Q1 2024 DoubleVerify Holdings Inc Earnings Call

Greetings and welcome to the double verify first quarter 2024 financial results Conference call.

Operator: Greetings and welcome to the Doubleverify first quarter 2024 Financial Results Conference. At this time, all participants are in a Question and Answer Session. We'll follow the formal presentation. If anyone should require operator assistance during the conference call, please call 1-866-333-4255 and press Star Zero.

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 as a reminder, this conference is being recorded.

Tejal R. Engman: As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Tejal Engman. Senior Vice President, Good afternoon, and welcome to Doubleverify's first quarter 2024 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.

Speaker Change: It is now my pleasure to introduce your host teach out Langbehn Senior Vice President Investor Relations. Thank you you may begin.

Tejal R. Engman: For more information, please refer to the risk factors in our recent SEC filings, including our Form 10-Q and 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.

Teachout Langbehn: Good afternoon, and welcome to double clarify first quarter 'twenty 'twenty four earnings conference call with US today I'm obstacles do you see you on Nikola life CFM today's press release and this call may contain forward looking statements that are subject to inherent risks uncertainties and changes and reflects our current expectations and information currently available to you.

Teachout Langbehn: Actual results could differ materially for more information. Please refer to the risk factors in our recent SEC filings, including our Form 10-Q.

Speaker Change: Okay and.

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

Tejal R. Engman: Reconciliations to the most comparable gap 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 will be referring to the slide deck listed on our website. With that, I'll turn it over to Mark. Thanks, Tejal.

Speaker Change: Joined the <unk>, we will be referring to the slide deck, that's not website with that I'll turn it over to Mark.

Mark S. Zagorski: And thank you all for joining us today. I'm excited to discuss our solid first quarter performance, and to share the substantial product and business development progress we've achieved so far this year, setting a robust foundation for future growth and success. From scaling our independently accredited core verification solutions across leading social and CTV environments to increasing customer adoption of our key performance solutions, side bids, and authentic attention, DV is excelling across multiple growth, And in the process, we're evolving our core value proposition to include protection and performance of media, solidifying our market leadership and driving sustained business, In the first quarter, we exceeded the top end of our guidance ranges on revenue and adjusted EBITDA, achieving solid revenue growth, profitability, and cash flow.

Mark: Thanks Angel and thank you all for joining us today I'm excited to discuss our solid first quarter performance.

Mark: Sure the substantial product and business development progress we've achieved so far this year setting a robust foundation for future growth and success from.

Mark: From scaling or independently accretive core verification solutions across leading social and CTV environment.

Mark: To increasing customer adoption of our key performance solutions side, there's no authentic attention D. V is excelling across multiple growth factors and in the process. We're evolving our core value proposition to include protection and performance of media spend solidifying our market leadership and driving sustained.

Mark: <unk> is a script.

Mark: In the first quarter, we exceeded the top end of our guidance ranges on revenue and adjusted EBITDA, achieving solid revenue growth profitability and cash flow.

Mark S. Zagorski: We grew first quarter revenue by 15% year over year to $141 million, with double-digit revenue growth across both activation and measurement. We delivered $38 million of adjusted EBITDA, representing a 27% margin, and grew net cash from operating activities by nearly 50% year-over-year to $32 million.

Mark: We grew first quarter revenue by 15% year over year to $141 million with double digit revenue growth across both activation and mesh.

Speaker Change: We delivered $38 million of adjusted EBITDA, representing a 27% margin and grew net cash from operating activities by nearly 50% year over year to $32 million.

Speaker Change: I'd like to begin my comments today by highlighting an evolving trend has become increasingly prominent in recent months.

Mark S. Zagorski: I'd like to begin my comments today by highlighting an evolving trend that's become increasingly prominent in recent months: the role that digital video is playing in driving ad impressions. More specifically, we're seeing ad spend increase in social video and CTV, which are two of DVD's fastest growing media environments. Advertisers, particularly DB's large brand advertisers, value these environments for their audience addressability, expansive scale across the purchase funnel, and measurable performance output. We're at a pivotal point where the ongoing increase in digital video has emerged as a key catalyst for digital advertising.

Speaker Change: The role that digital video is playing in driving AD impression growth.

Speaker Change: More specifically, we're seeing AD spend increase in social video and CTV, which are two of dd's fastest growing media environment.

Speaker Change: Advertisers particular, DBS large brand advertisers value these environments for their audience adjustability expansive scale across the purchase power and measurable performance outcomes.

Speaker Change: We're at a pivotal point with the ongoing increase in digital video has emerged as a key catalyst for digital advertising growth.

Mark S. Zagorski: As reported by MagnaGlobal, although global programmatic ad spend grew 10% in 2023, this growth rate would have been 5% if you excluded CTV. Similarly, the MAGNA data highlights that video comprised nearly 70% of social content in 2023, and the IAB expects social video to grow by 20% year-over-year, faster than any other type of media. DV is primed to capitalize on this trend in social media, where video comprised 81% of our social measurement impression volumes in Q1.

Speaker Change: As reported by Magna Global although global programmatic AD spend grew 10% in 2023. This growth rate would have been 5%. If you exclude a C T D.

Speaker Change: It really the magnitude data highlights the video comprise nearly 70% of social contact with each Q3, and the iab expect social video to grow by 20% year over year faster than any other type of media.

Speaker Change: D. D is primed to capitalize on this trend and social media with videos comprised 81% of our social measurement impression volumes in Q1.

Mark S. Zagorski: Our AI-powered universal content intelligence technology excels in measuring video content with unmatched efficiency and accuracy and underpins our growth and trajectory across all video environments. Today, social media is the leading driver of Dewey's impression volume at Revit.

Speaker Change: Our AI powered universal content intelligence technology excels in measuring video content with unmatched efficiency accuracy and underpins our growth.

Speaker Change: Trajectory across all video environments.

Speaker Change: Today, social media is the leading driver of duties impression volume revenue growth.

Mark S. Zagorski: Our newly launched brand safety and suitability measurement capabilities on platforms like Meta, YouTube, and TikTok are accelerating this growth trajectory, particularly in international markets, where our brand suitability language footprint continues to grow. We grew our social measurement revenue by 51% year over year in the first quarter, following 48% growth in the full year 2023. Most of our social media revenue growth was driven by existing DV advertisers who increased their usage of our social measurement solutions.

Speaker Change: Our newly launched brand safety and suitability measurement capabilities on platforms like better Youtube and Tic Toc are accelerating this growth trajectory, particularly in international markets, where our brand suitability language footprint continues to grow.

Speaker Change: We grew our social measurement revenue by 51% year over year in the first quarter following 48% growth in the full year 'twenty three.

Speaker Change: Most of our social media revenue growth was driven by existing DD advertisers to increase their usage of our social measurement solutions.

Mark S. Zagorski: In addition, we increased the number of top 100 customers leveraging our solutions across Meta, YouTube, TikTok, Pinterest, and Snap compared to last year. We're especially enthusiastic about the increase in ad spend on social media platforms, giving DV a strong competitive advantage in this media environment. In contrast to the open web, social platforms have limited partnerships with verification and measurement.

Speaker Change: In addition, we increased the number of top 100 customers leveraging our solutions across Manhattan, Youtube tick tock, Pinterest and Snapchat compared to last year.

Speaker Change: We're especially enthusiastic about the increase in AD spend on social media platforms, giving dd's strong competitive advantage in this media environment.

Speaker Change: In contrast to the open web social platforms have limited partnerships with verification of magic happens and.

Mark S. Zagorski: In addition, the technical integrations required by social platforms are complex and demand substantial infrastructure and expertise to handle efficiently. TV distinguishes itself by providing the most comprehensive, independently accredited solutions across social platforms, while simultaneously supporting the largest scale across the entire Internet, spanning both social media platforms and the open web. We see multiple layers of growth in our social media business, starting with measurement and increasingly extending to activation.

Speaker Change: The technical integrations required by social platforms are complex demand substantial infrastructure and expertise to handle this issue.

Speaker Change: TD distinguished itself by providing the most comprehensive independently accredited solutions across social platforms, while simultaneously supporting the largest scale across the entire internet spanning both social media platforms and the open web.

Speaker Change: We see multiple layers of growth in our social media list, starting with measurement and increasingly extending to activation.

Mark S. Zagorski: In measurement, there is ample opportunity to grow our social revenue by expanding our verification and performance products across new geographies and driving existing customer adoption. Let me take a moment to outline some recent developments in social. On Meta, we currently have over 40 DV advertisers testing our recently expanded brand safety and suitability measurement solution, including nine of DV's top 100 customers who have never activated us on Meta. Our meta volumes have expanded across large advertisers as we grow our scale and enhance our measurement capabilities across the platform.

Speaker Change: And measurement there is ample opportunity to grow our social value by expanding our verification of performance products across new geographies and driving existing customer adoption.

Speaker Change: Let me take a moment to outline some recent developments and social nationally.

Speaker Change: On meta we currently have over 40 divi advertisers testing, our recently expanded brand safety and suitability measurement solution, including nine Dd's top 100 customers who have never activated.

Speaker Change: Our metal volumes had expanded across large advertisers as we grow our scale and enhance our measurement capabilities across the platform.

Speaker Change: We launched Dd's brand safety and suitability measurement on Facebook and Instagram feed and real and seven languages in January and expanded to 18 more languages later in the quarter.

Mark S. Zagorski: We launched DV's brand safety and suitability measurement on Facebook and Instagram feeds and reels in seven languages in January and expanded to 18 more languages later in the quarter. Together, these 25 languages cover markets representing over 90% of global digital ad spend ex-China. Furthermore, we expanded our viewability and fraud measurement coverage to include Explore on Instagram, an area within the Instagram app that is dedicated to content discovery. We offer media quality measurement across key areas on Facebook and Instagram and are continually improving our coverage across some of the most engaging user-generated content environments in the world.

Speaker Change: Together these 25 languages copper markets, representing over 90% of global visual asked an ex China.

Speaker Change: Furthermore, we expanded our view ability and fraud measures coverage to include explore on Instagram and area within the Instagram App, it's dedicated to content discovery.

Speaker Change: We offer immediate party measurement across key areas on Facebook and Instagram and are continually improving our coverage across some of them as D. G user generated content environments in the world.

Mark S. Zagorski: On TikTok, where nearly half of our first quarter revenue came from EMEA and APAC markets, we're scaling our solutions across the platform by expanding our brand safety and suitability measurement capabilities to additional languages and markets. This year, we've already introduced brand safety and suitability measurement in key TikTok markets like Japan and Brazil, and broadened our Spanish coverage to include our four Central American countries where TikTok is launched. As a result, we now provide brand safety and suitability solutions on TikTok in 36 markets, representing over 90% of total digital ad spend ex-China and India. Moreover, we've introduced 16 new brand safety and suitability categories to complement TikTok's latest inventory filters. Vertical Sensitivity and Category Exclusion

Speaker Change: On to chart, where nearly half of our first quarter revenue came from EMEA and APAC markets were scaling our solutions across the platform by expanding our brand safety and suitability measurement capabilities to additional languages in markets.

Speaker Change: This year, we've already introduced brand safety and suitability matchmaking feature top markets, like Japan, and Brazil, and broadened our Spanish coverage to include our four central American countries, where Tictoc is launched.

Speaker Change: As a result, we now provide brand safety and suitability species on take talk in 36 markets representing over 90% of total digital AD spend ex China and India.

Speaker Change: Moreover, we've introduced 16, new brand safety and suitability categories complementary tox latest inventory filters.

Speaker Change: Political sensitivity and category exploration.

Mark S. Zagorski: With our expanded coverage and solutions in tech, Advisors can confidently verify and protect their ad spend allocation across all the. While our social media revenue is currently driven by measurement, the progress we've made in extending our industry-leading free screen activation and optimization solutions across social platforms points to a substantial opportunity to monetize social impressions further. This trajectory mirrors DB's business evolution on the open web 15 years ago, where we started enabling measurement solutions and progressively introduced premium-priced activation. Measurement data feeds our activation, enabling advertisers to optimize media spend effectively.

Speaker Change: With our expanded coverage installations don't take on average.

Speaker Change: Advertisers can constantly verify and protect their AD spend allocation across all regions.

Speaker Change: While our social media revenue is currently driven by measuring the progress we've made in extending our industry, leading prescreen activation and optimization solutions across social platforms points to a substantial opportunity to monetize social impressions for that.

Speaker Change: This trajectory mirrors do these business evolution on the open web 15 years ago, where we started enabling measurement solution and progressively introduced premium priced activations.

Speaker Change: Measurement data feeds our activation solution, enabling advertisers to optimize media spend affected.

Mark S. Zagorski: We are excited to continue to build upon our robust social media measurement data foundation, which, when coupled with our activation capabilities, will establish closed-loop verification and optimization that's tailored for the expansive social media market. Shifting focus to CTV, the IAB predicts CTV advertising to grow by 12% in 2024 to $22.7 billion, outpacing total media growth by 32%.

Speaker Change: We are excited to continue to build upon our robust social media measurement data foundation, which when coupled with our activation capabilities will establish closed loop verification and optimization, that's tailored for the expansive social media market.

Speaker Change: Shifting focus to see T. D D I b predict CTV advertising to grow by 12% and 2024 to $22 $7 billion outpacing total media growth by 32%.

Mark S. Zagorski: DV's CTV measurement growth continues to outperform the market, with CTV impression volumes growing by 45% year over year in the first quarter. In activation, we see a significant portion of programmatic spend growth being driven by CTV and online video. However, our attachment rate to CTV activation impression volumes has room to grow because this premium price inventory is largely acquired through private marketplaces or within programmatic guarantees or programmatic direct deals where DV solutions are implemented more selectively. To take advantage of this dynamic, DV is focused on increasing the attachment rate of our solutions to programmatic CTD impressions at scale and maximizing their monetization potential.

Speaker Change: D D C TV measurement growth continues to outperform the market with.

Speaker Change: With a C T b impression volumes growing by 45% year over year in the first quarter.

Speaker Change: And activation.

Speaker Change: A significant portion of programmatic spend growth being driven by C. T V online video.

