revenue grew 48% in 2023 and comprised 43% of our measurement revenue up from 37 in the prior year.

With spend on social platforms is expected to continue to represent approximately 60% of digital AD budgets ex search in 2024, our social measurement revenue continues to have a long runway for growth.

Supply side revenue growth of 5% was driven by increased publisher revenue.

Nicola T. Allais: For the full year 2023, advertiser revenue growth was primarily driven by volume growth. We measured 7 trillion billable transactions, a 25% year over year increase in MTM, while the average fee per thousand impressions increased to 7.5 cents, a 3% year over year increase in MTF. We expect volumes to remain the primary driver of our growth as we continue to verify more digital ad impressions through product innovation and channel and geographic expansion, and we expect MTF to remain stable. Our approach to pricing is to lead with our product offering of unique and differentiated solutions, including ABS, social prescreen, and now Cybid. Our ability to continue to upsell existing clients and acquire new clients to the full suite of products has yielded an overall increase in MTF over the last four years, including a 5% increase in Q4 2023.

For the full year 2023 Advertiser revenue growth was primarily driven by volume growth, we measured seven trillion billable transactions, a 25% year over year increase in MTM, while average fee per thousand impressions increased to 758.

A 3% year over year increase in MTS.

We expect volumes to remain the primary driver of our growth as we continue to verify more digital AD impressions through product innovation and channel and geographic expansion and we expect the MTF to remain stable.

Our approach on pricing is to lead with our product offering of unique and differentiated solutions, including avs, social pre screen and now <unk>.

Our ability to continue to upsell existing clients and acquire new clients to the full suite of products has yielded an overall increase in MTF over the last four years, including a 5% increase in Q4 2023.

Nicola T. Allais: Moving to expenses, cost of revenue in the fourth quarter increased by 32%, primarily driven by an increase in revenue sharing arrangement costs with programmatic partners driven by activation revenue growth. We delivered 83% revenue less cost of sales in the fourth quarter, up from 82% in Q3, as we eliminated some duplicative data center costs. Total non-GAAP operating expenses, which exclude stock-based compensation and other items for comparability, grew 24%, compared to 29% revenue growth, reflecting the efficiency of our operating model as we scale.

Moving to expenses cost of revenue in the fourth quarter increased by 32%, primarily driven by an increase in revenue sharing arrangement costs with programmatic partners driven by activation revenue growth.

We delivered 83% revenue less cost of sales in the fourth quarter up from 82% in Q3, as we eliminated some duplicative data center costs.

Total non-GAAP operating expenses, which excludes stock based compensation and other items for comparability grew 24% compared to 29% revenue growth, reflecting the efficiency of our operating model as we scale.

Finally, we delivered $65 million of adjusted EBITDA, or 38% margin and $33 million of net income in the fourth quarter.

Nicola T. Allais: Finally, we delivered $65 million of adjusted EBITDA, or 38% margin, and $33 million of net income in the fourth quarter. For full year 2023, cost of revenue increased by 37%, primarily driven by an increase in revenue sharing arrangement costs with programmatic partners driven by growth in activation revenue. We delivered 81% revenue less cost of sales. Going forward, we continue to expect revenue less cost of sales to range between 80 to 82% as we balance data center cost savings with continued investments in cloud optimization and in scaling our infrastructure. Total non-GAAP operating expenses represented 49% of total revenue as compared to 51% in full year 2022; non-GAAP product development costs grew 28%.

For full year 2023 cost of revenue increased by 37%, primarily driven by an increase in revenue sharing arrangement costs with programmatic partners driven by growth in activation revenue.

We delivered 81% revenue less cost of sales.

Going forward, we continue to expect revenue less cost of sales to range between 80% to 82% as we balanced data center cost savings with continued investments in cloud optimization and in scaling our infrastructure.

Total non-GAAP operating expenses represented 49% of total revenue as compared to 51% in full year 2022.

non-GAAP product development costs grew 28% sale.

Sales marketing and customer support grew 16% and G&A grew 15% compared to prior year.

Nicola T. Allais: Sales, marketing, and customer support grew 16%, and GNA grew 15% compared to the prior year. We delivered a full-year adjusted EBITDA of $187 million, representing a 33% adjusted EBITDA margin and $71.5 million of net income as our business continues to combine high-revenue growth with high profitability. We ended 2023 with 1,101 employees, up from 902 at the end of 2022.

We delivered full year, adjusted EBITDA of $187 million, representing a 33% adjusted EBITDA margin and $71 5 million of net income as our business continues to combine high revenue growth with high profitability.

We ended 2023 with 1101 employees up from 902 at the end of 2022.

Nearly half of our head count growth was attributable to R&D, where we continue to invest in our engineering and product resources.

Nicola T. Allais: Nearly half of our headcount growth was attributable to R&D, where we continue to invest in our engineering and product research. Moving to cash flow, we generated approximately $120 million of net cash from operating activities in 2023, which represented an operating cash flow to adjusted EBITDA ratio of 64%. Capital expenditures were approximately $17 million in 2023. And finally, we ended the year with $310 million of cash on hand and zero long-term debt.

Moving to cash flow, we generated approximately $120 million of net cash from operating activities in 2023, which were presented in operating cash flow to adjusted EBITDA ratio of 64%.

Capital expenditures were approximately $17 million in 2023, and finally, we ended the year with $310 million of cash on hand, and zero long term debt.

In 2023, we achieved a net revenue retention rate of 124% maintaining and over 120% NRI for the last five years, while our gross revenue retention remained above 95% also for the fifth year in a row.

Nicola T. Allais: In 2023, we achieved a net revenue retention rate of 124%, maintaining an over 120% NRR for the last five years, while our gross revenue retention remained above 95%, also for the fifth year in a row. We grew the average revenue from our top 100 customers by 42% year over year to $3.7 million. We also grew the number of advertisers generating more than $1 million of revenue by 19% year over year to 93. We grew the number of advertisers generating more than $200,000 of revenue by 18% year-over-year to 290.

We grew the average revenue from our top 100 customers by 42% year over year to $3 7 million.

We also grew the number of advertisers generating more than $1 million of revenue by 19% year over year to 93.

We grew the number of advertisers generating more than $200000 of revenue by 18% year over year to 290.

We have long term relationships with our customers and remain deeply embedded in their marketing plans are.

Our top 75 customers have worked with us for over seven years, while our top 50, and our top 25 have been dv clients for over eight years.

Nicola T. Allais: We have long-term relationships with our customers and remain deeply embedded in their marketing plans. Our top 75 customers have worked with us for over seven years, while our top 50 and our top 25 have been DV clients for over a decade. As Mark mentioned, we have maintained an 80% plus win rate across all opportunities and have a strong pipeline of new and expansionary deals that will continue to support a long-term growth trajectory. Now, let's talk about 2024 and guidance.

As Mark mentioned, we have maintained an 80% plus win rate across all opportunities and have a strong pipeline of new and expansionary deals that will continue to support our long term growth trajectory.

Now, let's talk about 2024 and guidance for.

For the first quarter of 2024, we expect revenue in the range of $136 million to $140 million.

The year over year increase of 13% at the midpoint and adjusted EBITDA in the range of $33 million to $37 million, representing a 25% adjusted EBITDA margin at the midpoint.

Nicola T. Allais: For the first quarter of 2024, we expect revenue in the range of $136 to $140 million, a year-over-year increase of 13% at the midpoint, and adjusted EBITDA in the range of $33 to $37 million, representing a 25% adjusted EBITDA margin at the midpoint. Our growth rate in the first quarter reflects a slow start by brand advertisers and a slow ramp by recently signed new customers, which will catch up in the second half based on large new customer seasonal spend and usage patterns. We're guiding to full year 2024 revenue in the range of $688 to $704 million, a year-over-year increase of 22% at the midpoint, and adjusted EBITDA in the range of $205 to $221 million, representing a 31% adjusted EBITDA margin at the midpoint. We expect the quarterly share of full-year revenue to be more second half weighted in 2024 than in prior years, as we expect fast growing already contracted new customer revenue to ramp in the second half of the year. We continue to expect Sybiz AI to contribute between $15 to $17 million to full year 2024 revenue.

