Q1 2025 DoubleVerify Holdings Inc Earnings Call

Greetings and welcome to the double very high first quarter 2025 financial results Conference call at this time all participants.

A question and answer session will follow the presentation.

If anyone should require operator assistance, please press star zero.

As a reminder, this conference is being recorded.

Teal England: Now my pleasure to introduce your host Teal, England Senior Vice President of Investor Relations. Thank you you may begin.

Speaker Change: Good afternoon, and welcome to double certified first quarter 'twenty to 'twenty five earnings conference call with US today are Mark Sikorsky CEO Niccolo Nice CFM today's press release and this call may contain forward looking statements that are subject to inherent risks uncertainties and changes.

Speaker Change: <unk> current expectations and information currently available to us and our actual results could differ materially for more information. Please refer to the risk factors in our recent SEC filings, including our Form 10-Q and annual report on Form 10-K. In addition, our discussion today will include references to certain supplemental non.

Speaker Change: GAAP financial measures and should be considered too and it should be considered in addition to and not a substitute for our GAAP results reconciliations to the most comparable GAAP measures are available in today's earnings press release, which is available on our Investor Relations website IR top couple of certified Dot com.

Mark Sikorsky: Also during this call today, we'll be referring to the slide deck, that's not website with that I'll turn it over to Mark.

Mark Sikorsky: Thanks, Pedro and thank you all for joining US today <unk> is off to a strong start in 2025 with momentum building across the business fueled by deeper expansion with existing customers and faster scaling by newly signed enterprise clients.

Mark Sikorsky: Our solid performance in Q1 was driven by three key trends first our existing customers are attached dd's core verification solutions across more of their spend.

Mark Sikorsky: Added sided AI two additional campaigns and showed encouraging early momentum in social activation on that.

Mark Sikorsky: Second we saw rapid scaling by new customers, who are attaching dv measurement to their open web and CTV spend and adopting our core and premium programmatic activation solutions, including authentic brand suitability.

Mark Sikorsky: And third our supply side business maintained its strong growth profile fueled by record influx of platform publisher customers in the second half of 2024 and rising demand from retail media platforms. Together. These three drivers have expanded our platform usage deepened our customer relationship.

Mark Sikorsky: And position <unk> to execute with strength and confidence throughout the rest of 2025.

Mark Sikorsky: Encouragingly business momentum remained steady through April with no evidence of macroeconomic pressure affecting customer demand.

Mark Sikorsky: Our strong growth this year reflects increasing demand for <unk> solutions and the value, we're delivering to advertisers across channels.

At the same time, we remain focused on executing our long term vision, which is building a unified platform that enables advertisers to verify optimize and measure media outcomes that drive brand success. We believe this integrated approach will drive broader customer adoption deeper.

Mark Sikorsky: Partner engagement and faster scaling that will continue to accelerate our momentum over time.

Mark Sikorsky: With that context, let's turn to our first quarter financial results.

Mark Sikorsky: We delivered total revenue of $165 million, an increase of 17% year over year, reflecting a strong reacceleration that exceeded expectations across all three revenue lines.

Mark Sikorsky: We delivered a 27% adjusted EBITDA margin and grew net cash from operating activities by 19% underscoring both the quality of our growth and the efficiency of our operations. Our advertiser business grew 16% driven by 20% growth in activation, while our supply side business delivered.

Mark Sikorsky: 35% year over year growth.

Mark Sikorsky: These results reflect solid and sustained demand for <unk> solutions and show that our core business is scaling efficiently setting us up to drive even greater impact for our customers.

Mark Sikorsky: Robust advertiser demand for our solutions continue to fuel, both new customer wins and expanded product expansions this quarter.

Mark Sikorsky: We won numerous global engagements with iconic brands, including Pinterest, Chipotle Levi Strauss Avon Libyan auto Valvoline, Nexis, Nordics and Ineos great idea.

Mark Sikorsky: We also grew existing relationships in North America, including significant expansions with Nike and clear.

Mark Sikorsky: We're driving growth through both competitive deals and greenfield wins, and our land and expand strategy continues to deliver that.