Speaker Change: However, our attachment rate to see Gd activation impression volumes has room to grow because of this premium priced inventory is largely acquired through private marketplaces or within programmatic guarantees or programmatic direct deals where <unk> solutions are implemented more selectively.

Speaker Change: To take advantage of this dynamic DD is focused on increasing the attachment rate of our solutions to programmatic CTV impressions at scale and maximizing their monetization potential.

Speaker Change: We've been working on enhancing our value proposition for C. T D by driving greater transparency for CBD datasets, namely brand safety suitability few ability and fraud at the show.

Mark S. Zagorski: We've been working on enhancing our value proposition for CTV by driving greater transparency for key TV data sets, namely brand safety, suitability, viewability, and fraud at the show level. However, show-level transparency has been limited in programmatic CTD purchases, both in direct data deals and to a greater extent in programmatic auctions until now.

Speaker Change: Show level transparency has been limited and programmatic CTV purchases, both in direct data deal and to a greater extent programmatic auction until now.

Mark S. Zagorski: Driven by advertiser demands, streaming publishers are warming up to selectively providing the more granular data and transparency needed to satisfy advertisers and significantly amplify DB's value in this premium-priced media landscape. As we mentioned on our last call, we partnered with a leading streaming network to introduce a pioneering program-level measurement solution for advertisers on OTT devices, including CTV. This groundbreaking development in streaming verification will empower advertisers to measure and optimize for brand safety and suitability, as well as content performance at the granular level. This is a win-win for all involved.

Speaker Change: Driven by Advertiser demand streaming publishers are warming up to selectively providing more granular data and transparency needed to.

Speaker Change: To satisfy advertisers and significantly amplified dd's value and this premium priced media landscape.

Speaker Change: As we mentioned on our last call, we partnered with a leading streaming network to introduce a pioneering program level measurement solution for advertisers on OTT devices, including C. T V.

Speaker Change: This groundbreaking development and streaming verification when power advertisers to measure and optimize for brand safety usability as well as content performance at the granular level.

Speaker Change: This is a win win for all involved advertisers gaining valuable transparency and insight.

Mark S. Zagorski: Advertisers gain invaluable transparency and insight. DVCTV and OTT solutions see broader attachment rates, and the streaming companies receive increased premium budget allocations. As major streaming companies adopt this level of transparency, it will catalyze others to follow suit swiftly. We believe that achieving content transparency at scale will not only drive widespread adoption of brand suitability measurement on CTD and the broader OTT market, which spans all devices, but will also fuel our CTD and OTT activation volumes in the future. Ultimately, this progress will also enable DB to better align its fees for CTV activation and measurement with the higher value of CTV Adam. Today, DV leads the market with its premier CTD activation measurement.

Speaker Change: D V C T D. An OTT solution, she broader attachment rates and the streaming companies received increased more premium budget allocations.

Speaker Change: As major streaming companies adopt this level of transparency it will catalyze others to follow suit Swift.

Speaker Change: We believe that achieving content transparency at scale not only drive widespread adoption of brand suitability, Michigan on C. T D and the broader OTT market, which spans all devices, but will also fuel our CTV and OTT activation volumes in the future.

Speaker Change: Ultimately this progress will also enable <unk> to better align our fees for CTV activation and measurement with the higher value of CTV ad impressions.

Speaker Change: Today D D leads the market with its premier CTD activation measurement solutions.

Mark S. Zagorski: We've achieved MRC accreditation for video viewability in CTV and broadened accreditation for our CTV pre-bid data segments to include property-level brand suitability, contextual, and fully on-screen segments. Moreover, DeeDee has the widest CT coverage, including media quality authentication on Amazon's owned and operated ad supported OTT and CTV image. Brands can leverage DV's fraud detection, NGO measurement, and app level Additionally, DV enables marketers to gauge viewability and attention on Amazon's owned and operated CTV.

Speaker Change: We've achieved MRC accreditation for video view ability and C. G D and broad and accreditation for our CTV pre bid data segments to include property level brand suitability contextual and fully onscreen segments.

Speaker Change: Moreover, Geely has the widest C T coverage, including media quality authentication on Amazon's owned and operated AD supported OTT and CTV inventory.

Speaker Change: Brands can leverage Dd's fraud detection N G O measurement and app level suitability across devices, including desktop mobile and C. T V.

Speaker Change: Additionally, D D enables marketers to gauge view ability and attention on Amazon's owned and operated as supported CTV inventory.

Speaker Change: Finally.

Mark S. Zagorski: Finally, we continue to innovate rapidly in CTV, where attention measurement is gaining traction. Recognizing its value, platforms are leveraging attention data as a selling point, similar to how ratings are used to sell TV inventory. With DV's authentic attention metrics, platforms can emphasize not only impression level verification and attention data, but also exposure and engagement across CTV content. This approach highlights high-attention shows, maximizing the efficacy of TV inventory.

Speaker Change: We continue to innovate rapidly and C T D where attention measurement is gaining traction.

Speaker Change: We're recognizing its value platforms that are leveraging attention data as a selling point.

Speaker Change: Similar to how ratings are used to sell T D inventory.

Speaker Change: With dd's authentic attention metrics platforms can emphasize not only impression level verification and attention data, but also exposure and engagement across CTV content.

Speaker Change: This approach highlights high attention shows maximizing the efficacy of T D inventory.

Mark S. Zagorski: Recently, DV partnered with Netflix to deliver a CTV attention measurement, using DVC-TV authentic attention to compare Netflix to other Avod apps and fast. This exciting development is just the beginning of DB Authentic Attention's pioneering advancements in CTV, which fueled a tripling of attention revenue and advertiser adoption in the first quarter compared to Q1 last year. We are gaining solid momentum with this differentiated measurement offering and look forward to updating all of you on our ongoing progress. We see significant potential for unlocking value with EV solutions in CTVs.

Speaker Change: Recently D V partner with Netflix to deliver a C T attention measurement using D. D. C. T D authentic attention to compare Netflix to other able to apps and fashion.

Speaker Change: This exciting development is just the beginning of DD authentic attention pioneering advancements in C. T D, which fueled a tripling of attention revenue and advertiser adoption in the first quarter compared to Q1 last year.

Speaker Change: We are gaining solid momentum with this differentiated measurement offering and look forward to updating all of you on our ongoing progress.

Speaker Change: We see significant potential for unlocking value with EDI solutions in the CTV space by expanding our solutions at the show, we expect higher attach rates and a more rewarding value prop for didi in an underpenetrated segment that accounts for a large share of programmatic revenue growth.

Mark S. Zagorski: By expanding our solutions at the show level, we expect higher tax rates and a more rewarding value proposition for DV in an underpenetrated segment that accounts for a large share of programmatic revenue growth. Moving on to the topic of accelerating customer wins, We won numerous RFPs in the first quarter and have a robust new customer acquisition pipeline. DB boasts an impressive list of blue chip clients, working with nearly half of the top 1,000 advertisers in the world.

Speaker Change: Moving on to the topic of accelerating customer wins, we won numerous rfps in the first quarter and have a robust new customer acquisition pipeline.

Speaker Change: D V boats and impressive list of Blue chip clients working with nearly half of the top 1000 advertisers in the world.

Mark S. Zagorski: In addition to our previously announced first quarter wins, which included the global advertising business of Pepsi and Halion, we closed additional new logos in the first quarter, including McAfee, Mars, Heineken, Levi Strauss, and Dolce & Gabbana in the United States, Carlsberg in Europe, and SoftBank, New Balance, and Aon Financial in Japan.

Speaker Change: In addition to our previously announced first quarter win which included the global advertising business of Pepsi and Haley on we closed additional new others in the first quarter, including Mcafee Mars Heineken Levi Strauss indulging in Gabon, it in the United States.

Speaker Change: Carlsberg in Europe, and Softbank, new balance and our financial in Japan.

Mark S. Zagorski: We've also signed meaningful expansions with existing clients, including Vodafone, Audible by Amazon, Pepsi, and Bacardi, adopting ADS across global markets, as well as Sanofi and Buyer's Door, scaling our social solution. Our win rate across all opportunities remains above 80%, with 62% of our first quarter wins being greenfield, which we define as wins where the advertiser wasn't using third-party tools for the business that D.

Speaker Change: We've also signed meaningful expansions with existing clients, including Vodafone Alibaba, Amazon Pepsi and Bacardi adopting E D asked across global markets as well as Santa Fe and buyers door scaling our social solutions.

Speaker Change: Our win rate across all opportunities remains above 80% with 62% of our first quarter wins being greenfield, which we define as wins, where the advertiser wasn't using third party tools for the business that D V. One.

Mark S. Zagorski: New client wins play into our successful land and expand strategy, through which we grew the number of advertiser customers generating more than $200,000 over the last 12 months by 12% in the first quarter. Additionally, with nearly 60% of our top 700 customers using less than half of our seven core products, the opportunity to expand within our existing customer base remains significant. Having covered social and CTV, let's move to the open web and touch upon retail media and cyber there.

Speaker Change: New client wins play into our successful land and expand strategy through which we grew the number of advertiser customers generating more than $200000 over the last 12 months by 12% in the first quarter.

Speaker Change: With nearly 60% of our top 700 customers using less than half of our seven core products the opportunity to expand within our existing customer base remains significant.

Speaker Change: Having covered social and C. T D. Let's move to the open web and touch upon our retail media and sided there are.

Mark S. Zagorski: Our global scale and connectivity across retail media environments continues to expand. DB's measurement tags are now accepted on 82 of the key global retail media networks and sites, including 15 of the top retail media platforms and 67 major retailers.

Speaker Change: Our global scale and connectivity across retail media environments continues to expand Tvs.

Speaker Change: Tvs measurement tags are now accepted on 82 of the key global retail media networks and sites, including 15 of the top retail media platform and 67 major retailers.

Mark S. Zagorski: Approximately half support DV measurement on their own and operated sites, while two-thirds support DV measurement on their off-site networks. As a result, we grew our first quarter retail meter measurement revenue by more than 45% year over year. Finally, on SciBiz AI, we're at an exciting inflection point where the adoption of custom bidding solutions to drive scalability and performance in optimizing programmatic advertising campaigns is gaining real traction. Since acquiring Cytus AI, we have successfully sold the solution to 19 DV customers, of which eight are among Deity's top 100 advertisers.

Speaker Change: Approximately half support DD measurement on their owned and operated sites, while truth third support TD measurement on their off site networks.

Speaker Change: As a result, we grew our first quarter retail meter measurement revenue by more than 45% year over year.

Speaker Change: Finally on Saturday I, we're at an exciting inflection point, where the adoption accustomed bidding solutions to drive scalability performance and optimizing programmatic advertising campaign is gaining real traction.

Speaker Change: Since acquiring the size of the day I. We have successfully sold this solution to 19 dv customers of which eight are among these top 100 advertisers.

Mark S. Zagorski: Moreover, we've engaged numerous large advertisers who, until now, weren't DD customers. Currently, we are in discussions with most DV customers and global prospects, leveraging our global sales team to cross-sell this powerful solution that can utilize DV's core verification. This early success is rooted in dbSciBiz AI's capability to consistently deliver strong advertising returns with an average return on investment of $4 for every $1 invested in Moreover, it delivers an average media cost savings of nearly 40%.

Speaker Change: Moreover, we've engaged numerous large advertisers who until now once DD customers.

Speaker Change: Currently we are in discussions with most TD customers and global prospects leveraging our global sales team to cross sell this powerful solution that can utilize D V core verification of assets.

Speaker Change: This early success is rooted in D. D sided AI capability to consistently deliver strong advertising returns with an average return on investment of $4 for every one dollar invested inside.

Speaker Change: Moreover, it delivers an average media cost savings of nearly 40%.

Mark S. Zagorski: It's also worth noting that marketers currently spend nearly a quarter of their time manually optimizing campaigns, tasks that SciBiz AI can significantly streamline and improve, thereby enhancing overall marketing efficiency and effectiveness. Like Authentic Attention, DV-SciVids represents another important step in DV's evolution to expand client engagements to not only protect their media spend but help it to perform as well. To conclude, we are witnessing strong growth in digital video, including CTV, social video, and online video.

Speaker Change: It's also worth noting that Margaret currently spent nearly a quarter of their time manually optimizing campaigns.

Speaker Change: I have decided I can significantly streamline and improve thereby enhancing overall marketing efficiency and effectiveness.

Speaker Change: Like it's authentic attention D. D side. This represents another important step in <unk> evolution to expand our client engagements to not only protect their media spend that help it to perform as well.

Speaker Change: To conclude we are witnessing strong growth in digital video, including CTV, social video and online video.

Mark S. Zagorski: We see this growth characterized by increasing ad spend on social video and CTV, which is primarily acquired through private marketplaces for programmatic guarantee and direct view. For advertisers, this has meant navigating through more closed ecosystems, leading to greater fragmentation, complexity, and challenges in implementing scalable strategies, interpreting data, evaluating performance, and establishing trust across various networks. Strong independent verification of closed ecosystems is essential to maintaining accountability and sustaining buyer confidence

Speaker Change: We see this growth characterized by increasing AD spend on social video S. E. T D, which is primarily acquired through private marketplace programmatic guaranteed and direct deals for.

Speaker Change: For advertisers. This is Matt navigating through more closed ecosystem, leading to greater fragmentation complexity and challenges in implementing scalable strategies.

Speaker Change: Interpreting data evaluating performance and establishing trust across various networks.

Speaker Change: Strong independent verification of closed ecosystem is essential to maintaining accountability and sustaining buyer confidence.

Mark S. Zagorski: DV has extensive experience in harnessing the power of AI, machine learning, and data science, as well as building trusted, scalable solutions integrated across all platforms, whether open or closed. We measure data that correlates with the business outcomes advertisers aim to achieve, and we can activate that measurement data to help advertisers drive better outcomes. All of this leaves DV well positioned to play a pivotal role in shaping the evolving future of digital advertising.

Speaker Change: He has extensive experience in harnessing the power of AI machine learning and data science as well as building trusted scalable solution integrated across all platforms, whether they're open or close.

