Q2 2024 Integral Ad Science Holding Corp Earnings Call

August 1, 2024

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Operator: Good day, and thank you for standing by. Welcome to the IAS Q2 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. 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 first speaker today, Jonathan Schaffer, SVP, Investor Relations with IAS. Please go ahead.

Operator: Good day, and thank you for standing by. Welcome to the IAS Q2 2024 earnings conference call.

Speaker Change: Good day and thank you for standing by. Welcome to the IAS Q2 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode.

Operator: At this time, all participants aren't in a listen-only mode.

Operator: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again.

Speaker Change: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again.

Operator: Please be advised that today's conference is being recorded.

Jonathan Schaffer: I would now like to hand the conference over to your first speaker today, Jonathan Schaffer, SVP, Investor Relations with IAS. Please go ahead.

Jonathan Schaffer: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jonathan Schaffer, SVP, Investor Relations with IAS. Please go ahead.

Jonathan Schaffer: Thank you.

Jonathan Schaffer: Thank you. Good afternoon, and welcome to the IAS 2024 Second Quarter Financial Results Conference. 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. 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.

Jonathan Schaffer: Good afternoon, and welcome to the IAS Q2 2024 second 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. 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.

Jonathan Schaffer: Thank you. Good afternoon and welcome to the IAS 2024 Second Quarter Financial Results Conference Call.

Speaker Change: I'm joined today by Lisa Utzschneider, CEO , and Tania Secor, CFO .

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. All financial comparisons, unless noted otherwise, are based on the prior year period.

Speaker Change: Before we begin, please note that today's call and prepared remarks contain forward-looking statements.

Speaker Change: 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.

Speaker Change: 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.

Jonathan Schaffer: All financial comparisons, unless noted otherwise, are based on the prior year period.

Jonathan Schaffer: So, with these formalities out of the way, I'd now like to turn the call over to our CEO, Lisa Utzschneider.

Lisa Utzschneider: 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 Utzschneider. Lisa, you may begin.

Lisa Utzschneider: Lisa, you may begin. Thank you, Jonathan. Welcome everyone to our 2024 second quarter call. I'm excited to discuss our strong second quarter results and increased outlook for the full year. On today's call, I'll review several growth drivers of our business, including key global customer wins, new and enhanced partnerships, our robust product pipeline, and the opportunity to pursue additional logo wins following Oracle's announcement to exit the advertising business. We extended our positive business momentum and exceeded our revenue and adjusted EBITDA guidance for the second quarter. Total revenue increased 14% to $129 million, ahead of our prior outlook of $125 to $127 million.

Lisa Utzschneider: Thank you, Jonathan. Welcome, everyone, to our 2024 second quarter call. I'm excited to discuss our strong second quarter results and increased outlook for the full year. On today's call, I'll review several growth drivers of our business, including key global customer wins, new and enhanced partnerships, our robust product pipeline, and the opportunity to pursue additional logo wins following Oracle's announcement to exit. We extended our positive business momentum and exceeded our revenue and adjusted EBITDA guidance for the second quarter.

Lisa Utzschneider: Total revenue increased 14% to $129 million ahead of our prior outlook of $125 to $127 million. We reported double-digit growth across all of our businesses in the second quarter, including optimization growth up 11%, measurement growth up 17%, and publisher growth up 12%. Adjusted EBITDA increased to $46.2 million at a 36% adjusted EBITDA margin.

Lisa Utzschneider: Thank you, Jonathan. Welcome everyone to our 2024 second quarter call. I'm excited to discuss our strong second quarter results and increased outlook for the full year.

Speaker Change: On today's call, I'll review several growth drivers of our business, including

Speaker Change: Key Global Customer Wins.

Speaker Change: New and Enhanced Partnerships, our Robust Product Pipeline, and the opportunity to pursue additional logo wins following Oracle's announcement to exit the advertising business.

Speaker Change: We extended our positive business momentum and exceeded our revenue and adjusted EBITDA guidance for the second quarter.

Speaker Change: Total revenue increased 14% to $129 million, ahead of our prior outlook of $125 to $127 million.

Lisa Utzschneider: We reported double digit growth across all of our businesses in the second quarter, including optimization growth up 11%, measurement growth up 17%, and publisher growth up 12%. Adjusted EBITDA increased to $46.2 million at a 36% adjusted EBITDA margin. Once again, we are raising our full year financial outlook to reflect our second quarter outperformance and our expectations for a strong second half of the year. We now expect 2024 revenue growth of 14% at the midpoint, with an adjusted EBITDA margin of 34%, well above the rule of 40. Our increased outlook for 2024 includes continued adoption of our leading social media offerings, the anticipated benefit from recently launched products, and the contribution from new logo wins.

Lisa Utzschneider: Once again, we are raising our full-year financial outlook to reflect our second quarter outperformance and our expectations for a strong second half of the year. We now expect 2024 revenue growth of 14% at the midpoint with an adjusted EBITDA margin of 34%, well above the rule of 40. Our increased outlook for 2024 includes continued adoption of our leading social media offerings, the anticipated benefit from recently launched products, and the contribution from new logo wins.

Lisa Utzschneider: Marketers partner with IAS based on our leading AI back technology that delivers actionable data to drive superior results. They value our customer service, which includes the industry's largest global footprint, with 31% of our revenue coming from outside of the Americas. International revenue has grown faster than overall revenue for the third consecutive quarter, driven by strong adoption of our social media.

Lisa Utzschneider: Marketers partner with IAS based on our leading AI-backed technology that delivers actionable data to drive superior results. They also value our customer service, which includes the industry's largest global footprint, with 31% of our revenue coming from outside of the Americas. International revenue has grown faster than overall revenue for the third consecutive quarter, driven by strong adoption of our social media offerings. We are excited to announce two recent major global brand wins in the important telecommunications vertical. Orange, the largest telecommunications provider in France, selected IAS as its new partner over an incumbent provider.

Speaker Change: Marketers partner with IES based on our leading AI-backed technology that delivers actionable data to drive superior results.

Lisa Utzschneider: We are excited to announce two recent major global brand wins in the important telecommunications vertical. Orange, the largest telecommunications provider in France, selected IAS as its new partner over an incumbent provider. We were awarded this opportunity based on our differentiated products as well as our quality of service. Telefonica, a Spanish multinational telecommunications company, selected IAS as one of its global strategic partners for both measurement and optimization solutions. Telefonica chose IAS based on our technology, innovation, and service. In addition, existing customers are growing with IAS. As discussed on last quarter's call, we've seen a 55% increase in average annual spend in year two of new contracts since 2019 based on our advertiser customer data.

Speaker Change: We are excited to announce two recent major global brand wins in the important telecommunications vertical.

Speaker Change: Orange, the largest telecommunications provider in France, selected IAS as its new partner over an incumbent provider. We were awarded this opportunity based on our differentiated products as well as our quality of service.

Lisa Utzschneider: We were awarded this opportunity based on our differentiated products, as well as our quality of service. Telefonica, a Spanish multinational telecommunications company, selected IIS as one of its global strategic partners for both measurement and optimization solutions. Telefonica chose IIS based on our technology, innovation, and service.

Speaker Change: Telefonica, a Spanish multinational telecommunications company, selected IIS as one of its global strategic partners for both measurement and optimization solutions.

Speaker Change: Telefonica chose IAS based on our technology, innovation, and service.

Lisa Utzschneider: In addition, existing customers are growing with IAS. As discussed on last quarter's call, we've seen a 55% increase in average annual spend in year two of new contracts since 2019 based on our advertiser customer data. Stellantis, the leading global automaker, renewed and expanded its partnership with IAS.

Speaker Change: In addition, existing customers are growing with IAS. As discussed on last quarter's call, we've seen a 55% increase in average annual spend in year two of new contracts since 2019 based on our advertiser customer data.

Lisa Utzschneider: Stellantis, a leading global automaker, renewed and expanded partnership with IAS. IAS is now the preferred global verification provider to Stellantis, growing our partnership beyond AMIA. Our demonstrated product superiority helps secure this renewal and expansion. Perfetti Van Meal, one of the world's largest manufacturers and distributors of confectionery and chewing gum, has expanded its exclusive global verification partnership with IAS beyond AMIA to include the US as well. Perfetti extended its partnership with IAS for several reasons, including the strength of our video measurement products. IAS leads with innovation and trust. We prioritize our roadmap of highly advanced products and platform integrations informed by our close customer partnerships.

Lisa Utzschneider: IAS is now the preferred global verification provider to Stellantis, growing our partnership beyond EMEA. Our demonstrated product superiority helped secure this renewal and expansion. Perfetti Van Meel, one of the world's largest manufacturers and distributors of confectionary and chewing gum, has expanded its exclusive global verification partnership with IAS beyond EMEA to include the U.S. as well.

Speaker Change: Stellantis, the leading global automaker, renewed and expanded its partnership with IAS.

Speaker Change: Perfetti Van Meel, one of the world's largest manufacturers and distributors of confectionary and chewing gum, has expanded its exclusive global verification partnership with IAS beyond EMEA to include the U.S. as well.

Lisa Utzschneider: Perfetti extended its partnership with IAS for several reasons, including the strength of our video measurement product. IAS leads with innovation and trust. We prioritize our roadmap of highly advanced products and platform integrations informed by our close customer partnership. Year to date, we've launched several AI-backed products to provide marketers with additional assurance and insight into the safety and efficacy of their advertising spend. By leaning into our deep technology assets, we are maintaining a high bar for product velocity and flexibility that is resonating with our customers and platform partners.

Speaker Change: IS leads with innovation and trust. We prioritize our road map of highly advanced products and platform integrations informed by our close customer partnerships.

Lisa Utzschneider: Year-to-date, we've launched several AI-back products to provide marketers with additional assurance and insight into the safety and efficacy of their advertising spend. By leaning into our deep technology assets, we are maintaining a high bar for product velocity and flexibility that is resonating with our customers and platform partners. We also remain steadfast in our commitment to the highest standards for the quality and accuracy of our products and our commitment to adhere to stringent principles and guidelines for the responsible use of AI. In June, we announced the availability of the industry's first deep-fake detection offering. Currently in beta testing, the new offering is expected to help advertisers avoid running adjacent to deep-fake content and to further verify the safety and suitability of their digital media investments through trusted and safe AI-powered technology.

Speaker Change: By leaning into our deep technology assets, we are maintaining a high bar for product velocity and flexibility that is resonating with our customers and platform partners.