Mark Sikorsky: The number of advertiser customers generating over $200000 in annual revenue grew 14% year over year to a total of 337.

Mark Sikorsky: Even with this strong expansion progress we continue to have substantial opportunity to grow at.

Mark Sikorsky: At the end of 2020 for approximately half of our top 700 customers were still using fewer than half of our core products, highlighting a clear path to deeper penetration and expansion across our customer base.

Mark Sikorsky: And with the strategic acquisition of rocker box, our newly expanded offerings unlocks, even greater opportunity to grow and scale our customer engagements.

Mark Sikorsky: Now, let's deep dive into our first quarter performance across three of our key growth areas, social media CTV and the open web.

Mark Sikorsky: Starting with social media, we launched our content level pre bid avoid intrusion on net as Facebook and Instagram feeds in Reals in late February of this year.

Mark Sikorsky: At launch we highlighted a robust sales pipeline of nearly 200 advertiser opportunities for our meta activation solution.

Mark Sikorsky: And a little over two months, we've already activated 20 customers, including major brands like Nike in AARP with numerous other top 100 clients preparing to go live soon.

Mark Sikorsky: And they're seeing great results two of our early adopter saw brand suitability rates improved by nine percentage points, a strong indication of impact. This early traction highlights the opportunity ahead as advertisers place greater focus on brand safety and suitability and social media environments.

Mark Sikorsky: Also highlighting the growth potential for our social activation solutions. This quarter, we brought kickoff video exclusion list solution into general availability, giving advertisers the power to avoid unsuitable content pre bid, helping elevate media quality and supporting brand success.

Mark Sikorsky: On the social measurement front, we expanded view ability and IV T measurement to Instagram reals, giving advertisers consistent transparency across all real AD formats on both Facebook and Instagram.

Mark Sikorsky: And as tick tock grows its offerings DD continues to lead in providing the protection and performance our clients rely on we recently expanded our safety and suitability measurement Ontic talk to include post roll ads and smart plus campaigns, new formats that broadened how advertisers engage on the platforms.

Mark Sikorsky: Finally in the first quarter. We also partnered with Bro blocks to launch the industry's first three D inexperienced measurement solution for MRC Das.

Mark Sikorsky: Shifting to CTV, we grew our first quarter CTV measurement volumes by nearly 43% year over year with notable strength across Youtube CTV and Netflix.

Mark Sikorsky: <unk> growth potential in CTV remains large because fraud and transparency are still critical challenges for advertisers and the threat is only getting bigger.

Mark Sikorsky: Sophisticated bot fraud, now accounts for 65% of all CTV front about 14% higher than in any other environment and it remains a dominant threat at its peak dv identified $3 9 million infected CTV devices that generated extreme levels of invalid traffic every day.

Mark Sikorsky: Just one bought variant we discovered was driving potential losses of more than $7 $5 million per month for advertisers.

Mark Sikorsky: We are seeing these risks play out clearly in our data in 2020 for Dd's filtering rate for CTD jumped 55% year over year and from an S. T filtering more than doubled up 110%.

Mark Sikorsky: <unk> ability challenges also continue to persist in CTV, our measurement data from the second half of 2024 showed that seven 4% of CTV video impressions ran on apps that serve ads, even when the television is off leading to wasted spend and diminish campaign performance.

Mark Sikorsky: <unk> leadership and I'm covering these issues and driving greater transparency in CTV has made us an essential solution and fueling its continued growth.

Mark Sikorsky: As we head into the upfront and new front season, we're investing in content level, scoring to improve brand's ability expanding coverage to natus CTV formats across the three major publishers and deepening partnerships with innovators like eto to connect measurement with outcomes using <unk> AI.

Mark Sikorsky: Yeah.

Mark Sikorsky: Turning to the open web we're seeing strong growth across all of our activation solutions, including authentic brand suitability and the first quarter ABS revenue grew 16%, while non ABS activation solutions, including core programmatic side, its AI and social activation collectively grew 24.

Mark Sikorsky: 4% year over year.

Mark Sikorsky: TD is also leading the industry and independent cross platform AI immediate optimization solutions.