Speaker Change: We measure data that correlates with the business outcomes advertisers aimed to achieve and we can activate that measurement data to help advertisers drive better outcomes.

Speaker Change: All of this leaves D V well positioned to play a pivotal role in shaping the evolving future of digital advertising.

Mark S. Zagorski: Our growth drivers of product upsell, channel expansion, customer acquisition, and growth, and international expansion remain intact, and we continue to see a large growing business opportunity for our expanding set of verification and performance solutions across new markets, platforms, and customers. With that, let me hand the call over to Nicola.

Speaker Change: Our growth drivers of product upsell channel expansion customer acquisition and growth in international expansion remain intact, and we continue to see a large growing business opportunity for our expanding set of verification and performance solutions across new markets platforms and customers with that.

Nick: Let me hand, the call over to nickel.

Nicola T. Allais: Thanks, Mark, and good afternoon, everyone. Our first quarter results exceeded the top end of our revenue and adjusted EBITDA guidance ranges, driven by all three of our revenue lines, activation, measurement, and supply side, gaining momentum in March. Total revenue grew 15% in the first quarter to $141 million, primarily driven by 16% advertiser revenue growth, which continues to be volume lent. In the first quarter, media transactions measured or MTMs increased 18% year-over-year; measure transaction fees or MTF declined 2% year over year, primarily due to product mix, as activation revenue, which is premium price to measurement, represented a smaller share of total revenue relative to the prior year.

Nickel: Thanks, Mark and good afternoon, everyone. Our first quarter results exceeded the top end of our revenue and adjusted EBITDA guidance ranges driven by all three of our revenue line activation measurement and supply side gaining momentum in March.

Nick: Total revenue grew 15% in the first quarter to $141 million, primarily driven by 16% advertising revenue growth, which continues to be volume led.

Nick: In the first quarter media transactions measured or M. T M increased 18% year over year.

Nick: Metro transaction fees, our MTS declined 2% year over year, primarily due to product mix.

Nick: Activation revenue, which is premium priced measurement represented a smaller share of total revenue relative to the prior year period.

Nick: We anticipated this mixed shift given the strength in social and international revenue and the impact of reduced programmatic spending by handful of large retail and CPG advertisers, we referenced last quarter.

Nicola T. Allais: While we expect MTFs on a per product basis to remain stable, we expect total MTFs to continue to reflect the impact of a mixed shift towards measurement relative to more premium prices. Activation revenue increased 13% compared to the prior year, and ABS, which represented 55% of activation revenue in the quarter, increased 12% year over year. 85% of ABS's growth in the quarter was driven by new advertiser spend and by upselling ABS to existing DV customers.

Nick: While we expect MTS on a per product basis to remain stable. We expect total MTS to continue to reflect the impact of a mix shift towards measurement relative to more premium priced activation.

Nick: Activation revenue increased 13% compared to the prior year and a b S, which represented 55% of activation revenue in the quarter increased 12% year over year.

Nick: 85% of a b S as growth in the quarter was driven by new advertiser spend and by up selling MBS to existing <unk> customers.

Nicola T. Allais: ABS is activated by over 90% of our top 100 advertisers and by over 60% of our top 500 advertisers. Moving forward, we're focused on new advertiser spend and upselling ABS to existing DV customers as the primary driver of its growth. Sybitz continues to build momentum with existing customers and prospects and continues to meet our performance expectations. Turning to measurement, revenue increased 19% versus a prior year, primarily driven by existing customer expansion on social. Social revenue increased 51% year over year and represented 49% of measurement revenue in the quarter.

Nick: Amy asked is activated by over 90% of our top 100 advertisers and by over 60% of our top 500 advertisers moving.

Nick: Moving forward, we're focused on new advertiser spending and up selling on E. D. S. Two existing D V customers as the primary driver of Abs's growth.

Nick: <unk> continues to build momentum with existing customers and prospects and continues to meet our performance expectations.

Nick: Turning to measurement revenue increased 19% versus the prior year, primarily driven by existing customer expansion on social.

Nick: Social revenue increased 51% year over year and represented 49% of measurement revenue in the quarter.

Nicola T. Allais: Social measurement growth continued to be led by Meta and YouTube, which together accounted for 80% of our first quarter social measurement revenue, with TikTok being a distant third. As Mark mentioned, nearly half of our first quarter TikTok revenue was sourced from EMEA and APathMarket. Growth in social drove international measurement revenue, which increased 40% compared to the prior year and now represents 31% of total measurement revenue, up from 26% in the first quarter of 2023.

Nick: Social measurement growth continued to be led by meta and Youtube, which together accounted for 80% of our first quarter, social management revenue with Tic Toc being a distant third.

Nick: As Mark mentioned nearly half of our first quarter Tic Toc revenue was sourced from EMEA and APAC markets.

Nick: Growth in social drove international measurement revenue, which increased 40% compared to the prior year and now represents 31% of total measurement revenue up from 26% in the first quarter of 2023.

Nicola T. Allais: Finally, supply-side revenue grew 8% in the first quarter, driven by the early signing of new platforms. Shifting to expenses, cost of revenue increased by approximately $3 million, primarily due to an increase in cloud services costs as we further invest in scaling the infrastructure required to support our growth, followed by an increase in costs from revenue sharing arrangements with programmatic partners tied to higher programmatic revenue.

Nick: Finally supply side revenue grew 8% in the first quarter driven by the early findings on the platform deals.

Nick: Shifting to expenses cost of revenue increased by approximately $3 million, primarily due to an increase in cloud services costs as we further invest in scaling the infrastructure required to support our growth.

Nick: Followed by an increase in cost from revenue sharing arrangements with programmatic partners tied to higher programmatic revenue rec.

Nicola T. Allais: Revenue less cost of sales of 81% in Q1'24 was in line with our expectations. Research and development expenses increased due to investments in AI and machine learning engineering resources. Sales and marketing expenses increased as we invested in additional resources to promote and sell our most recent product launches, including Cybiz, around the globe. G&A expenses remain relatively stable year over year as our growing scale drives leverage on this operating expense line. Adjusted EBITDA of $38 million in the first quarter represented a 27% margin and was ahead of plan, primarily due to higher revenue.

Nick: Revenue less cost of sales of 81% in Q1 24 was in line with our expectations.

Nick: Research and development expenses increased due to investments in AI and machine learning engineering resources.

Nick: Sales and marketing expenses increased as we invested in additional resources to promote and sell our most recent product launches, including signed is around the globe.

Nick: G&A expenses remained relatively stable year over year as our growing scale drives leverage on the operating expense line.

Nick: Adjusted EBITDA of $38 million in the first quarter represented a 27% margin and was ahead of plan primarily due to higher revenues.

Nick: We delivered net cash from operations of approximately $32 million compared to $21 million in the same period and our year.

Nicola T. Allais: We delivered net cash from operations of approximately $32 million compared to $21 million in the same period in the prior year, and capital expenses were approximately $6 million compared to approximately $4 million in the first quarter of 2020. We ended the quarter with $302 million in cash on hand.

Nick: Capital expenses were approximately $6 million compared to approximately $4 million in the first quarter of 2023.

Nick: We ended the quarter with $302 million in cash on hand, and in addition, we invested in the quarter approximately $32 million, new treasury bills with maturity over three months to capitalize on favorable interest rates.

Nicola T. Allais: In addition, we invested in the quarter approximately $32 million in treasury bills and maturities over three months to capitalize on favorable interest rates. This short-term investment is reflected as a use of cash and investing activities in the cash flow statement, including disinvestment cash and short-term investments worth $334 million at quarter end. Turning to guidance, we're lowering our full-year guidance primarily due to uneven spending patterns by the select large retail and CPG advertisers that we mentioned last quarter.

Nick: This short term investment is reflected as a use of cash and including in investing activities in the cash flow statement.

Nick: Including this investment cash and short term investments were $334 million at quarter end.

Nick: Turning to guidance, we're lowering our full year guidance, primarily due to uneven spending patterns by the select large retail and CPG advertisers that we mentioned last quarter.

Nicola T. Allais: These customers are heavy users of our activation solutions, including ABS, and our lowered revenue expectation from this cohort accounts for most of the change in our full-year guidance. Additionally, we expect more of our existing and new customers' ad spend to be allocated to social and CTV. While we are in a lower fee tier for social media measurements today, we see a significant opportunity to upsell our social activation and optimization capabilities going forward.

Nick: These customers are heavy users of our activation solution, including a b S.

Nick: And our lowered revenue expectation from this card accounts for most of the change in our full year guidance.

Nick: Additionally, we expect more of our existing and new customers AD spend to be allocated to social N C. T V.

Nick: While we earn a lower fee and social media measurement today, we see a significant opportunity to upsell, our social activation and optimization capabilities going forward.

Nicola T. Allais: As for CTV, Mark mentioned that we have been working on enhancing our solutions by providing show-level transparency, which will increase the attach rate to CTV impressions. We expect second-quarter revenue in the range of $152 to $156 million, which implies year-over-year growth of 15% at the midpoint. We expect second quarter adjusted EBITDA in the range of $41 to $45 million, which represents a 28% margin at the mid- For the second quarter, we expect stock-based compensation to range between $23 and $26 million and weighted average diluted shares outstanding to range between $175 and $177 million.

Nick: As for C. T V. Mark mentioned that we have been working on enhancing our solutions by providing show level of transparency, which will increase the attach rate to CTV impression.

Nick: We expect second quarter revenue in the range of $152 million to $156 million, which implies year over year growth of 15% at the midpoint we.

Nick: We expect second quarter adjusted EBITA in the range of 41% to $45 million, which represents a 28% margin at the midpoint.

Nick: For the second quarter, we expect stock based compensation to range between 23, and $26 million and weighted average diluted shares outstanding to range between 175 and 177 million shares.

Nick: For full year 'twenty 'twenty four guidance, we expect revenue in the range of $663 million to $675 million, which implies year over year growth of 17% at the midpoint.

Nicola T. Allais: For full year 2024 guidance, we expect revenue in the range of $663 to $675 million, which implies year over year growth of 17% in the mid. We expect Justity Betel revenue in the range of $199 to $211 million, which represents a 31% margin in the mid. Our four-year guidance reflects the following PSA. First, we anticipate more moderate growth throughout the year from select retail and CPG advertisers we identified as slow starting at the beginning of the year. While we saw an improvement in March, April's performance showed slower pacing, and as a result of this variability, we assume these select advertisers will spend infrequently for the rest of the year.

Nick: We expect adjusted EBITDA in the range of $199 million to $211 million, which represents a 31% margin at the midpoint.

Nick: Our full year guidance reflects the following key assumptions.

Nick: We anticipate more moderate growth throughout the year from the select retail and CPG advertisers, we identified a slow starting at the beginning of the year.

Nick: While we saw an improvement in March April performance showed slower pace and as a result of this variability we assume deselect advertiser will spend unevenly for the rest of the year.

Nicola T. Allais: Second, we expect a moderation in overall growth as we see current and new customers allocating more of their budgets to social and CTV. Third, the newly onboarded large global advertisers we mentioned last quarter are now performing in line with our expectations. We expect their continued ramp-up in the second half of the year to contribute to a sequential acceleration of our year-over-year growth in the second half of the year. Overall, we expect the second half of the year to contribute approximately 56% of our total revenue. Finally, as in prior years, we expect the fourth quarter to deliver the highest quarterly share of total revenue, ranging between 30 and 32%.

Nick: Second we expect a moderation of overall growth as we see current and new customers allocating more of their budgets to social and CTV.

Nick: Third the newly onboard a large global advertising as we mentioned last quarter, our nonperforming in line with our expectation. We expect their continued ramp up in the second half of the year to contribute to a sequential acceleration of our year over year growth in the second half of the year.

Nick: Overall, we expect the second half of the year to contribute approximately 56% of our total revenue broadly in line with last year.

Nick: Finally as in prior years, we expect the fourth quarter to delivered the highest quarterly share of total revenue ranging between 30 and 32%.

Nicola T. Allais: We remain measured in our full-year revenue expectations for the following opportunities: adoption by existing advertisers of our measurement solutions on Meta, which now includes brand safety; celebrated revenue growth from the expansion of TikTok into non-English speaking markets; and Accelerated Revenue Group from Sybiz, Authentic Attention, and OnCTV. In conclusion, we delivered a solid first quarter with double-digit revenue growth, robust profits, and substantial cash flow, ending the quarter with zero debt and $302 million cash on hand.

Nick: We remain measured in our full year revenue expectation for the following opportunities.

Nick: Adoption by existing advertisers of our measurement solutions no matter, which now include brand safety.

Nick: Accelerated revenue growth from the expansion up tick tock into non English speaking markets and.

Nick: And accelerated revenue grew up on cyber authentic attention and on CTV.

Nick: In conclusion, we delivered a solid first quarter with double digit revenue growth robust profit and substantial cash flow ending the quarter with zero debt and $302 million of cash on hand.

Nicola T. Allais: Our focus remains on driving execution to build growth momentum throughout the remainder of the year. And with that, we will open the line to questions. Operator, please go ahead.

Nick: Our focus remains on driving execution to build growth momentum throughout the remainder of the year.

Speaker Change: And with that we will open the line for questions. Operator. Please go ahead.

Speaker Change: Thank you.

Operator: And ladies and gentlemen, at this time, we will be conducting our questions. If you would like to ask a question, press Star 1 on your telephone keypad. A confirmation tone will indicate that your question has been submitted. You may press Star 2 if you would like to remove your question from the queue.

Speaker Change: And ladies and gentlemen at this time it will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue.

Speaker Change: You May press Star two if you would like to remove your question from the queue for participants using speaker equipment it may be necessary.

Operator: For participants using speaker equipment, it may be necessary to pick up a handset, and our first question is from Matt Swanson with RBC Capital. Yeah, thank you so much for taking my question. We have a lot of good metrics this quarter, right? Attention tripled, social 51, CTV 45, retail media 45, and international 40. Could you just maybe go a little bit more into the parts of the business that didn't perform as well? So obviously, those numbers are quite a bit higher than overall revenue growth. So maybe drilling down a little deeper, beyond those handful of CPG and retail companies. Yeah, Matt, thanks for the question.