Our growth rate in the first quarter reflects a slow start by brand advertisers and a slow ramp by recently signed new customers, which will catch up in the second half based on large new customers seasonal spend and usage patterns.

We are guiding to full year 2020 for revenue in the range of $688 million to $704 million a year over year increase of 22% at the midpoint and adjusted EBITDA in the range of $205 million to $221 million, representing a 31%.

Adjusted EBITDA margin at the midpoint.

We expect our quarterly share of our full year revenue to be more second half weighted in 2024 than in prior years as we expect fast growing already contracted new customer revenue to ramp in the second half of the year.

We continue to expect <unk> to contribute between $15 million to $17 million to full year 2020 for revenue.

The midpoint of our guidance implies an approximately $124 million increase in revenue in full year 2024, a testament to the accelerating demand for television solutions by existing and new customers across more geographies and media environment.

Last year, we expect the key drivers of DVS 2020 for revenue growth to be increased authentic brand suitability usage and adoption and activation.

Nicola T. Allais: The midpoint of our guidance implies an approximately $124 million increase in revenue for full year 2024, a testament to the accelerating demand for DV solutions by existing and new customers across more geographies and media environments. Similar to last year, we expect the key drivers of DV's 2024 revenue growth to be increased authentic brand suitability usage and adoption in activation, social measurement revenue growth, increased international adoption of our measurement solutions, SciBids AI, and new customer acquisitions. Our guidance reflects the measured contribution from new revenue opportunities in 2024, including incremental revenue from increased customer adoption and engagement, authentic attention, and CTV activation and measurement. We expect stock-based compensation expenses for the first quarter of 2024 in the range of 19 to 21 million dollars. For the full year, stock-based compensation expense is expected in the range of $91 to $96 million.

Phone measurement revenue growth increased international adoption of our measurement solutions, <unk>, AI and new customer acquisition.

Our guidance reflects measured contribution from new revenue opportunities in 2024, including incremental revenue from increased customer adoption of meta authentic attention and CTV activation and measurement.

We expect stock based compensation expenses for the first quarter of 2024 in the range of $19 million to $21 million.

For the full year stock based compensation expense is expected in the range of $91 million to $96 million.

Weighted average fully diluted shares outstanding for the first quarters are expected in the range of $175 million to $177 million.

We anticipate capital expenditures, including capitalized software to range between 20 and $30 million for 2024, as we continue to invest in new product innovation to support future growth.

Nicola T. Allais: Weighted average fully diluted shares outstanding for the first quarter are expected in the range of $175 to $177 million. We anticipate capital expenditures, including capitalized software, to range between $20 and $30 million for 2024 as we continue to invest in new product innovation to support future growth. With zero debt and a strong cash balance, we are well positioned to drive further business expansion and long-term growth in 2024. And with that, we will open up the line for questions. [inaudible] Yeah, great.

With zero debt.

Strong cash balance we are well positioned to drive further business expansion and long term growth in 2024.

And with that we will open up the line for questions.

Operator, Please go ahead.

Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the queue. You May press star two if you'd like to remove a question from the queue.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, we ask that you. Please limit yourself to one question and one follow up thank you.

One moment, while we poll for questions.

And the first question comes from the line of Matt Swanson with RBC capital markets. Please proceed with your question.

Unknown Executive: Thank you guys so much for taking my question. You know, it was great to hear about some of these big investment areas, social being up 62% for measurement, international coming up, CTV coming up. But just kind of maybe for a balance from a year over year perspective, do you mind kind of touching on some of the areas of your business that maybe were headwinds to those overall growth rates, and particularly kind of a, you know, topic du jour right now is pricing coming up more from a competitive standpoint? Yeah, thanks for the question, Matt. And everyone, thank you for your patience.

Yeah, great. Thank you guys. So much for taking my questions.

It was great to hear about some of these big investment areas, social being up 62% for measurement international coming up see TV coming up.

But just kind of maybe for a balance of the year over year perspective, do you mind touching on some of the areas in your business that maybe were headwinds to those overall growth rate and particularly kind of a.

Topic de jour, right now is pricing coming up more from a competitive standpoint.

Yeah. Thanks for the question, Matt and everyone. Thank you for your patience I know that was a long call before you got to your question, but we had a lot of news to share.

Mark S. Zagorski: I know that was a long call before you got to your questions, but we had a lot of news to share. Let me take this, the second part of your question, head on. We are not seeing pricing pressure, period.

Let me take this the second part of your question head on we are not seeing pricing pressure period.

Mark S. Zagorski: Nicola mentioned we saw MTFs actually increase full year on year in Q4 last year. And when we close new deals, of which we announced some great ones, we're not closing them based on price. We close them based on stronger technology, unique tools like ABS, and our continued social expansion that's driven by the most efficient AI video recognition out there. So we're not seeing pricing pressure. We are not addressing or going after new business with an aggressive price structure.

You know Nicole I mentioned, we saw Mtf's actually increase.

Full year last year in Q4 last year.

And when we close new deals of which we announced some great ones, we're not closing and based on price. We closed based on stronger technology, you need tools like ABS.

Our continued social expansion, that's driven by the.

The most efficient AI video recognition out there.

So.

We're not seeing pricing pressure.

We are not.

Addressing or going after new business with an aggressive price structure.

Nicola T. Allais: And to be clear, we're winning new deals and taking market share at MTFs that were increased last year. Yeah, no, that's really helpful. And I guess moving to the second question, I'll kind of revisit a piece of the first. But Nicola, when you were thinking about guidance, you gave us some of this color, and it certainly is not lost on us that we like to think of things as kind of core values or maybe not counting our chickens before they hatch. But we went through so many secular tailwinds between social and retail media, Rampant International, retail media, SciBids. How are you thinking about just kind of balancing these opportunities as we look out through the year, kind of how you're thinking about the impact that had on your guys? Yeah, so as we've always said, and we said it again today, you know, we look for a view of the year that's core And core on core for us because it is not part of our core is continued growth in ABS, right?

And to be clear, we're winning new deals and taking market share at MTS.

Our.

Were increased last year.

Yeah, No. That's that's that's really helpful.

And I guess moving to the second question I'll kind of revisit that piece of the first but Nicaragua when youre thinking about guidance you gave us some of his color and it certainly is not lost on us that we like to think of things as kind of core core for maybe not counting our chickens before they hatch.

We went through so many secular tailwind between social and retail media ramping international the retail media side beds, but how are you thinking about just kind of balancing these opportunities as we look out through the year kind of how youre thinking about the impact that had on your guidance.

Yeah. So as we've always said and we said it again today.

We look for.

Our view on the year, that's core on core.

And core on core for us because it is not part of our core is continued growth in ABS right. Two thirds of the growth even in the last quarter, which was the very strong quarter growth for ABS was from existing customers using ABS on more and more of their impression. So core on core assumes a continued growth from existing customer and avs.

Nicola T. Allais: Two-thirds of the growth, even in the last quarter, which was a very strong quarter for ABS, was from existing customers using ABS on more and more of their impressions. So core on core assumes continued growth from existing customers on ABS. It assumes continued growth on social just as a reminder, within the growth rate that we saw in 23. But really, that only included the English language for Tick Tock as an example.

It assumes continued growth on social just as a reminder, within the growth rate that we signed 23 really that only include an English language for Tictoc is an example, and that's a probably has a very large growth opportunity for us as we open up new languages above and beyond English.

Nicola T. Allais: And that's probably a very large growth opportunity for us as we open up new languages above and beyond English. So those are two of the sort of major ones that you're going to continue to see in addition to international. The fundamental growth drivers of what we saw in 23 are what we expect to continue to see in 24. And that's core on core.

So those are two of them sort of the major ones that youre going to continue to see in addition to international the fundamental growth drivers of what we signed 23 are what we expect to continue <unk> 24, and Thats core on core whats not in that is the meta opportunity, which is the one that.

Nicola T. Allais: What's not in that is the meta opportunity, which is the one that, you know, we've been talking about over the last few quarters. You know, that is, that is a measured, very measured view for us in 2024. And the numbers that we have, we're guiding to, we think the upside is, is, is, is, large. But you know, we're being measured about how exactly it's going to impact our numbers sticking to the core on the core message. In addition to that, authentic attention is also an opportunity where, you know, if there is upside and acceleration in adoption, that would be upside to a core on core view that we have on guidance and CTV. I appreciate it. Thank you very much. Two, if I can.