Lisa Utzschneider: We also remain steadfast in our commitment to the highest standards for the quality and accuracy of our products and our commitment to adhere to stringent principles and guidelines for the responsible use of AI. In June, we announced the availability of the industry's first deepfake detection offering.

Speaker Change: We also remain steadfast in our commitment to the highest standards for the quality and accuracy of our products and our commitment to adhere to stringent principles and guidelines for the responsible use of AI.

Lisa Utzschneider: Currently in beta testing, the new offering is expected to help advertisers avoid running adjacent to deepfake content and to further verify the safety and suitability of their digital media investments through trusted and safe AI-powered technology. We were delighted to pull forward the availability of deepfake detection to the first half of 2024 to meet high customer demand ahead of the Olympics and U.S. elections. Made for advertising, MFA represents a major industry challenge for marketers seeking to avoid web pages created solely to serve ads and clutter sites with high ad density and high ad-to-content ratio as they can lead to lower performance.

Lisa Utzschneider: We were delighted to pull forward availability of deep-fake detection to the first half of 2024 to meet high customer demand ahead of the Olympics and US elections.

Lisa Utzschneider: Made for advertising, MFA represents a major industry challenge for marketers seeking to avoid web pages created solely to serve ads and clutter sites with high ad density and high ad content ratio, as they can lead to lower performance. Since launching our MFA ad driven product in general availability in the second quarter, we are seeing 100% month-over-month growth in usage. As marketers seek to maximize their return on their digital ad investments across channels, we are extending our reach through new and enhanced platform and partner integrations. Social media represents a massive and sustainable market opportunity, and we have only just begun to scratch the surface.

Speaker Change: Made for advertising, MFA represents a major industry challenge for marketers seeking to avoid webpages created solely to serve ads and clutter sites with high ad density and high ad-to-content ratio as they can lead to lower performance.

Lisa Utzschneider: Since launching our MFA ad-driven product in general availability in the second quarter, we are seeing 100% month-over-month growth in usage. As marketers seek to maximize their return on their digital ad investments across channels, we are extending our reach through new and enhanced platform and partner integrations. Social media represents a massive and sustainable market opportunity, and we have only just begun to scratch the surface. Social media increased to 53% of measurement revenue and 22% of total revenue in the second quarter.

Speaker Change: Since launching our MFA ad-driven product in general availability in the second quarter, we are seeing 100% month-over-month growth in usage.

Speaker Change: As marketers seek to maximize their return on their digital ad investments across channels, we are extending our reach through new and enhanced platform and partner integrations.

Speaker Change: Social media represents a massive and sustainable market opportunity, and we have only just begun to scratch the surface.

Lisa Utzschneider: Social media increased to 53% of measurement revenue and 22% of total revenue in the second quarter. We believe our total media quality TMQ products suite provides marketers with unparalleled granularity and insights. Recently, we announced new platform partnerships with Pinterest, Reddit, and Snap. We also built on our existing integrations with platform partners, including Meta, YouTube, and TikTok, which offer our TMQ products suite. We continue to invest in our pre-bid optimization products in social media, including GARM, Global Alliance for Responsible Media. We currently provide pre-bid solutions across several of the largest social platforms, including X, where IS was selected to be the first to market based on our leading AI capabilities and our TMQ product offering.

Speaker Change: Social media increased to 53% of measurement revenue and 22% of total revenue in the second quarter. We believe our Total Media Quality TM2 product suite provides marketers with unparalleled granularity and insights.

Lisa Utzschneider: We believe our total media quality TMQ product suite provides marketers with unparalleled granularity and insight. Recently, we announced new platform partnerships with Pinterest, Reddit, and Snap. We also built on our existing integrations with platform partners, including Meta, YouTube, and TikTok, which offer our TMQ product suite. We continue to invest in our pre-bid optimization products on social media, including GARM, the Global Alliance for Responsible Media. We currently provide pre-bid solutions across several of the largest social platforms, including X, where IS was selected to be the first to market based on our leading AI capabilities and our TMQ product offerings.

Speaker Change: We continue to invest in our pre-bid optimization products in social media, including GARM, Global Alliance for Responsible Media.

Speaker Change: We currently provide pre-bid solutions across several of the largest social platforms, including X, where IAS was selected to be the first to market based on our leading AI capabilities and our TMQ product offering.

Lisa Utzschneider: In June, IS expanded its brand safety and suitability measurement product for YouTube to include reporting for Performance Max and Demand Gen campaigns on Google Ads. Performance Max is Google's campaign type that enables advertisers to access all Google Ads inventory through a single unified campaign. Demand Gen is a new Google ad solution that helps advertisers find and convert consumers with immersive, relevant, and visual creatives that grab attention and spur action in the right moment. During the second quarter, we expanded our global reporting and insights, now available for Amazon DSP media buys. Through a server-server integration on Amazon DSP, advertisers will now have access to measurement coverage for campaigns across Amazon custom audiences and Twitch inventory.

Speaker Change: Performance Max is Google's campaign type that enables advertisers to access all Google Ads inventory through a single unified campaign.

Lisa Utzschneider: During the second quarter, we expanded our global reporting and insights now available for Amazon DSP MediaBuy. Through a server-to-server integration on Amazon DSP, advertisers will now have access to measurement coverage for campaigns across Amazon Custom Audiences and Twitch Inventory. IES's solutions available to advertisers in Amazon DSP include viewability, IVT, and brand safety and suitability. IIS continues to lead the global market in CTV. We offer top-tier products, including granular measurement solutions at the content and channel level, optimization solutions for ad fraud protection, and MRC-accredited measurement metrics.

Speaker Change: Through a server-to-server integration on Amazon DSP, advertisers will now have access to measurement coverage for campaigns across Amazon Custom Audiences and Twitch Inventory.

Lisa Utzschneider: IS solutions available to advertisers and Amazon DSP include viewability, IVT, and brand safety and suitability. IS continues to be the global market in CTV. We offer top tier products, including granular measurement solutions at the content and channel level, optimization solutions for ad fraud protection, and MRC accredited measurement metrics. Our CTV investments are yielding significant results, with the majority of our clients using CTV optimization solutions, showing exceptional IVT pass rates. Additionally, public has introduced creative quality assurance, which automatically adjusts ad creatives to meet the specific requirements of various CTV channels and apps. This innovation is designed to eliminate, advertise or blind spots and enhance this programmatic effectiveness, leading to greater reach and scale for advertisers and improve yield management for publishers.

Speaker Change: IES's solutions available to advertisers and Amazon DSP include viewability, IVT, and brand safety and suitability.

Lisa Utzschneider: Our CTV investments are yielding significant results, with the majority of our clients using CTV optimization solutions that show exceptional IVT pass rates. Additionally, Publica has introduced Creative Quality Assurance, which automatically adjusts ad creatives to meet the specific requirements of various CTV channels and apps. This innovation is designed to eliminate advertiser blind spots and enhance programmatic effectiveness, leading to greater reach and scale for advertisers and improved yield management for publishers. In June, Oracle announced it was exiting the advertising business at the end of September.

Publica: Additionally, Publica has introduced Creative Quality Assurance, which automatically adjusts ad creatives to meet the specific requirements of various CTV channels and apps.

Speaker Change: This innovation is designed to eliminate advertiser blind spots and enhances programmatic effectiveness, leading to greater reach and scale for advertisers, and improved yield management for publishers.

Lisa Utzschneider: In June, Oracle announced they were exiting the advertising business at the end of September. I've highlighted several IS customer wins in recent quarters where we displaced incumbent providers, including Oracle. Following Oracle's announcement, we are pursuing this unprecedented opportunity with ingenuity and resources at scale to offer our industry-leading capabilities and capture potential incremental revenue. We are currently involved with dozens of RFPs, and we are working closely with potential large and mid-size partners on transition planning, including onboarding, integration, and support. We are addressing their needs with our products, tech, talent, and reputation for high integrity, with a history of strong partnerships across the digital ecosystem.

Speaker Change: In June , Oracle announced they were exiting the advertising business at the end of September .

Lisa Utzschneider: I've highlighted several IAS customer wins in recent quarters where we displaced incumbent providers, including Oracle. Following Oracle's announcement, we are pursuing this unprecedented opportunity with ingenuity and resources at scale to offer our industry-leading capabilities and capture potential incremental revenue. We are currently involved with dozens of RFPs, and we are working closely with potential large and mid-sized partners on transition planning, including onboarding, integration, and support. We are addressing their needs with our products, tech, talent, and reputation for high integrity with a history of strong partnerships across the digital ecosystem.

Speaker Change: I've highlighted several IAS customer wins in recent quarters where we displaced incumbent providers, including Oracle.

Speaker Change: Following Oracle's announcement, we are pursuing this unprecedented opportunity with ingenuity and resources at scale to offer our industry-leading capabilities and capture potential incremental revenue.

Speaker Change: We are currently involved with dozens of RFPs and we are working closely with potential large and mid-sized partners on transition planning, including onboarding, integration, and support.

Lisa Utzschneider: Sum. We have welcomed more than 20 Oracle Advertising employees to IAS since June. These new hires enhance our capabilities across functions in addition to bringing relevant experience with some of the largest platforms, publishers, and brands. Our pursuit of the Oracle business is another example of one of our core values at IAS: our bias for action. We are doing what's right not only for IAS, for clients, partners, and the industry at large. The feedback we've received has been overwhelmingly positive, including at the Can Line Festival of Creativity, where we hosted over 200 meetings and panel discussions.

Lisa Utzschneider: We have welcomed more than 20 Oracle Advertising employees to IAS since June. These new hires enhance our capabilities across functions, in addition to bringing relevant experience with some of the largest platforms, publishers, and brands. Our pursuit of the Oracle business is another example of one of our core values at IIS, our bias for action. We are doing what's right, not only for IAS but for clients, partners, and the industry at large.

Speaker Change: We have welcomed more than 20 Oracle Advertising employees to IAS since June . These new hires enhance our capabilities across functions, in addition to bringing relevant experience with some of the largest platforms, publishers, and brands.

Speaker Change: Our pursuit of the Oracle business is another example of one of our core values at IAS, our Bias for Action.

