Q1 2024 Integral Ad Science Holding Corp Earnings Call

May 9, 2024

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Operator: Good day, and thank you for standing by. Welcome to the IAS Q1 2024 earnings conference call. At this time, all participants are in a listen-only mode.

Okay.

Good day and thank you for standing by welcome to the IHS Q1, 'twenty 'twenty four earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During this session. Please press star one one on your telephone and wait for your name to be announced.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jonathan Schaffer, Senior Vice President, Investor Relations. Thank you.

Operator: To withdraw your question. Please press star one one again please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Jonathan Schaffer Senior Vice President Investor Relations.

Jonathan Schaffer: Good afternoon, and welcome to the IAS 2024 First Quarter Financial Results Conference Call. I'm joined today by Lisa Utzschneider, CEO, and Tania Secor, CFO. Before we begin, please note that today's call and prepared remarks contain forward-looking statements.

Jonathan Schaffer: Thank you good afternoon, and welcome to the I asked 2024, our first quarter financial results Conference call I'm joined today by at least a Schneider CEO Anton as C Corps CFO.

Jonathan Schaffer: Before we begin please note that today's call and prepared remarks contain forward looking statements. We refer you to the company's filings with the SEC posted on our Investor Relations site at investors that integral adds dot com for more details about important risks and uncertainties that could cause actual results to differ materially from our expectations.

Jonathan Schaffer: We will also refer to non-GAAP measures on today's call a reconciliation of non-GAAP measures to the most directly comparable GAAP measures is contained in today's earnings release available on our Investor Relations site.

Speaker Change: All financial comparisons unless noted otherwise are based on the prior year period.

Jonathan Schaffer: We refer you to the company's filings with the SEC posted on our investor relations site at investors.integralads.com for more details about important risks and uncertainties that could cause actual results to differ materially from our expectations. We will also refer to non-GAAP measures on today's call. A reconciliation of non-GAAP measures to the most directly comparable GAAP measures is contained in today's earnings release, available on our Investor Relations site. All financial comparisons, unless noted otherwise, are based on the prior year period. So with these formalities out of the way, I'd now like to turn the call over to our CEO, Lisa Utzschneider. Lisa, you may begin.

Lisa Utzschneider: So with these formalities out of the way I'd now like to turn the call over to our CEO, Lisa Ed Schneider, Lisa you may begin.

Lisa Utzschneider: Thank you, Jonathan. Welcome everyone to our 2024 first quarter call. Revenue and adjusted EBITDA for the first quarter exceeded our prior expectations. Revenue grew 8% to $114.5 million ahead of our prior outlook of $111 to $113 million. Adjusted EBITDA was $33.1 million at a 29% adjusted EBITDA margin.

Lisa Utzschneider: Thank you Jonathan and welcome everyone to our 2024 first quarter call revenue and adjusted EBITDA for the first quarter exceeded our prior expectations.

Lisa Utzschneider: Revenue grew 8% to $114 $5 million ahead of our prior outlook of $111 million to $113 million adjusted EBITDA was $33 $1 million at a 29% adjusted EBITDA margin as.

Lisa Utzschneider: As we move through the first quarter, we benefited from increased advertiser demand for our industry-leading products, particularly in social media. Our first quarter performance includes the previously discussed factors within measurement and optimization that we anticipated. We expect favorable demand trends for our products in the second quarter, and we are increasing our full-year outlook. On today's call, I'll address the importance of data integrity and our trusted AI-backed technology, the strong momentum in social media cross-platforms, our robust product pipeline in both measurement and optimization, and several high-growth opportunities that we continue to prioritize.

Lisa Utzschneider: As we move through the first quarter, we benefited from increased advertiser demand for our industry, leading products, particularly in social media. Our first quarter performance includes the previously discussed factors within measurement and optimization that we anticipated we expect favorable demand trend.

Lisa Utzschneider: As for our products in the second quarter, and we are increasing our full year outlook.

Lisa Utzschneider: Today's call I'll address the importance of data integrity, and our trusted AI backed technology. This strong momentum in social media across platforms, our robust product pipeline in both measurement and optimization and several high growth opportunities that we continue to prioritize.

Lisa Utzschneider: Marketers trust IS to protect, measure, inform, and optimize their brand campaigns. Their trust is based on the accuracy and reliability of our data. Data integrity is critical and inherent in all the reporting and insights we provide in every aspect of our business. Data science is at the heart of our business strategy. Our AI systems enable models that deliver classifications and analytics at greater speed that are scalable with extremely high precision.

Lisa Utzschneider: Marketers Trust Ias to protect measure inform and optimize their brand campaigns. Their trust is based on the accuracy and reliability of our data data integrity is critical in inherent in all of the reporting and insights we provide in every aspect of our business.

Lisa Utzschneider: Data sciences at the heart of our business strategy.

Lisa Utzschneider: This, in turn, helps deliver the most actionable data to our clients. In a recent IAF study, our AI technology delivered up to 74% more accurate brand suitability measurements across social media platforms when compared to other providers' solutions. While IIS is focused on harnessing the power of AI, we are committed to doing it responsibly.

Lisa Utzschneider: Our AI systems enable models that deliver classifications and analytics at greater speed that are scalable with extremely high precision. This in turn helps deliver the most actionable data to our clients in a recent study our AI technology delivered up to 74%.

Lisa Utzschneider: And more accurate brand suitability measurement across social media platforms, when compared to other provider solutions.

Lisa Utzschneider: Well I asked is focused on harnessing the power of AI, we are committed to doing it responsibly, we are investing in explainable, AI, which ensures that our customers can trust our models the accuracy reliability and integrity of our data is anchored in our AI innovation.

Lisa Utzschneider: We are investing in explainable AI, which ensures that our customers can trust our models. The accuracy, reliability, and integrity of our data are anchored in our AI innovation, as well as in our critical role as an independent third-party provider. This allows us to maximize the value we offer, all while maintaining and growing the trust customers have in IIS. A few weeks ago, I presented at TikTok's second annual Beyond Brand Safety Summit, along with TikTok's Head of Global Ad Tech Partnerships and Brand Innovation Product Lead. TikTok selected IAS as the only third-party measurement partner to speak at the event, highlighting the essential role IAS plays in supporting TikTok's advertising.

Lisa Utzschneider: As well as in our critical role as an independent third party provider. This allows us to maximize the value we offer all while maintaining and growing the trust customers have in ies.

Lisa Utzschneider: A few weeks ago I presented tick Tock second annual beyond brand safety summit, along with Tic Toc head of global AD Tech partnerships and brand innovation product, we'd tick tock selected <unk> as the only third party measurement partner to speak at the event highlighting the essential role <unk> plays in supporting.

Lisa Utzschneider: Our leading partnership with TikTok, as well as our recently announced exclusive first-to-market partnerships with Axe and Snap, demonstrate the trust major platforms place in IIS, which fuels our innovation. At IIS, we lead with customer obsession, putting the customer first and ensuring we're at the forefront of innovation. This has resulted in a highly sticky customer base with an average tenure of eight plus years for our top 100 marketers. We have increased wallet share with our large customers as a result of organic volume growth, upsell, and cross-sell of new products, expansion into new global markets and channels, as well as landing and expanding within existing customer brand portfolios.

Lisa Utzschneider: Chick talks advertisers are leading partnership with Tic Toc as well as our recently announced exclusive first to market partnerships with acts and snap demonstrate the trust major platforms placed an ias, which fuels our innovation.

Lisa Utzschneider: And I, yes, we lead with customer obsession, putting the customer first and ensuring we are at the forefront of innovation has resulted in a highly sticky customer base with an average tenure of eight plus years for our top 100 marketers, we have increased wallet share with our large customers as a result of organic.

Lisa Utzschneider: Volume growth.

Lisa Utzschneider: Sell cross sell new products expansion into new global markets and channels as well as land and expand within existing customer brand portfolios.

Lisa Utzschneider: Since 2019, we've seen a 55% increase in average annual spend in year two of new contracts based on our advertiser customer data. We're pleased to have secured several recent wins and renewal expansions across industry verticals including CPG, telecommunications, automotive, and financial services. We have also proven our ability to grow with our customers as they shift advertising budgets to capture the explosive growth of social media, including short form video. Social Media Measurement revenue represented 21% of total revenue and grew 40% in the first quarter due to the rapid adoption of our Total Media Quality TMQ product suite. IS is leading in social media, with integrations across the major social platforms, including Meta, YouTube, and TikTok.

Lisa Utzschneider: Automotive and financial services, we have also proven our ability to grow with our customers as they shift advertising budgets to capture the explosive growth of social media, including short form video.

Lisa Utzschneider: Social media measurement revenue represented 21% of total revenue and grew 40% in the first quarter due to the rapid adoption of our total media quality TMT product suite.

Lisa Utzschneider: Ias is leading in social media with integrations across the major social platforms, including matter Youtube and Tic Tac.

Lisa Utzschneider: IS has also established industry-first partnerships with X and Snap, further validating the superiority of our social media offerings. With META, we've achieved strong adoption of our AI-driven TMQ brand safety and suitability measurement product across Facebook and Instagram feeds and reels. Total volume of impressions on META increased more than 50% in the first quarter since our brand safety and suitability measurement launched on February 5th. We're delighted to announce that we've expanded availability of our brand safety and suitability measurement on META to include 21 new languages for a total of 28 supported languages.

Lisa Utzschneider: Ice has also established industry first partnerships with accident snap further validating the superiority of our social media offerings.

Lisa Utzschneider: With matter, we've achieved strong adoption of our AI, driven TMT brand safety and suitability measurement product across Facebook and Instagram feed in Reals total volume of impressions on that increased more than 58% in the first quarter since brand safety and suitability measurement launched in February 5th.

Lisa Utzschneider: We're delighted to announce that we've expanded availability of our brand safety and suitability measurement on meta to include 21, New languages for a total of 28 supported languages. In April. We've also expanded to include our garment line misinformation measurement to meet growing advertiser demand ahead of the.

Lisa Utzschneider: In April, we also expanded to include our GARM-aligned misinformation measurement to meet growing advertiser demand ahead of the upcoming U.S. election. With TikTok, we expanded our global industry-leading brand safety and suitability measurement to 12 GARM categories and 15 vertical sensitivity category exclusion segments in April. We added 11 countries for total coverage of over 60 countries.

Lisa Utzschneider: The upcoming U S elections.

Lisa Utzschneider: With Tic Toc, we expanded our global industry, leading brand safety and suitability measurement to 12 garden categories, and 15 vertical sensitivity category exclusions segments in April.

Lisa Utzschneider: We added 11 countries for total coverage of over 60 countries. We also expanded our measurement ease of activation with automated suitability profiles and enhanced reporting capabilities validating that our customers adds are appearing in brand suitable environments.

Lisa Utzschneider: We also expanded our measurement ease of activation with automated suitability profiles and enhanced reporting capabilities, validating that our customers' ads are viewable on desktop and mobile, including web and app, using Google's Ads Data Hub for Measurement partner. In February, IAS launched its exclusive pre-bid product with X, providing the opportunity for U.S. advertisers to opt-in to activate pre-bid IAS optimization for X on the vertical video product.

Lisa Utzschneider: With you too we earned MRC accreditation in March for our integrated third party calculation and reporting of Youtube video view ability for desktop and mobile, including web and App using Google's AD data hub for measurement partners.