We've been talking over the last few quarters.

That is that is a measured very measured view for us in 2024, and the numbers that we have we're guiding to.

We think the upside is large, but we're being measured about how exactly its going to impact our number sticking to the four on core <unk>.

Message. In addition to that authentic attention is also an opportunity where if there is upside and acceleration and adoption that would be an upside to our core on core view that we have on guidance in CTV. Similarly.

Alright appreciate it.

And the next question comes from the line of Justin Patterson with Keybanc capital markets. Please proceed with your question.

Alright. Thank you very much two if I can first just unpacking the guidance.

Unknown Executive: First, just unpacking the guidance a little bit more from the prior line of questioning. Could you help us understand a little bit more of just the slower start to the year? Typically, we thought about you as being a little more immune to some of the macro pressures in there?

A little bit more from the prior line of questioning could you help us understand a little bit more up to speed the slower start to the year typically we would thought about she was being a little more.

Moving to some of the macro pressures in there I believe you called out brand Advertiser is starting a little bit more slowly. This year. So just would love to hear a little bit more youre seeing there both from the activation and measurement side, and then I'll pause there and follow up after.

Nicola T. Allais: I believe he called out brand advertisers starting a little bit more slowly this year. So I just would love to hear a little bit more about what you're seeing there, both from the activation and measurement sides. And then I'll pause there and follow up, Yeah, so the, you know, what we said, what we're seeing is a slow ramp of our new contracted wins, and these are very large enterprise wins. And, you know, until we get in with the client to understand how the product is being rolled out, it's difficult to see how it's actually going to ramp. So that is item one.

Yeah. So.

The what we said what we're seeing is a slow <unk>.

The ramp of our new contracted wins.

And these are very large enterprise wins.

And until we get in with the client to understand how the product is being rolled out it's difficult to see how it's actually going to ramp so.

That is item one item two is a slow start for existing.

Nicola T. Allais: Item two is a slow start for existing brand advertisers. It's isolated to certain advertisers, and it feels specific to their spending patterns. It doesn't feel like a macro item at all.

Brand advertisers, it's isolated to certain advertisers.

It feels specific to their spending pattern it doesn't feel like a macro item at all.

Nicola T. Allais: This is a slow start that we expect will ramp up as we get into future quarters. The combination of those two slow starts is what's reflected in our Q1 outlook. The ramp that we expect is really based on what we know to be a relationship with a large enterprise client. It will ramp once our solutions are actually deployed across their entire global spend; we will see the benefit of it. So the ramp is really based on that happening rather than, you know, Got it. That's helpful.

This is this is a slow startup we expect will ramp as we get into the future quarters. The combination of those two slow starts.

What's reflected in our Q1 outlook.

The ramp that we expect is really based on what we know to.

To be a relationship with a large enterprise client it will ramp once once our solutions are actually deployed across our entire global spend we will see the benefit of it. So the ramp is really based on that happening rather than <unk>.

Over waiting on say Menno opportunity as I was discussing before it remains core on core is just added spend coming later than originally anticipated.

Mark S. Zagorski: And then for the next question, I just wanted to go back to the tech platform and the very healthy gross margins. You're saying, I know for short form video, that you're pretty unique in how you're approaching brand safety there. As we think about just short form scaling up over the next few years, how do you think about, you know, just some of the efficiencies on the tech platform providing more room to invest in the next growth opportunities for DV? Yeah, thanks.

Got it that's helpful. And then for the next question I just wanted to go back to the tech platform and the very healthy gross margins, you're saying I know for short form video that you are pretty unique towards how you're approaching brand safety. There as we think about just short form scaling up over the next few years, how do you think about just some of the efficiency.

Fees on the tech platform, providing more room to invest around the next growth opportunities for dv going forward. Thank you.

Yes, thanks, it's a great take us.

Mark S. Zagorski: It's a great take, Justin. You know, we've been talking over the last 12 to 18 months about how much we've invested in R&D, even versus kind of, you know, peers in the marketplace. And this is where it really starts to pay off. If you look at, you know, where we're talking about growth, we focused a ton on short form video. Right now, social video is something like over 60%, almost 70% of total volume. That means if we're going to grow on social, we have to analyze social video, build the tool set that we need to analyze and use AI to do predictive modeling across that video, and do so in a way that's highly accurate, that meets all the standards of the social platforms that we are on and can scale to massive levels. You know, that's something that could break you if you don't do it right.

We've been talking over the last 12 to 18 months on how much we've invested in R&D.

<unk> kind of peers in the marketplace.

And this is where it really starts to pay off if you look at where we're talking about growth we focus a ton on short form video.

Right now social video and social is something like over 60% almost 70% of total volume that means if we're going to grow on social we have to analyze social video.

Building the tool set that we had to analyze and use AI to do predictive modeling across that video and do so in a way that's highly accurate that meets all the standards of the social platforms that we are and can scale to massive levels.

That's something that could break Q, if you don't do it right.

Mark S. Zagorski: And as you know, we're guiding towards really nice gross margins even though, you know, a very big chunk of our growth is going to come from this video. So our investments in R&D, our investments in analyzing video, are really starting to pay off, because as that sector grows, you'll see that we're not seeing any additional degradation of our gross margin costs due to hosting or, you know, technical costs of analyzing that video. That's a real win for us. Thank you both. Ciao! Hi, this is Frank Atza Raimo.

And as you've seen we're guiding towards really nice gross margins even though.

A very big chunk of our growth is going to come from this video so our investments in R&D our investments in analyzing video.

We're really starting to pay off because as that sector grows youll see that we are not seeing any additional degradation of our gross margin cost due to hosting or technical cost of analyzing that video that's a real win for us.

Great. Thank you Paul.

And the next question comes from the line of Raimo lunch out with Barclays. Please proceed with your question.

Hi, This is Frank on for Raimo. Thanks for taking the question any way to quantify what you're embedding in the guide from the metal opportunity and what are some of the key metrics that you point us to for evaluating the progression on that opportunity. Thank you.

Mark S. Zagorski: Thanks for taking the question. Any way to quantify what you're embedding in the guide from the meta opportunity? And what are some of the key metrics that you point us to for evaluating the progression of that opportunity? Thank you. So, uh, you know, we mentioned a growth rate so far this year, uh, regarding that, uh, the total of over 50% growth so far year to date, um, that's in the context of a few things. Uh, first off, we launched across, uh, Instagram and, uh, Facebook Reels last year, which added some additional inventory. Um, we've now launched, uh, in late January, the News Feed opportunity, right?

So we mentioned a growth rate so far this year regarding matter of a total of over 50% growth so far year to date.

That's in the context of a few things first off we launched across.

Instagram and Facebook Reals last year, which added some additional inventory.

We've now launched in late January the newsfeed opportunity right. So if you think about if you want to scale, where Facebook and were meta sat with us last year.

Mark S. Zagorski: So, if you think about, if you want to scale kind of where Facebook and Meta sat with us last year, uh, it was roughly, let's say, 7% of our overall revenue. Um, growing at 50%-ish or so this year, uh, you know, if you take 7% of our revenue last year, of the 500, you're looking, you know, close to 40 million. And so, if we're growing at 50%-ish or so across all of those different lines this year, um, you know, you're looking at another 20 million dollars of revenue across all of the Meta properties that is potential there. Now, that's if we continue to maintain the growth rate. We've got some year over year comps.

Roughly let's say, 7% of our overall revenue.

Growing at 50% ish or so this year.

You take 7% of the.

<unk> of our revenue last year of the 500, Youre looking close to $40 million.

So if we're growing at 50% ish or so across all of those different lines. This year.

Youre looking at another $20 million of revenue across all of the meta properties that is a potential there now that if we continue to maintain the growth rate. We've got some year over year comps remember we launched across Reals.

Mark S. Zagorski: Remember, we launched across Reels, um, uh, and Instagram mid last year, but we've got the additional News Feed on here. So, I'd say something roughly in that range is where we're going to see, um, you know, that Meta opportunity panning out across all the new things that we've covered. Very helpful. Thanks, Mark. Hi, guys.