Lisa Utzschneider: The feedback we've received has been overwhelmingly positive, including at the Cannes Lime Festival of Creativity, where we hosted over 200 meetings and panel discussions. Before closing, I would like to welcome Bob Lord as a new member of IES's expanded board of directors. Bob is a highly regarded technology leader with a wealth of experience in technology, digital media, data science, and enterprise SaaS. He currently serves as the chief executive officer of RWL Advisory LLC, a consulting and advisory services firm, and his career includes senior-level roles at IBM, AOL, and Razorfish.

Speaker Change: We are doing what's right, not only for IIS, but for clients, partners, and the industry at large. The feedback we've received has been overwhelmingly positive, including at the Cannes Line Festival of Creativity, where we hosted over 200 meetings and panel discussions.

Lisa Utzschneider: Before closing, I would like to welcome Bob Lorde as a new member of IAS's expanded Board of Directors. Bob is a highly regarded technology leader with a wealth of experience in technology, digital media, data science, and enterprise SaaS. He currently serves as the Chief Executive Officer of RRWL Advisory LLC, a consulting and advisory services firm, and his career includes senior level roles at IBM, AOL, and Razer Fish. We are excited to welcome Bob and expand our board to include another industry expert as we continue to innovate and drive forward the future of media measurement and optimization.

Speaker Change: Bob is a highly regarded technology leader with a wealth of experience in technology, digital media, data science, and enterprise SaaS.

Bob: He currently serves as the Chief Executive Officer of RWL Advisory LLC, a consulting and advisory services firm, and his career includes senior-level roles at IBM, AOL, and Razorfish.

Lisa Utzschneider: We are excited to welcome Bob and expand our board to include another industry expert as we continue to innovate and drive forward the future of media measurement and optimization. In conclusion, we reported another positive quarter of innovation and execution. The investments we're making in technology are leading to higher customer engagement and increased demand for our product. Now that we're halfway through the year, we have greater visibility and even higher confidence in raising our full-year outlook.

Speaker Change: We are excited to welcome Bob and expand our board to include another industry expert as we continue to innovate and drive forward the future of media measurement and optimization.

Lisa Utzschneider: In conclusion, we've reported another positive quarter of innovation and execution. The investments we're making in technology are leading to higher customer engagement and increase demand for our products. Now that we're halfway through the year, we have greater visibility and even higher confidence in raising our full-year outlook. Our focus is on driving growth and continuing the momentum we've established. We have several tailwinds in our favor, including strong social media adoption, our robust product pipeline, new logo wins, and the opportunity to pursue additional revenue following Oracle's exit. We intend to deliver sustainable, profitable growth, and we look forward to keeping you updated on our progress.

Speaker Change: In conclusion, we reported another positive quarter of innovation and execution. The investments we're making in technology are leading to higher customer engagement and increased demand for our products.

Speaker Change: Now that we're halfway through the year, we have greater visibility and even higher confidence in raising our full year outlook.

Lisa Utzschneider: Our focus is on driving growth and continuing the momentum we've established. We have several tailwinds in our favor, including strong social media adoption, a robust product pipeline, new logo wins, and the opportunity to pursue additional revenue following Oracle's exit. We intend to deliver sustainable, profitable growth, and we look forward to keeping you updated on our progress. And with that, I'll turn the call over to Tania to review the financials, and then we'll take your questions.

Speaker Change: Our focus is on driving growth and continuing the momentum we've established.

Speaker Change: We have several tailwinds in our favor, including strong social media adoption, a robust product pipeline, new logo wins, and the opportunity to pursue additional revenue following Oracle's exit.

Bob: We intend to deliver sustainable, profitable growth, and we look forward to keeping you updated on our progress. And with that, I'll turn the call over to Tania to review the financials, and then we'll take your questions.

Tania Secor: And with that, I'll turn the call over to Tanya to review the financials, and then we'll take your questions. Thanks, Lisa, and welcome everyone. We are delighted to report total revenue growth of 14% for the second quarter, with double-digit gains across our optimization, measurement, and publisher businesses. We are also raising our full-year guidance to reflect our positive second quarter performance and strong outlook for the second half of the year. We expect to drive accelerated revenue growth as we move through 2024, with third quarter growth of 15% at the midpoint of our guidance. Total revenue in the second quarter increased 14% to $129 million, exceeding our prior outlook of $125 to $127 million.

Tania Secor: Thanks, Lisa, and welcome, everyone. We are delighted to report total revenue growth of 14% for the second quarter, with double-digit gains across our optimization, measurement, and publisher business. We are also raising our full-year guidance to reflect our positive second-quarter performance and strong outlook for the second half of the year. We expect to drive accelerated revenue growth as we move through 2024, with third-quarter growth of 15% at the midpoint of our guidance.

Tania Secor: Thanks Lisa and welcome everyone. We are delighted to report total revenue growth of 14% for the second quarter with double-digit gains across our optimization, measurement, and publisher businesses.

Speaker Change: We expect to drive accelerated revenue growth as we move through 2024 with third quarter growth of 15% at the midpoint of our guidance.

Tania Secor: Total revenue in the second quarter increased 14% to $129 million, exceeding our prior outlook of $125 to $127 million. Our Stronger Than Estimated performance benefited from measurement growth of 17 percent, optimization growth of 11 percent, and publisher growth of 12 percent in the period. Total revenue from advertisers, which includes optimization and measurement revenue, increased 14% in the second quarter and represented 86% of total revenue for the period. Drilling down further, optimization revenue grew to $58.5 million in the second quarter. Optimization growth of 11% significantly exceeded our prior expectation of more than doubling the first quarter growth rate.

Bob: Total revenue in the second quarter increased 14% to $129 million, exceeding our prior outlook of $125 to $127 million.

Tania Secor: Our stronger than expected performance benefited from measurement growth of 17%, optimization growth of 11%, and publisher growth of 12% in the period. Total revenue from advertisers, which includes optimization and measurement revenue, increased 14% in the second quarter and represented 86% of total revenue for the period. Strilling down further, Optimization revenue grew to $58.5 million in the second quarter. Optimization growth of 11 percent significantly exceeded our prior expectation of more than doubling the first quarter growth rate. Optimization growth in the second quarter reflects strong performance across verticals, including CPG and finance, the contribution from recent new logo wins, and increased demand for our premium priced optimization products.

Bob: Our stronger-than-expected performance benefited from measurement growth of 17 percent, optimization growth of 11 percent, and publisher growth of 12 percent in the period.

Bob: Total revenue from advertisers, which includes optimization and measurement revenue, increased 14% in the second quarter and represented 86% of total revenue for the period.

Bob: Drilling down further, optimization revenue grew to 58.5 million dollars in the second quarter. Optimization growth of 11% significantly exceeded our prior expectation of more than doubling the first quarter growth rate.

Tania Secor: Optimization growth in the second quarter reflects strong performance across verticals, including CPG and finance, the contribution from recent new logo wins, and increased demand for our premium priced optimization products. During the quarter, QualitySync revenue increased approximately three times versus the prior year period. We expect further acceleration in our optimization growth rate in the third and fourth quarters as we move through the year due to customer adoption of our recently launched products, ongoing quality sync expansion, and new logos.

Bob: Optimization growth in the second quarter reflects strong performance across verticals, including CPG and finance, the contribution from recent new logo wins, and increased demand for our premium priced optimization products.

Tania Secor: During the quarter, quality sink revenue increased approximately three times versus the prior year period. We expect further acceleration in our optimization growth rate in the third and fourth quarters, as we move through the year due to customer adoption of our recently launched products, ongoing quality sink expansion, and new logos. Measurement revenue increased 17 percent to $52.7 million in the second quarter. Social media revenue grew 34 percent in the second quarter, with strength across platforms, including TMQ on Meta, YouTube, and TikTok. Meta volumes benefited from strong overall growth in the second quarter. Meta was our largest and fastest growing platform sequentially from the first quarter, as a result of the launch of TMQ on Meta in February.

Bob: During the quarter, QualitySync revenue increased approximately three times versus the prior year period.

Bob: We expect further acceleration in our optimization growth rate in the third and fourth quarters as we move through the year due to customer adoption of our recently launched products, ongoing quality sync expansion, and new logos.

Tania Secor: Measurement revenue increased 17% to $52.7 million in the second quarter. Social media revenue grew 34% in the second quarter, with strength across platforms, including TMQ on Meta, YouTube, and TikTok. Meta volumes benefited from strong overall growth in the second quarter. Meta was our largest and fastest growing platform sequentially from the first quarter, as a result of the launch of TMQ on Meta in February.

Bob: Measurement revenue increased 17% to 52.7 million dollars in the second quarter. Social media revenue grew 34% in the second quarter with strength across platforms including TMQ on Meta, YouTube, and TikTok.

Bob: Meta volumes benefited from strong overall growth in the second quarter. Meta was our largest and fastest growing platform sequentially from the first quarter as a result of the launch of TMQ on Meta in February .

Tania Secor: Social media represented 22 percent of total revenue in the second quarter, compared to 21 percent in the first quarter of 2024, and 18 percent in the second quarter of 2023. Social media revenue represented 53 percent of total measurement revenue, with the balance being open web, which increased modestly in the second quarter. As a result of the strong growth in social media, video grew 22 percent in the second quarter. Video accounted for 53 percent of measurement revenue, up from 50 percent in the second quarter of 2023. From a vertical perspective, CPG and retail were strong contributors to measurement revenue in the period.

Tania Secor: Social media represented 22% of total revenue in the second quarter, compared to 21% in the first quarter of 2024 and 18% in the second quarter of 2023. Social media revenue represented 53% of total measurement revenue, with the balance being open web, which increased modestly in the second quarter. As a result of the strong growth in social media, video grew 22% in the second quarter.

Bob: Social media represented 22% of total revenue in the second quarter compared to 21% in the first quarter of 2024 and 18% in the second quarter of 2023.

Bob: Social media revenue represented 53% of total measurement revenue with the balance being open web which increased modestly in the second quarter.

Tania Secor: Video accounted for 53% of measurement revenue, up from 50% in the second quarter of 2023. From a vertical perspective, CPG and retail were strong contributors to measurement revenue in the period. Publisher revenue increased 12% to $17.8 million in the second quarter. 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. Publica's revenue increased more than 20% in the second quarter.

Bob: From a vertical perspective, CPG and retail were strong contributors to measurement revenue in the period.