Lisa Utzschneider: February Ias launched its exclusive pre bid product with <unk>, providing the opportunity for U S advertisers to opt in to activate pre bid Ias optimization for acts on the vertical video product.

Lisa Utzschneider: IS classifies vertical video ad adjacencies for brand safety and suitability aligned to the GARM framework, giving advertisers maximum control over where their ads appear on the X vertical video feed. Our relationship with X is based on trust and transparency, with a foundation built on the accuracy of our data. In March, IAS announced a first-to-market partnership on SNAP to provide AI-driven brand safety and suitability measurement for advertisers. By integrating our TMQ product suite, advertisers on Snap will have access to increased transparency across their Snapchat campaigns.

Lisa Utzschneider: Classifieds vertical video add Adjacencies for brand safety and suitability aligns to the garb framework, giving advertisers maximum control over where their ads appear in the ex vertical video feeds our relationship with <unk> is based on trust and transparency with a foundation built on the accuracy.

Lisa Utzschneider: Of our data.

Lisa Utzschneider: In March <unk> announced a first to market partnership on snap to provide AI driven brand safety and suitability measurement for advertisers by integrating our TMT products suite advertisers on snap will have access to increase transparency across their snapchat campaigns. We're currently in.

Lisa Utzschneider: We're currently in development and expect to go live later this year. This announcement expands our partnership with Snap, which dates back to 2018, when IAS launched viewability and IVT measurement. We are prioritizing offerings in measurement and optimization that drive superior results in ROI for our customers in an increasingly cookie-free world. We are expanding the reach of our QualitySync product to new DSPs, which simplifies activation for our pre-bid optimization products. QSP revenue more than tripled year-over-year in the first quarter.

Lisa Utzschneider: <unk> expect to go live later this year. This announcement expands our partnership with snap, which dates back to 2018, and which is launch view ability and <unk> measurements.

Lisa Utzschneider: We are prioritizing offerings in measurement and optimization that drives superior results and ROI for our customers and an increasingly cookie pre world. We are expanding the reach of our quality safe product to new DSP, which simplifies activation for our pre bid optimization products <unk>.

Lisa Utzschneider: New more than tripled year over year in the first quarter in the first quarter, we increased adoption of our total visibility product total visibility enables customers to connect performance metrics, such as conversions and sales lift supply path and cost of media to Ias's media quality metrics in <unk>.

Lisa Utzschneider: In the first quarter, we increased adoption of our Total Visibility product. Total Visibility enables customers to connect performance metrics such as conversions and sales lifts, supply paths, and cost of media to IAS's media quality metrics. In April, IIS expanded our MFA AI-driven solution to GA after an extensive beta that spanned over 100 campaigns. Our MFA solution is the first to measure and optimize against both MFAs and ad clutter sites to drive maximum efficacy across the programmatic buying process. Our quality attention solution went live in early January and has experienced significant growth in active customers since launch. Our differentiated approach unifies media quality and eye tracking with machine learning to deliver proven results for advertisers.

Lisa Utzschneider: Ias expand our MFA AI driven solution to gea after an extensive beta that spanned over 100 campaigns. Our MFA solution is the first to measure and optimize against both MFA and AG clutter sites to drive maximum efficacy across the programmatic buying process.

Lisa Utzschneider: Yes.

Lisa Utzschneider: Our quality attention solution went live in early January and has experienced significant growth in active customers since launch our differentiated approach unifies media quality and eye tracking with machine learning to deliver proven results for advertisers higher attention drives better sales performance.

Lisa Utzschneider: Higher attention drives better sales performance. In a recent study in partnership with NC Solutions on behalf of a major CPG client, we found that impressions with higher attention scores drove an increase of 157% in incremental sales versus impressions with lower attention scores. Ahead of this year's U.S. elections, IAS is helping protect brands by enabling them to identify and avoid misinformation using a combination of AI-backed technology and human detection. IAS has been combating misinformation on the open web since 2021 in partnership with the Global Disinformation Index or GDI and aligned with GARM standards.

Lisa Utzschneider: <unk> in a recent study in partnership with N C solutions on behalf of the major CPG client, we found that impressions with higher retention scores drove an increase of 157% in incremental sales versus impressions with lower attention scores.

Lisa Utzschneider: Head of this year's U S elections, Ias is helping protect brands by enabling them to identify and avoid misinformation using a combination of AI backed technology and human detection.

Lisa Utzschneider: <unk> has been combating misinformation in the open web since 2021 in partnership with the global Disinformation index or <unk> and aligned with garden standards, we've significantly enhanced our misinformation offering to include <unk> and leading social platforms.

Lisa Utzschneider: We've significantly enhanced our misinformation offering to include TMQ in leading social platforms. During the quarter, we realized double-digit revenue growth with our mid-tier clients. We have established new partnerships with mid-tier DSPs, including two in the important pharmaceutical sector. We also signed five mid-tier agencies as their preferred or exclusive partners.

Lisa Utzschneider: During the quarter, we realized double digit revenue growth with our mid tier clients. We have established new partnerships with mid tier dsp's, including two in the important pharmaceutical sector. We also signed five mid tier agencies as their preferred or exclusive partners.

Lisa Utzschneider: Lastly, we continue to invest in high-growth opportunities, including CTV, retail media, and gaming. During the quarter, Publica by IIS partnered with CNN and Turner Sports Media. Both publisher partners used Publica by IIS's unified ad auction solution to increase yields and guarantee the best viewing experience for users. We are delighted to announce that Cam Milley will be joining IAS as Chief Revenue Officer at Publica. With over 12 years in sales leadership roles at Freewheel and OpenX, Cam possesses deep knowledge of the CTV and publisher landscapes. We look forward to welcoming Cam to the team.

Lisa Utzschneider: Lastly, we continue to invest in high growth opportunities, including CTV retail media and gaming.

Lisa Utzschneider: During the quarter publica by Ias partnering with CNN, and Turner sports and EMEA, both publisher partners used publica by Ias's unified AD auction solution to increase yield and guarantee the best viewing experience for users we.

Lisa Utzschneider: We are delighted to announce that Cam Miller will be joining ias as chief revenue officer Publica with over 12 years in sales leadership roles at Freewheel and open ex Cam possesses deep knowledge of the CTV and publisher landscape, we look forward to welcoming <unk> to the team in.

Lisa Utzschneider: In April, IAS received accreditation for filtration of sophisticated invalid traffic in CTV environments as applied to video impressions, viewable impressions, and viewability related. Our latest MRC accreditations demonstrate our continuing commitment to transparency and to the MRC process. In the last 12 months, we've achieved 10 third-party certifications accreditations, including four from the MRC. In April, IAS was one of the first companies to receive TrustArk's trustee-responsible AI certification, demonstrating our commitment and alignment with the highest standards of AI governance.

Lisa Utzschneider: In April Ias received accreditation for filtration of sophisticated invalid traffic in CTV environments as applied to video impressions Viewable impressions and view ability related metrics, our latest MRC accreditation demonstrates our continuing commitment to transparency into the MRC process.

Lisa Utzschneider: Yes in the last 12 months, we've achieved 10 third party certifications accreditations, including four from the MRC.

Lisa Utzschneider: In April Ias was one of the first companies to receive Truste <unk> trustee responsible AI certification, demonstrating our commitment and alignment with the highest standards of AI governance.

Lisa Utzschneider: The certification validates that our practices for the development and deployment of AI systems are secure, fair, and transparent. In retail media, IAS is a leader in independent verification with coverage for viewability, IBT, and brand safety with the top retail media networks. In the first quarter, volume from retail media networks grew 88%. Last week, IAS announced a first-to-market integration with Roblox to provide 3D in-game viewability and invalid traffic measurement in the immersive environment.

Lisa Utzschneider: The certification validates our practices for the development and deployment of AI systems are secure fair and transparent and.

Lisa Utzschneider: In retail media Ias as a leader in independent verification with coverage for view ability IGT and brand safety with the top retail media networks in the first quarter volume from retail media networks grew 88%.

Lisa Utzschneider: Last week, <unk> announced a first to market integration with roadblocks to provide <unk> in game view ability and invalid traffic measurement in the immersive environment.

Lisa Utzschneider: Advertisers can access best-in-class third-party measurement to verify that their immersive, in-game advertisements on Roblox are driving engagement with real users. To conclude, first quarter results exceeded our prior outlook, and we expect accelerated growth in the second quarter. As previously discussed, we expect the measurement contract renewals to be net revenue positive in 2024. In addition, new products and recent customer wins, along with other contributing factors, reinforce our confidence in our increased full-year outlook. And with that, I'll turn the call over to Tania to review the financials, and then we'll take your questions. Thanks, Lisa, and welcome everyone.

Lisa Utzschneider: Advertisers can access best in class third party measurement to verify that theyre immersive in game advertisements or roadblocks are driving engagement with real users to.

Tania: To conclude first quarter results exceeded our prior outlook and we expect accelerated growth in the second quarter. As previously discussed we expect the management contract renewals to be net revenue positive in 2024. In addition, new products and recent customer wins along with other contributing.

Lisa Utzschneider: Factors reinforce our confidence in our increased full year outlook and with that I'll turn the call over to Tania to review the financials and then we'll take your questions.

Tania R. Secor: We were pleased to see increasing business momentum as we moved through the first quarter and into the second quarter. We expect to benefit from multiple growth drivers in the second half of the year, which I will discuss. As a result, we are raising our full-year outlook. Total revenue in the first quarter increased 8% to $114.5 million, ahead of our prior outlook of $111 to $113 million. Increasing social media spend by marketers was the main driver of our better-than-expected performance in the period. Total revenue from advertisers, which includes optimization and measurement revenue, increased 8% in the first quarter and represented 86% of total revenue for the period. Optimization revenue grew 3% to $52.5 million in the first quarter.

Tania: Thanks, Lisa and welcome everyone. We were pleased to see increasing business momentum as we move through the first quarter and into the second quarter, we expect to benefit from multiple growth drivers in the second half of the year that I will discuss.

Tania R. Secor: As a result, we are raising our full year outlook.

Tania R. Secor: Total revenue in the first quarter increased 8% to $114 5 million ahead of our prior outlook of $111 million to $113 million.

Tania R. Secor: Increasing social media spend by marketers with the main driver of our better than expected performance in the period.

Tania R. Secor: Total revenue from advertisers, which includes optimization and measurement revenue increased 8% in the first quarter and represented 86% of total revenue for the period.

Tania R. Secor: Optimization revenue grew 3% to $52 $5 million in the first quarter.

Tania R. Secor: Optimization revenue growth in the first quarter reflects the implementation of previously negotiated pricing by one optimization client, as discussed on our last call, as well as softer demand, particularly in auto and T&E. Additionally, on a comparable basis, last year's first quarter benefited from strong seasonal campaign performance, as well as from carryover campaigns from the 2022 World Cup. We expect the growth rate and optimization to more than double in the second quarter from first quarter levels based on improving demand trends as well as the anticipated contribution from recent new logo wins. Measurement revenue increased 14% to $46.3 million in the first quarter.

Tania R. Secor: Optimization revenue growth in the first quarter reflects the implementation of previously negotiated pricing by one optimization client as discussed on our last call as well as softer demand, particularly in auto and <unk>.

Tania R. Secor: Additionally, on a comparable basis last year's first quarter benefited from strong seasonal campaign performance as well as from carryover campaigns from the 2022 World Cup.