Nick: Pick up the handset before pressing the star keys, one moment, please while we poll for questions.

Nick: And our first question comes from Matt Swanson with RBC capital markets. Please state your question.

Matthew John Swanson: Yeah. Thank you so much for taking my question.

Matthew John Swanson: You have a lot of good metrics in the quarter right attention Triple Social 51, CTV 45, retail media 45, New International Party.

Matthew John Swanson: Could you just maybe go a little bit more into the parts of the business that didn't perform as well. So obviously those numbers are all you know quite a bit higher than overall revenue growth, so maybe trailing download deeper.

Matthew John Swanson: Beyond those dose panful of CPG and retail companies.

Speaker Change: Yeah. Thanks for the question you know you know in addition to that we also saw great growth outside of the U S. You know that was that was positive.

Mark S. Zagorski: You know, you know, in addition to that, we also saw, you know, great growth outside of the US, which was positive. And, you know, so we do see some bright spots. Now, obviously, you know, where we saw some challenges was in our activation business, which has been such a powerhouse over the last several quarters. And I think a lot of it was driven by those core customers who were heavily invested in our activation solutions, including ADS. So I think there was definitely some drag on the activation side of our business, as we noted, considering this is the first quarter that I can remember in which activation actually grew slower than measurement.

Speaker Change: We do see some bright spots, yeah, obviously, where we saw some challenges is where our activation business.

Speaker Change: Which has been such a powerhouse over the last several quarters.

Speaker Change: And I think a lot of that was driven by those core customers, who are heavily into our activation solution, including a b S.

Speaker Change: So I think there is definitely some drag on the activation side of our business as he noted and are considering this is the first quarter that I can remember in which.

Speaker Change: Activations actually grew slower than measurement and I think that's.

Mark S. Zagorski: And I think that's, you know, obviously due to those customers who, you know, we saw them drag in Q1, and we're projecting them to remain relatively uneven through the year. And the second is, obviously, a good amount of spend is starting to head towards social, where we've got a lower attach rate at this stage for some of our previous solutions, but what we're seeing, you know, a pretty big measurement upswing.

Speaker Change: Obviously very large part due to those customers who may be startup drag in Q1.

Speaker Change: We're projecting them to remain.

Speaker Change: It remains relatively even through the year.

Speaker Change:

Speaker Change: And as Doug. It is obviously a good amount of spend is starting to edge was social.

Speaker Change: And you've got a lower attach rate at this stage for some of our previous versions of.

Speaker Change: Although we're seeing a pretty big upswing so.

Mark S. Zagorski: So, you know, the bright spots continue to be social and international, and some of the areas on that side of the business where we saw the drag were pretty heavily in activation, which, you know, again, those core customers who did slow down and we expect them to be uneven for the year have a high concentration of spend. Yeah, that's, that's really helpful.

Speaker Change: The bright spots continuing to be social international.

Speaker Change: Some of the areas on that side of the business.

Speaker Change: Where we saw the drag was pretty heavily and activation.

Speaker Change: Which are again at this.

Speaker Change: Those core customers did slow down we expect them to be uneven for the year I have a high concentration of spend.

Speaker Change: Yeah. That's that's really helpful. And then I think it might just be helpful to kind of go over to other things that were investor focuses coming out last quarter and one it didn't show up at all obviously in measurement.

Mark S. Zagorski: And then I think it might just be helpful to kind of go over two of the things that were investor focuses coming out last quarter. And one, it didn't show up at all, obviously, in measurement, but just any commentary around the pricing environment competitively. And then maybe on the second, like, you said that the same companies as before, but just that there hasn't been any, you know, contagion of spreading out beyond kind of those retail and CPG customers we identified. Yeah, I'll take that one.

Speaker Change: But just any commentary around the pricing environment competitively.

Speaker Change: And then maybe on the second like you said that the same company as this before but just that there hasn't been any contagion of spreading out beyond kind of those retail CPG customers we identified.

Nicola T. Allais: So I'll start with the second one. The answer to that is no, it is the same cohort of advertisers where we've seen this uneven pattern of spend. They actually saw a small increase in March, but they didn't see it in April.

Speaker Change: Yeah, I don't think I'll take that one so I'll start with the second widely but the answer to that is no. There isn't the same cohort of advertisers.

Speaker Change: Everything does the uneven patterns of spend there.

Speaker Change: Actually nothing.

Speaker Change: Nothing in March and April and so we thought was the right thing to do to take that number down and they will remain fairly uneven but in your eyes in cohort.

Speaker Change: So this is this is not a growing number of advertisers.

Nicola T. Allais: And so we feel it's the right thing to do to take our numbers down for the year, assuming that it will remain fairly uneven for the year as a cohort. So this is not a growing number of advertisers. On the first question for NTF, what we saw this quarter was an overall decline in NTF because the mix has shifted towards measurement.

Speaker Change: On the first question for MTI.

Speaker Change: What we saw this quarter is an overall decline on the MBS and the vantage yet because the mix is shifting work measurement and as we've always been activation.

Nicola T. Allais: And as we've always said, activation commands higher premium-priced products. So as more volume is shifted to measurement, we will feel on the NTF the impact of lower price points on social media and lower price points internationally, in general. So per product pricing has remained stable.

Speaker Change: In the higher coupons.

Speaker Change: So as more volume is shifting to a measurement you will feel on the EM yeah. The impact of the price points are on board in.

Speaker Change: International in general.

Speaker Change: For product pricing remains stable and that's really the part that we control the MTF mix shift, it's sort of a byproduct of where the advertisers are spending.

Nicola T. Allais: And that's really the part that we control. The NTF mix shift is sort of a byproduct of where the advertising is. And our next question comes from Andrew Boone with JMP Security. Thanks so much for taking my question. Mark, can you talk about the early warnings from meta brand safety and what advertiser conversations are like currently in terms of adoption demand? Yeah, thanks, Andrew.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: And our next question comes from Andrew Boone with JMP Securities. Please state your question.

Andrew M. Boone: Thanks, So much for taking my question Mark can you talk about the early learnings from meta brand safety and what advertiser conversations are like currently in terms of adoption and demand for the product.

Mark S. Zagorski: We've got, we're engaged with just about every one of our top customers on the MetaBrand Safety Solution. I think, in the last call, we talked to something like, you know, 40 to 45 folks who are testing it. The good news is we're starting to wrap those tests now and activate some of those clients. So we've got a handful of folks who are now running, a bunch of them are new.

Mark: Yeah. Thanks, Andrew.

Mark: We've got we've engaged with just about every one of our top customers on the mother brand safety solution I think last in the last call we talked to something like 40 to 45 folks are testing it.

Mark: Good news is we're starting to wrap those tests now and then and activate some of those clients. So we've got a handful of folks who are now running.

Mark: There's a bunch of them are new and Ah the feedback has been really positive.

Mark S. Zagorski: And the feedback has been really positive. They like the fact that now we've got the full suite across all the solutions. As we noted in the call, we've now even extended some new aspects of Instagram as well.

Mark: They like the fact now that you've got the full sweep across all the solutions.

Mark: As we noted in the call we've now even extended some new aspects of Instagram as well.

Mark S. Zagorski: So I think, you know, it's pacing as we expected. We talked about starting to really pick up in the second half of this year. As Nicola noted in his guidance comments, you know, we still are planning for a moderated impact on the business based on that. But net net, good traction, exactly what we wanted to do and expected to do. And, you know, Meta as a partner has really leaned into it.

Mark: So I think it's pacing as we expected we talked about starting to really pick up on the second half of this year as Nikola noted in his guidance comments.

Mark: Still our planning for a moderated impacts on the business based on that but net net.

Mark S. Zagorski: You know, as represented by the fact that we started the year and launched with a handful of languages, and we expanded to over 20 languages by the end of the quarter, which was a great sign that they think this is important, and they want to continue to work with us on this. Mark, just as a follow-up to that to help us maybe try to quantify the qualification of strong demand, is there anything you guys are seeing in terms of violation rates or anything else again that you can discuss maybe in broad strokes that suggest that hey, advertisers need to be implementing a brand safety tool within the social media UGC environment?

Mark: Good traction.

Mark: What we wanted to do and expect it to do and meta as a partner.

Mark: It has really leaned into it.

Mark: You know as represented by the fact, you know we started the year and launched with a handful of languages and we expanded to over 20 languages.

Mark: We ended the quarter, which was the which is a great sign that they think this is important and they want to continue to work with us on this front.

Mark: And then Mark just as a follow up to that to help us maybe try to quantify the qualification of strong demand on meta.

Mark: Is there anything that you guys are seeing in terms of violation rates or anything else again that you can discuss maybe in broad strokes that suggest that hey, advertisers need to be implementing our brand safety tool within the social media or UGC environments.

Mark S. Zagorski: You know, I can't speak to META specifically, but we know that, you know, all social environments have, you know, a sense of, you know, brand safety and suitability challenges that we ensure that they can, you know, these tools are made for, right?

Mark: Oh, you know I can't speak to meta specifically, but we know that you know all social environments.

Mark: Yeah.

Mark: I have a sense of brand safety and suitability challenges that we ensure that that they can these tools are made for right.

Mark S. Zagorski: And I think that, you know, the interesting demand around them is based on the fact that, as we've seen, there is lots of growth in dollars flowing into social networks, and advertisers want to have comfort in those environments. So, you know, I think the solutions are doing what they need to do, which is provide greater transparency, not just on brand safety and suitability but on viewability, on ensuring there's not invalid traffic, et cetera.

Mark: And I think that the interest in demand around them is based on the fact that the reality is that there's there's lots of growth in dollars flowing into social networks as we've seen and how much I just wanted to have comfort.

Mark: In those environments. So.

Mark: Net net I think the solutions are doing what they need to do which is provide greater transparency not just comprehensive inscrutability, but on visibility on insurance is not invalid traffic et cetera.

Mark S. Zagorski: And I think, you know, they're playing that role. And as exemplified by the growth that we saw in the quarter of over 50% growth in social, and I think there's still going to be people leaning on those. Thank you. Our next question: Arjun Bhatia with William Blair. Yes, thank you.

Speaker Change: Thank you know, they're playing that role.

Speaker Change: As exemplified as you know the growth that we saw in the quarter of over 50% growth in social and I think theres still going to be people who need them.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Arjun Bhatia with William Blair. Please state your question.

Mark S. Zagorski: Maybe for Mark to start. You know, it seems like obviously social media is a little bit of a headwind here. But when you think about getting more attached to with pre-bid, I guess, how is product parity for DV solutions on what you have in social from a pre-bid perspective versus what you have with ABS and programmatic, and then, you know, what just helps us understand maybe what tools you have at your disposal to actually increase those attachments on the social side and, you know, maybe chop away at some of these headwinds that might be impacted.

Speaker Change: Yep.

Arjun Rohit Bhatia: Maybe for Mark so starts.

Arjun Rohit Bhatia: It seems like obviously social.

Arjun Rohit Bhatia: A little bit of a hard one here, but when you think about getting more attach with what's pretty bad I guess, how is product parity.

Arjun Rohit Bhatia: Or given some of the shutdown and what you have in social from a pre buy perspective.

Arjun Rohit Bhatia: What you have with ABS.

Speaker Change: And programmatic and then well you know what just help us understand maybe what tools you have at your disposal to actually increase those those attach rates.

Speaker Change: Oh, sorry.

Speaker Change: Yeah.

Speaker Change: And if somebody is a better one.

Speaker Change: Yeah.

Mark S. Zagorski: So, you know, in the slides we showed, there is some level of prescreening controls across a handful of social networks. So, certainly not as broad across, you know, across activation as we have across measurement, and the depths and types of those tools are different.

Speaker Change: Yeah, It's a great question RJ. So we you know in the slides. We showed you know are some level of pre screening controls across a handful of our social networks. So certainly not as broad across across activation as we have a cross measurement.

Mark S. Zagorski: So, prescreening social heavily leans on YouTube and TikTok right now as the main drivers of application. I think there is opportunity for us to expand on both of those platforms, and we are, as well as look at, you know, blowing out some of the things we're doing on optimization and activation. So, we've got some work to do. Right now, most of that work is around selling, not on product development.

Speaker Change: The depths and types of those tools are different so pre screening social.

Speaker Change: Heavily leans on Youtube and chip talk right now as the main drivers of application I think there is opportunity for us to expand on both of those platforms and we are as.

Speaker Change: As well as look at it.

Speaker Change: Blowing out some of the things we're doing on our optimization and activation. So we got some work to do right now most of that work is around selling not on product development, you know less than 20% of our top 700 customers are using us on a social prescreen. So I think we got it.

Mark S. Zagorski: You know, less than 20% of our top 700 customers are using us for, you know, social prescreen. So, I think we've got, you know, an opportunity to upsell there. We also, you know, have some product and coverage work to do, but I do think we have an opportunity to continue to grow that. Okay, and then maybe sticking with that theme.

Speaker Change: Pertaining to upsell there and we also have some product and coverage work to do but I do think we have an opportunity.

Speaker Change: Opportunity to continue to grow that.

Speaker Change: Okay, and then maybe just sticking on that theme.

Mark S. Zagorski: Um, you know, certainly, I think we see it across the advertising landscape that more and more spend is getting allocated to video literature, social, or CTV. And, you know, I think you have implemented some prices, some premium prices on some video solutions. But as you look ahead, you know, I think there are good advertising CPMs with a pretty wide discrepancy. So, like, how do you think about price as a lever on some of those more premium impressions? because I think there's still quite a bit of a gap there between what the ad is and what you read. Yeah, we've talked about this on previous calls. And it's a great point.

Speaker Change: You know certainly I think we see it across the advertising landscape at more and more of that spend is that in all cases.

Speaker Change: Social or or you know I think you have implemented.

Speaker Change: Some quite well some premium twice.

Speaker Change: Video.

Speaker Change: Solutions, but as we look ahead.

Speaker Change: Yes.

Speaker Change: Advertising, who canceled a pretty wide discrepancy so like how do you think about.

Speaker Change: Price as a lever some of those more premium compressions, because I think there's still quite a bit of.