And Instagram mid last year, but we've got the additional news feed on here. So I'd say something roughly in that range is where we're going to see.

That met opportunity panning out across all the new things that we've covered there.

Very helpful. Thanks, Mark.

Okay.

And the next question comes from the line of Youssef Squali with <unk> Securities. Please proceed with your question.

Nicola T. Allais: Thanks for taking the questions. One starting with you, Nicola, I think you mentioned that you believe MTX should remain stable. I'm not sure you were referring to, if that was a kind of formal outlook for 2024, because I think you mentioned that before you started talking about the outlook. But the point is, out of that 22% growth in the revenue guide for 2024, can you maybe help us parse out volume versus price? And if MTFs are to remain stable, why is that, considering the mixed shift going on?

Hi, guys. Thanks for taking the questions one starting with.

Let me call out I think you mentioned that you believe.

Should remain stable.

Not sure you were referring to it if that was a kind of a formal outlook for 2020 for it because I think you mentioned that before you start talking about the outlook, but the point is.

Out of that 22% growth in the revenue guide for 2024 can you maybe help us parse out volume versus price and with MTN MTX archery remained stable why is that considering the mix shift going on there I have a quick follow up.

Nicola T. Allais: And then I have a quick follow-up. Yeah, so, Youssef, what we mentioned in the remarks is that we anticipate most of the growth to come from volume. That shouldn't be a surprise to anyone, right, that the MTM is really driving the continued growth of the business. From an MTF perspective, you know, we grew in Q4 of 23, and we grew for the full year of 2023. The growth that we saw was based on a mixed shift towards premium price products. It's slightly upset by the fact that we're expanding internationally quite aggressively. But overall, it did increase.

Yeah. So.

Use of the.

Well, we mentioned in the remarks is that we anticipate most of the growth to come from volume that shouldn't be a surprise to anyone that the MTM is really driving the continued growth of the business from an MTF perspective.

We grew we grew in Q4 of 'twenty three we grew full year of 2023 the growth that we saw was based on a mix shift towards premium priced products slightly offset by the fact that we're expanding internationally quite aggressively but overall it did increase the the statement. We made is we do not expect.

Nicola T. Allais: The statement we made is that we do not expect those to go down based on us needing to lower the price of the products that we have in the market. The likely, our expectation is that we will continue to see strong MTF because we're able to continue to upsell premium priced products. And, you know, our perspective is not that we necessarily have to necessarily reduce the MTF on other products. Awesome, that's very clear now. Thank you.

Those two go down based on us needing to lower the price of the products that we have in the market.

The likely our expectation that we will continue to see.

Strong MTF, because we're able to continue to up sell premium priced products.

And our perspective is not that we have to necessarily reduce the MTF on other products.

Awesome, that's very clear now thank you and just on the linearity of the year as we look throughout.

Nicola T. Allais: And just on the linearity of the year, as we look throughout 2024, typically, your Q1 is maybe 21-22% of revenues, I think, based on your guide, it looks more like the high teens. So, and I understand the kind of call you're using around the brand advertisers, some of the large new enterprises coming on. But maybe help us think through how, you know, where you make, when you make up the shortfall in Q1? Does Q2 kind of retract?

2024, typically your Q1 is maybe 21, 22% of revenues I think based on your guide it looks more like high teens.

And I understand kind of the.

The color you've given about around the brand advertisers some of the larger enterprises coming on.

Maybe help us think through how.

Where are you when do you make up the shortfall in Q1, thus Q2 kind of retraction.

Nicola T. Allais: And do we see kind of a nice uptick in Q2? Or does it, is it more linear across the three quarters? Thank you. Yeah, I think what we're going to see is, as we said in our remarks, it is going to be heavier weighted towards the second half of the year versus the first half of the year. You know, it's probably one to two points in terms of revenue share between the first half and the second half. So you can kind of see sort of the ramp starting after Q1, if you take that as a, Thank you very much. Yep, perfect.

Do you see kind of a nice uptick in Q2 or does it is it more linear.

The three quarters. Thank you.

Yes, I think what we're going to see is.

We said in our remarks, it is going to be heavier weighted towards the second half of the year versus the first half of the year.

Probably one to two points in terms of revenue share between the first half to the second half.

So you can kind of see.

The ramp starting after Q1, if you take that as a guide.

Okay. Thank.

Thank you very much Nicola.

And our next question comes from the line of Arjun Bhatia with William Blair. Please proceed with your question.

Okay perfect. Thank you.

Mark S. Zagorski: Thank you. Maybe I can start on some of the large customer wins that you talked about that are signed and contracted but we haven't started recognizing Remi from those yet.

Maybe if I can start on some of our large customer wins that you talked about that.

Our signed and contracted but Havent started recognizing revenue from those yet is that.

Mark S. Zagorski: Is that, you know, this, in Q4, Q1. Is that larger than it's been in historical periods? Or maybe if we compare to 2023 and 2022, have you seen a greater activity of, you know, larger customers that are taking longer ramps? Just maybe expand on that a little bit. Yeah, it's a great question, Arjun.

This was in Q4 Q1 is that larger than it's been in historical periods or maybe if you compare to 2023 and 2022 have you seen a greater activity.

Larger customers that are taking longer to ramp just let me expand on that a little bit if you could please.

Yes, it's a great question Arjun.

Mark S. Zagorski: You know, we see this periodically when we hit on a couple large businesses. If you remember Q2 of last year, we closed a couple of really big deals; they started a little bit slower than we expected, and it created a bit of a drag. I think, you know, as we start moving into these large enterprise global customers like Pepsi and Halion, etc., they do take a bit of time to scale up. And as Nicola noted, you know, we are learning over time. The bigger the customer and whether or not they're launching globally all at once or they're launching, you know, market by market, there is a bit of a drag that creates some level of, you know, predictability challenges for us.

We see this periodically when we nail a couple of large businesses. If you remember Q2 of last year.

We closed a couple of really big deals they started it a little bit slower than we expected and it created a bit of a drag.

I think as we start moving into these large enterprise global customers like Pepsi and Haley on et cetera.

They do take a bit of time to scale up.

As Nicole are noted.

We are learning over time, the bigger the customer and whether or not they are launching globally all at once or they're launching.

No.

Market by market, there is a bit of a drag that creates a.

Some level of <unk>.

Predictability challenges for us.

Mark S. Zagorski: That being said, I think, you know, I would say this year's pipeline and the deals that we closed in the pipeline were pretty comparable to last year. Last year, we closed a bunch of big deals coming into the year. And we see this kind of, you know, ebb and flow of big deals coming in. And I think that's just, you know, the nature of the game.

That being said I think I would say this year.

Pipeline and the deals that we closed in our pipeline were pretty comparable.

To last year last year, we closed a bunch of big deals coming into the year and we see this kind of ebb and flow of big deals coming in.

And I think thats its just the nature of the game.

Mark S. Zagorski: You know, we're talking a couple, we're looking at this, this is a couple million dollars here or there on the edges, which I know makes a big difference for how we look at the year. But as Nicola noted, when we provided the guide for the year, this is, you know, we're guiding based on core, core growth on pipeline deals that are closed, and we expect to ramp up. So we know that these are going to come in; they're just coming in a bit slower than we would have hoped. Okay, that's very helpful, Mark. Thank you.

Talking a couple.

We're looking at this as a couple of million dollars here or there on the edges, which I know makes a big difference for how we look at the year, but as Nicola noted when we provided the guide for the year.

This is <unk>.

We're guiding based on.

Core on core growth on pipeline deals that are closed and we expect to ramp.

So we know that these are going to come in they are just they are just coming in a bit slower than.

We would have hoped.

Okay.

Very helpful. Mark Thank you.

Mark S. Zagorski: And then, if I can maybe just revisit the pricing aspect a little bit. You know, obviously, I know you don't want to compete on price and you have a superior product to be able to do that. But when you have a competitor in the market that is using aggressive pricing tactics, how do you think you might respond if that continues into the future? Is there enough of a ROI differential that you can continue to compete on product? I have to go down this price route.