Mark Sikorsky: Since acquiring <unk> in August 2023, we have successfully absorbed sided AI campaign optimization to over 200, DD customers, notably over 50 of our top 100 clients now use side its AI to optimize campaigns up from 40 last quarter with this steady momentum we remain.

Mark Sikorsky: Solidly on track to deliver $100 million besides revenue by 2028.

Mark Sikorsky: In addition, we've announced the launch of Dd's Prescreen brand safety and suitability solution for Google's search partner network or SPN. This launch gives advertisers additional control when extending their campaign reach on SPN inventory.

Mark Sikorsky: We're also continuing to expand our global retail media footprint.

Mark Sikorsky: <unk> measurement tags are now accepted across 129 key retail media networks and sites, including 16 of the top platforms and 113 major retailers with close to half supporting TV measurement on owned and operated properties at the same time first quarter retail media supply side revenue grew.

Mark Sikorsky: 35% year over year underscoring strong platform demand.

Mark Sikorsky: As we continue to execute across our key growth areas, we remain mindful of the broader macroeconomic environment and the need to stay focused and disciplined we will continue to prudently invest in innovation with an eye to operational efficiency and ensure that we take advantage of the cost benefits leveraging AI can.

Mark Sikorsky: Ever.

Mark Sikorsky: And at time when brands are facing economic uncertainty one thing is certain.

Mark Sikorsky: Advertisers are not standing still they are looking for smarter faster and more accountable ways to invest across an increasingly complex media landscape to get the most out of their ad spend.

Mark Sikorsky: This environment demands more from marketers and it demands more from partners, who they trust DD is in a unique position to meet these demands.

Mark Sikorsky: Moving beyond verification to also deliver the intelligence and tools, our customers need to drive performance for smarter faster and better outcomes are.

Mark Sikorsky: Our recent acquisition of rocker box is well aligned with these increasing advertiser demands to have greater clarity and how their AD spend is performing on any platform from social to CTV.

Mark Sikorsky: Over the past five years Didi has strategically expanded its protection and performance sweep across more platforms formats and markets positioning us to thrive even in volatile macro environment, we delivered strong growth through both 2020 and 2022 when uncertainty reshaped the ad market.

Thanks to the resilience of our revenue model and the essential nature of our solution.

Mark Sikorsky: In times like these when AD spend shift to scaled platforms and marketers double down on an ROI dd's value proposition becomes even more critical.

Mark Sikorsky: To that end DD is building a ground breaking unified intelligence platform for advertising integrating a suite of tools and adjourn take AI features that enable advertisers to gain a deep understanding of whereas Ron how they are optimized and the bottomline results they deliver in one seamless.

Mark Sikorsky: <unk>.

Mark Sikorsky: Our platform powered solutions help advertisers make smarter decisions drive greater impact and maximize the value of every media dollar.

Mark Sikorsky: <unk> value proposition has moved beyond verification and now fuels real brand success.

Mark Sikorsky: We are leveraging AI to deliver these rules in a way that no one else can by extracting the highest value from our deep proprietary data building models.

Mark Sikorsky: Our nearly two decades of institutional intelligence and learning from the broadest group of advertisers on any platform.

Mark Sikorsky: No. Other company has a unique set of assets intelligence and scale. The DD does to take advantage of an AI enabled advertising future.

Mark Sikorsky: We look forward to sharing more Dd's innovation day on Wednesday June 11th where our executive leadership team and industry experts will showcase how DB is leading the future of their media verification optimization and outcomes measurement. The that will be hosted live at the New York stock exchange and webcast for the broad.

Mark Sikorsky: <unk> investment community.

Mark Sikorsky: In closing we are energized by our strong start to 2025 and the opportunities that lie ahead with continued strong demand for our trusted measurement optimization and outcome solutions and a relentless drive to efficiently innovate DB is positioned to lead across the channels and platforms where adverse.

Mark Sikorsky: Pfizer's are investing the most we are focused we are executing and we are confident in our long term strategy to drive durable diversified growth with that let me hand, the call over to Nicola.

Nicola: Thanks, Mark and good afternoon, everyone. We're pleased to report strong first quarter results with revenue and adjusted EBITDA ahead of expectations, reflecting steady expansion from existing customers and accelerated scaling from large new enterprise clients.