Speaker Change: A gap there.

Speaker Change: I want to add.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Yeah, we've talked about this in prior calls it it's a great point I think we're still losing money on the table based on the pricing structure that we have on video and I think it becomes a bigger factor as more dollars move there.

Mark S. Zagorski: I think, you know, we are still leaving money on the table based on the pricing structure that we have for video. And I think it will become a bigger factor as more dollars move there. So I think we've got an opportunity to, you know, drive pricing at the level of our value that we're not taking advantage of. But I do think there's an opportunity for us to do that. We've done it a bit, as we said, in some of our activation solutions, which will be bifurcated between display and video on some of the platforms.

Speaker Change: We've got an opportunity to.

Speaker Change: Drive pricing at the level or value is that we're not taking advantage of them, but I do think there's an opportunity for us to do that we've done it a bit.

Mark S. Zagorski: I think, you know, we have an opportunity as well to look at both activation measurement pricing as the CPMs and video become higher as the demand for video comes greater pushing them up. Okay, appreciate it. Thank you. Thank you.

Speaker Change: You said some of our activation solutions will be bifurcated between.

Speaker Change: Display and video.

Speaker Change: The platforms I think we have an opportunity as well to look at both activation and measurement pricing as the C. P M video become higher.

Speaker Change: Demand for the video comes greater pushing them up.

Speaker Change: Okay. Appreciate it thank you.

Speaker Change: Thank you and our next question comes from.

Operator: And our next question comes from... Raimo Lenschow with Barclays Police. Hi, this is Frank on behalf of Raimo. Thanks for taking the question. Despite the guidance, it still implies a step up in the growth rate throughout the year. With that, what's giving you the most confidence there? And within this, how much does meta ramping factor in, especially relative to your Q4 view? Yeah, I'll take that question,

Speaker Change: Raimo <unk> with Barclays. Please state your question.

Speaker Change: Hi, This is Frank on for Raimo, Thanks for taking the question.

Frank: Some guidance it still implies a step up in the growth rate throughout the year.

Frank: With that what's giving you the most confidence there and within this how much does matter ramping factor in especially relative to your Q4 for you.

Nicola T. Allais: So, you know, if you just step back and look at what we're expecting in the second half versus the first half of the year, we expect the second half to contribute about 56% of total revenue, which is in line with what we saw last year. So there is always more revenue in the second half of the year than there is in the first half. So that's one way to look at the numbers.

Speaker Change: Yeah, I'll take that question frankly so.

Speaker Change: I'll step back and look at our what we're expecting the second half versus the first half of the year. We expect the second half to contribute about 56% of total revenue, which is in line with what we saw last year. So there is always more revenue in the second half of the year as there is in the first half. So that's one way to look at the numbers that they are.

Speaker Change: We have assumed the continued ramp up in the second half are.

Speaker Change: Part of that is baked.

Speaker Change: Based on the ramping that we're seeing from the news article about advertisers that we had already mentioned last quarter. They are.

Nicola T. Allais: We have assumed a continued ramp-up in the second half. Part of that is based on the growth that we're seeing from the new large global advertisers that we had already mentioned last quarter. They are now performing in line with our expectations that they're a slow start. So that is one part of the equation. The other part I would say related to that is additional new advertisers are large global enterprise advertisers that are likely to take our premium price products, which will have an impact on activation off of what we saw in the first quarter. Those are the two large ones.

Speaker Change: Now performing in line with our expectations that their slow a slow start.

Speaker Change: So that is one of the parts of the equation and the other part of everything related to that is additional new advertisers are large global enterprises.

Speaker Change: Advertisers that are likely to take a premium priced product, which will have an impact on activation off of what we saw in the first quarter does that those are the two large one I think if you think about either question the other way.

Nicola T. Allais: I think if you think about the question the other way, you know, we thought it was the right thing to do to take down the contribution from the core of advertisers just to be on the safe side based on the volatility of their spend. What is not yet in the second half, and we spoke about this in the prepared remark, we have not assumed a meaningful contribution from the meta brand safety solution.

Speaker Change: We felt it was the right thing to do to take down the contribution from the cohort of advertisers just.

Speaker Change: To be on the safe side based on the volatility of their spend.

Speaker Change: What is not yet in the second half and we spoke about this on the on the on the prepared remarks.

Speaker Change: We have not assumed that.

Speaker Change: Meaningful contribution from the met up brand safety solution that has not changed it's always been our view that it will take time for that AR to provide meaningful contribution to our numbers, but that could go faster than we expected baseline on the steps that mark shared in terms of.

Nicola T. Allais: That has not changed. It's always been our view that it will take time for that to provide meaningful contributions to our numbers, but that could go faster than we expected based on the stats that Mark shared in terms of the pickup on that solution. TikTok is also now available in a lot of non-English languages.

Speaker Change: The pick up on that on.

Speaker Change: On that solution.

Nicola T. Allais: It is providing some growth, but again, it could go faster than we have expected. And then Cybers is performing to expectations, and that has proven to be very successful in terms of testing. So there are factors that are not included in what we've shown in the second half guidance. But overall, it's 56% of the four-year revenue, which is relatively small. Okay, thank you. Our next question comes from Tim Nollen with Macquarie Police. Hi, thanks very much.

Speaker Change: Kicked off is also now available and a lot of non English languages.

Speaker Change: It is providing some growth, but again it could go faster than we than we had expected and inside it and performing to expectation and that is.

Speaker Change: We're going to be very successful in terms of testing. So there are factors that are not included in what we've shown in the second half guidance.

Speaker Change: But overall, it's 56% of the full year revenue, which is small children get last year.

Speaker Change: Okay. Thank you.

Speaker Change: Our next question comes from Tim Nolan with Macquarie. Please state your question.

Mark S. Zagorski: Mark, I'd like to pick up on your comments on the opportunity in CTV. And I thought it was very interesting to discuss how, you know, a majority of CTV deals are still done on insertion orders, not through private marketplaces, but that that is changing. And actually, the role that DV can play in helping bring about that change on CTV. I just wonder if you could expand a bit more on that. Is this, you know, comments and efforts you're getting from your advertiser base to move toward that, that you can offer more attribution tools that can help move that market to be more biddable and programmatically driven? I just think it's a very interesting concept. I'd love to hear some more color on that. Yeah, thanks for the question.

Tim Nollen: Hi, Thanks, very much Mark I'd like to pick up on your comments on the opportunity in C. T V.

Tim Nollen: Very interesting discussing how you know a majority of C. T. V deals are are still done an insertion order is not through private market places, but that that is changing and actually the role of the D. V can play in helping bring about that change to see together just wondering if you could expand a bit more on that is this.

Tim Nollen: You know comments and efforts you're getting from your advertiser base to move toward that that you can offer more attribution tools that can help them.

Speaker Change: Move that market to be more biddable programmatically, driven I just think it's a very interesting concept I'd love to hear some more color on that please.

Mark S. Zagorski: I think, you know, this is something I've been personally banging the drum on for a while, which is the lack of transparency in CTV buying, which has led to basically an old-school way of purchasing, which is private, you know, PG, or programmatic guaranteed buys, which are not very innovative, don't apply any data, and don't really take advantage of the programmatic pipes and the elegance of the programmatic pipes that people You know, I think where we see an opportunity there is to provide the same level of granular transparency and, you know, safety and suitability performance applications that we see on a page level on the open internet.

Speaker Change: Yeah. Thanks for the question I think you know this is something that I've been personally banging the drum on for a while which is the lack of transparency in CTV buying which has led towards basically an old school way of purchasing which is Friday you know P.

Speaker Change: P J programmatic guaranteed buys which are not very innovative don't apply any data and don't really take advantage of the programmatic pipes and the elegance of the program at a place that people like trade desk and others have I think where we see an opportunity there is to provide the same level.

Speaker Change: Granular transparency and.

Speaker Change: Safety and suitability performance applications that we see on an eight.

Speaker Change: On a page level on the open internet.

Mark S. Zagorski: I think, you know, we've started to be able to crack that with some partners out there on the publisher side to be able to get what we call show-level data so that we can provide measurement and granular measurement for advertisers so they have a greater sense of transparency and a greater sense of, you know, safety, and opportunity to buy in more, you know, more elegant ways. And I think that we're just at the start of that. Like if I say, you know, we are the first to kind of get into that space.

Speaker Change: I think we've started she'd be able to crack that with some partners out there on the publisher side to be able to get the call show level data. So that we can provide measurement and Greenland measurement for for advertisers. So they have a greater sense of transparency and a greater sense of.

Mark S. Zagorski: In a real way, it provides an opportunity down the road for us. And, you know, the granular aspect of the data, I think it's going to open that up a bit. And the nice part is, we're not, you know, we're not blowing our own horn. We think it's good for everybody.

Speaker Change: Oh the opportunity.

Speaker Change: Goodbye and more you know more elegant ways and I think that we're just at the start of that like in I'd say you know we are the first to kind of get into that space in a real way. It provides an opportunity down the road for us and the granular aspects of the data and you can kind of open that up.

Speaker Change: And the nice part of it.

Speaker Change: No we're not.

Speaker Change: Blowing our own Heartland. This is good for everybody. It gives them the publishers because it allows for better safer buying it at more premium level. It's good for the the platforms because they wanted to use the tools that they have to to enhance those buys and obviously it helps us to as we get a higher attach rate.

Mark S. Zagorski: It's good for publishers because it allows for better, safer buying at a more premium level. It's good for the platforms because, you know, they want to use the tools that they have to enhance those buys. And obviously, it helps us, too, as we get a higher attach rate. The one other aspect that I'd say, you know, beyond that, which is really interesting, and we mentioned in the script, is the opportunity for attention on CTV. We've seen this, not with just some of the solutions that we've launched, but, you know, we mentioned Netflix running a study with us on attention across their solutions or across their platform.

Speaker Change: The one other aspect that I would say you know beyond that which is really interesting we mentioned in the script is the.

Speaker Change: The opportunity for attention.

Speaker Change: The TV we've seen this not with just now some of the solutions that we've launched but we mentioned Netflix running.

Speaker Change: Ah study with us on attention across their solutions across their platform.

Speaker Change: No I think.

Speaker Change: CTV is looking for new ways to measure and sell their impressions.

Speaker Change: The reach and frequency of play is is something that doesn't really resonate in the digital world. The way it did in the linear world. So I think things like attention, where we showed some some great promise no year over year, we've tripled our business, even though it's small.

Mark S. Zagorski: You know, I think CTV is looking for new ways to measure and sell their impressions, The reach and frequency play is something that doesn't really resonate in the digital world the way it did in the linear world. So I think things like attention, where we've shown some great promise, and year over year we've tripled our business, even though it's small, I think provide a really interesting opportunity in CTV and OTT applications that I think we're at the early stages of taking advantage of. Great.

Speaker Change: It provide a really interesting opportunity.

Speaker Change: In CTV and OTT applications, but I think we're at the early stages of uptake in Belgium.

Operator: Oh, very, very interesting. And our next question comes from Eric Sheridan with Goldman Sachs. Thanks so much for taking the question. Maybe two if I can.

Speaker Change: Great all very very interesting. Thank you.

Speaker Change: Thanks.

Speaker Change: And our next question comes from Eric Sheridan with Goldman Sachs. Please state your question.

Operator: In terms of the components of the advertising dynamic that is leading you to lower the guide for this year, can maybe you unpack a little bit of how much of that trajectory you now see as sort of a permanent downtick, or it's just delayed or deferred? And could there be elements where some of that on the category side come back as we go through the year? That'd be question one. And then as you look towards the back part of the year, and you frame it against what you typically talk about in terms of your long-term growth drivers, can you give us a little bit more sense of how your visibility continues to evolve into those long-term growth drivers returning the company either the exit velocity in Q4 or the exit velocity as an indicator towards 2025 in terms of compounded growth higher than the levels you're talking about tonight? Thanks.

Eric James Sheridan: Thanks, so much for taking the question maybe two if I can in terms of the components of the advertising dynamic that is leading you to lower.

Eric James Sheridan: The guide for this year could can maybe you unpack a little bit of how much of that trajectory you now see is sort of a permanent downtick.

Eric James Sheridan: Or it's just delayed or deferred and there could be elements where.

Speaker Change: Some of that on the category side come back as we go through the year That'd be question, one and then as you look towards the back part of the year and you frame. It against what you typically talk about in terms of your long term growth drivers can you give us a little bit more sense of how your visibility continues to evolve into those long term growth drivers returning the company either the exit.

Speaker Change: Boston in Q4, or the extra velocity isn't indicator towards 2045 in terms of compounded growth higher than the levels. You are talking about tonight. Thank you.

Nicola T. Allais: Yeah, Eric, I'll start on the impact that we're seeing from this cohort of advertisers. Let me just be clear, no one's turned off the service. This is really based on advertiser spending patterns at the client level, and it's tied to specific issues at the client. So we don't see that as a permanent downshift.

Speaker Change: Yeah, Eric I'll start on.

Speaker Change: On the.

Speaker Change: The impact that we're seeing from this cohort of advertisers.

Speaker Change: Let me just be clear that no one's turned off the service with Israeli based on advertiser spending patterns at the client level.

Speaker Change: Hi, two specific issues.

Speaker Change: Client. So we don't see you guys have come in either permanent downshift.

Nicola T. Allais: We're just seeing it as more of an uneven spending pattern, which is why it is going to impact the rest of the year, and which is why it's having an impact on the debt. And, as an aside, this is the largest component of the impact on the changed guidance that we quoted today. The impact of these uneven spends, and our view is that we just need to take it down. So that is the first step. So that is not the situation, and as I said, no one's turned off the solution.

Speaker Change: We're just seeing it as more of a uneven spending pattern, which is why it is going to impact the rest of the year and which is why timing impact on the guy is as an aside this is the largest component of the impact to the changed guidance that we're that we quoted today not the impact of these uneven span.

Speaker Change: Argued that we can.

Speaker Change: Take it down.

Speaker Change: So that is that is for the first half so that is not a situation and as I said no one's turned off the line.

Speaker Change: The solution digits anyway.