Tania Secor: Publisher revenue increased 12 percent to $17.8 million in the second quarter. Publisher revenue reflects continued adoption of our public solutions by large OEM partners, partially offset by the performance of our non-CTV supply side business. Publisher revenue increased more than 20 percent in the revenue. We continue to invest in global market expansion and talent to extend our leading international presence. Thirty-one percent of our total revenue in the second quarter, or $40 million, was from outside of the Americas. In addition, 43 percent of measurement revenue was from outside of the Americas. International growth of 16 percent benefited from growth in social media spend, including TMQ, in both the MIA and APAC, as well as the contribution from new logos.

Speaker Change: Publisher revenue increased 12% to $17.8 million in the second quarter. 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.

Tania Secor: Publisher revenue represented 14% of total second quarter revenue. We continue to invest in global market expansion and talent to extend our leading international presence. 31% of our total revenue in the second quarter, or $40 million, was from outside of the Americas. In addition, 43% of measurement revenue was from outside of the Americas.

Speaker Change: Publica revenue increased more than 20% in the second quarter.

Speaker Change: Publisher revenue represented 14% of total second quarter revenue.

Speaker Change: We continue to invest in global market expansion and talent to extend our leading international presence.

Speaker Change: 31% of our total revenue in the second quarter, or $40 million, was from outside of the Americas.

Tania Secor: International growth of 16% benefited from growth in social media spend, including TMQ in both EMEA and APAC as well as the contribution from new logos. During the quarter, revenue in the Americas increased 13%. Gross profit margin for the second quarter was 79%, at the upper end of our full year gross margin target of 77 to 79%. Sales and marketing, technology, and development, and general and administrative expenses combined decreased 23% year-over-year, primarily as a result of $23.5 million of stock-based compensation expense related to return target options recognized in the second quarter of 2023. The stock-based compensation expense for the period was $15 million, at the low end of our prior outlook of $15 to $17 million.

Speaker Change: International growth of 16% benefited from growth in social media spend including TMQ in both EMEA and APAC as well as the contribution from new logos

Tania Secor: During the quarter, revenue in the Americas increased 13 percent. Growth profit margin for the second quarter was 79 percent at the upper end of our full-year growth margin target of 77 to 79 percent.

Speaker Change: Gross profit margin for the second quarter was 79% at the upper end of our full year gross margin target of 77 to 79 percent.

Tania Secor: 10%. Sales and marketing, technology and development, and general and administrative expenses combined decreased 23% year-over-year, primarily as a result of $23.5 million of stock-based compensation expense related to return target options recognized in the second quarter of 2023. Stock-based compensation expense for the period was $15 million at the low end of our prior outlook of $15 to $17 million. Adjusted EBITDA for the second quarter, which excludes stock-based compensation and one-time items, was $46.2 million at a 36% margin, ahead of our prior outlook of $37 to $39 million. This was driven primarily by higher than expected revenue and improved operating efficiencies.

Speaker Change: Sales and marketing, technology and development, and general and administrative expenses combined decreased 23% year-over-year, primarily as a result of $23.5 million of stock-based compensation expense related to return target options recognized in the second quarter of 2023.

Speaker Change: Stock-based compensation expense for the period was $15 million at the low end of our prior outlook of $15 to $17 million.

Tania Secor: Adjusted EBITDA for the second quarter, which excludes stock-based compensation and one-time items, was $46.2 million at a 36% margin, ahead of our prior outlook of $37 to $39 million. This was driven primarily by higher than expected revenue and improved operating efficiency. We continue to capitalize internally developed software related to new product development, which contributed to adjusted EBITDA in the quarter. Net income for the second quarter was $7.7 million, or $0.05 per share, unchanged from the prior year period.

Tania Secor: We continue to capitalize internally developed software related to new product development, which contributed to adjusted EBITDA in the quarter. Net income for the second quarter was $7.7 million, or $0.05 cents per share, unchanged from the prior year period. Net income for the second quarter of 2023 includes the one-time charge of $23.5 million related to return target options, as well as an income tax benefit of $29.1 million in the prior year period. Moving to our performance metrics, our second quarter net revenue retention, or NRR, was 112% on a trailing 12-month basis. The total number of large advertising customers, which includes both mid-tier and top-tier clients with annual revenue of over $200,000, increased to 232, up 12% compared to 208 last year and up sequentially from 227 in the first quarter of 2024.

Speaker Change: Net income for the second quarter was $7.7 million, or $0.05 per share, unchanged from the prior year period.

Tania Secor: Net income for the second quarter of 2023 includes a one-time charge of $23.5 million related to return target options as well as an income tax benefit of $29.1 million in the prior year period. Moving on, we discuss our performance metrics. Our second quarter net revenue retention, or NRR, was 112% on a trailing 12-month basis. The total number of large advertising customers, which includes both mid-tier and top-tier clients, with annual revenue of over $200,000, increased to 232, up 12% compared to 208 last year and up sequentially from 227 in the first quarter of 2024.

Speaker Change: The total number of large advertising customers, which includes both mid-tier and top-tier clients with annual revenue of over $200,000.

Tania Secor: The increase year-over-year was driven primarily by growth and mid-tier advertisers with annual spend between $200,000 and $1 million. 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 second quarter of 2023. We continue to generate strong cash flows and maintain a healthy balance sheet with cash and cash equivalents at the end of the second quarter of $71 million. During the quarter, we reduced our long-term debt by $30 million to $95 million. As a result, our net debt at the end of the second quarter was $24 million.

Tania Secor: The increase year-over-year was driven primarily by growth in mid-tier advertisers with annual spend between $200,000 and $1 million. 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 second quarter of 2020. We continue to generate strong cash flows and maintain a healthy balance sheet with cash and cash equivalents at the end of the second quarter of $71 million. During the quarter, we reduced our long-term debt by $30 million to $95 million. As a result, our net debt at the end of the second quarter was $24 million. Turning to guidance.

Speaker Change: The increase year-over-year was driven primarily by growth in mid-tier advertisers with annual spend between 200,000 and 1 million dollars

Speaker Change: We continue to generate strong cash flows and maintain a healthy balance sheet with cash and cash equivalents at the end of the second quarter of 71 million dollars.

Tania Secor: Turning to guidance. For the third quarter ending September 30th, 2024, we expect total revenue in the range of $137 to $139 million, or 15% year-over-year growth at the midpoint. Adjusted epitaph for the third quarter is expected in the range of $48 to $50 million, or a 36% margin at the midpoint. For the full-year 2024, we are raising the midpoint of our revenue outlook by $4 million. We now expect full-year revenue of $538 to $544 million, or 14% year-over-year growth at the midpoint, versus the prior range of $533 to $541 million.

Tania Secor: For the third quarter ending September 30th, 2024, we expect total revenue in the range of $137 to $139 million, or 15% year-over-year growth at the midpoint. Adjusted EBITDA for the third quarter is expected in the range of $48 to $50 million, or a 36% margin at the midpoint. For the full year 2024, we are raising the midpoint of our revenue outlook by $4 million. We now expect full-year revenue of $538 to $544 million, or 14% year-over-year growth at the midpoint, versus the prior range of $533 to $541 million.

Speaker Change: Turning to Guidance.

Speaker Change: Adjusted EBITDA for the third quarter is expected in the range of 48 to 50 million dollars or a 36 percent margin at the midpoint.

Speaker Change: We now expect full-year revenue of $538 to $544 million, or 14% year-over-year growth at the midpoint, versus the prior range of $533 to $541 million.

Tania Secor: dollars. We are raising our full year adjusted EBITDA guidance to $180 to $184 million, or a 34% margin at the midpoint, versus the prior range of $174 to $180 million at a 33% margin. As Lisa discussed, we are actively pursuing the Oracle opportunity following their decision to access the advertising business. We have already won several Oracle deals that we expect to contribute in the fourth quarter and factored into our full year guide. We will include any additional wins in our future quarterly financial guidance.

Tania Secor: We are raising our full-year adjusted EBITDA guidance to $180 to $184 million, or a 34% margin at the midpoint, versus the prior range of $174 to $180 million at a 33% margin. As Lisa discussed, we are actively pursuing the Oracle opportunity following their decision to exit the advertising business. We have already won several Oracle deals that we expect to contribute in the fourth quarter and factored into our full-year guide. We will include any additional wins in our future quarterly financial guidance. A few additional modeling points.

Speaker Change: We are raising our full-year adjusted EBITDA guidance

Speaker Change: versus the prior range of $174 to $180 million at a 33% margin.

Speaker Change: We will include any additional wins in our future quarterly financial guidance.

Tania Secor: 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 our higher hosting costs related to our video offerings. Third quarter stock-based compensation expense is expected in the range of 16 to $17 million. Full year 2024 stock-based compensation expense is expected in the range of $63 to $65 million compared to our prior expectation of $63 to $66 million. We expect weighted average shares outstanding for the third quarter in the range of 161 to 162 million shares and 160 to 162 million shares for the full year.

Operator: Our gross profit margin outlook remains unchanged in the range of 77 to 79% for the full year, which reflects our higher hosting costs related to our video offering. Third-quarter stock-based compensation expense is expected in the range of $16 to $17 million. The full-year 2024 stock-based compensation expense is expected in the range of $63 to $65 million compared to our prior expectation of $63 to $66 million. We expect weighted average shares outstanding for the third quarter in the range of 161 to 162 million shares and 160 to 162 million shares for the full year.

Speaker Change: 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 our higher hosting costs related to our video offerings.

Speaker Change: Full year 2024 stock-based compensation expense is expected in the range of $63 to $65 million compared to our prior expectation of $63 to $66 million.

Speaker Change: We expect weighted average shares outstanding for the third quarter in the range of 161 to 162 million shares and 160 to 162 million shares for the full year.

Tania Secor: To conclude, our second quarter results reinforce our confidence in the financial goals we set for the full year. We are pleased to raise our 2024 revenue growth outlook to 14% at the midpoint and adjusted EBITDA margin to 34% at the midpoint. As a result, we expect to exceed the Rule of 40 for the third consecutive year since our IPO. With a strong balance sheet, low debt, and healthy cash flow, we are investing in strategic initiatives to drive sustainable growth.

Operator: To conclude, our second quarter results reinforce our confidence in the financial goals we've set for the full year. We are pleased to raise our 2024 revenue growth outlook to 14% at the midpoint and adjusted EBITDA margin to 34% at the midpoint. As a result, we expect to exceed the rule of 40 for the third consecutive year since our IPO. With a strong balance sheet, low debt, and healthy cash flow, we are investing in strategic initiatives to drive sustainable growth. Lisa and I are now ready to take your questions. Operator.