Nicola: Total revenue grew 17% in the first quarter to $165 million driven by 16% growth in advertiser revenue <unk>.

Nicola: Advertiser growth reflected a 22% increase in volume or MTM, and a 6% decrease in price our MTF, both excluding the impact of an introductory fixed fee deal for one large customer onboard it from mode.

Nicola: <unk> will vary with product and geographic mix and in the near term will be impacted by wins that were brought in at competitive rates. Our focus remains on driving volume through multi product adoption and upsell opportunities across Tvs platform.

Nicola: Activation revenue grew 20% compared to the prior year with both ABS and non ABS activation solutions contributing to growth.

Nicola: <unk>, which accounted for 54% of activation revenue grew 16% year over year led by new logo activation with additional contributions from upsells to existing customers and expanded usage. Among current users nearly 70% of our top 500 customers have now activated ABS in Q1.

Nicola: Up from over 60% in Q1 last year, demonstrating the continued adoption of this premium product.

Nicola: Turning to measurement revenue grew 8% driven by new customer Activations on open web and stable growth from existing customers measurement also includes revenue from the rocket box acquisition, which closed on March 13.

Nicola: Social as well as international revenue growth was softer this quarter, primarily due to the impact of a large customer pausing spend due to higher commodity costs that we discussed on the last call.

Nicola: International revenue accounted for 26% of total measurement revenue this quarter supply side revenue grew 35% driven primarily by increased revenue from existing and new platform and publisher customers.

Nicola: Shifting to expenses cost of revenue increased by approximately $4 million driven by a higher revenue sharing costs with programmatic partners tied to the growth in programmatic revenue and increased cloud services expenses.

Revenue less cost of sales was 81% in the quarter and is expected to remain stable as we continue infrastructure investments to support future growth.

Nicola: Product development expenses increased driven by investments in engineering talent as well as software and services to support product development initiatives, including advancements in our AI capabilities.

Nicola: Sales and marketing expenses grew at a slower rate than revenue, reflecting operating leverage while G&A expenses included acquisition related costs for rocker box.

Nicola: As discussed on our last call, we expect hiring to slow this year as we continue to prioritize investments in product innovation reallocate resources toward growth initiatives and actively optimizing the organization.

Nicola: Adjusted EBITDA of approximately $45 million in the first quarter represented a 27% margin and was ahead of plan due to higher revenues and continued cost discipline.

Nicola: Net operating cash flow was $38 million in the first quarter driven by strong cash collections during the quarter, we repurchased five 2 million shares for $82 million and as of March 31, $140 million remained available and authorized under the new repurchase program.

Nicola: We also completed the acquisition of rocket box on March 13th for $83 million net of cash acquired and subject to customary post closing adjustments.

Nicola: We ended the quarter were approximately $175 million in cash and short term investments and continue to have zero debt, which provides us with the flexibility necessary to navigate a more uncertain macro environment.

Nicola: Turning to guidance, we expect second quarter revenue to range between 169, and $173 million, representing a 10% year over year growth at the midpoint.

Nicola: We expect second quarter, adjusted EBITDA to range between 48% and $52 million, representing a 29% margin at the midpoint.

Nicola: For the second quarter, we expect stock based compensation to range between 26% and $29 million and weighted average diluted shares outstanding to range between 165 and 167 million shares.

Nicola: Stock based compensation expense growth is decelerating and we continue to expect annual growth to stabilize in the high teens for full year 2025 down from 2024 levels.

Nicola: Yeah.

Nicola: Shifting to full year guidance as we outlined last quarter, we said 2025 guidance to reflect a transition year based on a prudent outlook on three longer term opportunities social activation Upselling recently signed large new customers and expanding rocker box adoption among existing decline.

Nicola: We exceeded expectations in Q1 are pacing ahead on social activation and up selling large new customers and so far have not seen any evidence of macro weakening.

Nicola: However in light of increasing macro uncertainty, we are leaving our full year 2025 guidance unchanged at 10% revenue growth and 32% adjusted EBITDA margins.