If I can maybe just when you visit the park.

Dissing aspect a little bit.

Obviously I know you expect you don't want to compete on price and you have a superior product to be able to do that.

When you have a competitor and market that.

Is using aggressive pricing tactics.

Or do you think.

You might respond if that continues.

For the future.

Fair enough.

Roy differential.

We can continue to compete.

On product or do we have to go down the price route at some point.

Mark S. Zagorski: Yeah, so it's a great, a great ask. And I think the way we look at this is, if we were just competing for the same products that did the same things and delivered the same results, then yeah, we'd have to look at price, but we're not. We're looking at a differentiated, you know, set of solutions, everything from Cybiz optimization to what we do on ABS, which no one else has, to even now the speed and efficacy of our social business, which if you look at how our social business grew versus, you know, how some others in the markets have grown, grew twice as fast. If we had the same product in social, how are we growing twice as fast in social Right?

Yeah. So it's a great a great ask and I think the way we look at this is if we were just competing on the same products that did the same things and delivered the same results then yes, we'd have to look at price, but we're not we're looking at a differentiated.

Set of solutions everything from sides optimization to what we do on ABS, which no one else has to.

Even now the speed and efficacy of our social business, which if you look at how our social grew versus how some others in the markets that grew grew twice as fast.

We had the same product and social how are we growing twice as fast and social right. So it really is a strategy of saying the investments we made in product and in R&D over the last 12 to 18 months are allowing us to charge a premium and the solutions that are basic.

Mark S. Zagorski: So it really is a strategy of saying the investments we made in product and in R&D over the last 12 to 18 months are allowing us to charge a premium. And the solutions that are basic, that go head to head with each other, sure, if we just had those, you'd end up in a price situation. We're not there yet, as exemplified by increasing MTFs in Q4 and for the full year last year. And that's why we're being very clear and saying we're not going out there and attacking deals on price. But that doesn't mean that we aren't competitive. And it doesn't mean that we don't get into the muck.

Go head to head with each other sure. If we just had those you'd end up in a pricing situation. We're not there as exemplified by increasing MTS in Q4 and for the full year last year.

That's why we're being very clear in saying, we're not going out there.

And attacking deals on price doesn't mean that.

We arent competitive doesn't mean that we.

We don't get in the into the market, but if you look at our Greenfield wins still close to 60% that means we're winning new deals not going out and just trying to take share from our competitors by.

Mark S. Zagorski: But if you look at our greenfield wins, still close to 60%, that means we're winning new deals, not going out and just trying to take a share from our competitors by driving price, winning deals based on functionality, and winning deals based on differentiation. All right. Very helpful. Thank you, Mark. Got it. Hi, thanks very much.

Driving price winning deals based on functionality and winning deals on differentiation.

All right very helpful. Thank you Mark.

Got it.

And the next question comes from the line of Michael Graham with Canaccord Genuity. Please proceed with your question.

Hi, Thanks, very much Mike.

Mark S. Zagorski: My two quick questions are number one on ABS, you know, you mentioned 45% growth and also called it out as an expected source of strength in 2024. And can you just frame out, you know, how much penetration you think is left with your customers? I mean, you mentioned that a lot of your customers are sort of increasing their, you know, their deployment of that product. So maybe just frame out how much you think is left there. And then I just a quick one on how the election year might have factored into your full year guidance would be helpful. And that's a great question, Michael. I hope everything's okay there. I'm hearing sirens in the background.

Two quick questions are number one on ABS, you mentioned, 45% growth and also called it out as a expected source of strength in 2024 and can you just frame out.

How much penetration you think is left with your customers. I mean, you mentioned that a lot of your customers are sort of increasing there.

Their deployment of that products. So maybe just frame out how much you think is left there and then just a quick one on.

How the election year might've factored into your full year guidance would be helpful to understand.

And Thats great questions, Michael I Hope everything is okay. There I'm hearing the sirens in the background I don't know what boss dropped down there on fifth Avenue.

Unknown Executive: I'll tell you, I don't know what's going on down there on 5th Avenue, but it's loud. Sorry. All right, I thought you were up in Boston.

[laughter] that's allowed sorry.

Alright, I thought youre up in Boston.

Mark S. Zagorski: So, you know, look, ABS for us, continues to be a bright spot. And I think a key thing, a key couple of things to think about are that, you know, 65% of our top 500 customers use ABS, which means, you know, in those top 500, we still have, you know, over a third who haven't used them. So number one.

So look ABS for us it continues to be a bright spot.

A key thing couple of things to think about or a.

65% of our top 500 customers use ABS, which means you know in those top 500, we still have over a third who haven't used them. So number one number.

Mark S. Zagorski: Number two, if you look at our growth, you know, last quarter, 66% of that growth came from existing ABS. So even when we penetrate a user, we go and add a new top 500 customer. They still grow.

Number two if you look at our growth.

Last quarter, 66% of that growth came from existing ABS users. So even when we penetrate a user so we go and add a new top 500 customer.

They still grow there's still they're adding new markets, they're adding new lines of business.

Mark S. Zagorski: They're still adding new markets. They're adding new lines of business. So, you know, we had existing ABS customer expansions with Amazon, with Pfizer, with Walmart. A lot of growth is still, you know, there's a lot of growth opportunity there, which is what I'm getting at. And, you know, I think it's a great testament to the efficacy of the product. The second half of your question on elections, you know, it's interesting. We didn't bake anything into our guide for elections.

So we had existing ABS customer expansions with Amazon with Pfizer with Walmart.

A lot of growth is still you know there's a lot of still growth opportunity. There is what I'm getting at.

I think it's a great testament to the efficacy of the product.

Second half of your question on elections.

It's interesting we didn't bake anything into our guide for elections, I think it's something that.

Mark S. Zagorski: I think it's something that is a bit of a wild card, right? It can have the intent to create lots of incendiary content and more demand for our solutions. But we also know sometimes it crowds out traditional advertisers from buying impressions. So I think net net, we've looked at it as neutral for our business. And again, as Nicola said, we're not driving or betting growth on things that are still questionable. We're betting our growth and our guidance on things that we have in the pipeline and that we can predict. Thank you, Mark. Sheridan.

Is a bit of a wildcard right. It can have the it can have the intent to.

Create lots of.

Incendiary content and more demand for our solutions.

But we also know sometimes of crowds out traditional advertisers from buying impressions. So I think net net we've looked at as the neutral.

For our business and again as Nikolas said, we're not driving their bidding betting growth on on things that.

There are still questionable, we're betting our growth and our guidance on things that we have in the hopper and that we can predict.

Thank you Mark.

Sure.

And the next question comes from the line of Andrew Boone with JMP Securities. Please proceed with your question.

Mark S. Zagorski: Great, thanks so much for taking my questions. Mark, you talked about the $20 million for META, and I know that we've asked you this in the past, but if you think about META as more of a medium-term opportunity, can you come back and help size the overall potential of brand safety on META? It's a great question, Andrew.

Great. Thanks, so much for taking my questions Mark you talked about the $20 million for meta and I know that we have asked you. This in the past, but if you think about meta in more of a medium term opportunity can you come back and help size. The overall potential brand safety on meta.

It's a great question, Andrew I think I think it's a bit early for us to to size out meta the brand safety aspect on its own in combination with the other things we've launched across.

Mark S. Zagorski: I think it's a bit early for us to size out META, the brand safety aspect on its own. In combination with the other things we've launched across, we know there's a significant growth opportunity for sure. We do know, and we've said this before, only about half of our top 100 customers use us for measurement across META today. Whereas across YouTube, another incredibly popular social platform, we are over 90% penetrated.

We know there is significant growth opportunity for sure. We do know and we've said this before only about half of our top 100 customers use us for measurement across matter today, whereas across Youtube another incredibly popular social platform.

We are over 90% penetrated.

Mark S. Zagorski: So I think that the addition of, we've said this in the past, the addition of news feed coverage is certainly going to attract new customers into social. But I don't think we've factored that fully into it as of today. Again, we're being measured in how we look at the growth trajectory of that solution. But net-net, the addition of coverage of Instagram, of Reels, and now the news feed makes META really a strong driver and a strong growth catalyst. We've seen it in the last year, ending the year with social growing at 62%, and META was a big part of that.