Operator: Lisa and I are now ready to take your questions.

Operator: Operator? Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press start one on your telephone and wait for your name to be announced. To withdraw your question, please press start one one again. Please stand by while we compile the Q&A roster.

Speaker Change: Lisa and I are now ready to take your questions. Operator?

Operator: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A list. Our first question comes from the line of Andrew Marok of Raymond James. Your line is now open.

Speaker Change: As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.

Andrew Marok: Our first question comes from the line of Andrew Marock of Raymond James. Your line is now open.

Andrew Marok: Hi, thanks for taking my questions, and congrats on the quarter. I wanted to start on the optimization business. Thank you for the color on some of the moving pieces that went behind the acceleration this quarter.

Andrew Marok: Hi, thanks for taking my questions and congrats on the quarter. I wanted to start in the optimization business.

Speaker Change: Hi, thanks for taking my questions and congrats on the quarter. I wanted to start on the optimization business.

Tania Secor: Thank you for the color on some of the moving pieces that went behind the acceleration this quarter. And maybe it's a bit unfair to ask it like this off the back of a strong quarter, but how's the visibility in this business given that it's bounced around a little bit in light of some of those premium product uptake drivers that you've been talking about?

Tania Secor: Maybe it's a bit unfair to ask you like this off the back of a strong quarter, but how is the visibility in this business given that it's bounced around a little bit in light of some of those premium product uptake drivers that you've been talking about?

Tania Secor: I'll take that. Thanks, Andrew.

Tania Secor: I'll take that. Thanks, Andrew. So we continue to see strong momentum in the optimization business, putting double-digit growth, 11% growth on the board for Q2. There are a couple of specific verticals to call out that have done well with optimization, including finance and CPG.

Tania Secor: We continue to see strong momentum in the optimization business, putting double-digit growth, 11% growth on the board for Q2. Couple of specific verticals to call out that have done well with the optimization, including finance and CPG.

Speaker Change: I'll take that. Thanks, Andrew. So we continue to see strong momentum in the optimization business, putting double-digit growth, 11% growth on the board for Q2. A couple of specific verticals to call out that have done well with optimization, including finance and CPG.

Andrew Marok: Great, and then maybe one on Oracle and Modif I could.

Tania Secor: Great. And then maybe one on Oracle and Moat, if I could. Thank you, Tania, for some of the guidance assumptions there, but how much of the opportunity would you say is still outstanding? And is there anything about Moat's customers or some of their customer segments that positions you better as a go-forward vendor versus some of your competitors?

Tania Secor: Thank you, Tania, for some of the guidance assumptions there, but how much of the opportunity would you say is still outstanding? And is there anything maybe about most customers or some of their customer segments that positions you better as a go-forward vendor versus some of your competitors?

Speaker Change: Great. And then maybe one on Oracle and Mode if I could. Thank you, Tania, for some of the guidance assumptions there.

Tania Secor: Thank you.

Tania Secor: Sure, I'll take that one to Andrews, so we're in the thick of the Oracle opportunity, and we're playing to win. We've already won several deals and are currently pursuing dozens of RFPs with brands, platforms, and publishers both within the US and internationally, and we've also factored in a contribution from Oracle into our full year outlook in fourth quarter.

Tania Secor: Sure. I'll take that one too, Andrew.

Tania Secor: Thank you. Sure. I'll take that one too, Andrew.

Tania Secor: So we're in the thick of the Oracle opportunity, and we're playing to win. We've already won several deals and are currently pursuing dozens of RFPs with brands, platforms, and publishers, both within the U.S. and internationally. And we've also factored in a contribution from Oracle into our full-year outlook for the fourth quarter. One other noteworthy thing to call out is that since June, we've also hired over 20 former Oracle employees across several functions, including sales, solution engineers, and customer support. The one deal, the signed deal that I am able to call out on the call is OpenX. So IAS, we have partnered with OpenX to provide OpenX with AI-driven brand safety, suitability, and IVT.

Tania Secor: One other noteworthy thing to call out is since June, we've also hired over 20 former Oracle employees across several functions, including sales, solution engineers, and customer support.

Tania Secor: The one deal, the sign deal that I am able to call out on the call is OpenX. So IAS, we have partnered with OpenX to provide OpenX with AI-driven brand safety, suitability, and IVT.

Speaker Change: and Customer Support. The one deal, the signed deal, that I am able to call out on the call is OpenX. So, IAS, we have partnered with OpenX.

Speaker Change: to provide OpenX with AI-driven brand safety, suitability, and IVT.

Tania Secor: Thank you.

Jason Helfstein: One moment for our next question. Our next question comes from the line of Jason Healthstein of Oppenheimer Company. Your line is now open.

Speaker Change: Thank you.

Speaker Change: One moment, please.

Speaker Change: One moment for our next question.

Operator: One moment for our next question. Our next question comes from the line of Jason Helfstein of Oppenheimer & Company. Your line is now open.

Speaker Change: Our next question comes from the line of Jason Helfstein of Oppenheimer and Company. Your line is now open.

Jason Helfstein: Thanks for taking the question. Please, I really appreciate all the color and the prepared remarks.

Jason Helfstein: Thanks for taking the question. Please really appreciate all the color and the prepared remarks. Super helpful. What percent of clients have deployed CMQ for Meta at this point? And why I guess what in and are we in with Meta, CMQ is more broadly? I mean you said we're just scratching the surface, so I guess I can answer my own question and just lay the first thing. But any more color, there is we're just thinking about the ramping of this business.

Jason Helstein: Thanks for taking the question, please really appreciate all the color in the prepared remarks, super helpful.

Jason Helfstein: Super helpful. What percent of clients have deployed TMQ for meta? point. And I guess what inning are we in with meta TMQ? Just more broadly? I mean, you said, we're just scratching the surface. So I guess I can answer my own question and just say the first thing, but any more color there is, we're just thinking about the ramping of this business. And then, as a follow-up question, how long will it take to win and onboard Mote clients? Will this happen this year? Or does that like take into next year?

Jason Helfstein: What percent of clients have deployed TMQ for Meta at this point? And I guess, what inning are we in with Meta, TMQ?

Speaker Change: More broadly, I mean, you said, we're just scratching the surface. So I guess I can answer my own question is the first thing but

Jason Helfstein: And then if follow-up, how long will it take to win an on-board, remote clients? What will this happen this year or does that take into next year?

Speaker Change: Any more color there as we're just thinking about the ramping of this business? And then a follow-up, how long will it take to win and onboard Moat clients? Will this happen this year or does that, like, take into next year? Thanks.

Tania Secor: Thanks.

Tania Secor: Sure, I'll take those questions, Jason. So, in terms of Meta measurement and CMQ in particular on social, continues to be a tailwind for our business. And especially with Meta, which is the largest social platform, our Meta revenue increase more than any other platform both sequentially and versus prior year. In terms of volumes, Meta volumes, they're up close to 50 percent since launch of CMQ in February. And from a client base, just over 50 percent of our social clients spend on Meta. You might remember in first quarter we reported over 100 clients adopted Meta, CMQ after launching the product in February.

Tania Secor: Sure, I'll...

Tania Secor: Sure. I'll take those questions, Jason.

Speaker Change: Sure, I'll take those questions Jason. So in terms of meta, measurement and TMQ in particular on social continues to be a tailwind for our business.

Speaker Change: And especially with META, which is the largest social platform, our META revenue increased more than any other platform, both sequentially and versus prior year. In terms of volumes, META volumes, they're up close to 50% since launch of TMQ in February .

Tania Secor: So in terms of META, measurement and TMQ, in particular on social, continues to be a tailwind for our business, and especially with META, which is the largest social platform. Our META revenue increased more than any other platform, both sequentially and versus prior year. In terms of volumes, META volumes, they're up close to 50% since the launch of TMQ in February. And from a client base, just over 50% of our social clients spend on META.

Speaker Change: And from a client base, just over 50% of our social clients spend on meta.

Speaker Change: You might remember in first quarter, we reported over 100 clients adopted Meta TMQ after launching the product in February . In second quarter, we saw a significant increase in the number of Meta clients who adopted Meta TMQ. So we're really pleased with the adoption rate that we're seeing across all of the major social platforms, in particular Meta and TMQ.

Tania Secor: In second quarter, we saw a significant increase in the number of Meta clients who adopted Meta, CMQ. So we're really pleased with the adoption rate that we're seeing across all of the major social platforms, in particular, Meta and CMQ.

Tania Secor: And to answer your second question related to mode.

Tania Secor: So, as I mentioned earlier to Andrew, we are playing to win Oracle customers. We are pursuing multiple RFPs. Dozens of RFPs actually are currently in the pipeline.

Speaker Change: And to answer your second question related to mode, so as I mentioned earlier to Andrew, we are playing to win Oracle customers. We are pursuing multiple RFPs, dozens of RFPs actually are currently in the pipeline.

Tania Secor: As I'm sure you're aware, Oracle announced that they are exiting the business as of September 30th. So that does give you a timeline to know when those Oracle clients are shutting off with Oracle. We have factored some revenue in our guide in the fourth quarter. But I would say that the majority of those wins would be factored into 2025 since we'd have to integrate them on board then and get them live.

Speaker Change: As I'm sure you're aware, Oracle announced that they are exiting the business as of September 30th, so that does give you a timeline to know when those Oracle clients are shutting off with Oracle. We have factored some revenue in our guide in fourth quarter, but I would say that the majority of those wins would be factored into 2025, since we'd have to integrate them, onboard them, and get them live.

Tania Secor: You might remember in the first quarter, we reported that over 100 clients adopted META TMQ after launching the product in February. So that does give you a timeline to know when those Oracle clients are shutting off with Oracle. We have factored some revenue in our guide for the fourth quarter, but I would say that the majority of those wins would be factored into 2025 since we'd have to integrate them, onboard them, and get them live.

James Heaney: One moment for our next question. Our next question comes from the line of James Heaney of Jeffery's Group. Your line is now open.

Operator: One moment for our next question. Our next question comes from the line of James Heaney of Jeffrey's Group. Your line is now open.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from the line of James Heaney of Jeffries Group. Your line is now open.

James Heaney: Great, thanks for taking the questions. Your guidance does imply a nice acceleration into the fourth quarter. I was just hoping you could talk about some of the tailwinds that you're seeing that give you confidence in your growth getting into what looks to be like high teens or maybe even low 20s in the holiday quarter and then just curious about Q3 if you have any tailwind from the Olympics.