Nicola: While we remain confident in DVS continued solid performance our guidance reflects a prudent view of the operating environment for the remainder of the year.

Nicola: To close we delivered a strong first quarter and remained focused on executing our plan for the rest of the year, while positioning <unk> for sustained growth well beyond 2025.

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

Speaker Change: Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two to remove yourself from the queue for participants using speaker equipment. It may be necessary to pick up the handset before pressing the star keys.

Nicola: One moment, please while we pull for questions.

Speaker Change: Our first question comes from the line of Matt Swanson with RBC capital markets. Please proceed with your question.

Matt Swanson: Great. Thank you and congratulations guys on such a strong start to the year. So maybe thinking about that strong start and then the upside to guidance, what's the thought process around maintaining the full year.

Speaker Change: It does feel like a time to be prudent around the macro.

Speaker Change: But if you could maybe talk us through a little bit what you saw in 2022, and 2020 and about that resiliency and how you're kind of factoring that in with the uncertainty that we all have around the macro environment right now.

Speaker Change: Thanks, Matt for the question.

Speaker Change: Yeah look I think every macro uncertainty that we've had over the last few years has created.

Speaker Change: Created the advertisers that are bit more agile.

Speaker Change: But also we're kind of getting used to these these.

Speaker Change: Systematic.

Speaker Change: It changes.

Speaker Change: What we saw in those two years was some initial obviously initial slowdown but when.

Speaker Change: Advertisers start focusing on things that matter like driving performance.

Speaker Change: And protecting their brand.

Speaker Change: We've seen our stickiness really shine through right and the fact that so much of our revenue now is on the activation side, which is very much performance driven very much programmatic I think that that bodes well for us being brazilians through any kind of challenging times that could be coming ahead.

Speaker Change: <unk>.

Speaker Change: As we noted we've not seen any real impact from some of the global macro shocks yet this year and I think that's a good sign for us.

Speaker Change: And if anything we've seen a greater focus on our performance solutions.

Speaker Change: Some faster uptake of those solutions.

Speaker Change: Driven in our activation numbers.

Speaker Change: And advertisers really doubling down on the fact that this is the time, where they want to lean in to protect their brands and they want to lean into ensuring that they are using tools that are driving real ROI in DD is one set of tools that does that.

Speaker Change: Yes, I mean, maybe building on that point, Mark you talked a lot about the ROI or ROE as it's kind of a.

Speaker Change: Core of what you're offering your customers is optimizing those numbers.

Speaker Change: I mean coming off a quarter, where you saw the strong upselling for large customers.

Speaker Change: Better patient activation better quarter beside that doesn't artist spending environment ever end up being.

Speaker Change: A benefit from.

Speaker Change: From that expansion side of people trying to get more.

Speaker Change: Let me spend more performance where that type of budget.

Speaker Change: Yeah, I think look there's probably two aspects to this one is a product aspect, which is what you noted.

Speaker Change: Our solutions that help drive greater transparency and better performance people lean into them more or less willing to deal with issues of fraud, there are less willing to pay a higher CPM when.

Speaker Change: When they can compress it using sides right and now with rocker box.

Speaker Change: The ability for them to actually show attribution and be able to look at their media mix modeling is another asset that we have win when theyre looking at ensuring every dollar hits its mark there's another aspect to it which is just the business model aspect.

Speaker Change: If there's supply and demand imbalance, which cpm's global CPM start going down for digital media that means volumes go up and if you remember we are volume based business, we charge a fixed CPM for most of our products.

Speaker Change: So that that dynamic actually starts to play out as well so we get a little bit of a tailwind there too so yes performance solutions.

Speaker Change: <unk> become the focus and we also get a slight tailwind of CPM start to compress a bit.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Maria <unk> with Canaccord Genuity. Please proceed with your question.

Maria: Great. Thanks, so much for taking my questions and that congrats on the strong quarter here.

Maria: First can you maybe help us understand a little bit better what contributed to the revenue outperformance in the quarter sort of a relative.

Maria: Relative to your guidance and then February was it driven by maybe most customers coming on or anything else that was sort of one time.