Tania R. Secor: We expect the growth rate and optimization to more than double in the second quarter from first quarter levels based on improving demand trends as well as the anticipated contribution from recent new logo wins.

Tania R. Secor: Measurement revenue increased 14% to $46 3 million in the first quarter.

Tania R. Secor: Measurement growth in the first quarter reflects strong demand for our social media products, including our premium price TMT offering. Social media revenue grew 40% in the first quarter, with strengths across platforms, including Meta, following the launch of TMQ, as well as YouTube and TikTok. Meta volumes overall increased more than 50% following the TMQ launch in early February, and we expect a similar rate of growth of meta volumes for the balance of the year. Advertisers on Meta represent more than 40% of our social media revenue today. Social media revenue represented 21% of total revenue in the first quarter, compared to 18% in the fourth quarter of 2023.

Tania R. Secor: Measurement growth in the first quarter reflects strong demand for our social media products, including our premium priced TMT offering.

Tania R. Secor: Media revenue grew 40% in the first quarter with strength across platform, including Mehta. Following the launch of <unk> as well as Youtube and Tic Tac.

Tania R. Secor: Net of volumes overall increased more than 50% following the TMT launched in early February and we expect a similar rate of growth is net of volumes for the balance of the year.

Tania R. Secor: Advertisers on meta represent more than 40% of our social media revenue today, social media revenue represented 21% of total revenue in the first quarter compared to 18% in the fourth quarter of 2023.

Tania R. Secor: Social media revenue represented 52% of total measurement revenue, with the balance being open web, which saw lower demand as marketers shift spend to social. As a result of the strong growth in social media, video grew 27% in the first quarter. Video accounted for 53% of measurement revenue, up from 47% in the first quarter of 2023. Measurement performance in the first quarter also included the expected impact of the previously discussed contract renewal. Publisher revenue increased 10% to $15.8 million in the first quarter.

Tania R. Secor: Social media revenue represented 52% of total measurement revenue with the balance being open web, which saw lower demand as marketers shift spend in social.

Tania R. Secor: As a result of the strong growth in social media video grew 27% in the first quarter.

Tania R. Secor: <unk> accounted for 53% as measurement revenue up from 47% in the first quarter of 2023.

Tania R. Secor: Measurement performance in the first quarter also included the expected impact of the previously discussed contract renewals.

Tania R. Secor: Publisher revenue increased 10% to $15 $8 million in the first quarter.

Tania R. Secor: Publisher revenue reflects continued adoption of our publica solutions by large OEM partners, partially offset by the performance of our non-CTV supply-side business. Publisher revenue represented 14% of total first quarter revenue. Looking at our revenue performance by region, revenue in the Americas increased 6%. International revenue, excluding the Americas, increased 13% year-over-year and benefited from growth in social media spend, including TMQ in both EMEA and APAC. While international revenue represented 31% of total revenue, 42% of measurement revenue came from outside of the Americas.

Tania R. Secor: Publisher revenue reflects continued adoption of our public the solutions by large OEM partners, partially offset by the performance of our non CTV supply side businesses.

Tania R. Secor: Publisher revenue represented 14% of total first quarter revenue.

Tania R. Secor: Looking at our revenue performance by region revenue in the Americas increased 6%.

Tania R. Secor: International revenue, excluding the Americas increased 13% year over year and benefited from growth in social media spend including <unk> in both EMEA and APAC.

Tania R. Secor: While international revenue represented 31% of total revenue, 42% of measurement revenue came from outside of the Americas.

Tania R. Secor: Gross margin for the first quarter was 77%, in line with our full year margin target of 77 to 79%. Gross margin performance reflects investment in data infrastructure and increased hosting costs compared to the prior year. Sales and Marketing, Technology and Development, and General and Administrative Expenses combined increased 14% year-over-year, which includes the impact of higher stock-based compensation expense.

Tania R. Secor: Gross profit margin for the first quarter was 77% in line with our full year margin target of 77% to 79%.

Tania R. Secor: Gross margin performance reflect investment in data infrastructure and increased hosting cost compared to the prior year.

Tania R. Secor: Sales and marketing technology, and development and general and administrative expenses combined increased 14% year over year, which includes the impact of higher stock based compensation expense.

Tania R. Secor: We continue to invest in the long-term growth of IAF with particular focus on the areas of engineering, data science, and sales. We continue to capitalize internally developed software related to new product development and long-term investments in our technology. Staff Based Compensation Expense for the period was $15.7 million, in line with our prior expectation of $14 to $16 million. Adjusted EBITDA for the first quarter, which excludes stock-based compensation and one-time items, was $33.1 million at a 29% margin, ahead of our prior outlook of $28 to $30 million, primarily driven by higher-than-expected revenue. The net loss for the first quarter was $1.3 million, or 1 cent per share.

Tania R. Secor: We continue to invest in our long term growth of IAF with particular focus in the areas of engineering data science and sales.

Tania R. Secor: We continue to capitalized internally developed software related to new product development and long term investments in our technology.

Tania R. Secor: Stock based compensation expense for the period was $15 $7 million in line with our prior expectation of $14 million to $16 million.

Tania R. Secor: Adjusted EBITDA for the first quarter, which excludes stock based compensation and onetime items was $33 1 million.

Tania R. Secor: At a 29% margin ahead of our prior outlook of $28 million to $30 million, primarily driven by the higher than expected revenue.

Tania R. Secor: Net loss for the first quarter was $1 $3 million.

Tania R. Secor: <unk> per share.

Tania R. Secor: Turning to our performance metrics, our first quarter net revenue retention, or NRR, was 113%, which reflects the trend of our overall growth rate for the period. The total number of large advertising customers, which includes both mid-tier and top-tier clients with annual revenue over $200,000, increased to 227, up 11% compared to 204 last year and up sequentially from 222 in the fourth quarter of 2023.

Tania R. Secor: Turning to our performance metrics.

Tania R. Secor: Our first quarter net revenue retention, our NRI was 113%, which reflects the trend of our overall growth rate for the period.

Tania R. Secor: The total number of large advertising customers, which includes both mid tier and top tier clients with annual revenue over $200000 increased to 227 up 11% compared to 204 last year and up sequentially from 222 in the fourth quarter of 2023.

Tania R. Secor: Revenue from large advertising customers was 85% of total advertising revenue at the end of the period, up from 84% at the end of the first quarter of 2023. The profitable nature of our business model results in strong free cash flow, which enables us to lower our debt and provides us with financial flexibility to invest in the long-term growth of the business. We maintain a healthy balance sheet with cash and cash equivalents at the end of the first quarter of $83.9 million. During the quarter, we reduced our long-term debt by $30 million to $125 million. As a result, our net debt at the end of the first quarter was $41 million.

Tania R. Secor: Revenue from large advertising customers was 85% of total advertising revenue at the end of the period up from 84% at the end of the first quarter of 2023.

Tania R. Secor: The profitable nature of our business model results in strong free cash flow, which enabled us to lower our debt and provides us with financial flexibility to invest in our long term growth of the business.

Tania R. Secor: We maintain a healthy balance sheet with cash and cash equivalents at the end of the first quarter of $83 9 million.

Tania R. Secor: During the quarter, we reduced our long term debt by $30 million to $125 million.

Tania R. Secor: As a result, our net debt at the end of the first quarter was $41 million.

Tania R. Secor: Turning to guidance, for the second quarter ending June 30, 2024, we expect total revenue in the range of $125 to $127 million, or 11% year-over-year growth at the midpoint. Adjusted EBITDA for the second quarter is expected in the range of $37 to $39 million, or a 30% margin at the midpoint.

Tania R. Secor: Turning to guidance for the second quarter ending June 32024, we expect total revenue in the range of $125 million to $127 million or 11% year over year growth at the midpoint.

Tania R. Secor: Adjusted EBITDA for the second quarter is expected in the range of 37% to $39 million.

Tania R. Secor: Or 30% margin at the midpoint.

Tania R. Secor: For the full year 2024, we are increasing our revenue outlook to $533 to $541 million, or 13% year over year growth at the midpoint, versus the prior range of $530 to $540 million. Additionally, we are raising our full-year adjusted EBITDA range to $174 to $180 million, or a 33% margin at the midpoint, versus the prior range of $171 to $179 million. A few additional modeling points. Our gross profit margin outlook remains unchanged in the range of 77 to 79% for the full year, which reflects higher hosting costs related to our video offerings. Second quarter stock-based compensation expense is expected in the range of $15 to $17 million.

Tania R. Secor: For the full year 2024, we are increasing our revenue outlook to $533 million to $541 million or 13% year over year growth at the midpoint versus the prior range of $530 million to $540 million.

Tania R. Secor: We are raising our full year, adjusted EBITDA range to $174 million to $180 million or <unk>, 33% margin at the midpoint versus the prior range of 171% to $179 million.

Tania R. Secor: A few additional modeling point, our gross profit margin outlook remains unchanged in the range of <unk>, 77% to 79% for the full year, which reflect higher hosting costs related to our video offerings.

Tania R. Secor: Second quarter stock based compensation expense is expected in the range of $15 million to $17 million.

Tania R. Secor: Full year 2024 stock-based compensation expense is expected in the range of $63 to $66 million, lower than our prior expectation of $72 to $76 million. We expect weighted average shares outstanding for the second quarter in the range of 160 to 161 million shares and 160 to 162 million shares for the full year. We are pleased to introduce a positive outlook for the second quarter, with continued growth and measurement driven by strong customer adoption of our social media offerings.

Tania R. Secor: Full year 2020 for stock based compensation expense is expected in the range of $63 million to $66 million lower than our prior expectation of $72 million to $76 million.

Tania R. Secor: We expect weighted average shares outstanding for the second quarter in the range of 160 to 161 million shares and 160 to 162 million shares for the full year.

Tania R. Secor: We are pleased to introduce a positive outlook for the second quarter with continued growth in measurement driven by strong customer adoption of our social media offerings.

Tania R. Secor: The optimization growth rate year-over-year is expected to more than double in the second quarter from the first quarter. Publisher revenue in the second quarter is expected to include double-digit growth in Publica, consistent with Publica's strong first quarter performance.

Tania R. Secor: The optimization growth rate year over year is expected to more than double in the second quarter from the first quarter.

Tania R. Secor: Published their revenue in the second quarter is expected to include double digit growth in publica consistent with public a strong first quarter performance.

Tania R. Secor: As we move into the back half of the year, we expect accelerated growth driven by our robust product pipeline, including the ongoing TMQ rollout across social platforms, and the scaling of our recently launched MFA and Attention Products. QualitySync Expansion.

Tania R. Secor: As we move into the back half of the year, we expect accelerated growth driven by our robust product pipeline, including the ongoing <unk> rollout across social platforms.

Tania R. Secor: The scaling of our recently launched MFA and attention products.

Tania R. Secor: Quality think expansion.

Tania R. Secor: Contribution from New Logo Wins and Higher Volumes from Recent Measurement Renewals. In addition, we expect profitable growth with expanded adjusted EBITDA margins as we move through the year while investing in the growth of the business and reducing debt. Lisa and I are now ready to take your questions. Operator.

Tania R. Secor: The contribution from new logo wins and higher volumes from the recent measurement renewals.

Tania R. Secor: In addition, we expect profitable growth with expanded adjusted EBITDA margins as we move through the year, while investing in the growth of the business and reducing debt.

Speaker Change: And I are now ready to take your questions opt.