James Heaney: Great.

James Heaney: Thanks for taking the questions. Your guidance doesn't apply a nice acceleration into the fourth quarter.

Tania Secor: I was just hoping you could talk about some of the talents that you're seeing that give you confidence in your growth getting into what looks to be like high teens, or maybe even low 20s in the holiday quarter. And then just curious on Q3 if you have any talent from Olympics.

James Heaney: Great, thanks for taking the questions. Your guidance does imply a nice acceleration into the fourth quarter. I was just hoping you could...

Tania Secor: Sure.

Tania Secor: Sure. Hey James, it's Tania.

Tania Secor: Hey James, it's Tania. Thanks for the question. So we're really pleased with our execution in the first half of the year where we beat on our second quarter results across all three of our businesses. And as a result, we're rolling that forward into our failure of guidance, raising our failure of guidance by $4 million at the midpoint of the range. And as you noted, yes, we are expecting our guide does imply 17 percent growth in the second half of the year, up from 16 percent growth in the second half of the year in 2023. And there's multiple levers there, right?

Tania Secor: Thanks for the question. So we're really pleased with our execution in the first half of the year, where we beat our second quarter results across all three of our businesses. And as a result, we're rolling that forward into our full-year guidance, raising our full-year guidance by $4 million at the midpoint of the range. And as you noted, yes, we are expecting 17% growth in the second half of the year, up from 16% growth in the second half of the year in 2023. And there are multiple levers there, right?

Tania Secor: It's the strong execution and momentum we've seen to date, the cumulative impact of the new products that we've launched, and our clients adopting those new products. We've been successful with new logos, and we expect that trend to continue in the second half. And then we've also factored in a contribution from the Oracle clients that we've already won, where we have a line of sight. So, net net, really pleased to be raising our guide and also raising our profit as well.

Tania Secor: It's the strong execution and momentum we've seen to date, the cumulative impact of the new products that we've launched, and our clients adopting those new products. We've been successful with new logos and expecting that trend to continue in the second half. And then we've also have factored in a contribution from the Oracle clients that we've already won, where we have line of sight. So NetNet really pleased to be raising our guide and also raising our profit as well. Great.

Tania Secor: Great. And then also on the Olympics for Q3.

Tania Secor: And then also on Olympics for Q3. Yeah, we do expect some moderate impact from Olympics and political, but it's small. Great.

Tania Secor: Yeah, we do expect some moderate impact from the Olympics and politics, but it's small.

James Heaney: Great, and then also on Olympics for Q3.

Lisa Utzschneider: And then maybe, Lisa, if I can try one more on, you know, there's a lot of new CTV inventory coming online with, you know, Amazon, Netflix, and Disney. Could you just talk about how you're participating in that and, yeah, your position within CTV for some of these premium publishers? Thank you. Sure. So.

Lisa Utzschneider: And then maybe, Lisa, if I can try one more, just on, you know, there's a lot of new CTV inventory coming online with Amazon, Netflix, and Disney. Could you just talk about how you're participating in that? And yeah, just your position within CTV for some of these premium publishers?

Lisa Utzschneider: Thank you. Sure. So CTV, there's a long runway with CTV. And, as you mentioned, some of those premium players, like Netflix, we see lots of opportunity. We do have a partnership with Netflix where we're offering our core verification solutions on CTV. We've been running that partnership for over a year and will continue to work with the various streaming platforms as they also open up their premium inventory for our verification solutions to offer them.

Lisa Utzschneider: Sure. So, CTV, there's a long runway with CTV. And as you mentioned, some of those premium players like Netflix, we see lots of opportunity. We do have a partnership with Netflix, where we're offering our core verification solutions on CTV. We've been running that partnership for over a year, and we'll continue to work with the various streaming platforms as they also open up their premium inventory for our verification solutions to offer them.

Speaker Change: CTV, there's a long runway with CTV, and as you mentioned, some of those premium players like Netflix, we see lots of opportunity. We do have a partnership with Netflix, where we're offering our core verification solutions on CTV. We've been running that partnership for over a year, and we'll continue to work with the various streaming platforms as they also open up their premium inventory for our verification solutions to offer them.

Omar Dessouky: One moment for our next question. Our next question comes from the line of Omar D'Soukey of Bank of America. Your line is now open.

Operator: One moment for our next question. Our next question comes from the line of Omar Dessouky of Bank of America. Your line is now open.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from the line of Omar Dessouky of Bank of America. Your line is now open.

Omar Dessouky: Okay. Hey guys, it's Arthur and Omar D'Soukey for taking the question. So firstly, maybe just quickly on the guide.

Omar Dessouky: Hey, guys, it's Arthur and Omar. Thanks for taking my question. First of all, maybe just quickly on the guide. So the four-year guide is raised slightly. It looks like optimization did better than expected in the quarter. I'm just wondering if your assumptions around growth for optimization and measurement have changed at all. Do you still expect, for example, measurement to outgrow optimization for the balance of the year?

James Heaney: Hey, guys. It's Arthur. Omar, thanks for taking the question.

Omar Dessouky: So four-year guide was recently, it looks like optimization, you know, did better than expecting the quarter. I'm just wondering, like if your assumptions around sort of growth for optimization and measurement has changed at all, like do you still expect, you know, for example, measurement to outgrow optimization for the latter of the year.

Arthur: So firstly, maybe just quickly on the guide, so full year guide is raised slightly, it looks like optimization, you know, did better than expected in the quarter. I'm just wondering, like, if your assumptions around sort of growth for optimization and measurement has changed at all, like, do you still expect, you know, for example, measurement to outgrow optimization for the balance of the year?

Omar Dessouky: And then I have a follow-up question, if I could.

Tania Secor: And then I have a follow-up question, if I could. Thank you.

Tania Secor: Thank you. Are there are from a revenue perspective, are views of growth in optimization and measurement are fairly unchanged since last time we provided guidance. At the midpoint of our guidance, fully your guidance range for revenue. We're forecasting 14% growth, and we expect measurement growth to accelerate from the second quarter levels. So, primarily fueled by social optimization, growth is expected to be slightly lower than the midpoint, but still accelerating from second quarter levels, continuing the trend we've seen from first quarter to second quarter into the second half of the year.

Speaker Change: and then I have a follow-up question if I could. Thank you.

Tania Secor: Arthur, from a revenue perspective, our views of growth in optimization and measurement are fairly unchanged since last time we provided guidance. At the midpoint of our guidance, full year guidance range for revenue, we're forecasting 14% growth, and we expect measurement growth to accelerate from the second quarter levels, primarily fueled by social. Optimization growth is expected to be slightly lower than the midpoint, but still accelerating from second quarter levels, continuing the trend we've seen from first quarter to second quarter into the second half of the year, for all the reasons I talked about earlier, particularly in optimization with our new product launches and new logos, and we also anticipate high single-digit growth in publisher for the remainder of the year.

Speaker Change: At the midpoint of our guidance, full year guidance,

Speaker Change: We're forecasting 14% growth, and we expect measurement growth to accelerate.

Tania Secor: For all the reasons I talked about earlier, particularly on optimization with our new product launches and new logos. And we also anticipate high single digit growth and publisher for the remainder of the year.

Omar Dessouky: Perfect.

Tania Secor: Perfect, thank you. And then just a follow-up question on Publica. Within CTV, ad serving, there are already some prominent players like, you know, Freewheel or, you know, Magnite. I'm just curious, like, what you guys sort of see as a gap in the market that Publica is looking to fill? Thank you.

Omar Dessouky: Thank you.

Tania Secor: And then just a follow-up question on public. I mean, within like CTV S serving there are already some sort of like prominent players like, you know, Free Will or you know, Mag Night. I'm just curious, like will you guys sort of see as a gap in the market that, you know, public eyes looking to feel. Thank you.

Tania Secor: Yeah, so Publica continues to be a strategic differentiator for IES. We've posted double-digit growth with Publica in the second quarter. That growth is driven by our strategic OEM partnerships, including Samsung.

Tania Secor: Yeah, so public A continues to be a strategic differentiator for IES. We've posted double-digit growth with public and second quarter back growth is driven by our strategic OEM partnerships, including Samsung. We're also continuing to invest in our non-public A business to and just seeing healthy growth across the publisher business in particular with public.

Tania Secor: We're also continuing to invest in our non-Publica business, too, and just seeing healthy growth across the publisher business. In particular, with Publica, the areas where we are helping brands are providing greater transparency to where their ads are running in programmatic CTV because advertisers and brands are just tired of sort of the black box of programmatic CTV, and they'd like to understand where their ads are running, whether it be by channel, by genre, by show.

Tania Secor: The area is where we are helping the brands is providing greater transparency to where their ads are running in programmatic CTV because advertisers and brands. They're just tired of sort of the black box of programmatic CTV, and they'd like to understand where their ads are running, whether it be by channel, by genre, by show. So that's an area where public is really leaning in and helping the brands as there's just so much opportunity as brands ship more and more of their linear TV dollars over into CTV, and then the second area where public is helping is solving for the frequency capping issues.

Speaker Change: In particular, with Publica, the areas where we are helping the brands is providing greater transparency to where their ads are running in programmatic CTV, because advertisers and brands are just tired of sort of the black box of programmatic CTV, and they'd like to understand where their ads are running, whether it be by channel, by genre, by show. So that's an area where Publica is really leaning in and helping the brands, as there's just so much opportunity, as brands shift more and more of their linear TV dollars over into CTV. And then the second area where Publica is helping

Tania Secor: So that's an area where Publica is really leaning in and helping the brands, as there's just so much opportunity as brands shift more and more of their linear TV dollars over to CTV. And then the second area where Publica is helping is solving for the frequency capping issues. So again, we're really pleased with the double-digit growth of Publica as our partner. As I said, I appreciate it.

Tania Secor: So again, we're really pleased with the double-digit growth of public as our partners.

Speaker Change: is solving for the frequency capping issues. So again, we're really pleased with the double-digit growth of Publica as our partners.

Tania Secor: I appreciate it.

Tania Secor: Patterson. I appreciate it. Thank you. Thank you. Our next question comes from the line of

Tania Secor: Thank you.

Matthew Cost: Our next question comes from the line of Matthew Cost of Morgan Stanley. Your line is now open.

Operator: Our next question comes from the line of Matthew Cost of Morgan Stanley. Your line is now open.

Matthew Cost: Matthew. Hi, can you hear me? Yeah.