Nicola T. Allais: In terms of exit and growth rates going into next year, obviously, we're seeing very solid growth rates in social and international, and those are bound to continue. I mean, in social, what we're seeing today in terms of growth rates, 51% growth in the quarter versus 48 last year, that is still with basically a diminishing impact from the launch of Brain Safety and Meta, and that, as we've talked in the past, is a very large opportunity. So social growth is expected that to continue at a healthy clip. Internationally, within that, obviously, will be held by social.

Speaker Change: In terms of exit and growth rate going into next year, obviously, we're seeing very solid growth rates in social.

Speaker Change: International and those are you know are.

Speaker Change: Ah bound to continue social are when we're seeing today and she is a great growth rate is 51% growth in the quarter versus 48 last year, but it's still basically a de minimus impact from.

Speaker Change: The launch of brand safety, a matter and that as we've talked in the past is a very large opportunity for social the social growth is we expect them to continue at a healthy clip international within that obviously will be helped by social is the first time in smartphones over 30% of management revenue and as we know.

Speaker Change: International spend as a percent of total as well about 31 right. So we've probably got there too.

Speaker Change: And that will continue and will certainly still be in the exit rate.

Speaker Change: What we will be at the end of this year that we may not be seen in the first quarter is the combined impact of the lower advertising spend.

Speaker Change: And the fact that more dollar moved historically the ABS as part of our activation is lower.

Speaker Change: Corporate expense in the quarter.

Speaker Change: This is a premium priced product.

Speaker Change: Type of product.

Speaker Change: The market is.

Speaker Change: We signed new deal, we do anticipate that we're going to choose between people as well.

Speaker Change: Yeah, and just get through you know one of the factor here is.

Mark S. Zagorski: This is the first time international revenue has over 30% of measurement revenue, and as we know, international spend for the percent of total is well above 31, right? Yeah, and just to throw in, you know, one of the factors here is for the second half of the year and the trajectory they see kind of running out of the year. We do, we have a really nice slate of customer wins. And, you know, those will start hitting and rolling in the second half, as well as a robust pipeline, as we mentioned in the call. We still have a great win ratio of opportunities that stayed stable. And again, we saw, you know, almost two-thirds of those wins.

Speaker Change: For the second half of the year and the trajectory of D. C kind of running out of the year and we do we have a really nice slate of customer wins.

Speaker Change: And those will start hitting enrolling in the second half as well as a robust pipeline as we mentioned in the call.

Speaker Change: We still have great win ratio of opportunities that stayed stable.

Speaker Change: And again, we saw almost two thirds of those wins are coming from what we call Greenfield customers. So those things I think will start to lean in and fill some of the gaps that those large customers who have the beyond even spend I have created in the second half of the year.

Mark S. Zagorski: Coming from what we call greenfield customers. So, you know, those things I think will start to lean in and fill some of the gaps that those large customers who have beyond even spent have created in the second half of the year. And our next question comes from Omar Dessouky, Bank of America.

Speaker Change: Thank you.

Speaker Change: And our next question comes from Omar <unk> with Bank of America. Please state your question.

Operator: Hey, thanks a lot for taking my question. So I'm hearing, first of all, that your large select advertisers that you called out last quarter were one reason for the lowered outlook for the back half of this year. I wanted to just double check, like, how many of them there were, and could you remind us which verticals they were in?

Omar: Hey, Thanks, a lot for taking my question.

Nicola T. Allais: And then I have a question about CTV as a follow-up. Yeah, so we said it was a handful of advertisers. They are all in our top 100. Just to give you a sense of scale, the average spend on our top 100 is over $3 million. And these are advertisers that are towards the top of the top 100 for us. They are in the retail and CPG space.

Speaker Change: So.

Omar: I'm hearing a couple of things I'm hearing first of all that.

Nicola T. Allais: As we said in the first quarter, and we'll repeat it here, these are spending patterns that are tied to specific issues at the advertiser. So, sorry, I apologize, but I thought I heard after the last quarter that one of the advertisers was in the health care area. Is that Are you able to comment on that at all? Because that doesn't sound like either CPG or retail. Correct me if I'm wrong.

Omar: Your large select advertisers that you called out last quarter was one reason for the lowered outlook for the back half of this year I wanted to just double check like how many of it how many of them were there and could you remind us.

Nicola T. Allais: I think we did. I think we quoted retail and CPG. These are retail and CPG clients. Okay, got it. Okay, thanks. And then just a question on CTV.

Speaker Change: Which verticals they were in and then I have a question about CTV as a follow up.

Mark S. Zagorski: Now, I'm getting a little bit of a sense that there's a shift in ad spending towards CTV. It's a market that I think is fairly small for you at the moment. Does the product market fit within CTV differ for advertisers as compared to the markets that you've traditionally focused on? Also, how is the competitive environment different, you know, among CTV verification firms, as compared to, you know, your bread and butter, if at all? Yeah, so in the latter half, the competitive set isn't any different.

Speaker Change: Yeah. So we said it's a handful of advertisers. They are all in our top 100, just to give you a sense of scale. The average spend on a top 100 is over.

Speaker Change: Over $3 million and these are advertisers that are towards the top of the top 100 for US are they are in the retail and CPG space are as we said in the first quarter and we'll repeat it here. These are these are spending patterns that are tied to specific issues at the advertiser.

Speaker Change: This is not tied to the effectiveness of our product is that these clients are going to.

Speaker Change: Their own issues that has led them to do some belt tightening around advertising spend.

Speaker Change: So sorry, I apologize, but I did I thought that I heard after the last quarter that that one of the advertisers who isn't a health care area is that are you able to comment on that at all because that doesn't sound like either CPG or or retail correct me if I'm if I'm wrong.

Speaker Change: I don't think we did.

Speaker Change: Think we quoted retail and CPG, they didn't need a retail and CPG clients not health care.

Speaker Change: Okay got it.

Speaker Change: Okay. Thanks, and then just a question on on C. T V. Now yeah, I'm I'm getting a little bit of a sense that there is a shift in ad.

Speaker Change: Spending towards C T V.

Mark S. Zagorski: It's a it's a market that I think is fairly small for you at the moment.

Speaker Change: Does the does the product market fit.

Speaker Change: Within CTV differ for your advertisers as compare to the.

Speaker Change: The markets that you've traditionally focused on.

Speaker Change: Also how is the competitive environment different.

Speaker Change: Among C T V verification firms as compared to you know your bread and butter if at all.

Mark S. Zagorski: Actually, it's even more limited because the ability to verify and measure within CTV is a pretty heavy lift. And like any walled garden or kind of closed environment, the balance goes from limited CTV inventory to, you know, an overabundance of inventory in the same way we saw it in the open web, the same way we saw it in mobile. I think there's a change in the dynamics of how CTV will be bought and sold.

Speaker Change: Yeah sure.

Speaker Change: Or have the that the competitive set isn't any different actually its even more limited because the ability to verify measure within CTG is a pretty heavy lift and like any walled garden or or closed <unk>.

Speaker Change: Environment.

Speaker Change: Partners only platforms on work with a handful of folks for example, net flix when they rolled out and they worked with two verification partners NY measurement partner when they launched right. So so I think a competitive set is even more limited than it is on the open web.

Speaker Change: With regard to product market fit I think that's something that we were kind of alluding to in the comments, but really there's.

Speaker Change: There's two aspects to it the first is current product market fit with the way most.

Speaker Change: Most.

Speaker Change: C. G D is being bought and sold which is through programmatic guarantees.

Mark S. Zagorski: And through limited kind of direct buying.

Speaker Change: That provides a lower attach rates for us just due to the fact that it's really a one to one by in many cases, and theres not data or targeting or verification applying.

Speaker Change: Where would you see that evolving however is where the opportunity lies which is our CTV inventory becomes much more prevalent and the balance goes from limited CTV inventory to you.

Mark S. Zagorski: More of it will be programmatic. More of it will be open market or more open TMPs or private marketplace packages where there's a better product market fit for us and a better attach rate for us. That will be enhanced as we get more granular in our ability to measure on a show level.

Speaker Change: Overabundance of inventory in the same way we saw it in the open web saying what he saw in mobile.

Mark S. Zagorski: I think theres a change in the dynamics of how CTV will be gone so more of it will be programmatic more of it will be open market or more open e&ps are private marketplace packages.

Mark S. Zagorski: Which theres, a better product market fit for us and a better attach rate for us that will be enhanced as we get more granular her ability to measure on a show level. So I think the opportunities there.

Mark S. Zagorski: So I think, you know, the opportunities there go from being, you know, a relatively small opportunity today as far as overall volume and percentage of revenue are concerned to one which is greater and commensurate with the percentage that CTV is taking of the overall ad market. So again, I think there's some evolution in how CTV is bought and sold. That will be, you know, a positive attach rate driver for our product. And then there's some evolution in the actual product and measurement products that we're building to be able to do so on a show level basis in the same way we do on the open web. Appreciate you going through that again.

Mark S. Zagorski: Go from being a relatively small opportunity.

Speaker Change: Opportunity today as far as overall volume and percentage of revenue to.

Speaker Change: To one which is greater and commensurate with the percentage that CTV is taking of the overall AD market. So again I think theres some evolution of how Cte bought sold that would be.

Mark S. Zagorski: Positive yeah attach rate driver to our product and then there's some evolution of the actual product mix the products that we're building and should be able to do so on a on a show level day basis in the same way we did in the open web.

Speaker Change: Okay. I appreciate you going through that again, thank you.

Speaker Change: Yeah, you got it.

Operator: Thank you. Yeah, you got it. Our next question comes from Michael Graham with Canaccord.

Our next question comes from Michael Graham with Canaccord. Please state your question.

Nicola T. Allais: You know, you've covered this a few times, but it sounds like the softness from those retail CPG advertisers is really just a function of their overall ad spend as opposed to any migration away from your products or any competitive pressure. But I wanted to just ask about the competitive landscape and if you're seeing any changes there. And then separately, you were able, despite the lower revenue guidance, to keep your EBITDA margin guidance pretty consistent.

Michael Patrick Graham: Yeah. Thank you.

Nicola T. Allais: You've covered this a few times, but it sounds like the softness from those retail CPG advertisers, there's really just a function of their overall AD spend as opposed to any migration away from your products or any competitive pressure, but I wanted to just ask about the competitive landscape.

Nicola T. Allais: If you're seeing any changes there.

Nicola T. Allais: And then separately.

Speaker Change: You were able to despite the lower revenue guide you were able to keep your EBITDA margin guidance, you know pretty consistent so I just wanted to ask what dynamics, you're seeing that are enabling you to kind of keep your profitability profitability levels up.

Nicola T. Allais: And so I just wanted to ask what dynamics you're seeing that are, you know, enabling you to kind of keep your profitability levels up. Thanks, Michael. So I'll take the first part; Nicole will take the second.

Mark S. Zagorski: On the competitive dynamics, I mean, I think, as we mentioned last quarter, we have been with a lot of the same competitors for over a decade, and that dynamic remains as it always has been, which is robust, but certainly has not devolved into any type of pricing competition or pricing war. We were very clear about that in the first quarter; we remain, you know, steadfast in our position that, you know, there's nothing happening that hasn't happened in the past, which is, great products win customers, great service keeps customers, and we always are very competitive with the folks out there.

Speaker Change: Thanks, Michael I'll take the first part go I'll take the second.

Mark S. Zagorski: On the competitive dynamics I mean, I think as we mentioned last quarter.

Mark S. Zagorski: He has been with a lot of the same competitors for over a decade.

Mark S. Zagorski: And that dynamic remains as it always has been which is robust.

Mark S. Zagorski: It certainly is not.

Mark S. Zagorski: Devolved into any type of pricing competition or pricing.

Mark S. Zagorski: We're very clear about that in the first quarter.

Mark S. Zagorski: Name.

Mark S. Zagorski: Steadfast in our position that you know there's nothing happening that it has.

Mark S. Zagorski: Happened in the past, which is a great.

Mark S. Zagorski: Great products when customers Great service keeps customers and we always are very competitive with the folks out there. So.

Speaker Change: They have not played a role.

Speaker Change: The slowness in even a suspended those core customers that we saw them. So they're not kicking our competitors haven't taken chunks of that business or our competitors haven't you know caused that slowing has to happen sooner.

Mark S. Zagorski: So they have not played a role in the, you know, the slowness and laziness and spending of those core customers that we saw. So they're not taking, our competitors haven't taken chunks of that business, or our competitors haven't, you know, caused that slowness to happen. So the environment remains, you know, as it always has been; we've not, as Nicole noted, seen a degradation in per product pricing between activation and measurement. So those dynamics remain the same.

Mark S. Zagorski: So the environment remains as it always has been not as Nikola noted.

Mark S. Zagorski: Degradation on per product pricing.

Mark S. Zagorski: Activation and and measurement and so those dynamics remain the same.

Nicola T. Allais: And on the second question, we, you know, our business is very profitable, right? So, and, you know, you can even see it on the cost of sales, meaning 1% of revenue. The dynamics we're seeing are the same as we saw at the beginning of the year, which is that we are starting to see some benefits from the use of AI and machine learning around the cost that it takes us to innovate. We are continuing to innovate.

Speaker Change: And on the second question.

Nicola T. Allais: We you know our business is very profitable right. So and you can even seen on the cost of sales and 1% of revenue. The the dynamics. We are seeing are the same as we saw at the beginning of the year, which is we are starting to see some benefits from the use of AI and machine learning around the cost that it takes us to innovate.

Nicola T. Allais: We are continuing to innovate.

Nicola T. Allais: We're also benefiting from the fact that we are we are seeing the economies of scales around G&A in general so the benefit of our model is is basically contributing to us to be able to continue to manage out of 31% margin, even though we are continuing to invest.

Nicola T. Allais: We're also benefiting from the fact that, you know, we are seeing the economy scale around GNA in general. So the benefit of our model is basically contributing to us being able to continue to manage our 31% margin, even though we're continuing to invest. Okay, thank you. And our next question comes from Mark Kelley with Stifel. Great, thank you very much.

Nicola T. Allais: Yeah.

Mark Patrick Kelley: Okay. Thank you.