Tania R. Secor: Operator.

Operator: Thank you. As a reminder, to ask a question, please press star one on your telephone and wait for your name to be announced. To withdraw your question, please press star one again.

Tania R. Secor: Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please limit yourself to one question and one follow up one moment for questions.

Operator: Please limit yourself to one question and one follow-up. One moment for questions. Our first question comes from Matt Farrell with Piper Sandler. You may proceed. Hey, guys, congrats on the really strong results and the strong guide. Maybe just getting this question out of the way on the pricing side of things. We'd just love to hear a bit more about the contract renewals and the new contracts you signed since the last call, and our conversations with advertisers around pricing, following the Q4 commentary. You are happy to take that, Matt?

Operator: Our first question comes from Matt Farrell with Piper Sandler you May proceed.

Operator: Yes.

Speaker Change: Hey, guys. Congrats on the really strong results in the <unk>.

Operator: Guide, maybe just getting this question out of the way on the pricing side of things would just love to hear a bit more about the contract renewals and the new contracts you signed since the last call our conversations with advertisers around pricing.

Operator: Following the Q4 commentary.

Matthew F. Farrell: Sure happy to take that Matt.

Unknown Executive: So a few things about the pricing dynamics. The first is in terms of renewals; as anticipated, our average measurement eCPMs in the quarter were as we had expected and based on our guidance and forecast. And also, we saw measurement volume growth that was also part of our guide. In addition to that, for our renewals in Q1, we saw 100% renewal rates with all of the renewals we were able to close in Q1. Gotcha. Thanks for that.

Operator: So few things about the pricing dynamics.

Unknown Executive: First is in terms of renewals as we anticipated.

Unknown Executive: Our average management <unk> in the quarter as we had expected.

Unknown Executive: Baked into our guidance and forecast and also we saw.

Unknown Executive: Management volume growth that was also.

Unknown Executive: Part of our.

Speaker Change: Thanks, guys.

Unknown Executive: In addition to that our renewals in Q1, we saw 100% renewal rate.

Unknown Executive: With all of the renewals, we were able to close in Q1.

Unknown Executive: And maybe just on the second half revenue ramp, a lot of good growth drivers there. We just love to think about how much visibility you have into those different growth drivers at this point in time. Thanks.

Speaker Change: Yes, so thanks for that and maybe just on the second half revenue ramp.

Speaker Change: A lot of good growth drivers there were just loves how to think about how much visibility you have.

Speaker Change: Into those different growth drivers at this point in time.

Unknown Executive: Sure. So in terms of the growth drivers for the second half of the year, when you take a look at our Q1 results, there are several strong tailwinds that are driving our business. The tailwinds include social, TMQ in particular. We're seeing rapid adoption of TMQ across all of the social platforms, and we anticipate ongoing adoption of TMQ into the back half of the year. In addition to that, we expect continued expansion of QualitySync, especially in the new DSPs we had just mentioned on the call.

Speaker Change: Sure. So in terms of the growth drivers in the second half of the year. When you take a look at our Q1 results. There are several strong tailwind that are driving our business. The tailings include social TMT in particular, we're seeing rapid adoption of <unk>.

Unknown Executive: Cross all of the social platforms, and we anticipate ongoing adoption of <unk> into the back half of the year. In addition to that.

Unknown Executive: We expect continued expansion of quality think especially in the new DSP as we just mentioned on the call and then also we have a robust new product.

Unknown Executive: And also, we have a robust new product roadmap for the back half of the year. We've already launched these products, including MFA, attention, and misinformation. We're seeing nice adoption, and the team will focus in the back half of the year on continuing to drive that adoption. The other tailwind is Publica.

Unknown Executive: Brought back to the back half of the year, we have already launched these products, including MFA attention misinformation, we're seeing nice adoption.

Unknown Executive: And the team.

Unknown Executive: <unk> focus in the back half of the year continuing to drive that adoption.

Unknown Executive: We love to see the double-digit growth in Publica in the first quarter, as the team continues to drive engagement with strategic OEMs, including Samsung and Vizio, and we anticipate ongoing growth and adoption for Publica. Thank you. One moment for questions. Our next question comes from Jason Helfstein with Oppenheimer. You may proceed. Can you hear me? Yeah, yeah. I wasn't sure if the mute was on.

Unknown Executive: Tailwind is publica, we love to see the double digit growth in public here in the first quarter as the team continues to drive engagement with strategic Oems, including Samsung and Vizio, and we anticipate ongoing growth in adoption for.

Jason Stuart Helfstein: Public hub.

Jason Stuart Helfstein: Thank you.

Jason Stuart Helfstein: One moment for questions.

Jason Stuart Helfstein: Our next question comes from Jason <unk> with Oppenheimer You May proceed.

Jason Stuart Helfstein: Can you hear me.

Unknown Executive: How are you? So I guess, on behalf of investors, kind of a thank you for kind of doing the mature thing last quarter and, you know, kind of making sure that you weren't overly sticking your neck out, just given some of the facts. Two questions. I guess first, at the level of meta adoption assumed in the guide, is it basically a kind of a continuation of the current spend that you've kind of seen through April, or kind of further adoption, and maybe how much of that further adoption is kind of already contracted with minimum? And then secondly,

Jason Stuart Helfstein: Yes, hi, Jason pleasure of meat was on how are you. So I guess on behalf of investors kind of think.

Unknown Executive: Four.

Unknown Executive: Doing the mature thing last quarter end.

Unknown Executive: Kind of making sure that you werent overly sticking your neck out just given some of the factors. So I think everybody appreciates that.

Unknown Executive: Two questions.

Unknown Executive: I guess first on the level of meta adoption assumed in the guide is it basically kind of a continuation of the current spend that you've kind of seen through April or kind of further adoption and maybe how much of that further adoption is kind of already contracted with minimums and then.

Speaker Change: And Lee.

Unknown Executive: <unk>.

Unknown Executive: We're going to see a pretty big increase probably from kind of Netflix and kind of Amazon after this up front. Any exposure, we know you have exposure with Netflix there, but just broadly, does that impact the company kind of coming out of this from just given the more adoption of some of that? Okay, Jason, happy to take both questions.

Unknown Executive: We're going to see a pretty big increase probably from kind of Netflix and kind of Amazon. After this upfront any exposure. We know you have exposure with Netflix there, but just broadly does that impact.

Jason: The company kind of coming out of this up from just given the more adoption of some of that video. Thank you.

Unknown Executive: So, as I mentioned before, an important tailwind for our business continues to be social, driving the adoption of TMQ. We were thrilled to launch TMQ on Meta in early February and are pleased with the adoption that we've seen to date. We're also seeing our customers lean into our measurement offerings in CTV, both on Netflix and on other platforms, and we anticipate ongoing growth in the back half of the year. Thank you. One moment for a question. Our next question comes from Justin Patterson with KeyBank. You may proceed. Great, thanks for taking my question. This is Jacob on for Justin.

Unknown Executive: Okay, Jason happy to take both questions. So as I mentioned before.

Jacob: An important tailwind for our business continues to be social driving the adoption of <unk>. We were thrilled to launch TMT. One meta in early February and are pleased with the adoption that we've seen to date.

Jacob: As we mentioned before the 40% growth in social for the first quarter. We also saw the 50% year.

Jacob: Year over year increase in volume on meta and were seeing that ongoing growth into the second quarter. The other thing I'll call out in terms of <unk> adoption from a vertical perspective, where we're seeing nice adoption is CPG retail and <unk>.

Jacob: Tech Telco verticals and then in terms of your question regarding Netflix and Amazon.

Jacob: As I mentioned before we're seeing really nice growth in the CTV space with Publica, We're also seeing.

Jacob: Our customers lean into our measurement offerings in CTV, both in Netflix and on other platforms and we anticipate ongoing growth in the back half of the year.

Jacob: Thank you.

Jacob: One moment for questions.

Unknown Executive: Our next question comes from Joseph Patterson with Keybanc you May proceed.

Unknown Executive: Great. Thanks for taking my questions is Jacob on for Justin.

Unknown Executive: You've had a solid relationship with X, a channel others have struggled with. How are your social capabilities being viewed by advertisers, and do you believe social is a factor behind you winning business? Yeah, so we've been partnered with X for over six years, and we continue to lean into our X partnership and innovate on behalf of X and the brands that are running on X. You might recall, we launched an exclusive pre-bid brand safety and suitability partnership with X, and X remains committed to the importance of brand safety and suitability for our brands and for the broader digital ecosystem. Thank you. One moment, please, request. Our next question comes from Brian Fitzgerald with Wells Fargo. Hi, this is Rob on the call for Fitzgerald.

Jacob: <unk> had a solid relationship with X channel others have struggled with.

Rob: How are you associate what is being viewed by advertisers and do you believe social is a factor but are you winning business.

Rob: Yes, so we've been.

Rob: Been partner with <unk> for over six years, and we continue to lean into our X partnership innovate on behalf of acts in the brands that are running on X you might recall, we launched an exclusive pre bid brand safety suitability in partnership.

Rob: With X and X remains committed to the importance of brand safety and suitability.

Rob: For our brands and for the broader digital ecosystem.

Rob: Thank you.

Rob: One moment for questions.

Rob: Our next question comes from Brian Fitzgerald with Wells Fargo. You May proceed.

Unknown Executive: Thanks for taking our questions. Lisa, you've been ahead of the curve in talking about and really preparing us for the mix shift from programmatic to social video and CTV. It seems like that shift is accelerating, but I wanted to ask if you could expand on what you're seeing right now.

Unknown Executive: Hi, This is rob on the call today, Thanks for taking my question.

Unknown Executive: <unk> been ahead of the curve and talking about it really preparing us for the mix shift from programmatic to social video and CTV.

Unknown Executive: And Tania, could you maybe talk a bit about your outlook for activation segment growth for the rest of the year? And second, sort of related to that, Lisa, could you talk about the opportunity in social and CTV in comparison to programmatic, maybe in terms of your ability to expand your solution set over time and capture value for IIS as well in relation to underlying media spend? Thanks so much.

Unknown Executive: It seems like that shift is accelerating but wanted to ask if you could expand on what youre seeing right now and Tania if you could maybe talk a bit about your outlook for activation segment growth.

Unknown Executive: For the rest of the year and second sort of related to that.

Unknown Executive: Lisa could you talk about the opportunity in social in CTV and comparisons of programmatic maybe in terms of your ability to expand the solution set over time and capture value for Ias as well in relation to underlying media spend thanks, so much.

Unknown Executive: Sure. So in terms of social, as I mentioned before, we're pleased with that 40% growth year-over-year in the first quarter, particularly with the launch of our Total Media Quality technology that we're currently running across multiple social platforms and launched in meta in early February. It is a major driver for our business. We command a premium price for our TMQ products because of the level of sophistication of the technology that we are classifying multimedia from video images, audio, and text in a very granular way, frame by frame.

Tania: Sure. So in terms of social as I mentioned before we're pleased with that 40% growth year over year and first quarter.

Unknown Executive: Particularly with the launch of our total media quality.

Unknown Executive: Technology that we're currently running across multiple social platforms and launched in meta in early February.

Unknown Executive: It is a major driver for our business, we command a premium price.

Unknown Executive: For our <unk> products because of the level of sophistication of the technology that we are classifying multi media.