James Heaney: Matthew.

Matthew Cost: So just following up on the CTV point, there's been a lot of news coverage about new inventory coming online that's been covered in some prior questions. But there's also been discussion in the press about higher-priced inventory giving away lower-priced inventory at higher volumes. And given that you're a volume-driven business, I guess, on the CTV side, are you seeing any specific benefit from increased volumes on CTV? And then I have one follow-up as well.

Matthew Cost: Oh, sorry about that. So just following up on the CTV point, you know, there's been a lot of news coverage about new inventory coming online that's been covered in some prior questions, but there's also been discussion in the press about higher-priced inventory giving away the lower-priced inventory at higher volume. And given that you're a volume driven business, I guess on the CTV side, are you seeing any specific benefit from increased volumes on CTV, and then I have one follow up as well.

James Heaney: Yep.

Matthew: Oh, sorry about that.

Matthew: So, just following up on the CTB point, you know, there's been a lot of news coverage about new inventory coming online that's been covered in some prior questions.

Matthew: But there's also been discussion in the press about higher-priced inventory giving away to lower-priced inventory at higher volumes. And given that you're a volume-driven business, I guess, on the CTV side, are you seeing any specific benefit from increased volumes on CTV? And then I have one follow-up as well. Thank you.

Lisa Utzschneider: Thank you.

Lisa Utzschneider: So, you know, in terms of CTV, we are leaning into, as I mentioned before, partnerships like Netflix that are opening up their inventory on the premium side. In terms of the programmatic where we see the opportunity is bittable programmatic demand in CTV, broadcasters will continue to sell out their high production quality content, and there are new players in the field who sell fast and are dependent on programmatic revenue, and we feel there's an opportunity for IES in both buying models.

Lisa Utzschneider: So, you know, in terms of CTV, we are leaning into, as I mentioned before, partnerships like Netflix that are opening up their inventory on the premium side. In terms of programmatic, where we see the opportunity is biddable programmatic demand on CTV. Broadcasters will continue to sell out their high-quality content, and there are new players in the field who sell fast and are dependent on programmatic revenue. And we feel there's an opportunity for IES in both buying models.

Speaker Change: So, um, you know,

Speaker Change: In terms of CTV, we are leaning into, as I mentioned before, partnerships like Netflix that are opening up their inventory on the premium side. In terms of the programmatic, where we see the opportunity is biddable programmatic demand in CTV. Broadcasters, they'll continue to sell out their high production quality content, and there are new players.

James Heaney: in the field who sell fast and are dependent on programmatic revenue. And we feel there's an opportunity for IES in both buying models.

Lisa Utzschneider: For example, open measurement and STK will allow for viewability and user engagement to be measured regardless of how a publisher has chosen to make their inventory available. So, as I mentioned before, it's early days in CTV, and we're really looking forward to continuing to innovate on behalf of our partners.

Lisa Utzschneider: For example, Open Measurement NSTK will allow for viewability and user engagement to be measured regardless of how a publisher has chosen to make their inventory available. So, as I mentioned before, it's early days in CTV, and we're really looking forward to continuing to innovate.

Speaker Change: For example, Open Measurement and STK will allow for viewability and user engagement to be measured regardless of how a publisher has chosen to make their inventory available. So as I mentioned before, it's early days in CTV and we're really looking forward to continuing to innovate on behalf of our partners.

Lisa Utzschneider: On behalf of our partners. Great.

Tania Secor: Great, thank you. And then just following up, just on the broader ad markets, it's been kind of a mixed set of earnings results so far this quarter from the ad ecosystem. Are there any specific areas of strength or weakness from a vertical perspective that you're seeing, and any jitters at all in the market so far this year?

Matthew Cost: Thank you. And then just following up, just on the broader ad markets, it's been kind of a mixed set of earnings results so far this quarter from the ad ecosystem.

Speaker Change: Great. Thank you. And then just following up, just on the broader ad markets, it's been kind of a mixed set of earnings results so far this quarter from the ad ecosystem. Are there any specific areas of strength or weakness from a vertical perspective that you're seeing and any jitters at all in the market so far this year?

Lisa Utzschneider: Are there any specific areas of strength or weakness from a vertical perspective that you're seeing, and any jitters at all in the market so far this year? Yeah, so we're pleased with the fact that we have a diversified portfolio from a vertical perspective. We're seeing strength across all of our verticals. Our two strongest verticals are CPG and retail in second quarter, both increasing by double digits measurement, in particular driven by TNQ. We saw strength with CPG and retail, but I think it's also important to note that nearly every vertical increase in percent of growth in the quarter.

Tania Secor: Yeah, so we're pleased with the fact that we have a diversified portfolio from a vertical perspective. We're seeing strength across all of our verticals. Our two strongest verticals are CPG and retail in the second quarter, both increasing by double digits. Measurement, in particular, driven by TMQ, we saw strength in CPG and retail. But I think it's also important to note that nearly every vertical increased in percent of growth in the quarter. And then, in terms of optimization, CPG and finance were the two strongest verticals. So we'll continue to keep a close eye on this diversification because it's really important to maintain a healthy portfolio for our business.

Speaker Change: Yeah, so we're pleased with the fact that we have a diversified portfolio from a vertical perspective.

Speaker Change: We're seeing strength across all of our verticals. Our two strongest verticals were CPG and retail in second quarter, both increasing by double digits.

Speaker Change: Measurement in particular driven by TMQ. We saw strength with CPG and retail, but I think it's also important to note that nearly every vertical increased.

Lisa Utzschneider: And then, in terms of optimization, CPG and finance were the two strongest verticals.

Speaker Change: And then in terms of optimization, CPG and finance were the two strongest verticals. So we'll continue to keep a close eye on this diversification because it's really important to maintain a healthy portfolio for our business.

Lisa Utzschneider: So, we'll continue to keep a close eye on this diversification because it's really important to maintain a healthy portfolio for our business.

Matt Farrell: One moment for our next question. Our next question comes from the line of Matt Farrell of Piper Sandler. Your line is now open.

Operator: One moment for our next question. Our next question comes from the line of Matt Farrell of Piper Sandler. Your line is now open. Thanks guys, and congrats on the really strong answer.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from the line of Matt Farrell of Piper Sandler. Your line is now open.

Matt Farrell: Thanks, guys. Congrats on the really strong results. My question would just be around the EBITDA off side in Q2. Pretty significant beat.

Matt Farrell: Thanks guys, congrats on the really strong results.

Matt Farrell: The question would just be around the EBITDA upside in Q2, pretty significant beat.

Tania Secor: Is there anything one time in the beat, and as we think about moving forward, how should we be thinking about the different levers and the balance between margin expansion and revenue growth, maybe in the back half and maybe into 25 as well. Thanks. Yeah, we were really pleased with the beat in the second quarter on our EBITDA margin of 36 percent versus expectations. There were a couple of factors that drove that first was the drop through the higher than expected revenue. Secondly, we had a higher level of capitalization of internally developed software as the R&D team was very busy and successful in launching several new products.

Matt Farrell: Is there anything one time in the beat, and as we think about moving forward, how should we be thinking about the different levers in the balance between margin expansion and revenue growth, maybe in the back half, and maybe into 25 as well? Thanks.

Matt Farrell: Yeah, we were really pleased with the beat in the second quarter on our EBITDA margin of 36% versus expectations. There were a couple of factors that drove that. The first was the drop-through of the higher-than-expected revenue. Secondly, we had a higher level of capitalization for internally developed software, as the R&D team was very busy and successful in launching several new products. And we aligned our costs in the quarter to better align with the ramping revenue in the third quarter and fourth quarter.

Speaker Change: Yeah, we were really pleased with the beat in the second quarter on our EBITDA margin of 36% versus expectations. There were a couple of factors that drove that. First was the drop-through of the higher-than-expected revenue. Secondly, we had a higher level of capitalization of internally developed software, as the R&D team was very busy and successful in launching several new products.

Tania Secor: And we aligned our costs in the quarter to better align with the ramping revenue in the third quarter and fourth quarter.

Matt Farrell: We aligned our costs in the quarter to better align with the ramping revenue in the third quarter and fourth quarter. As we move forward through the year, look, we're continuing to invest in the business to drive longer-term sustainable growth. We do not expect the same percentage of capitalized, internally developed software as we move through the year as we saw in the second quarter.

Tania Secor: As we move forward through the year, look, we're continuing to invest in the business to strive for longer term sustainable growth.

Matt Farrell: As we move forward through the year, look, we're continuing to invest in the business to drive longer-term sustainable growth. However, we do not expect the same percentage of capitalized internally developed software as we move through the year as we saw in the second quarter.

Tania Secor: We do not expect the same percentage of capitalized internally developed software as we move through the year as we saw in the second quarter.

Yun Kim: One moment for our next question. Our next question comes from the line of Yun Kim of Loop Capital.

Operator: One moment for our next question. Our next question comes from the line of Yeon Kim of Loop Capital.

Speaker Change: One moment for our next question.

Yeon Kim: Your line is now open. All right. Thank you.

Lisa Utzschneider: Your line is now open. All right, thank you. Lisa, of your mix of business on social and CTV, continues to increase. Has your go-to-market motion changing at all? For instance, are you more focused on agencies than ever before, rather than just selling directly to the brand? You're realizing that the agency may have a much bigger role in the decision-making process out there. And then also, is this also an opportunity to go after medium-sized and smaller advertisers, or do you continue to increase your footprint in social channels?

Speaker Change: Our next question comes from the line of Yeon Kim of Loop Capital. Your line is now open.

Lisa Utzschneider: All right, thank you. Lisa, as your mix of business on social and CTV continues to increase, has your go-to-market strategy changing at all? For instance, are you more focused on agencies than ever before, rather than just selling directly to brands, realizing that the agency may have a much bigger role in the decision-making process out there? And then also, is this also an opportunity to go after medium-sized and smaller advertisers, or do you continue to increase your footprint on social channels?

Yeon Kim: All right, thank you. Lisa, as your mix of business on social and CTV continues to increase,

Yeon Kim: Has your go-to-market motion changing at all? For instance, are you more focused on agencies than ever before, rather than just selling directly to the brands? Are you realizing that the agencies maybe have a much bigger role in the decision-making process out there? And then also, is this also an opportunity to go after medium-sized and smaller advertisers?

Speaker Change: As you continue to increase your footprint in social channels.