Nicola T. Allais: Yep.

Nicola T. Allais: And our next question comes from Mark Kelley with Stifel. Please state your question.

Operator: I wanted to ask a question just about the bigger picture, just about guidance philosophy. You know, a win rate above 80% sounds like the RFP pipeline is pretty robust. You know, you mentioned 40 plus advertisers kind of evaluating meta brand safety, I guess. When you take a look at all of, you know, the visibility that you do have to, Any of those, I guess, you know, what's the right way for us to think about how you embed that into the full year guide? That's my first question. And then the second one is just more of a clarification.

Mark Patrick Kelley: Great. Thank you very much I wanted to ask a question just about.

Operator: Bigger picture, just just guidance philosophy.

Operator: Win rate above 80% it sounds like the RFP pipeline is pretty robust.

Operator: You know you mentioned 40, plus advertisers kind of evaluating that a brand safety I guess.

Operator: When you take a look at all of the visibility that you do have to.

Operator: Any of those I guess, you know, what's the right way for us to think about how you embed that into the full year guide.

Operator: That's my first question and then the second one is just more of a clarification.

Nicola T. Allais: The commentary about slower pacing in April, I just want to make sure that that is a comment focused on the retail and CPG clients and not a broader statement about what you're seeing at the corporate level. Yeah, so Mark, I'll start with the second question. You're correct.

Operator: The commentary about slower pacing in April I, just want to make sure that that is a comment that's.

Mark: Focused on the retail and CPG clients and not a broader statement about you know what youre seeing.

Speaker Change: At the corporate level. Thank you.

Nicola T. Allais: That statement was related to this cohort of advertisers, which is why we chose to take a year down based on the volatility that we've seen around that cohort. And again, they're, you know, they are within the top 100 of their material clients for us. I think this goes a little bit into the philosophy that we adopted around guidance, which is not unlike what we've done in prior quarters, which is incredibly close to the pin based on what we see at the time that, you know, we are issuing guidance.

Speaker Change: Yeah, So mark I'll start with the second question you are correct that seemed like it was related to the cohort of advertisers, which is why we were chosen to take a year down based on the policy that we've seen around that cohort and again there you know they are within the top 100 of their material clients for us.

Nicola T. Allais: I think this goes a little bit into the philosophy that we took around a guidance, which is not unlike what we've done in prior quarters, which is probably close to the pin based on what we see at the time that we are issuing guidance.

Nicola T. Allais: So it felt like the right thing to do to take, you know, the impact of these advertisers into the guidance. You're correct that there is lots of positive momentum around pockets of the business that we anticipate will continue. So this is a measured view of the second half of the year.

Nicola T. Allais: So it felt like the right thing to do to take.

Nicola T. Allais: The impact of these advertisers into the guidance.

Nicola T. Allais: Correct.

Nicola T. Allais: Lots of positive momentum around pockets of the business that we anticipate will continue so it is a measured view of the second half of the year, but the reality around this cohort of advertisers a material impact on what we're guiding to today. It is the vast majority of the impact that we took on today's guide.

Nicola T. Allais: But the reality around this core of advertiser is a material impact on what we're getting to today. It is the vast majority of the impact that we took on today's guidance. Okay, thank you very much.

Nicola T. Allais: Yeah.

Speaker Change: Okay. Thank you very much.

Nicola T. Allais: Yeah.

Operator: Our next question comes from Justin Patterson with KeyBank Capital Markets. Great, thank you. I don't think you could elaborate a little bit more on the spending from large customers. I appreciate that there's some uneven spending there, a few large ones in retail and CPG cutting back. But it's also a pretty robust brand advertising market. You started some nice trends around social within there.

Nicola T. Allais: Our next question comes from Justin Patterson with Keybanc capital markets. Please state your question.

Speaker Change: Great. Thank you.

Operator: I was hoping you could elaborate a little bit more on just sort of a spending from large customers that I appreciate that there's some uneven spending there a few large ones in the retail and CPG cutting that's also a pretty robust brand advertising market started some nice trends around social with them. There. So just trying to get a better understanding of how macro.

Nicola T. Allais: So just try and get a better understanding of how macro is playing in this and perhaps that there might be a little bit of crowding out from a more price inflationary versus impression heavy market. Thank you. Yeah, I think, Justin, we're going to say again what we said in the first quarter because it remains consistent, which is, you know, we are seeing issues that are specific to these clients. You know, we talked about this in the first quarter; some of these clients are going through corporate restructuring and have either expenses that are leading them to tighten their ad spend.

Nicola T. Allais: <unk> is playing in that and perhaps that there might be a little bit of a crowding out from a more price inflationary universes impression I think market. Thank you.

Nicola T. Allais: So we're not seeing this, and we're not saying that this is a broader macro factor. And as a prior, as an answer to the prior question, we haven't seen this spread to other clients at all. So we're not factoring this as a macro component at all.

Speaker Change: Yeah I think.

Nicola T. Allais: Justin.

Speaker Change: Say again, what we said at the first quarter because it remains consistent which is you know we are seeing issues that are specific to these clients. We talked about this in the first quarter. Some of these clients are going through a corporate restructuring and have either items that are leading them to tighten their AD spend so we're not seeing that we're not.

Nicola T. Allais: Saying that this is a broader macro.

Nicola T. Allais: A factor.

Speaker Change: And as the prior answer to a prior question we haven't seen this.

Nicola T. Allais: Spread to other clients at all so.

Nicola T. Allais: We're not we're not factoring in this is a macro component at all this is really specific to these advertisers.

Speaker Change: Okay got it.

Nicola T. Allais: This is really specific to these advertisers, which I think contributes to some of the confusion of it's still a pretty solid brand advertising market out there. So are there any other other factors that you're watching?

Nicola T. Allais: [noise] contributes to some of the confusion, that's still a pretty solid brand advertising market in there. So are there any others.

Nicola T. Allais: Other factors that you're watching and perhaps it's just the west visibility because activations.

Nicola T. Allais: The larger piece of revenue, that's a kind of driving.

Nicola T. Allais: Driving the outlook here.

Mark S. Zagorski: Perhaps it's just less visibility because activations are becoming a larger piece of revenue that's kind of driving the outlook here. Yeah, I think, you know, we added the factor which is creating some questions around moderated growth, which is the shift to spend on social, right, from the open web and the internet. And by the shift to spend, I mean, the shift to growth, right? A lot of the growth that we're seeing in our business, as we know, is coming from social.

Speaker Change: Yeah, I think we.

Mark S. Zagorski: We did that we added a factor which is you know.

Mark S. Zagorski: Creating a.

Mark S. Zagorski: Some questions around moderated graph, which is the shift of spend as social right from open web and from the Internet.

Mark S. Zagorski: And by the shift to spend that shifted the growth rate a lot of the growth that we're seeing in our business as we know it is coming in social.

Mark S. Zagorski: That business is.

Mark S. Zagorski: Not as it.

Mark S. Zagorski: Now that that business is not as rich for us as our activation businesses, so, you know, we are seeing some of that impact as we see dollars go to CTV or see dollars go to social. And we mentioned CTV a lot in the call because we think there's a big opportunity there. But, as you and, you know, a lot of analysts have noted, we're still underpriced in that space, right? And I think, you know, that's something that we need to start to work on.

Mark S. Zagorski: As rich for us as our activation businesses. So.

Mark S. Zagorski: We are seeing some of that impact as we see dollars go to CTV or see dollars go to to social and we mentioned CTV a lot in the call because we think there's a big opportunity there but as.

Mark S. Zagorski: But as you and you know a lot of analysts have noted we're still under priced in that space right and I think.

Mark S. Zagorski: That's something that we should start to work on getting our value prop aligned in our value aligned with the price of those impressions. So.

Operator: Getting our value proposition aligned and our value aligned with, you know, the price of those impressions. So it's something that I think, you know, we've talked about in the past; I think it would be a focus of ours moving forward. All right, thank you, and our next question. Matthew Cost: Hi, everybody. Thanks for taking the questions. I have two.

Matthew Andrew Cost: It's something that I think we've talked about in the past I think it would be.

Matthew Andrew Cost: A focus of ours moving toward.

Matthew Andrew Cost: Alright, thank you.

Operator: And our next question comes from Matthew cost with Morgan Stanley. Please state your question.

Operator: I'll start with one just on the large customers. I guess last quarter, you articulated kind of the same headwinds and uneven spends that, you know, that you saw from them then that you're talking about now. I guess how are you getting confident at this point now that, you know, three months later, it's a little bit worse than you thought it was when you guided it last time? How are you getting confident that it won't keep getting worse for these large customers?

Matthew Andrew Cost: Hi, everybody. Thanks for taking the question I have two I'll start with one just on the large customers I guess last quarter, you articulated kind of the same headwinds and uneven spend that are that you saw from the man that you're talking about now I guess.

Operator: How are you getting confident at this point now that we're three months later, it's a little bit worse than we thought it wasn't you guided last time, how are you getting confident that it won't keep getting worse with these large customers like why should we be confident that this is appropriately derisked in the second half given that you have the same mix of revenue in the second half that you had.

Operator: Like, why should we be confident that this is appropriately de-risked in the second half, given that you have, you know, the same mix of revenue in the second half that you had last year, but you don't have this drag that could get worse over the course of the year? Yeah, I think, look, we're getting we are, we feel, we feel it's the right thing to take the number down for the patterns that we've seen in the first four months, right?

Operator: Last year that you don't have this drag that could get worse over the course of the deal.

Speaker Change: And I have a follow up.

Operator: So there actually was a good, there was a pickup in spend in March, but April is now uneven again. And so we are taking the impact of all of that into the second half. It is, you know, it certainly feels like the right thing to do for the second half of the year.

Operator: Yeah, I think look we're getting where we are we're feeling we're feeling it's the right thing to take the number down for the patterns that we've seen in the first four months right. So there actually was a good.

Operator: There was a pick up in spend in March but April is now and even again and so we are we are taking the impact of all of that into the second half.

Operator: It is a it feels like it certainly feels like the right thing to do for the second half of the year. So I think if you back into that then the question is really how to how to how to think about the second half and what is happening there and the sequential growth from new customers.

Nicola T. Allais: So I think if you back into that, then the question is really how to think about the second half and what is happening there. And you know, the sequential growth from new customers is one of the factors that is going to help us deliver sequential revenue percentage growth in the second half of the year versus the first half of the year, along with other opportunities. And we do think that, you know, from what we can see now, the right thing to do for those advertisers was to take it down, and Thank you.

Nicola T. Allais: Is one of the factors that are going to.

Nicola T. Allais: To help us deliver sequential revenue percentage growth in the second half of the year versus the first half of the year along with other opportunities and we do think that.

Nicola T. Allais: From what we can see now.

Nicola T. Allais: The right thing to do for this advertiser wants to take it down in the second half.

Nicola T. Allais: And then, you know, you mentioned some of the new dollars coming in, sort of being more focused on social and CTV rather than the open web. Is that a structural issue that maybe gets worse when cookies, you know, go away at some point in the future?

Speaker Change: Got it. Thank you and then you mentioned you know some of the new dollars coming in it's sort of being a more focused on social and P. T V. Rather than open web is that a structural issue that maybe gets worse when cookies that will go away at some point in the future and and and if it's not I assume its because eventually.

Nicola T. Allais: Youll launch the full suite of products that you have on open web on social and Ptv, but but how long does it take for that to unfold and then could there be a mismatch and how quickly dollar shift next year at the social CEB versus your roadmap of launching all your products on those are all those vertical.

Mark S. Zagorski: And if it's not, I assume it's because eventually you'll launch the full suite of products that you have on the open web on social and CTV, but how long does it take for that to unfold? And then could there be a mismatch in how quickly dollars shift next year on to social and CTV versus your roadmap of launching all your products on those? Yeah, it's a great insight.

Mark S. Zagorski: And, you know, I want to be clear about one thing: we don't need to wait to launch new products to take advantage of this growth, right? So, you know, our expansion already across meta and TikTok has borne a significant amount of fruit based on the solutions that we have in place. So we are experiencing that growth, and that will continue to be a factor in, you know, our trajectory moving forward.

Speaker Change: Yeah, it's a great insight and I want to be clear on one thing is that we don't need to wait to launch new products to take advantage of this growth right. So we.

Mark S. Zagorski: Our expansion already across meta and Tic Toc.

Mark S. Zagorski: Has borne a significant amount of fruit based on the solutions that we have in place. So we are experiencing that growth.

Mark S. Zagorski: That will continue to be a factor in our trajectory moving forward.

Mark S. Zagorski: So I think, you know, we certainly aren't banking on our ability to grow in CTV or social on new products. I think they will enhance our opportunities there and kind of give us even more fuel to continue to grow at the trajectory we want. And with regard to cookies and the role they'll play there, I mean, this is something where I think it's probably less about cookie deprecation than it is about performance.

Mark S. Zagorski: So I think a we.

Mark S. Zagorski: We certainly are not banking.

Mark S. Zagorski: Our ability to grow in CTV or social on new products I think they will enhance our opportunities there and kind of give us even more fuel to continue to.

Mark S. Zagorski: Grow with it.

Mark S. Zagorski: Factory, Vermont and with regard to cookies in the role they'll play there.

Mark S. Zagorski: I mean, this is something where I think it's probably less about cookie deprecation than it is about performance.

Mark S. Zagorski: And as advertisers push for more granularity, more transparency, and more performance, both on social and CTV, that will be the biggest deciding factor on how it works. And performance is directly tied not just to remembering to close the loop, but what the CPMs are of those platforms.

Mark S. Zagorski: And as advertisers push for more granularity more transparency and more performance.

Mark S. Zagorski: On social and CTV that will be the biggest deciding factor on on how it works and performance is directly tied not just remember too she like closing the loop, but what the CPM Saar of those platforms. So if.

Mark S. Zagorski: So if demand on those platforms starts to be so much that it exceeds the value or the ROI of spending on those platforms, then dollars will shift to where it's cheaper, whether those cookies are or aren't. And we actually saw this earlier this year with some of the social platforms, and people complaining that prices were being bid up by a lot of Asian reselling companies that advertise on the Super Bowl, driving CPMs up and lowering ROI for advertisers, which meant they fled some of those platforms. So we've seen this before.