Unknown Executive: From a video image audio and tax in a very granular way frame by frame and as I mentioned before we're seeing several verticals in particular lean into our measurement solutions and our <unk> products in particular, including CPG retail.

Unknown Executive: And as I mentioned before, we're seeing several verticals in particular lean into our measurement solutions and our TMQ product in particular, including CPG retail and tech telco. In terms of CTV, as I mentioned before, that is also a tailwind for our business. A big reason for that is because of our differentiated, leading CTV platform, Publica, where we have strategic partnerships with Samsung, Vizio, and other OEMs.

Unknown Executive: And tech telco.

Unknown Executive: In terms of CTV as I mentioned before that is also a tailwind for our business.

Unknown Executive: Big reason for that is because of our differentiated leading CTV platform publica, where we have strategic partnerships.

Unknown Executive: And the fact that we have a marketplace in place bringing together brands and the broadcasters and publishers is a huge differentiator for IEM. And Rob, so on your second question around optimization, we experienced softer demand in Q1 on the optimization front, particularly in the auto and teeny verticals. It's also, but we're starting to see that rebound as we head into the second quarter.

Unknown Executive: With Samsung Vizio, and other Oems and the fact that we have a marketplace in place bringing together.

Unknown Executive: Brands and.

Unknown Executive: The broadcasters and publishers, it's a huge differentiator for us.

Unknown Executive: And it's also worth noting that there was some seasonable camp seasonal campaign spending in Q1 of last year, which was a little bit of a headwind for optimization in Q1 of this year in terms of the comps, but we're seeing optimization improvement in March. And as we head into the second quarter, our outlook is for optimization growth rates more than doubling in the second quarter from our first quarter growth rate. Okay, thanks so much. Sorry, I got the segment order wrong.

Unknown Executive: And Rob So on your second question around optimization.

Unknown Executive: We experienced softer demand in Q1 on the optimization front, particularly in the auto and teeny verticals.

Unknown Executive: Also we're starting to see that rebound as we head into the second quarter.

Unknown Executive: And it's also worth noting there are some seasonable seasonal campaign spending in Q1 of last year, which was a little bit of a headwind for optimization in Q1 of this year in terms of the comps, but we're seeing optimization improvement in March and as we head into the second quarter, our outlook is optimization growth rate.

Unknown Executive: More than doubling in the second quarter from our first quarter growth rate.

Speaker Change: Okay. Thanks, so much alright got that.

Speaker Change: Thank you.

Unknown Executive: Thank you. One moment for questions. Our next question comes from Raimo Lenschow with Barclays. He may say, Hey, perfect. Thank you. Two questions.

Speaker Change: One moment for questions.

Raimo Lenschow: Our next question comes from Raimo <unk> with Barclays. You May proceed.

Unknown Executive: Lisa, after this week's earnings from some of your competitors, there's a big question mark around the health of advertisers. In general, you are very kind of tuned in to what's going on in the industry. What are you seeing there in terms of like, how spending is evolving on the advertiser side? And then I had one follow-up.

Raimo Lenschow: Perfect. Thank you.

Unknown Executive: Two questions Lisa.

Unknown Executive: After this week's earnings from some of your competitors there is a big question Mark around it.

Unknown Executive: The health of advertisers in general you will vary kind of geared.

Unknown Executive: What's going on in the industry. What are you seeing there in terms of like how.

Unknown Executive: How spending is evolving do you on the advertiser side, and then I had one follow up.

Unknown Executive: Yeah, sure, Raimo. I am happy to take your questions. So, what we're seeing is a positive advertising environment and marketers, and as you know, I spent a lot of time with brands. They're leaning into our differentiated solutions, and the reason why they're leaning into our solutions is that they're looking for performance, transparency, efficiency, and growth. And some of the stats we've already shared on the call demonstrate the strength that we're seeing in the industry, those tailwinds of social and CTV, and we're just so excited to have a robust product roadmap and continue to launch innovative products in the back half of the year.

Lisa Utzschneider: Yes sure Raimo.

Raimo: You can take your question so.

Unknown Executive: What we're seeing as a positive advertising environment and marketers and as you know I spent a lot of time with the brands they are leaning into our differentiated.

Unknown Executive: Solutions and the reason why they are leaning into our solutions as they're looking for performance transparency efficiency and growth and some of the stats we've already shared on the call demonstrate the strength that we're seeing in the industry those tailwind of social.

Unknown Executive: And CTV and we're just so excited to have a robust product roadmap and continue to launch innovative products in the back half of the year.

Unknown Executive: Perfect, thank you. And then one follow-up question, if I think about events from here, like, how do you think about the European Championship in football, the election, etc.? Should those be the kind of drivers that should have a positive influence on you?

Raimo: Perfect. Thank you and then one follow up if I think about events from here like how did you think about like European championship in football election, et cetera, like should that be kind of drivers that should have a positive influence for you. Thank you.

Unknown Executive: Thank you. I'm happy to take that one too. So, a few points on that. First of all, there are over 2 billion people globally who are voting this year.

Speaker Change: Happy to take that one too so.

Unknown Executive: You <unk>.

Unknown Executive: So on that so there are over 2 billion people globally, who are voting this year.

Speaker Change: And especially the U S elections is top of mind for the marketers and we got a lot of demand to launch a misinformation segue.

Unknown Executive: Segment across our social platforms. This is part of you probably remember Raimo the garden framework misinformation new.

Unknown Executive: And especially the US elections are top of mind for marketers. And we got a lot of demand to launch a misinformation segment across the social platforms. This is part of, you probably remember, Raimo, the GARM framework.

Unknown Executive: Misinformation is a new category that we recently launched. We launched it on Meta and TikTok. It was the number one request from the brand, so we pulled that product into H1 of our roadmap. We've launched the product so that marketers can rest assured when they run digital advertising, especially leading up to the elections, that their brands are running adjacent to other brands, say, and suitable content. The other seasonal events, in addition to the elections, the Olympics, that's another important event happening this summer.

Unknown Executive: Categories that we recently launched we launched it on met Us and Tic Toc. It was the number one request from the brands. So we pulled that product into each one.

Unknown Executive: Our roadmap we've launched the product so that marketers can rest assured when they brand digital advertising, especially leading up to the elections that their brands are running adjacent to brand safe and suitable content. The other seasonal events. In addition to the elections The Olympics.

Unknown Executive: And again, we're engaged with our brands and ensuring that both they're investing in our solutions and that they're leaning into our products so they have brand safety and suitability. Thank you.

Unknown Executive: That's another.

Unknown Executive: Porton event happening this summer and again, we're engaged with our brands and ensuring that both they are investing in our solutions and that.

Unknown Executive: They're leaning into our products so they have brand safety and suitability running.

Speaker Change: Perfect. Thank you.

Unknown Executive: Thanks.

Unknown Executive: Thank you. One moment for questions. Our next question comes from James Heaney with Jeffries. You may proceed.

Speaker Change: Thank you.

Speaker Change: One moment for questions.

Unknown Executive: Great, thanks for taking my question. Can you just talk about the revenue contribution that you saw from the cohort of customers who asked for pricing concessions on measurement? I know you mentioned that these customers are committed to increasing their volume commitments. So just curious how you're thinking about the Q2 and full year impact from those customers, you know, starting to ramp back up. Thank you.

James Edward Heaney: Our next question comes from James <unk> with Jefferies. You May proceed.

Speaker Change: Great. Thanks for taking my question can you just talk about the revenue contribution that you saw from the cohort of customers, who ask for pricing concessions on measurement I know you mentioned that these customers are committed.

Unknown Executive: Committed to increasing their volume commitments. So just curious how youre thinking about the Q2 and full year impact from from those customers starting to ramp back up thank you.

Unknown Executive: Thanks for the question. In Q1, we – sorry, in our last earnings call, we were clear and transparent about the trends that we saw. We shared those with you in terms of this cohort of measurement renewals, and Q1 played out as expected. So, the trends in our average CPM for measurement did decline, and that was reflective of the impact of this cohort of measurement renewals on our CPMs in Q1, but that was also partially offset by the premium that we're charging for TMQ, and as TMQ is expanding, that helped drive up our CPMs slightly. And so – and we factored in – you know, things played out as we expected.

Speaker Change: Sure Hey, Jamie Thanks for the question.

Unknown Executive: Q1, we saw and when we in our last earnings call, we were clear and transparent with the trends that we saw we shared those with you in terms of this cohort of measurement renewals in Q1 played out as expected so the trends in our average CPM for measurement.

Unknown Executive: Decline did decline and that was reflective of the impact of this cohort of measurement renewals on our Cps in Q1, but that was also partially offset by the premium that we're charging for <unk> and <unk> is expanding that helped drive up slightly our CPM.

Unknown Executive: As we moved through the year, the measurement renewals are expected to be net revenue positive, and we factored that all into our guide. There is actually one other thing I wanted to add just to enhance the question. In Q1, of the renewals we had, 100% of them renewed at a similar price and expanded volume.

Unknown Executive: And so we factor things played out as we expected as we move through the year the measurement and renewals are expected to be net revenue positive.

Unknown Executive: And we factored that all into into our guide there is actually one other thing I wanted to add just to enhance on the question in Q1 of the renewals, we had a 100% of them renewed at similar price and expanded volume.

Unknown Executive: Great, and if I could just ask one more quick question for Lisa. I mean, we didn't hear as much conversation about just retail media, so we'd love to get your updated thoughts there and on some of the partnerships that you've done. Thank you. Sure. So, in retail media, we have integrations and partnerships with nine out of the top ten retail media players.

Speaker Change: Great and.

Speaker Change: If I could just ask one more quick one for me.

Unknown Executive: Lisa I mean, we didn't hear as much conversation about just retail media So would love to get your updated thoughts there and on some of the partnerships that you've done. Thank you.

Lisa Utzschneider: Sure so in retail media.

Lisa Utzschneider: Have integrations and partnerships with nine out of the top 10 retail media players and once that I'd be happy to share in Q1, the volume from retail media networks. It grew 88% year over year, which demonstrates the strength that we have in retail media and <unk>.

Unknown Executive: The fact that.

Lisa Utzschneider: These partners are leaning into our solutions.

Speaker Change: Great. Thank you.

Unknown Executive: And one stat I'd be happy to share: in Q1, the volume from retail media networks grew 88% year over year, which demonstrates the strength that we have in retail media and the fact that these partners are leaning into our solutions. Great, thank you. Thank you. Thank you. One moment for questions. Our next question comes from Jason Kreyer with Craig Hallam, if you would. Thank you guys and congrats on the good results. Um, I want to ask about the MFA solution. You know, it seems like the IAB has kind of declared war on MFAs.

Speaker Change: Thank you.

Speaker Change: Thank you one moment for questions.

Jason Michael Kreyer: Our next question comes from Jason <unk> with Craig Hallum, You May proceed.

Unknown Executive: And we've heard a little bit of pushback against that in some of our industry conversations. So just curious how, you know, if you can elaborate on early feedback or just your expectations for adoption of that. Sure. So MFA and rolling out our MFA solution was incredibly important for our advertising customers, because I'm sure you've seen the third-party reports that say that advertisers are wasting up to 20% of their ad spend on MFA sites. In April, we went GA with our MFA ad-driven solution after an extensive beta that spanned over 100 campaigns.

Jason Michael Kreyer: Great. Thank you guys and congrats on the good results I wanted to ask about the MFA solution. It seems like the Iab is kind of declared war on Msas and we've heard a little bit of pushback against that in some of our industry conversations.