So I think that the addition, we said this in the past. The addition of news feed coverage is certainly going to attract new customers.

Into social I don't think we've factored that fully into it.

As of today and again, we're being measured in how we look at that that growth trajectory of that solution, but net net.

The addition of <unk>.

Coverage of Instagram of Reals, and how the news feed make matter really.

From driver in our strong growth catalysts, we've seen it in the last year.

Ending up the year with social growing at 62% and metal is a big part of that.

Mark S. Zagorski: And then Mark, we've talked about in the past couple quarters kind of side bids and it's opportunity to bring on new customers. Can you just update us there now as the product has been? longer through the sales cycle?

And then Mark we've talked about in the past couple of quarters kind of sideburns and its opportunity to bring on new customers can you just update us there now as the product has been.

Longer through the sales force is maturing in terms of your go to market. What are you seeing there in terms of that being a new on ramp for customers. Thanks. So much.

Mark S. Zagorski: Thanks. Yeah, and the interesting thing about Cybiz, you know, we talked about it, like this is some of the solution that we've, you know, we've had for years, and teams are, you know, we've only had it for around a quarter, a full quarter. And, you know, it's generated a ton of excitement. We talked about, 40% of our new customer wins so far this year are actually testing out Cybiz. That's pretty huge. If you think about the attach rate of a new product to a new close, at almost 50%, it's pretty big. Right?

Yeah, and the interesting about <unk>, we talk about it like this is some solution that we've had for years and the teams are we've only had it for around a quarter a full quarter.

And it's generated a ton of excitement we talked about 40% of our new customer wins. So far this year are actually testing outside that's that's that's pretty huge if you think about the attach rate of new product to a new clothes.

Almost 50%, it's pretty big right. So again, we're being tempered in how we look at how that business can grow.

Mark S. Zagorski: So again, we're being tempered in how we look at how that business can grow. But it goes into that bucket of differentiators, right? It goes into that bucket of things that take us out of the pricing muck and allows us to continue to drive a premium approach to our customers. So we like it.

But it goes into that bucket of Differentiators right. It goes into that bucket of things that takes us out of the pricing Marc and allows us to continue to drive premium a premium approach to our customers. So we like it we know customers who are interested we know its something unique that television has.

Mark S. Zagorski: We know customers are interested. We know it's something unique that DV has. And when I talked about on the call how it's changing the way we look at verification, it really is. And then we're starting to look at not just Cybiz as a standalone, but how we can plug it into things like re-screening on social video, how we can plug it into, you know, other types of social networks, etc. It's a really kind of neat tool set that I think we've got a lot of bandwidth to kind of continue to push. Thank you. Got it. Matthew Cost. Hi, everybody.

And when I talked about in the call how it's changing the way we look at verification. It really is and we're starting to look at not decided as a stand alone, but how we can plug it into things like re screen honestly on social video, we can plug it into other types of social networks et cetera, It's really have meet toolset.

That I think we've got a lot of a lot of bandwidth to kind of continue to push.

Thank you.

Got it.

And the next question comes from the line of Matthew cost with Morgan Stanley. Please proceed with your question.

Unknown Executive: Thanks for taking the question. You talked about the slower start to the year for existing brands. But I wonder if we zoom out and just think about the behavior of brand advertisers versus performance advertisers. Is there any difference that you would call out that you've seen in 4Q and into 2024 in terms of the willingness of brands versus performance to lean into the product offerings, whether that's, you know, adopting new products or, you know, expanding usage of the ones they already use? It's a great question.

Hi, everybody. Thanks for taking my question you talked about the slower start to the year for existing brands, but I wonder if we if we zoom out and just think about the behavior of brand advertisers versus performance advertisers is there any difference that you would call out that you've seen in <unk> and into 2024 in terms of the willingness of bran.

Versus performance to lean into the product offerings, whether that's adopting new products or.

Expanding usage once they are to us.

It's a great question.

Mark S. Zagorski: I think that, you know, for us, and I'm not going to paint the entire, you know, brand advertiser category in one way, because that's not what we're saying. I think we just had some selected customers who had slower growth in the first, you know, the first couple months of the year. I don't think there's anything brand versus performance that we really would talk about other than that, you know, a handful of retail and CGB clients that we had had a slower start to the year. So I don't think there's a ton to look into there on brand versus performance.

I think that.

US and I'm not going to paint the entire brand advertiser category in one way because thats not what were saying I think we just had some selected customer.

Who had slower growth in the first the first couple months of the year.

Don't think Theres anything brand versus performance that we really would talk about other than that.

A handful of retail in CTV clients that we had had a slower start to the year. So I don't think there's a ton to look at their into there.

Brand versus.

Versus performance.

Yeah.

Great. Thank you.

Mark S. Zagorski: Yeah. Great, thank you. Sure. Mark, you mentioned sidebids before, maybe just an update, further update there around your pre-bid MFA avoidance announcement, perhaps an opportunity in the broader pre-campaign planning and activation market as you see it, you know, just maybe some of the early customer feedback. I know you said it's still early.

Sure.

And the next question comes from the line of Brian Pitz with BMO capital markets. Please proceed with your question.

Thanks Mark.

You mentioned some bids before.

Just an update further update there around your pre bid MSA avoidance announcement, perhaps an opportunity on the <unk>.

Water free campaign planning and activation market as you see it just maybe some of the early customer feedback I know you said, it's still early.

Mark S. Zagorski: Yeah, thanks, Brian, for the question. I mean, you know, if you've hung around the ad space for the last, you know, eight to 12 months, MFA has probably been the hottest topic out there besides, you know, really bad generative AI tools. I think that, you know, the MFA area is one in which advertisers first looked at using a meat cleaver to attack. And, you know, I think that was to the detriment of a lot of great publishers, particularly marginalized publishers who are being excluded from media buys.

Yes, Thanks, Brian for the question.

If you've hung around the AD space for the last eight to 12 months MFA has probably been the hottest topic out there besides really bad generative AI tools.

I think that the MFA area is one in which advertisers first looked at using a meat cleaver to attack.

And I think that was at the detriment of a lot of great publishers, particularly marginalized publishers, who are being excluded.

From media buys.

Mark S. Zagorski: And, you know, where we approach this and say, look, MFA is not this monolithic definition of content. Advertisers need to interpret it based on specific rules, what they're comfortable with. And that was the launch of our MFA pre-bid product set, the second gen that we just launched this week, which basically allows advertisers to hear how they filter out content. And they can do that in addition to exclusion lists or any other specific sites they want to have.

And where we approach this and saying look MFA is not monolithic definition of content advertisers need to interpret it based on specific rules on what.

They are comfortable with and that was the launch of our MFA prepaid product set the second Gen that we just launched this week, which basically allows advertisers to cheer how they filter out content.

Two and they can do that in addition to exclusion lists or any other specific sites they want to have.

Mark S. Zagorski: But what it does is it allows them to balance reach, performance, and specific sites that they also want to include in those lists. And the feedback has been great. You know, we had some coverage recently in the press about advertisers who are certainly looking for more of a scalpel than a meat cleaver. And this fits that bill perfectly.

But what it does is it allows them to balance reach performance and specific sites that they also want to include in those lists.

And the feedback has been great.

We had some coverage recently in the press about advertisers who are certainly looking for more of a scalpel then Amit cleaver.

And this fits that bill perfectly the cool part about this as well as this plugs right into our ABS toolset. So again, we've got a differentiated powerful tool set in ABS and now we've made it even more powerful by plugging MFA tiers into their allowing advertisers to dynamically optimize what they're doing on the upfront.

Mark S. Zagorski: The cool part about this as well is this plugs right into our ABS tool set. So again, we've got a differentiated, powerful tool set in ABS, and now we've made it even more powerful by plugging MFA tiers into there, allowing advertisers to dynamically optimize what they're doing on the upfront as well. So we're pretty fired up about MFA. We're fired up about what we've been able to do differently than our competitors and how it plugs into a tool that's totally proprietary to us. I got it.

As well so.

We're pretty fired up about MFA, we're fired up about.

What we've been able to do different than our competitors and how it plugs into a tool that's totally proprietary to us.