Maria: Yeah, I think the one of the main drivers was we saw some of our new clients new.

Maria: New clients actually grow and accelerate their theyre scaling a little bit ahead of our expectations, which was one key thing.

Maria: But I think the second also was our current customer expansion I mean, that's always the biggest growth driver for us, which is our large enterprise clients and.

Maria: Their adoption of new tools, and we saw a strong adoption of additional solutions I mean, <unk> had its best quarter since 2023.

Maria: And we saw increasingly.

Maria: Interest increasing interest in tools like <unk>, right, which are performance tool. So I think the combination of core client growth.

Maria: New solutions and some scaling of.

Maria: Of our.

Maria: New Onboarding big brands, it looks like can view and others I think it was what was the main drivers of our exceeding expectations.

Maria: Got it that's very helpful and then.

Maria: I just wanted to talk about sort of your thoughts on expanding a little bit.

Maria: Deeper into direct response budgets and Mark you talked about sort of the performance from our solution this quarter as they have been strong.

Maria: Data now Rocco box have been expanding your functionality.

Maria: Maybe talk about sort of that pertain it either on the direct side I'll make more broadly in terms of your strategy of that.

Maria: Yeah.

Maria: In today's environment, we're seeing this.

Maria: Vergence between brand and performance objectives right.

Speaker Change: I'm going to steal a term from our fellow CEO shows me. The other day is this idea of brand performance right, where advertisers want to protect their brand right, but they also need to drive better results.

Speaker Change: And those results can be things like taking fraud out of the ecosystem, but they'll also be compressing prices like like <unk>.

Speaker Change: <unk> is able to do I think we're able to do both in one of the few companies that can actually protect brand pull garbage out of the systems will also drive CPM is down.

Speaker Change: <unk> has been a great asset for US 50 of our top 100 customers have now used it up.

Speaker Change: Up from 40 last quarters.

Speaker Change: And I think.

Speaker Change: We talked about rocker box Rockenbach starts playing into this equation as well when they want to look at actually what's working what's performing.

Speaker Change: Who they should be attributing the success of their campaigns to rocker box plays into that equation. So yes performance advertisers are considered middle middle funnel or bottom funnel advertisers.

Speaker Change: Now become a more important part of our mix, but I'd say all of our advertisers.

Speaker Change: Are now part of this kind of brand performance.

Speaker Change: <unk>, where brand is important but the cost of those impressions and the impact of those impressions is just as important.

Speaker Change: Got it that's very helpful. Thank you.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Thank you. Our next question comes from the lineup Andrew Merrick with Raymond James. Please proceed with your question.

Andrew Merrick: Hi, Thanks for taking my question just one for me so.

Andrew Merrick: You talked about in your social growth the impact of the customer.

Speaker Change: Who slowed their spend recently, but I guess, if we could take a step back and just think of with the shift to activation with the varying kind of ramp and scale phases of your different.

Andrew Merrick: Partnerships and platform relationships, how should we think about that social.

Andrew Merrick: Measurement growth here in the near term in the context of your guidance.

Andrew Merrick: Yeah, I mean, we've got some we had some pretty significant comps last year on the social front.

Andrew Merrick: Year over year and 24, we had 50% growth Q2 was 44% growth last year. So we're kind of lapping some very big numbers, where we expanded across more impressions.

Andrew Merrick: That being said, we're leaning in very hard into social activation. The new meta-prebid solutions are gaining traction. And the beauty of that solution is that you have to use social measurement for it to be enabled.

Andrew Merrick: So we see, again, we're going to see social growth across the board, it'll be stronger in activation, social activation, then it will be in measurement, but we've got social activation, launching in meta, we've got social activation, launching in TikTok.

Andrew Merrick: So social is going to be a key part of our future moving ahead, and I think those two solutions on the measurement side and on the pre-bid side will show growth because they're going to grow hand in hand.

Thank you.

Speaker Change: Thank you. Our next question comes from the line of Andrew Boone with Citizens' GMP. Please receive with your question.

Andrew Boone: Thanks much for taking the question. Mark, I want to go with a big picture question across all of kind of programmatic at large. You're seeing more curation from DSPs and SSPs, and can you just speak to that trend across programmatic, and how does DB fit into that given your historic kind of brand safety? Thank you.