Unknown Executive: Just curious how are you.

Unknown Executive: Can you elaborate on early feedback or just your expectations for adoption of that solution.

Unknown Executive: Sure, So MFA and rolling out our MFA solution was incredibly important for our advertising customers because I'm sure you've seen the third party reports that say that advertisers are wasting up to 20% of their AD spend on MSR.

Unknown Executive: Hey.

Unknown Executive: Sites in April we launched our.

Unknown Executive: When GE with our MSA AI driven solution. After an extensive beta that spanned over 100 campaigns our advertising customers. They are leaning into this solution. They love. The fact that we've launched.

Unknown Executive: Our advertising customers are leaning into the solution. They love the fact that we've launched GA. And the one thing I should call out about our solution is that it is the first solution with MFA to measure and optimize against both MFA and ad-clutter sites to ultimately drive maximum efficiency and performance of the brand. So it is early days, but having run 100 campaigns in the beta, we got the engagement with the advertisers, and now they're leaning into the product. Great.

Unknown Executive: And the one thing I should call out about our solution is the first solution with MSA to measure and optimize against both MSA and AD clutter sites to ultimately drive maximum.

Unknown Executive: Efficiency and performance of the brand. So it is early days, but having run the 100 campaigns in the beta got the engagement with the advertisers and now they are leaning into the product.

Unknown Executive: Thank you. Thank you. Thank you. One moment for questions. Our next question comes from Mark Mahaney with Evercore ISI. Hey, thanks. The build out of Meta has been some time in coming for you, but it's obviously very material for you now.

Speaker Change: Great. Thank you.

Mark Stephen F. Mahaney: Thank you.

Mark Stephen F. Mahaney: Thank you one moment for questions.

Unknown Executive: Could you just talk about the ability to continue to expand within Meta? What is the range of the solutions you're able to sell in, and how many more solutions you could sell into that? And then separately, could you just comment briefly again on cookie deprecation, with the push out now into early next year, just your latest thoughts on the impact that has on your business? Thank you very much.

Unknown Executive: Our next question comes from Mark Mahaney with Evercore ISI you May proceed.

Speaker Change: Hey, thanks.

Unknown Executive: The Buildout of meta has been sometime in coming for you, which obviously very material for you know could you just talk about the ability to continue to expand within matter how much of the inventory there you have access to with the <unk>.

Unknown Executive: <unk> solutions, you are able to sell in and how many more solutions you could sell into that and then separately could you just comment briefly again.

Unknown Executive: Deprecation, which pushed out now into early next year, just your latest thoughts on the impact that has on your business. Thank you very much.

Unknown Executive: Sure, happy to take that, Mark. So with Metta, we've been running our verification solutions, but what the advertisers were clamoring for was Metta to open up the Facebook news feed, the Instagram feed, and Metta Reels with our total media quality. You're familiar with that, the brand safety and suitability solution.

Speaker Change: Sure happy to take that Mark so with meta we've been running our verification solutions, but what the advertisers were clamoring for his opening up for <unk> to open up the Facebook news feed Instagram feed and <unk> with our <unk>.

Unknown Executive: Media quality youre familiar with the brand safety and suitability solution. So we launched that product February 5th.

Unknown Executive: So we launched that product February 5th, and as I mentioned before, we're seeing very strong adoption. We saw 50% growth year-over-year in volumes. That's with the TMQ adoption. And in terms of expansion, we also recently announced that we launched an additional 21 new languages on Metta, offering now a total of 28 supported languages.

Unknown Executive: As I mentioned before we're seeing very strong adoption, we saw 50%.

Unknown Executive: Growth year over year in the volumes, that's with the <unk> adoption and in terms of expansion. We also recently announced that we launched an additional 21 new languages on meta.

Unknown Executive: In addition to that, with TMQ, and we'll continue to roll out more markets and more languages for our advertising customers with Metta, we also launched misinformation. As I mentioned, we pulled misinformation into the first half of our product roadmap because of the demand from our advertising customers to launch misinformation before the elections. And in April, we were thrilled to launch misinformation in Metta, which is aligned according to the GARM framework. In terms of your second question with cookie deprecation pushing out to 2025, cookie deprecation is actually a tailwind for our business because what we focus on is the environment and the contextual environment where advertisers are running their brands. So even if it is getting pushed out to 2025, we're not dependent on cookies for any of our verification or optimization products.

Unknown Executive: And offering now total of 28.

Unknown Executive: Supported languages. In addition to that with <unk> and we will continue to rollout more markets and more languages.

Unknown Executive: For our advertising customers with meta we also launched as I mentioned, we pulled misinformation into the first half of our product roadmap because of.

Unknown Executive: Demand from our advertising customers to launch Miss information before the elections and in April. We also were thrilled to launch misinformation in meta which is aligned to according to.

Unknown Executive: The guard framework in terms of your second question with Cookie deprecation pushing out to 2025 Cookie deprecation, it's actually a tailwind for our business because.

Unknown Executive: What we focus on is the environment and the.

Unknown Executive: Contextual environment, where advertisers are running there.

Unknown Executive: Their brand so even if since it is getting pushed out to 2025.

Unknown Executive: We're not dependent on cookies for any of our verification our optimization product and again, we see it ultimately as a tailwind.

Speaker Change: Thank you Lisa.

Speaker Change: Thanks Mark.

Unknown Executive: And again, we see it ultimately as a tailwind. Thank you, Lisa. Thanks, Mark. Thank you. One moment for questions. Our next question comes from Youssef Squali with Truist Securities. Please proceed. Thank you very much. Lisa, versus that 50% growth in volume at Meta that you just referenced, how does that jibe with the revenues that you're generating from Meta? Are you charging separately for that?

Speaker Change: Thank you one moment for questions.

Unknown Executive: And I think you talked about it obviously being a premium product, or is that part of an existing bundle that you're already selling? And then I have a follow-up question: Yeah, I'm happy to take that one. So yes, we're seeing tremendous adoption of our total media quality product, which is represented in that 50% year over year volume growth is because of launching TMQ in February. And with TMQ, because of the sophistication of the technology, the granularity of the technology, we're able to classify video, image, audio, and text, frame by frame.

Unknown Executive: Our next question comes from Youssef Squali with true Securities You May proceed.

Speaker Change: Thank you very much.

Speaker Change: Lisa versus that 50% growth in volume.

Speaker Change: That you just referenced how does that Jive with the revenues that you're right that you're generating from better are you charging separately for that and I think you've talked about.

Speaker Change: Obviously being a premium product was that part of the existing bundles that you're already selling and I have a follow up please.

Unknown Executive: So what that means is, for 30 second videos running, we're classifying every single frame. And because of the granularity, we're able to demonstrate and prove that we're finding higher quality media for the advertisers. Because of that, we're charging a premium. To add on to that, thanks, Lisa. We've already successfully negotiated a premium rate on our TMQ offering. And to help, Youssef, you size the opportunity of META and the way we're thinking about it.

Unknown Executive: Okay.

Unknown Executive: Yeah.

Speaker Change: Are we to take that one so yes, we're seeing tremendous adoption of our total media quality product.

Unknown Executive: That is represented in that 50% year over year volume growth is because of launching <unk>.

Unknown Executive: In February and with <unk> because of the sophistication of the technology. The granularity of the technology, we're able to classify video image audio tax frame by frame. So what that means is 32nd video is running.

Unknown Executive: Classifying every single frame and because of the granularity we're able to demonstrate improved that we're finding higher quality media for the advertisers because of that we're charging a premium.

Unknown Executive: META revenue today is just over 40% of our social media revenue. And as we mentioned, with the volume growth of approximately 50% that we've experienced on all of META since its launch, assuming that continues through the rest of the year, that's roughly, give or take, a $15 million increase in our expectations for META overall. That's great. Thanks. Thanks, Tania, for that. And then you talked about double-digit growth in revenue with mid-tier clients. Can you unpack that a little bit?

Speaker Change: To add onto that thanks, Lisa we've already successfully negotiated a premium rate on our <unk> offering.

Unknown Executive: And to help you size the opportunity of meta and the way we're thinking about it meta revenue today is the product is just over 40% of our social media revenue.

Unknown Executive: And as we mentioned with the volume growth of approximately 50% that we've experienced on all of <unk> since its launch assuming that continues through the rest of the year, that's roughly give or take a $15 million increase in our expectations for meta overall.

Unknown Executive: That's great. Thanks, Thanks, Tony for that and then.

Unknown Executive: You talked about double digit growth in revenue with the mid tier clients can you unpack that a little bit.

Unknown Executive: talk to the drivers of that, that's actually very, Sure, I'm happy to take that. So in Q1, we did see double-digit revenue growth with mid-tier clients, and it's an area where our sales team is very focused on. A couple of data points to add to that: more than half of our large customers today are defined as mid-tier customers, and where we're seeing nice runway and opportunity with the mid-tier channel is establishing partnerships with mid-tier DSPs. As mentioned earlier on the call, there were two in particular in the pharmaceutical sector. We also signed five mid-tier agencies as their preferred or exclusive partners.

Unknown Executive: Talk to the drivers of that that's actually very impressive.

Unknown Executive: Yes.

Speaker Change: Sure I'm happy to take that so in Q1, we did.

Unknown Executive: See double digit revenue growth with the mid tier clients and it's an area where our sales team is very focused on a couple of data points to add to that more than.

Unknown Executive: Half of our large customers today are defined as mid tier customers and where we're seeing nice runway and opportunity with the mid tier channel is establishing partnerships with mid tier.

Unknown Executive: So we're feeling very good about mid-tier in terms of the traction and momentum that we have, and the team will continue to cross-sell, up-sell, and put new logos on the board with the mid-tier channels. Great. Thanks, Lisa.

Unknown Executive: Dsp's, we mentioned it earlier on the call there were two in particular in the pharmaceutical sector.

Unknown Executive: We also signed five mid tier agencies as their preferred or exclusive partners. So.

Unknown Executive: We're feeling very good about mid tier in terms of the traction and momentum that we have and the team will continue to cross sell up sell and put new logos on the board with the mid tier channel.

Speaker Change: Great. Thanks, Lisa.

Lisa Utzschneider: No problem.

Unknown Executive: No problem. Thank you. One moment for questions. Our next question comes from Omar Dessouky with Bank of America. You may proceed. Hi, thank you.

Lisa Utzschneider: Thank you.

Speaker Change: One moment for questions.

Omar Dessouky: Our next question comes from Omar <unk> with Bank of America, You May proceed.

Omar Dessouky: Alright, thank you.

Unknown Executive: Just looking at your guidance, you know, it looks like you raised guidance for the year by about three million. And the first quarter was maybe above your guidance by about the same amount. So it looks like there is a path.

Omar Dessouky: So just looking at your guidance it looks like you raised guidance for the year.

Omar Dessouky: By about $3 million.

Unknown Executive: And.

Omar Dessouky: First quarter was maybe.

Omar Dessouky: Your guidance by about the same so it looks like a pass through to me.

Unknown Executive: I was wondering, first of all, if that's correct, I was wondering, for the balance of the year, have your... [inaudible] You speak more enthusiastically about social media measurement driven by Facebook and Meta, which sounds to me like maybe you'd be more enthusiastic about the growth prospects for measurement and would imply that optimization might be a little weaker. That's kind of how I'm reading it.