Mark S. Zagorski: Demand on those platforms starts to be so much that it is extra exceeds the the value or the ROI.

Mark S. Zagorski: Spending on those platforms the dollars will shift to where it's cheaper whether there's cookies or not and we actually saw this earlier this year with.

Mark S. Zagorski: With some of the social platforms and the people complaining that.

Mark S. Zagorski: Prices were being bid up by.

Mark S. Zagorski: A lot of.

Mark S. Zagorski: Asian reselling companies that advertise on the Super Bowl.

Mark S. Zagorski: We're driving CPM up in lowering ROI for advertisers, which they fled some of those platform. So we've seen this before so I think it's gonna be a balance of dollar shift.

Mark S. Zagorski: So I think it's going to be a balance, a dollar shift plus ROI on those dollar shifts that will impact, you know, where spend goes. So I don't think what I'm getting at is that it's not game over yet for the cookie-based or non-cookie-based environment. It's going to be a story of return on investment and CPMs. Thank you. And our next question. Youssef Squali: Hi, this is Robert Zeller.

Youssef Houssaini Squali: Plus ROI on those dollar shift that will impact.

Youssef Houssaini Squali: Their spend goes so I don't think what I'm getting at is not game over yet for <unk> for the.

Youssef Houssaini Squali: Cookie based or non cookie based environment, it's going to be a story of return on ROI and CPM.

Youssef Houssaini Squali: Great. Thank you.

Mark S. Zagorski: Thank you and our next question comes from Youssef Squali with tourists Securities. Please state your question.

Operator: Thank you for taking the questions. I just wanted to ask a clarifying question on the uneven spending pattern as well. Do you think advertisers are pulling back on ABS, like product specifically or the programmatic space altogether? And if an advertiser shifts more spend to social, I'm just curious why D.V. shouldn't see a greater tailwind in that channel.

Youssef Houssaini Squali: Hi, This is Robert seller. Thank you for taking my questions I just wanted to ask a clarifying question on the uneven spending pattern as well.

Speaker Change: Do you think advertisers are pulling back on ABS like.

Speaker Change: Like product, specifically or the programmatic space altogether.

Operator: And if an advertiser shifts more spend social I'm just curious why.

Operator: T V you shouldn't see a greater tailwind in that channel. Thank you.

Nicola T. Allais: Thank you. Yeah, I think the first one is, you know, the spend unevenness is across their entire spend. This is not specific to a product; it's overall lower spend.

Speaker Change: Yeah, I'll take the first one.

Nicola T. Allais: The spend that's been unevenness is across their entire span. It is this is not a.

Nicola T. Allais: Specific to product its overall lower spend as we said earlier in the call, but we're not seeing any of these advertisers turn off the product.

Speaker Change: Overall spending wise.

Nicola T. Allais: As we said earlier in the call, we're not seeing any of these advertisers turn off the product; they're just overall spending. In terms of the shift to social, yes, it is. I mean, it's ultimately a positive for us, right, because it is part of the ecosystem where we do have products that are continuing to evolve. And if you think about the evolution here, you know, we can get those social measurements going, and then we are developing the product that will allow us to do a solid activation offering for social. So it is a positive overall for sure. In the short term, activation products are premium priced.

Speaker Change: In terms of the shift to social yes. It is I mean.

Nicola T. Allais: It's ultimately a positive for us right because it is part of the ecosystem or we do have products under their continuing to evolve.

Nicola T. Allais: And if you think about the evolution here is we can get those social measurement going and then we are developing a product that will allow us to do a solid activation offerings for social.

Nicola T. Allais: And so as more volume of growth goes to social, we will have an impact there in terms of the revenue that we can extract. But over time, it is a positive for us. Okay, thank you. And our next question comes from Vasily Karasyov. Thank you, good afternoon.

Nicola T. Allais: So it is a positive overall for sure.

Vasily Karasyov: The short term.

Vasily Karasyov: The activation products are premium priced and so as more volume.

Vasily Karasyov: It goes to social.

Vasily Karasyov: Will we will have an impact there in terms of the revenue.

Vasily Karasyov: And then we can extract but over time it is a positive for us.

Vasily Karasyov: Okay. Thank you.

Vasily Karasyov: And our next question comes from Vasily Cutoffs, you off with Cannonball Research. Please state your question.

Operator: I wanted to ask you if you are already having conversations with big connected TV platforms, apps, and publishers and so on, and also with advertisers who use CTV through the open programmatic channels, and how far along are you in those conversations in terms of the growth opportunity you outlined? And connected to that question is, how long would it take for you to sort of get into that market and make that revenue stream sizable enough to return to growth? Can we even say that when all is said and done, we will be growing at 25% again? Or do you think it's just a few percentage points of growth a year? Thanks, Vasily.

Vasily Karasyov: Thank you. Good afternoon wanted to ask you if you are already having conversations with that.

Operator: Big connected TV platforms power apps, and Ah publishers, and so on and also with the advertisers who use C. T V.

Operator: Open programmatic channels and how far along are you in those conversations in terms of the growth opportunity you outlined and connected to that question is when how long would it take for you to sort of get into that market and maybe a good revenue stream sizable enough to return to growth.

Operator: <unk> into 'twenty.

Operator: We havent save that one when all said and done we won't be growing at 25% again or do you think it's just a few percentage points growth a year.

Operator: No.

Mark S. Zagorski: So on the first question from CTV, I mean, yes, we are in dialogue with, you know, many of the top 10 publishers out there. Last month, we announced that we were working with NBC Universal on this front, and there's a string of others, which we hope to announce over the next several months. So that momentum is there, and we're pretty excited about it. With regard to growth, I mean, look, CTV is going to be part of the growth story.

Vasily: Ah Thanks nationally so on the first question on CTV and yes, we are in dialogue with.

Mark S. Zagorski: Many of the top 10 publishers out there last month, we announced.

Mark S. Zagorski: That we were working with NBC Universal on this front and there's a there's a string of others, which we hope to announce over the next several months. So that momentum is there and we're pretty excited about it.

Mark S. Zagorski: As we noted, we've got lots of growth levers we're still pressing on. Social is still driving a big chunk of growth. Global is still driving growth. Our activation solutions and optimization solutions via Cybiz are, you know, still a small but nice contributor. So, you know, we are optimistic about continuing to look at a strong growth profile in the future without, you know, getting our pipeline deals closed to drive the additional growth that we think is out there.

Mark S. Zagorski: With regard to growth in HELOC CTD is going to be part of the growth story.

Mark S. Zagorski: As we noted we've got lots of growth levers, we're still pressing on social skills driving.

Mark S. Zagorski: A big chunk of growth global is still driving growth.

Mark S. Zagorski: Our activation solutions and optimization solutions ESI bids now is is still small but nice contributor.

Mark S. Zagorski: So we are.

Mark S. Zagorski: Optimistic about continuing to look at our strong growth profile in the future about getting our pipeline.

Mark S. Zagorski: Deals close to drive.

Mark S. Zagorski: The additional growth.

Mark S. Zagorski: Gross said everything that is out there and you know again.

Mark S. Zagorski: The dynamics of our penetration in the market hasn't changed.

Mark S. Zagorski: During the call.

Speaker Change: Yeah less than half of our customers use.

Mark S. Zagorski: For more of our solutions. So we've got lots of Upselling can still do.

Mark S. Zagorski: I think the ball is in our core right now so we don't want to say is this is all product development opportunity here. It's all new solutions that are going to continue to drive growth is continuing to win in places outside the U S. Continuing to lean in on Upselling solutions to our current clients.

Mark S. Zagorski: And, you know, again, the dynamics of our penetration in the market haven't changed. So, you know, what we don't want to say is this is all a product development opportunity or it's all new solutions that are going to continue to drive growth. It will continue to invest in places outside the U.S., continue to invest in upselling solutions to our current clients, and continue to expand coverage across the platforms where we already have relationships.

Mark S. Zagorski: And continuing to expand coverage across the platforms, where we already have relationships those things, which drove our growth in the past are going to continue to drive our growth in the future.

Mark S. Zagorski: Those things which drove our growth in the past are going to continue to drive our growth in the future. So would it be fair to say that, judging by your guidance, you're not expecting this pivot to yield results until next year, or is it? , http://TheBusinessProfessor.com,,,,,, Yeah, I think I think it's going to take longer than a few quarters to see it play out.

Speaker Change: So would it be fair to say that judging by your guidance Youre not expecting this pivot to yield results until next year or is it.

Speaker Change: It's farther out than that.

Speaker Change: Yes, I think I think it's this will take longer than a few quarters to play out for sure.

Speaker Change: Thank you.

Speaker Change: Thank you and our next question comes from Robert Cole Bridge with Wells Fargo. Please state your question.

Mark S. Zagorski: Thank you. And now for our next question. Robert Colbridge with Wells Fargo, Great, thank you for taking our questions. If we go back to the META brand safety evaluations going on right now, could you perhaps expand on the early advertiser response to or adoption of META's own platform safety tools? Essentially, you know, how many among your customer base are sort of prepared to layer on your verification tools at this point? And anything you can say about the early response to the verification tools as well.

Mark S. Zagorski: Great. Thank you for taking our questions. If you go back to the matter of brand safety evaluations going on right now could you perhaps expand on the early advertiser response to or adoption of that is platform safety tools essentially you know how many.

Robert Colbridge: Among your customer base are sort of prepared to to layer on your verification tools at this point.

Robert Colbridge: And anything you can say about the early response to the very good verification tools as well and then finally as we think about industry changes that we may see in 'twenty. Five wondering if you might be willing to give us a sense of.

Mark S. Zagorski: And then finally, as we think about industry changes that we may see in 25, I'm wondering if you might be willing to give us a sense of TikTok US scale in terms of your exposure and how that's been contributing to the growth. Thank you. Yeah, so on the meta question, I think we mentioned that, you know, we're working, we're in active tests with over 40 of our customers, and many of them are some of our top, top 100 customers. The feedback has been solid.

Mark S. Zagorski: Tick Tock U S scale in terms of your exposure and how that's been contributing to the growth. Thank you.

Mark S. Zagorski: Many, you know, we've closed a number of activation deals after the test, and it's pacing on the schedule and at the rate at which we expect it to, you know, the nice part about that is, you know, getting into social, the number of impressions that we see across those platforms is pretty massive, right? It's, it's, the dollars spent, the impressions that are going across the newsfeed are big, so when we close a deal with a customer, they're, these are not small deals, they're pretty big deals, and I think, you know, the pacing of that, the testing of that is going as planned, and again, you know, we mentioned over 40 customers with, you know, a number of them already closing, we'll start activating in the second half of the year.

Mark S. Zagorski: Yeah. So on the meta question I think we mentioned that we're working we're in active tests with over 40 of our customers and many of them are some of our top our top 100 customers.

Mark S. Zagorski: The feedback has been solid many we've closed.

Mark S. Zagorski: Number of activation deals.

Mark S. Zagorski: After the test and it's pacing on the schedule and at the rate at which they.

Mark S. Zagorski: Do you expect it to and the nice part about that is.

Mark S. Zagorski: Getting into social the number of impressions that we see across those platforms is pretty massive right.

Mark S. Zagorski: The the dollar spent the impressions that are going across the news feed or big said, when we close a deal with a customer.

Mark S. Zagorski: There are these are not small deals there are pretty big deals.

Mark S. Zagorski: The pacing of that testing that is going as planned.

Mark S. Zagorski: And again.

Mark S. Zagorski: Over 40 customers.

Mark S. Zagorski: Number of them already closing will start activating in the second half of the year.

Mark S. Zagorski: So that's going well. With regard to TikTok, I think we mentioned that almost 50% of our TikTok revenue is outside the U.S., and I think that's significant to note because we just started expanding the language footprint on TikTok in the second half of last year and rolling into the first half of this year. So as we move into more languages, as we move into more markets, the balance between the U.S. and the world will continue to shift, probably towards more of the world than the U.S., considering where we sit today.

Mark S. Zagorski: So that that's going well with garden tick Tock I think we mentioned almost 50% of our Tic Toc revenue is outside the U S.

Mark S. Zagorski: And I think that's significant to know because we just started expanding the language footprint on ship dock in the second half of last year. It ruins. The first half of this year. So you know.

Mark S. Zagorski: As we move into more language as we move into more markets.

Mark S. Zagorski: At.

Mark S. Zagorski: The balance between U S and the world will continue to shift probably towards.

Mark S. Zagorski: More of the world in the U S sitting where we sit today. So I think it's a good growth driver, we still think there's legs there and.

Mark S. Zagorski: We're not going to sit here and try to prognosticate on what happens to them than you asked but net net.

Mark S. Zagorski: They are.

Mark S. Zagorski: Growing their footprint outside the U S with us which provides opportunity and it.

Mark S. Zagorski: And also to put that in scale, Facebook and YouTube are still by far our largest social platforms. I think we may have mentioned they're over 80% of our social revenue. So they are still the big dogs in this game.

Mark S. Zagorski: And also to put that in scale.

Mark S. Zagorski: Yeah.

Mark S. Zagorski: Book and Youtube are still by far our largest social platforms. I think we may have mentioned there are over 80% of our social revenue. So they are still the big dogs in this game.

Mark S. Zagorski: Got it. Thank you. There are no further questions at this time. I would like to turn the floor back to Mark. All right, thank you all for your time today. We remain excited about the significant opportunities that lie ahead in social, CTV, and retail media channels as we grow the value proposition with our customers around the world. Thank you. With that, we conclude today's call.

Speaker Change: Got it thank you.

Mark S. Zagorski: Thank you and there are no further questions at this time I would like to turn the floor back to Mark Zagorski for closing comments.

Mark: Alright. Thank you all for your time today, we remain excited about the significant opportunities that lie ahead, and social CTV and retail media channels as we grow the value proposition with our customers around the world.

Speaker Change: Thank you.

Speaker Change: That will conclude today's call all parties may disconnect have a great day.

Mark S. Zagorski: Yeah.