Product Set, and everything else that you're offering.

Andrew Boone: Yeah, I think curation starts with data, and at our core data, D.V. is the data business.

Andrew Boone: So, you know, we lean into ensuring our data can be anywhere where a buyer needs it. And that's why we recently announced that we are launching and developing curations solutions with Google, Microsoft, Index Exchange,

Andrew Boone: And, you know, for us, it's about ensuring our advertiser partners, no matter how they want to buy, if they want to buy directly from an SSP, if they want to buy a direct package that's been packaged up into a PMP, but they can apply our data to those curated packages and

Andrew Boone: We're doing it. So, you know, we see it just as another opportunity for us to get highly specialized data in the hands of our advertiser customers and again, whether they buy it through a DSP directly through an SSP.

Andrew Boone: or they want to create a custom curated segment, it's someplace where we'll apply our data.

Speaker Change: And then Mark, I'd love to double click on International. You guys highlighted weakness in the prepared remarks. Is there anything you can expand upon in terms of call outs of why that is and then how do you guys turn that around? Thanks much.

Mark Sikorsky: Yeah, I mean I think we had some pretty substantial growth last year.

Mark Sikorsky: in, you know, across the globe after a couple of slow years. So we're lapping some pretty big numbers. That being said, you know, the one customer that we have that pulled back their spin considerably that we announced in the last call, they were big global customers. So that had an impact as well.

Mark Sikorsky: I think this is a momentary blip on the international side. We continue to lean in there and some of our biggest customer closes that we had come into the year are global customers that will start to scale outside the U.S. over the next few quarters. So, we see that as some place where we'll continue to grow. We're not overly concerned about the slow down there and I think it's not endemic to anything else. You know, there any any big.

story.

All right. Thank you.

Sure.

Speaker Change: Thank you. Our next question comes from the line of Brian Pitz with BMO Capital Markets. Please foresee with your question.

Speaker Change: is coming up more with customers as they think about their future needs and then separately on categories. Any changes in CPG over the quarter can give us some more fine tune points on that, are you seeing potentially more meaningful recovery in that vertical longer term. Thanks.

Speaker Change: Brian , I'll take the first part and Nicola will talk about category growth. On the agentech AI front, we see agents as being useful tools for us.

Speaker Change: to help us employ our data in a more granular and more custom way for our customers, right? And I think we're very excited about leaning into that.

Speaker Change: Part of our vision for the integrated platform where we can measure, optimize, and then prove the effectiveness of ad spend is having an agent which actually not only creates custom measurement, but also can create custom allocations based on how well certain.

Speaker Change: segments are delivering the hell well, certain platforms are delivering, so I think agents as part of our overall AI strategy will play a key role. The same way, you know, AI is playing a role in the ability for us to classify massive amounts of content faster, it's ability our ability to get product to market in a quicker way. Thank you very much.

Speaker Change: and Dusso in a super efficient way. As Nicola noted, we've been able to manage our expenses and cost this year and we'll continue to do so based on some of the efficiencies that we're seeing coming out of AI. I think AI is an umbrella for us.

Speaker Change: There's a key part of efficiency, it's a key part of our ability to scale, and obviously it's driving innovation in areas such as classification as well as Agenda AI and being able to create much more custom engagements with our customers.

Speaker Change: We, you know, our beat in Q1 and our performance versus executive was very broad across a lot of our existing clients plus expansions in you and that was the same in terms of the industry view. We didn't have any specific.

Thank you.

Great, thank you.

Yep.

Thank you.

Speaker Change: Thank you. Our next question comes from the line of Mark Kelly with Steffel. Please proceed with your question.

Mark Kelly: Great, thank you very much. I wanted to ask two quick ones, just the first on...

Mark Kelly: on Metta. I appreciated the comments, you know, the outset about the pre-bid solution. You know, I know you had talked in the past about, you know, post-bid was likely to see more adoption once the pre-bid solution rolled out, so we'd love to get maybe an update on how those conversations are going and if...