Omar Dessouky: I was wondering if first of all if that's correct I was wondering for the balance of the year.

Unknown Executive: Have have your.

Unknown Executive: Have your outlooks for measurements or optime optimization changed as compared to.

Unknown Executive: Right after the fourth quarter print.

Unknown Executive: You speak more enthusiastically.

Unknown Executive: About.

Unknown Executive: Social media measurement.

Unknown Executive: My Facebook in meta.

Unknown Executive: Which sounds to me like maybe you'd be more enthusiastic about the growth prospects for measurement, which would imply that optimization might be a little weaker.

Unknown Executive: But I wanted to be a little bit more and get a little bit more clarity. Unknown, if that's how I should think about it. Hi, Omar.

Unknown Executive: Hum I'm reading, it, but I want it to be a little bit more a little bit more clarity.

Omar: That's how I should think about it.

Unknown Executive: For clarity, our full-year revenue guidance was an increase of $2 million at the midpoint of the range. And we also increased our EBITDA midpoint by $2 million. So 13% revenue growth at the midpoint on the top line, and 33% EBITDA margin at the midpoint. Yeah, I mean...

Omar: Hi, Omar.

Speaker Change: For clarity.

Speaker Change: Our full year revenue guidance was an increase of $2 million at the midpoint of the range and we also increased our EBITDA midpoint by $2 million so 13%.

Unknown Executive: Percent revenue growth at the midpoint on the top line and 33% EBITDA margin at the midpoint.

Unknown Executive: The back half of the year regarding the product roadmap and product adoption, like I said before, nice momentum across the social platforms, especially with our TMQ product. We are also launching, as we mentioned earlier on the call, new partnerships with social platforms like SNAP. We were the first to market offering brand safety and suitability, which will be available later this year.

Speaker Change: Yeah and in terms of.

Speaker Change: The back half of the year regarding.

Unknown Executive: The product roadmap and product adoption like I said before nice.

Unknown Executive: Momentum across the social platforms.

Unknown Executive: Especially with our <unk> product.

Unknown Executive: We are also launching as we mentioned earlier on the call new partnerships with social platforms like snap.

Unknown Executive: The first to market offering brand safety and suitability snap, which will be available later this year and then launching several.

Unknown Executive: And then launching several, what we're referring to as cookie-free products, so looking into the future in a cookie-less world, products like MFA, attention, and misinformation, which we offer both at the pre-bid and post-bid levels. We're seeing our advertising customers lean into these solutions. I had mentioned before the robust MFA beta that we did run 100 campaigns.

Unknown Executive: What we're referring to as cookie free product so looking into the future.

Unknown Executive: A cookie less world products like MFA attention.

Unknown Executive: Mis information, which we offer both at the.

Unknown Executive: Prepaid and postpaid we're seeing our advertising customers lean into these solutions I had mentioned before the robust MFA beta that we did running a 100 campaigns and we'll just continue to cross sell upsell.

Unknown Executive: And we'll just continue to cross-sell, up-sell, and ride this momentum and ensure we're driving adoption in the back half of the year. The other note to make is that we're also confident in our ability to deliver on this increased outlook because of the robustness of the product roadmap, the investments we're making in innovation, the investments we're making in AI-powered products, and the ability for the team to execute. Let me just maybe focus on optimization, just so I can like narrow this down.

Unknown Executive: And ride this momentum and ensure we are driving adoption in the back half of the year.

Unknown Executive: The other note to make is we're also confident on our ability.

Unknown Executive: To deliver on this increased outlook because of the robustness of the product roadmap. The investments, we're making in innovation investments, we're making in AI powered products and the ability for the team to execute.

Unknown Executive: Let me just maybe focus on optimization, just so I can narrow this down.

Unknown Executive: As compared to when you gave your initial guide how is your outlook for optimization.

Unknown Executive: As compared to when you gave your initial guide, has your outlook for optimization changed? I mean, Omar, overall, while we had a beat in Q1, we did raise our guide for the full year, given that many of the products that we've launched, and now we've announced the launch of those products. And given the ramp we have expected for products that are ready in the market, like QSP, for example, which is an optimization, you know, we have a lot of confidence in the second half of the year, I wouldn't say that our view is that it's declined. I mean, we're still confident about the second half of the year.

Unknown Executive: Worsened at all even if even if a little bit.

Unknown Executive: I mean Omar overall, while we had a beat in Q1, we did raise our guide for the full year given that many of the products that we've launched and now we've announced the launch of those products and given the ramp we have expected for products that are already in market like <unk>.

Unknown Executive: For example, which is an optimization.

Unknown Executive: We have a lot of confidence in the second half of the year I wouldn't say that.

Unknown Executive: Our view is that that declined I mean, we're still confident in the second half of the year and.

Unknown Executive: And, you know, optimization in particular, we're looking at more than doubling our growth rate from Q1 to Q2. And no, we're still positive and confident about our outlook for the second half of the year. Just one more question, if I could, you haven't mentioned context control on the call or in the transcript.

Unknown Executive: Optimization in particular, we're looking at more than doubling our growth rate from Q1 to Q2 and no. We are still positive and confident about our outlook for the second half of the year.

Speaker Change: So just one more question if I could you haven't mentioned context control.

Unknown Executive: And I think in the last couple of quarters, you started to talk about kind of detail for that specific product, you know, is context control going to grow in 24? Yeah, is it a driver of growth anymore? And if so, like, how is that growth coming? Is it coming from, you know, new accounts using it for the first time or increased consumption by existing accounts? Great question.

Unknown Executive: On the call or in the transcript and I think in the last couple of quarters. You had started to talk about kind of a detail for that specific product.

Unknown Executive: As context control going to grow in 'twenty four.

Unknown Executive: Is that a driver of growth anymore, and if so like how is that growth coming is it coming from.

Unknown Executive: New accounts using it for the first time or increased consumption by existing accounts.

Unknown Executive: So, in terms of context control performance in the period, it reflected the overall optimization demand, which, as you might remember, ramped through Q1, so it improved in March and will continue to grow in Q2. As for new logo versus existing, we're seeing both. We're seeing the team put new logo wins on the board with context control, and we're also seeing existing advertisers increase their spend on context control. Great. Thank you. I appreciate it.

Speaker Change: Great question. So in terms of context control performance in the period reflected the overall optimization demand, which as you might remember it ramped through Q1, so and improved in March.

Unknown Executive: We'll continue to grow in Q2 from new logos versus existing.

Unknown Executive: Seeing both we're seeing the team put new logo wins on the board with context control and were also seeing.

Unknown Executive: Existing.

Unknown Executive: Advertisers increase their spend in context control.

Speaker Change: Alright. Thank you appreciate it.

Speaker Change: Thank you.

Unknown Executive: Okay.

Unknown Executive: Thank you. Thank you. One moment for questions. Our next question comes from Mark Kelley with Stiefel. He may... Great, thank you very much. I was hoping to go back to CTV and ask you if it's possible to kind of strip out the public from that conversation. I know the public is super important for that segment.

Speaker Change: Thank you.

Speaker Change: One moment for questions.

Unknown Executive: Our next question comes from Mark Kelley with Stifel. You May proceed.

Mark Patrick Kelley: Great. Thank you very much.

Mark Patrick Kelley: I was hoping to go back to CTV.

Mark Patrick Kelley: And ask you if it's possible to kind of strip out public from that conversation I know public is super important for that for that segment, but can you talk about I guess, maybe the current trends youre seeing in CTV.

Unknown Executive: But can you talk about, I guess, you know, maybe the current trends you're seeing in. And B, you know, in my mind, as things become more programmatic and biddable, I think that makes your solutions more desirable and needed a bit more. I guess, is there a way for us to frame it?

Unknown Executive: B.

Unknown Executive: In my mind as things become more programmatic and Biddable.

Unknown Executive: I think that makes your solutions more desirable and needed a bit more I guess is there a way for us to frame either attach rates or.

Unknown Executive: either attach rates or, you know, how your products are used in a like a private deal environment versus biddable programmatic, that would be great. Yeah, I'm happy, Mark, to take that question in terms of the trends and differentiation that we have. So, and I know you're very familiar with Publica. So, Publica is a platform. We have deep relationships both with the major global broadcasters and the TV OEMs. In addition to that, we have IAS relationships with Fortune 500 global brands.

Speaker Change: How your products are used in a like a private deal environment versus.

Unknown Executive: Biddable programmatic that'd be great. Thank you.

Speaker Change: Yeah, I'm happy Mark to take.

Mark: The question in terms of the trends and differentiation that we have.

Speaker Change: And I know you are very familiar with public so public as a platform we have deep relationships, both with the major global broadcasters and the TV Oems. In addition to that we have Ias is relationships with a fortune 500 global.

Unknown Executive: And because of bringing together both the buy side and the sell side, we're uniquely positioned in CTV to create a marketplace for transparency between the publishers and the brands. Because speaking with the brands, the number one reason, at least what I hear and the team hears, in terms of what's holding brands back in shifting linear TV dollars into CTV and programmatic CTV in particular, is a lack of transparency. And that's an area we're very focused on.

Speaker Change: And because of bringing together, both the buy side and.

Unknown Executive: Sell side, we're uniquely positioned in CTV to create a marketplace for transparency between the publishers and the brands because speaking with the brand. The number one reason at least what I hear in the team here is in terms of whats holding brands back in shifting linear TV.

Unknown Executive: Into CTV and programmatic CTV in particular, its lack of transparency and thus an area. We're very focused on we're actually at the forefront of it.

Unknown Executive: We're actually at the forefront of enabling show-level transparency for brands so they can trust where their buys are being activated. We already have several initiatives in motion that are already providing this level of transparency that I'm describing between major US broadcasters and TV OEMs. So that's where we're very focused right now on show-level transparency and also with direct partnerships with the OEMs and the bargainers. Okay, thanks. And anything just on the difference between, like, a PMP deal and, you know, more biteable programmatic inventory in CTV.

Unknown Executive: Enabling show level of transparency for brands. So they can trust where their buys are being activated we already have several initiatives in motion that are already providing this level of transparency that I'm describing between major U S broadcasters.

Unknown Executive: And TV Oems, So that's where we're very focused on right now is the show level of transparency.

Unknown Executive: And also with the direct partnerships with the Oems and the broadcasters.

Unknown Executive: Okay. Thanks, and then anything just on like the difference between.

Unknown Executive: PMT deal and more.

Unknown Executive: More biddable programmatic inventory in CTV.

Unknown Executive: Yeah, we're leaning in more to the biddable programmatic area. Okay, thank you. Thank you. Thank you. One moment for questions. Our next question comes from Mark Zgutowicz with The Benchmark Company. Thank you. Tania, I was hoping maybe to ask the earlier question a little differently about your growth in optimization versus measurement. If you look at.

Unknown Executive: Yes, we're leaning in more to the Biddable programmatic.

Unknown Executive: Area.

Mark John Zgutowicz: Okay. Thank you.

Mark John Zgutowicz: Thank you.

Mark John Zgutowicz: Thank you one moment for questions.

Mark John Zgutowicz: Our next question comes from Mark <unk> with the Benchmark Company you May proceed.

Mark John Zgutowicz: Thank you.

Mark John Zgutowicz: Tony I was hoping maybe to asset.

Mark John Zgutowicz: Earlier question, a little differently about your growth and optimization versus measurement.

Mark John Zgutowicz: If you look at.