Got it and then just maybe a quick political fall onto an earlier question, how big of a problem is avoiding disinformation or fake news for your clients, particularly as it relates to AD placement next to UGC videos.

Mark S. Zagorski: And then just maybe a quick political follow on to an earlier question, you know, how big of a problem is avoiding disinformation or fake news for your clients, particularly as it relates to ad placement next to UGC videos? You know, this is something that we started talking about in 2020, and we launched officially, you know, our, our political news task force in 2022 but really hadn't been going before then and in which we hear from customers all the time I mean this ebbs and flows but one thing we do know we saw this in the 2022 midterms is that during heated elections no surprise we see not only more inflammatory news and political content but we see more hate speech we see more disinformation and in more competitive races and this isn't just national but local more competitive the race is in the state the higher instances we see of things like hate speech that becomes scary for advertisers and again going back to that MFA discussion I have in the past their choice was well I'm going to use a meat cleaver and just block news I want to be away from UGC I want to be away from news I'm going to shut things off we're giving them a scalpel again so that you know the legitimate news legitimate content and UGC that doesn't violate you know those those areas of misinformation disinformation inflammatory news and politics and you know hate speech isn't excluded so it's something where advertisers are leaning into again we don't see it as a category as in its own that's going to drive business for us we think it is just another value add that our solution provides that makes us sticky with our customers. Awesome. Thanks. Very helpful, for sure. Thanks, guys. Maybe one little differentiator when you think about third-party cookies and Project Sandbox, after looking over the back and forth between the IoT tech labs and Google, it seems as though there's still some work to be done there in terms of allowing for verification on the new on-device auctions.

Hi, This is something that we started talking about in 2020.

We launched officially.

R R.

Our political news task force in 2022, but really haven't been going before them and in which we hear from customers. All the time I mean, this ebbs and flows but one thing we do know we saw this in 2022 mid terms is that during heated elections, no surprise, we see not only more and inflammatory news and political content.

We see more hate speech, we see more disinformation.

In more competitive races, and this isn't just national but local more competitive the races in the state.

The higher instances, we see if things like hate speech.

That becomes scary for advertisers and <unk>.

Again going back to the MSA discussion I have in the past their choice was well <unk> Cleveland just block news I want to be away from UGC I want to be away from news I'm going to shut things off.

We're giving them a.

A scalpel again, so that you know.

The legitimate news legitimate content.

And UGC that doesn't violate those those areas of misinformation disinformation inflammatory news and politics and hate speech.

Isn't excluded so it someplace, where advertisers are leaning into again.

We don't see it as a category is and it's one that's going to drive business for US. We think it is just another value add that our solution provides that makes us sticky with our customers.

Awesome, Thanks very helpful.

For sure.

And the next question comes from the line of Brian Fitzgerald with Wells Fargo. Please proceed with your question.

Thanks, guys, maybe one.

We'll differentiate when you think about third party cookies and privacy sandbox after looking over the back and forth.

Between the Ivy Tech labs, and Google It seems as though there is still some work to be done there in terms of allowing for verification on the new under Bice auctions could you talk about your preparations there and how you think about both the risks and the opportunities around under Bice auctions, how do you think.

Mark S. Zagorski: Could you talk about your preparations there and how you think about both the risks and the opportunities around on-device auctions? How do you think cookie deprecation pans out for you guys? Thanks. Yeah, for sure, for sure, Brian.

Cookie deprecation pans out from you guys. Thanks.

Thanks.

Yes for sure for sure Brian.

Mark S. Zagorski: So we've been, you know, obviously prepping for this for a long time; we're fully engaged with kind of multiple working groups that are working on Google's Privacy Sandbox. And we're pretty confident that we'll have, you know, a seamless transition of services, you know, as the sandbox and the deprecation of cookies become implemented over time. There are a lot of moving parts.

So we've been obviously prepping for this for a long time, we were fully engaged with multiple working groups that are working on google's privacy sandbox and we're pretty confident that we'll have.

A seamless transition of services.

As the sandbox and the deprecation of cookies become implemented over time.

Theres a lot of moving parts, but this is one thing where Google has been pretty open and leaning in and making sure that they become good partners to the ecosystem.

Mark S. Zagorski: But this is one thing where, you know, Google has been pretty open and leaning in and making sure that they become good partners to the ecosystem. And we've had a relationship with Google on multiple levels for many years. You know, the sandbox, the Privacy Sandbox, although not perfect, is certainly going to be a place where we're going to be able to deliver our services and solutions, and we're working with the right people to make sure that happens. Thanks, Mark. I appreciate it. Got it. Hi, thanks for fitting me in here.

And we've had relationship with Google on multiple levels for for many years.

The sandbox and privacy sandbox, although not perfect is certainly going to be a place where we're going to be able to deliver our services and solutions and we are working with the right people to make sure that happens.

Great. Thanks, Mark I appreciate it.

Got it.

And the next question comes from the line of Omar <unk> with Bank of America. Please proceed with your question.

Hi, Thanks for fitting me in here.

Nicola T. Allais: So you sounded fairly confident on ABS, and you did specify that new contract wins were driving the lower guidance, excuse me, driving the low-team guidance for the first quarter. So is it fair to assume that those newly contracted wins are ramping up their measurement volumes? I think it's important to note that the U.S. economy is slower than previous history and that they're still early in the upsell process. Yes, I think that's exactly right, Omar. No, we, the onboarding process for large enterprise clients would start on the measurement side, and so that's where you're going to see the initial impact of their ramp.

So you sounded fairly confident on.

On ABS and you did specify that new contract wins were driving the lower guidance excuse me driving the low teens guidance for the first quarter. So is it fair to assume that those newly contracted wins are ramping their measurement volumes.

Slower than.

Previous history and that there is still early in the up sell process.

Yes.

Exactly right Omar.

We do.

The onboarding process for large enterprise clients would start on the measurement side.

And so thats, where youre going to see the initial impact of the Ram.

Nicola T. Allais: And I will leave the activation and the upsell opportunity for the premium price product for, Okay, great. And then, you know, as you look into calendar 24, which geography will drive most of the growth and the activation revenues? And can you give us some sense of whether international, you know, is, you know, if there's any market structure difference in international that, you know, makes it a less high-growth market than the US? I mean, the international markets are, for us, this is a high-growth area, just because the opportunities for us to go after greenfield opportunities are still greater, right? There are just more opportunities outside of the US than there are in the US.

And I will leave the activation and the upsell opportunity.

For the premium priced products towards second base.

Okay, Great and then as you look into calendar 'twenty, four which geography will drive most of the growth in the activation revenues and can you give us some sense of.

Whether international.

And if there is any market structure difference in international that makes it a less high growth market than the U S.

In the international markets are for us.

This is a high growth area, just because the opportunities for us to go after greenfields.

The opportunity is still greater right, there's just more opportunities outside of the U S than they are in the U S.

Nicola T. Allais: And so, you know, if you look at our growth for the rest of the world, it was 43% in the fourth quarter of 23. So it is spread across both EMEA and APAC. You know, there was a bit of a disjointed growth trajectory for those two areas the year prior to the last one when the macros were a different environment.

So if you look at our growth for the rest of the world was 43% in the fourth quarter of.

'twenty three so.

It is spread across both EMEA and APAC.

There was a bit of a dip.

This jointed growth trajectory for those two areas.

The year prior to last one when the macros was a different environment, but right now we're seeing growth in all areas of.

Nicola T. Allais: But right now, we're seeing growth in all areas of the rest, so I was just trying to hone in specifically on activation. So do your comments apply to that segment as well? Yeah, I think the patterns don't really change too much between measurement and activation in terms of the opportunity that we have internationally. Got it. I appreciate it. Great, I have two.

The rest of the world.

So I was just trying to hone in specifically on activation. So do you do your comments apply to that segment as well.

Yes, I think actually the patterns the patterns don't really change too much between measurement and activation in terms of the opportunity that we have internationally.

Got it I appreciate it thank you.

And the next question comes from the line of Laura Martin with Needham <unk> Company. Please proceed with your question.