Lisa Utzschneider: Sure, happy to take that. So, in terms of brands and agencies in the sales motion, when it comes to driving the social adopting, both are equally as important, especially with the fact that the majority of the brands that are adopting TMQ, as I mentioned before, across the social platforms, they're Fortune 500 customers, and the majority of them are global customers. So the sales motion is typically engaging with the global account, advertiser directly, negotiating the terms, and the agency executes the paperwork of the social platform. So our teams are double down, both with brands and with agencies.

Lisa Utzschneider: Sure, happy to take that. So in terms of brands and agencies and the sales motion when it comes to driving social adoption. Both are equally as important, especially with the fact that the majority of the brands that are adopting TMQ, as I mentioned before, across the social platforms, they're Fortune 500 customers, and the majority of them are global customers. So the sales motion is typically engaging with the global account advertiser directly, negotiating the terms, and the agency executes the paperwork on the social platform.

Speaker Change: Sure, happy to take that. So, in terms of brands and agencies and the sales motion when it comes to driving the social adoption,

Speaker Change: Both are equally as important, especially with the fact that the majority of the brands that are adopting TMQ, as I mentioned before, across the social platforms, they're Fortune 500 customers, and the majority of them are global customers.

Speaker Change: The sales motion is typically engaging with the global account advertiser directly, negotiating the terms.

Speaker Change: and the agency executes the paperwork of the social platform. So our teams are doubled down both with brands and with agencies. They're doing it globally to cross-sell, up-sell our existing advertisers who are running our solutions across the social platforms and then also pursuing new brands to adopt our TMQ solutions on social.

Lisa Utzschneider: So our teams are doubled down, both with brands and with agencies. They're doing it globally to cross-sell and up-sell our existing advertisers who are running our solutions across the social platforms, and then also pursuing new brands to adopt our TMQ solutions on social. And then in terms of the mid-tier channel, we saw yet another quarter of double-digit revenue growth with our mid-market clients, an increased adoption of context control, and we've also added new mid-market logos. It's a great demonstration of the execution that our team is doing, both in the second

Lisa Utzschneider: They're doing it globally to cross-sell, upsell our existing advertisers who are running our solutions across the social platforms, and then also pursuing new brands to adopt our TMQ solutions on social. And then in terms of the mid-tier channel, we saw yet another quarter of double-digit revenue growth with our mid-market clients, an increased adoption in context control, and we've also added new mid-market logos. It's a great demonstration of the execution that our team is doing, both in the second quarter and their details there.

Speaker Change: And then in terms of the mid-tier channel, we saw yet another quarter of double-digit revenue growth with our mid-market clients, an increased adoption in context control, and we've also added new mid-market logos. It's a great demonstration of the execution that our team is doing, both in the second quarter and they're poised to drive adoption in the back half of the year.

Lisa Utzschneider: Okay, great. I much appreciate all the details there. Just another question.

Lisa Utzschneider: There's another question. Obviously, we are seeing the social channel growing fast, especially in the international market. Is that changing the overall pricing dynamics for the company? Are you seeing the singular attach rate and any update on the previous solutions for Meta in terms of when we can expect that to ramp?

Speaker Change: Okay, great. Much appreciated all the details there. Just another question.

Lisa Utzschneider: Obviously, we are seeing the social channel growing fast, especially in the international market. Is that changing the overall pricing dynamics for the company? Are you seeing a similar attach rate? And any update on the previous solutions for meta in terms of when we can expect that to ramp?

Speaker Change: Obviously, we are seeing the social channel growing fast, especially in the international market. Is that changing the overall pricing dynamics for the company? Are you seeing a similar attach rate?

Speaker Change: And any update on the pre-bid solutions for META in terms of when we can expect that to ramp. Thanks.

Lisa Utzschneider: Thanks. Yeah, so there are a few things to call out about the social platforms. The first is we're seeing rapid adoption, especially in the international markets with our TMQ solution across the major social platforms, and we'll continue to drive that adoption. In addition to that, in Q2, we announced three social platform partnerships, new ones, first to market with SNAP. We launched TMQ on SNAP in June with 90 languages. We also launched Pinterest in the second quarter and Reddit in an early fourth quarter will launch. So we're very focused, again, to drive TMQ adoption across all of the major social platforms and driving additional coverage and opportunity to be able to expand and drive our TMQ across the new social platforms. In terms of your question on international, yes, social was a driver of our overall international growth rate with our international growth rate of 16% in the second quarter, and that adoption we saw both across Europe and Asia as well as contribution from new logos internationally.

Lisa Utzschneider: Yeah, so there are a few things to call out about the social platforms. The first is that we're seeing rapid adoption, especially in international markets, of our TMQ solution across the major social platforms, and we'll continue to drive that adoption. In addition to that, in Q2, we announced three new social platform partnerships. First to market with Snap, we launched TMQ on Snap in June in 90 languages. We also launched Pinterest in the second quarter, and Reddit in early the fourth quarter will launch. So we're very focused, again, on driving TMQ adoption across all of the major social platforms and driving additional coverage and opportunity to be able to expand and drive our TMQ across the new social platforms.

Speaker Change: Yeah, so there are a few things to call out about the social platforms. The first is we're seeing rapid adoption, especially in the international markets, with our TMQ solution across the major social platforms, and we'll continue to drive that adoption.

Speaker Change: In addition to that, in Q2, we announced three social platform partnerships, new ones.

Speaker Change: First to market with Snap, we launched TMQ on Snap in June with 90 languages. We also launched Pinterest in second quarter and Reddit in early fourth quarter will launch. So we're very focused again to drive TMQ adoption across all of the major social platforms.

Speaker Change: and driving additional coverage and opportunity to be able to expand and drive our TMQ across the new social platforms.

Lisa Utzschneider: Okay, great. Thank you so much.

Tania Secor: Yeah, in terms of your question on international growth, yes, social was a driver of our overall international growth rate, with our international growth rate of 16% in the second quarter. And that adoption, we saw both across Europe and Asia, as well as contribution from new logos internationally. And then, Justin?

Speaker Change: Thank you so much.

Speaker Change: In terms of your question on international, yes, social was a driver of our overall international growth rate, with our international growth rate of 16% in the second quarter. And that adoption we saw both across Europe .

Lisa Utzschneider: And then just to follow up on your question regarding pre-bid solutions, pre-bid on social is in high demand with the brands. The social platforms, they're leaning into the brand's demand to offer pre-bid solutions. We're well on our way; we're live with pre-bid social on platforms like TikTok, X, and LinkedIn. As the brands continue to request pre-bid on the other major social platforms, we're poised to launch those products.

Lisa Utzschneider: And then just to follow up on your question regarding pre-bid solutions. Pre-bid on social is in high demand with brands, and the social platforms are leaning into the brand's demand to offer pre-bid solutions. We're well on our way. We're live with pre-bid social on platforms like TikTok, X, and LinkedIn. And as brands continue to request pre-bid on the other major social platforms, we're poised to launch those products.

Speaker Change: and Asia, as well as contribution from New Logos International.

Speaker Change: And then just to follow up on your question regarding pre-bid solutions,

Speaker Change: Pre-bid on social, it's in high demand with the brands, the social platforms, they're leaning into the brand's demand to offer pre-bid solutions. We're well on our way. We're live with pre-bid social on platforms like TikTok.

Speaker Change: X, and LinkedIn. And as the brands continue to request pre-bid on the other major social platforms, we're poised to launch those products.

Lisa Utzschneider: Great, thank you so much. Yeah, thank you. One moment for our next question. Our next question

Lisa Utzschneider: Great, thank you so much.

Operator: Yeah, thank you.

Jason Cryer: One moment for our next question. Our next question comes from the line of Jason Cryer of Craig Hallam; your line is now open.

Speaker Change: Great, thank you so much.

Operator: One moment for our next question. Our next question comes from the line of Jason Kreyer from Craig Hallam. Your line is now open. Great, thank you.

Speaker Change: Yeah, thank you.

Speaker Change: One moment for our next question.

Jason Cryer: Great, thank you. Just on optimization, it seems to get some nice pricing improvements with CPMs of up 9%. Curious if there's any particular solutions that are driving those pricing changes. Sure, yeah, we were pleased with our optimization results in the second quarter, with 11% growth year over year.

Jason Kreyer: Sure, yeah, we were pleased with our optimization results in the second quarter, with 11% growth year over year. You might recall in our last earnings call, we talked about the robust product roadmap that we had in place to launch many new optimization products.

Tania Secor: You might recall in our last earnings call, we talked about the robust product roadmap that we had in place to launch many new optimization products. We've launched some of those products; second quarter, we'll continue to launch and drive adoption in the back half of the year. MFA, in particular, is seeing great adoption in the second quarter. We had 100 campaigns in beta on MFA, and as we noted with MFA, we just have seen tremendous adoption. Other products include context control from the mid-tier clients, in particular, that we're driving new mid-tier logos with context control. Thank you.

Lisa Utzschneider: We've launched some of those products in the second quarter, and we'll continue to launch and drive adoption in the back half of the year. MFA in particular is seeing great adoption in the second quarter. We had 100 campaigns in beta on MFA, and as we noted with MFA, we just have seen tremendous adoption. Other products include context control, from the mid-tier clients, in particular, that we're driving new mid-tier logos with context control.

Operator: I'm showing no further questions at this time.

Lisa Utzschneider: I am showing no further questions at this time. I would now like to turn it back to Lisa Utzschneider, CEO, for concluding remarks.

Lisa Utzschneider: I would now like to turn it back to Lisa Schneider, CEO, for concluding remarks. Thanks everyone for joining today's call and for your questions. We're coming off a strong second quarter, and we look forward to building on our momentum in the back half of the year. We highlight several growth drivers, and we will continue to lead with credibility and transparency as we execute on our stated goals.

Lisa Utzschneider: Thanks, everyone, for joining today's call and for your questions. We're coming off a strong second quarter, and we look forward to building on our momentum in the back half of the year. We've highlighted several growth drivers, and we will continue to lead with credibility and transparency as we execute on our stated goals.

Lisa Utzschneider: Have a great night.

Operator: Have a great night!

Thank you for your participation in today's conference. This concludes the program. You may now disconnect.

Operator: Thank you for your participation in today's conference.

Operator: This concludes the program. You may now disconnect.

Speaker Change: [music].

Speaker Change: Sure.

Speaker Change: Yeah.

Speaker Change: Hum.

Speaker Change:

Speaker Change: Okay.

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