Unknown Executive: Your optimization segment, and I know you've guided to doubling growth in 2Q, but that still implies a deceleration, you know, 1Q to 2Q, at least on a two-year stack. So I guess the question is, if you think about your guidance and the mix of measurement in that guidance, what might that be? And it looks to me like it, you might need to see measurement mix.

Mark John Zgutowicz: Your optimization segment.

Unknown Executive: I know you've guided to doubling growth in <unk>, but that still implies a deceleration.

Unknown Executive: From <unk> to <unk> at least on a two year stack.

Unknown Executive: The question is if you think about your guidance and the mix of measurement in that guidance.

Unknown Executive: What.

Unknown Executive: Might that be.

Unknown Executive: And it looks to me like you might need to see measurement mix.

Unknown Executive: Transcripts provided by Transcription Outsourcing, LLC. Please provide some color there. It'd be helpful. Sure. As you look at our full-year guidance at 13% at the midpoint of the range, growth and measurement fueled by social is expected to be higher than the midpoint, and optimization growth is expected to be slightly lower than the midpoint, although in the double digits. Okay, great. And then just one last one on measurement.

Unknown Executive: Mix expand from close to 39%, 40% to 50% perhaps on your guidance.

Unknown Executive: If we follow the same trend line for optimization, unless youre expecting a reacceleration of optimization in the second half if you could maybe.

Speaker Change: Provide some color there would be helpful. Thanks sure.

Unknown Executive: As you look at our full year guidance at 13% at the midpoint of the range growth in measurement fueled by social is expected to be higher than the midpoint and optimization growth rate is expected to be slightly lower than the mid point, although in the double digits.

Unknown Executive: Is there any lumpiness that we should expect in the next three quarters? Or should that be? I think we're pretty linear in terms of sequential strength in that segment. So our measurement growth throughout the year, I would think of it as really primarily driven by social and TMQ. In terms of lumpiness, we don't expect any lumpiness, but we do anticipate, given the trends we're seeing, an acceleration of our measurement growth rate as we move through the year. Okay, great, thanks, Tania, I appreciate it.

Speaker Change: Okay, Great and then just.

Unknown Executive: One last one on measurement is there any lumpiness that we should expect in the next three quarters or is that should that be.

Unknown Executive: Pretty linear in terms of sequential strength in that segment.

Unknown Executive: Yeah.

Unknown Executive: So our measurement growth throughout the year I would think about it as really primarily driven by social TM Q in terms of Lumpiness.

Unknown Executive: We don't expect any lumpiness, but we do anticipate given the trends, we're seeing an acceleration of our measurement growth rate as we move through the year.

Speaker Change: Okay, great. Thanks, Tony I appreciate it.

Speaker Change: Thank you.

Unknown Executive: Thank you. One moment for questions. Our next question comes from Mauricio Munoz with Raymond James. Hi, can you hear me okay?

Speaker Change: One moment for questions.

Unknown Executive: Our next question comes from Mauricio Munoz with Raymond James You May proceed.

Unknown Executive: Okay.

Mauricio Munoz: Can you hear me okay.

Unknown Executive: Yes.

Unknown Executive: Yep. Yeah, thank you. Lisa. Yeah, I just wanted to go back to.

Mauricio Munoz: Yes. Thank you.

Mauricio Munoz: Yeah, I just wanted to go back to.

Unknown Executive: The expanded opportunity I made up. You have obviously talked about it on the call, but I'm wondering if you could offer some contrasts, of Reception and Rate of Adoption, that you're seeing this early between those social customers that already advertise in meta and now are expanding to adopt TMQ in the platform. And perhaps the largest opportunity for you, which is those social customers that do not advertise in meta will start doing so under the TMQ umbrella. So if you could please talk about the sort of interest and adoption you're seeing by this cohort. And then I have a follow-up question.

Mauricio Munoz: Oh, the expanded opportunity Ahmed al.

Unknown Executive: Obviously.

Unknown Executive: A bondholder call, but I'm wondering if you could offer some context.

Speaker Change: Hello reception on the rate of adoption that you are.

Unknown Executive: Seeing this early between.

Unknown Executive: Those social customers that already all been made up.

Unknown Executive: Our expanding too.

Speaker Change: Thank you.

Unknown Executive: And the platform.

Unknown Executive: Well, perhaps is the largest opportunity for you which is those new social customers that do not have rituxan middle.

Unknown Executive: My style doing so on the deal.

Unknown Executive: <unk> umbrella.

Unknown Executive: If you could please talk about.

Unknown Executive: Sort of internally.

Unknown Executive: I'm sure you've seen by this cohort and then I have a follow up.

Unknown Executive: Yeah, sure. Happy to take that. So I've shared all the stats in terms of meta, the volume, the growth we're seeing in social. We launched TMQ on meta in early February, February 5.

Speaker Change: Yes, sure happy to take that so <unk>.

Speaker Change: I've shared all the stats in terms of meta the volume the growth we're seeing in social we launched <unk> on meta in early February February 5th.

Speaker Change: And we are seeing tremendous adoption the once that I can share is over 100 advertisers.

Speaker Change: <unk> adopted <unk> on meta since launch and this is a combination of new logos.

Unknown Executive: And we are seeing tremendous adoption. The one stat I can share is that over 100 advertisers have adopted TMQ on meta since launch. And this is a combination of new logos and existing advertisers. And we're thrilled with meta in terms of being a partner, the fact we're seeing that adoption rate, the fact that we continue to roll out new languages, more languages, more marks, really important for Fortune 500 global marketers. And in addition to that, also launching misinformation in April was also meaningful for the advertisers, especially the ones who are being advertised, plan to advertise during the US election. Okay, thanks.

Unknown Executive: And existing advertisers.

Unknown Executive: And we're thrilled with meta in terms of as a partner. The fact, we're seeing that adoption rate of the fact that we continue to rollout new languages more languages more mark which is really important for the fortune 500.

Unknown Executive: Global marketers and in addition to that also launching misinformation.

Unknown Executive: In April was also meaningful for the advertisers, especially the ones who are.

Unknown Executive: Advertise plan to advertise during the U S elections.

Unknown Executive: And then on CTV, obviously, a lot of excitement about the prospects of CTV as a long-term driver of digital spending. So we'd be understanding that most of the talent, initially expected to come from dollars shifting from linear TV, which will largely be incremental to you. But just wanted to ask you about the potential impact. Advertisers continue to emphasize the format, but budget within digital starts shifting from other video formats into CTV, which has a higher CPM, but relatively lower volume.

Unknown Executive: Okay. Thanks.

Unknown Executive: On CTV, obviously, a lot of excitement about the prospects of CTV for long term driver of digital spending.

Unknown Executive: So we'd be understanding that most of the tailwind is initially expected to come from.

Unknown Executive: Shifting from linear television, which will largely be incremental to you but.

Speaker Change: Just wanted to ask you about the potential impact.

Unknown Executive: Tysons continues to emphasize the four months.

Unknown Executive: Budget within digital.

Unknown Executive: Teams from from.

Unknown Executive: All their video formats into CTV, which have the highest CPM, we're relatively lower volume.

Unknown Executive: So if you could think about this dynamic and perhaps talk about the steps you're taking, capitalizing on this trend, including any potential monetization strategy that would allow benefits from the higher CPM. Thank you. Yeah, happy to take that. In terms of the trends that we're seeing, there are a few.

Unknown Executive: So if you could think about this dynamic and perhaps talk about the schedule.

Unknown Executive: Taking to capitalize on this trend, including any potential monetization strategy that would allow you to benefit from the higher CPM.

Speaker Change: Yeah happy to take that in terms of.

Speaker Change: The trends that we're seeing there are few so with CTV in particular typically those by those budgets are moved from linear traditional TV into CTV, whether it's premium CTV content like what is running on Netflix.

Unknown Executive: So with CTV in particular, typically, those budgets are moved from linear traditional TV into CTV, whether it's premium CTV content, like what is running on Netflix; we have a measurement partnership with Netflix, or moving over into programmatic CTV. So that's how we view CTV. And it's roughly what $25, $26 billion marketplace today, double-digit growth, lots of runway in CTV, early days, but that is a new revenue stream for CTV. And growth right now as an industry is short-form video.

Unknown Executive: We have a measurement partner ship with Netflix or moving over into programmatic CTV. So that's how we view CTV and it's roughly about $25 $26 billion marketplace today double digit growth lots of runway in CTV early days, but that is a new <unk>.

Unknown Executive: Revenue stream of television.

Unknown Executive: And then the other area to call out in terms of when you think about measurement and social the.

Unknown Executive: The growth right now as an industry is short form video short form video you hear about it in met his earnings calls and Youtube with Med <unk> Youtube shorts short form video running on tick tock. The usage is through the roof in terms of users viewing creating.

Unknown Executive: Short-form video, you hear about it in Meta's earnings calls and YouTube with MetaReels, YouTube Shorts, and short-form video running on TikTok. The usage is through the roof in terms of users viewing, creating, and sharing short-form video within the live feeds of those platforms. And as I like to say, brands go where the users are. And that's why we're seeing such high engagement from advertisers as they are investing more and more of their digital advertising dollars in social platforms because of the explosive growth of short-form video, which also commands a higher CPM.

Unknown Executive: Sharing short form video.

Unknown Executive: Within the live feeds of those platforms and as I'd like to say the brands go where the users are and that's why we're seeing such high engagement from the advertisers as they are investing more and more of their digital advertising dollars in the social platforms because of the explosive growth.

Unknown Executive: Of short form video, which also commands a higher CPM.

Speaker Change: Okay. Thank you.

Lisa Utzschneider: Thank you. I would now like to turn the call back over to Lisa Utzschneider for any closing remarks. Thanks, everyone, for joining today's call. I'm proud of our global team's execution, and we're pleased with our momentum heading into the second quarter. We're excited to drive adoption of our innovative new products throughout the year. We look forward to updating you on our progress and to seeing you at several upcoming investor events. Thank you. This concludes the conference. Thank you for your participation. You may now disconnect. ,,,,

Speaker Change: Thank you.

Unknown Executive: I would now like to turn the call back over to Lisa <unk>.

Lisa Utzschneider: For any closing remarks.

Lisa Utzschneider: Thanks, everyone for joining today's call I am proud of our global team's execution and we're pleased with our momentum heading into the second quarter. We're excited to drive adoption of our innovative new products throughout the year. We look forward to updating you on our progress and to seeing you at several upcoming investor events.

Lisa Utzschneider: Thank you. This concludes the conference. Thank you for your participation you may now disconnect.

Lisa Utzschneider: Okay.

Lisa Utzschneider: [music].

Lisa Utzschneider: Hum.

Lisa Utzschneider: Yes.

Lisa Utzschneider: [music] Hum.

Lisa Utzschneider:

Lisa Utzschneider: Okay.

Lisa Utzschneider: [music].

Lisa Utzschneider: Hum.

Lisa Utzschneider: [music].

Lisa Utzschneider: Hmm.

Lisa Utzschneider: Yeah.

Lisa Utzschneider: [music].

Lisa Utzschneider: Okay.

Lisa Utzschneider: Yeah.

Lisa Utzschneider: Yes.

Lisa Utzschneider: [music].

Lisa Utzschneider: Okay.

Lisa Utzschneider: Hum.

Lisa Utzschneider: [music].

Q1 2024 Integral Ad Science Holding Corp Earnings Call

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