Well, great I have two so following up on your side that the answer that you said, 40% of your new customers are testing side, that's what I like best about that acquisition as they got paid as a percent of revenue, whereas historically doubled their clients always gotten paid.

Nicola T. Allais: So following up on your sidebids answer, you said 40% of your new customers are testing sidebids. What I liked best about that acquisition is they got paid as a percent of revenue, or historically, Doubleverify has always gotten paid on 60 per 1000 impressions. My question is, as these new customers are adopting sidebids, or at least testing it, are they still getting paid as a percent of revenue? So does that sort of lend revenue to the business model over time? I guess that's my problem. Okay. It's great hearing from you, Laura.

<unk> thousand impressions. My question is as these new customers are adopting side does that mean touching it are they still getting paid as a percent of revenue so does that.

Revenue diversification is your business model over time.

I guess, that's my question.

Okay.

Great hearing from you Laura yes, they are still pursuing a percentage of media model N.

Nicola T. Allais: Yes, they are still pursuing a percentage of media model. And I like the way you framed it as a kind of revenue-type diversification. You know, we've always thought of ourselves as transactional SaaS, which is fixed and has its pluses. But, as you know, in this space, when CPMs go up, it can also, you know, have a potential negative as well. So having them as a percentage of revenue, I think is, is, is an interesting opportunity for us; we get to take advantage of some of those increased CPMs that we may see down the road. Okay, fantastic news. And then my second question is about one of the things I see going on for these big brands, like you call them the biggest 100 brands.

I like the way you framed it as kind of revenue type diversification, we've always thought of ourselves as transactional SaaS, which is fixed and has its pluses.

But as you know in this space when Cpm's up go up it can also have a potential negative as well so having them as a percentage of revenue I think is is it's an interesting opportunity for us we get to take advantage of some of those increase CPM that we may see down the road.

Okay.

And then my second question is on.

One of the things I see going on.

Big brands like you call them, the biggest 100 brands and one other things I see them doing is trying to call connected television all the way down to performance by full funnel and I think that's what we see in Amazon Avon additions to it.

Nicola T. Allais: And one of the things I see them doing is trying to tie connected television all the way down to performance like Full Funnel. And I think that's what we see in Amazon's AVOD addition to it. Streaming Tier, and Walmart's acquisition of Vizio. So my question to you is, as these big brands that are your core customers, do more to drive all of their advertising into performance, even what's historically been top of funnel, rather than just CPMB. Is that good for you, or is that bad?

<unk> care and Walmart's acquisition of Disney Oh. So my question to you is as these big brands that are your core customers do more to drive that.

They're all of their advertising in the performance, even what's historically been top of funnel rather than just the Campbell is that good for you or is that bad for you.

Mark S. Zagorski: It's a great question. I mean, I don't think so. I think, I want to say it's neutral. And by that, you know, if we look at all the other platforms we're on, so social, mobile, open web, all of those have performance, capabilities, performance-type advertisers, and brand-type advertisers. CTV will eventually start to look at that in the same way, as you noted, connecting a closed loop aspect of it. And I think that, you know, our core value proposition in those places is very similar to the core value prop that we'll see in CTV, which is ensuring that that spend, whether it's evaluated on a closed loop basis or on some type of brand metric, is secure, fraud-free, viewable, and brand safe. So I think it doesn't really change the value prop.

Hi.

It's a great question I mean, I don't think I think I want to say, it's neutral and by that and if we look at.

Where we've come from all the other platforms. We are we're on so social mobile open web all of those have performance.

Capabilities and performance type advertisers and brand type advertisers CTV will eventually start to look at that in the same way as you noted connecting a closed loop aspect of it and I think that our core value prop.

In those places is very similar to the core value prop that we will see in CTV, which is ensuring that that spend whether it is evaluated on a closed loop batch basis or on some type of brand metric is secure fraud free viewable and brand safe. So I think it doesn't really change the value prop.

Mark S. Zagorski: And the cool thing for us is, since we are integrated into, you know, all the top 10 CTV platforms at the app level, we, you know, if there's an opportunity for us, for example, to start looking at driving performance through a tool like SciBids, you know, we're already there. And we've already kind of built those hooks and those connections. So I think, you know, down the road, it could be something interesting for us. But, net net, I think it's more of the same that we've seen across other media.

And the cool thing for US is since we are integrated into <unk>.

All of the top 10 CTV platforms at the App level.

<unk>.

If there's an opportunity for us for example to start looking at driving performance through a tool like side.

<unk>.

We're already there and we've already kind of built those hooks in those connections. So I think down the road it could be something interesting for us, but net net I think it's more of the same that we've seen across other media types.

Mark S. Zagorski: Thanks very much. Thank you. [inaudible] And our final question, Hey, this is already on for Mark Murphy.

Thanks very much thank you.

Sure.

And our final question comes from the line of Mark Murphy with J P. Morgan. Please proceed with your question.

Hey, this is already on for Mark Murphy, Thanks for taking the question just.

Unknown Executive: Thanks for taking the question. Just to test the waters again on the certain brand advertisers that are kind of starting a little bit forward, is there any kind of common thread between them, whether it's kind of what's causing that geography industry, anything along those lines worth kind of discussing? Now, I mean, look, you know, we're not going to pin this on macro; I don't think it's a macro thing. It's just it's a bit anomalous.

Just to touch base again on the certain brand advertisers that are kind of starting a little bit for this year is there any any kind of common thread between them, whether it's kind of what's causing that geography industry or anything along those lines what kind of are discussing.

No I mean look we're not going dependence to macro I don't think it's a macro thing it's just it's a bit anomalous.

Mark S. Zagorski: We have a couple of retailers having a tough go of it, you know; a CPG company is having some issues regarding ramping up spend based on some challenges they have. So it's not really anything I think we can pin to either a vertical in any way or macro in any way; it just happens to be a handful of customers spending less than they did last year. That's very helpful. Thank you. And then just to follow up, and I know it's early on, but what side are you guys able to kind of use that new set of solutions to speak with customers that maybe just weren't speaking, didn't make sense to before that you can now? Thanks, and I'll step back into the queue.

We have a couple of retailers are having are having a tough go of it.

A CPG company is having some issues regarding ramping up spend based on some challenges. They have so it's not really anything I think we can pin to either a vertical in any way or a macro and anyway. It just happens to be a handful of customers spending slower than they did last year.

That's very helpful. Thank you and then just to follow up and I know, it's early on but what sizes are you guys able to kind of use that new set of solutions to speak with customers that maybe weren't being does it make sense to before that you can now thanks, and I'll jump back into the queue.

100%. So in some cases, we may have mentioned this for <unk>.

We're even talking to <unk>.

Folks, who arent using our core measurement solutions right now, but they know that there's pretty much not another great optimization opportunity like this around so it gets our foot in the door with them as well. So it does its spend a lot of conversations and as we noted even with folks we are talking to.

Mark S. Zagorski: 100%. So, you know, in some cases, and we may have mentioned before, we're even talking to folks who aren't using our core measurement solutions right now, but they know that there's pretty much not another great optimization opportunity like this around. So it gets our foot in the door with them as well. So it does, it's spurred a lot of conversations.

50% of them so far this year, the new deals we closed our testing and so it's a good uptick and a good attach rate.

Unknown Executive: And as we noted, you know, even with folks we are talking to, almost 50% of them, you know, so far this year, the new deals we closed are testing it. So it's a good uptick, and a good attach rate. Great. Thank you all for joining us today. And, as always, we'd like to thank our customers, our team, partners, shareholders, and all the stakeholders that helped make 2023 a record year for DV and who will be supporting our growth for years to come. We're excited about the prospect of another great year of growth, driven by our unmatched global scale and differentiated technology. Have a great night, everybody. Goodbye. ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

There are no further questions at this time I would like to turn the floor back over to Mark for any closing comments.

Great.

Thank you all for joining us today and as always we'd like to thank our customers our team partners shareholders and all the stakeholders that helped make 2023, a record year for TV and who will be supporting our growth for years to come. We're excited about the prospect of another great year of growth driven by our unmatched global scale and differentiated.

Technology have a great night everybody.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Okay.

Goodbye.

[music].

Okay.

[music].

Yes.

[music].

Yeah.

[music].

Okay.

[music].