Mark Kelly: You know, they're playing out the way you thought they would. And then the second one...

Speaker Change: Some of the statue you gave on CTV fraud, I thought was interesting. I guess I'm curious, you know are the trends in CTV similar to you know other ad formats when they were at a similar stage, you know in digital or a CTV kind of a totally different animal just from a fraud perspective. Thank you.

Thanks, Mark. So, with regards, you kind of met a measurement.

Speaker Change: We've got eight of the 20, our top 100 customers of the folks that we're launching, so we're getting bigger customers who are launching free screen and to launch free screen you have to have post bid measurement.

Speaker Change: So, we expect there to be this kind of virtuous cycle of...

Speaker Change: Adding Post-Bid, Upselling Pre-Bid, and then getting folks who never really considered Post-Bid at all to sign up for Pre-Bid and Post-Bid together. So it's definitely opening more doors for us. We're getting discussions with customers who really have not entertained the Post-Bid measurement without the pre-bid kind of opportunity. And I think it's going to be, you know, well ahead of our pre-bid expectations at this point. So far this year, and we think it'll be

Really impactful going into next year. [inaudible]

Speaker Change: with regard to the CT fraud numbers, CDV fraud numbers. Yeah, I mean, look, I think that in some ways it's, you know, history repeats itself, we've seen, you know

Speaker Change: Frog focus on mobile when it first came out. We saw Frog try to attack social when it started gaining steam. This CTV is showing a lot of resiliency in the fraud area just because the fact that the CPMs are so high.

Speaker Change: You know, and if you're going to rob a bank, do you want to rob a bank with dollar bills inside or with hundred dollar bills inside? And I think that's why there's so much focus on CTV. It's still a relatively concentrated universe.

where the demand is outstripping supply. Bye.

Speaker Change: So when you have those dynamics together, it makes it ripe target for fraud.

Speaker Change: I think the beauty of where we sit is the partners and platforms that come to us.

Thank you very much.

Thank you.

Speaker Change: Thank you. Our next question comes from the line of Justin Patterson with Keymate Capital Markets. Please

Hi, this is Jacob on for Justin.

Speaker Change: Can you stand on what you're seeing on the macro currently and your decision to kind of embed that in the full year guide despite not seeing any impact yet?

Speaker Change: You know, if this macro kind of leads to pricing, replacing your market, you know, do you believe that the business can remain a bit more resilient there? Thank you.

Yeah, so.

Speaker Change: So, let me start with saying, we are performed in Q1 consistently, month on month.

and that has continued in April .

Speaker Change: and so the unchanged guidance is really not because of anything we're seeing yet.

Speaker Change: but it's just because of just prudence based on the macro uncertainty. So this is really just a position we're taking based on on the uncertainty in the macro rather than what we're actually seeing of what we saw evidence in the first quarter into April and even very early in May, but even what we're seeing for the first week of May. So the approach was to keep it unchanged based on the macros. [inaudible]

Mark Kelly: In terms of resiliency, I mean, Mark spoke about it a bit earlier, you know, the shift of our clients towards products that are based on performance is one way that we feel strongly that our model will sustain.

Mark Kelly: Larger displacements in the macro environment. We, you know, we feel very good about the new initiatives that we launched, social activation being a large one and upselling our new clients.

Those are opportunities that continue despite the macro environment.

Andrew.

Speaker Change: Thank you. Our next question comes from the line of Omar Basuki with Michael with America Securities. Please proceed with your question.

and Omar Jarline on mute.

Yes, it is. Sorry about that.

Speaker Change: You know, how, if at all, you know, does that affect, you know, doubleverify in your activation segment or your measurement segment, then I have a follow-up question on CTV.

Speaker Change: Yeah, Mark, thanks for the question. So on the DSP space, you know, we're widely distributed across all the DSPs. So although, you know, volume concentration tends to be to the big guys, you know

Speaker Change: Virtually all of our activation solutions are available on any DSP that matters.

Speaker Change: Impricing remains consistent across all of them, it's customer-based. So we're relatively indifferent to where an advertiser spends on a DSP. It's probably not the worst thing for us, if...

Speaker Change: He doesn't have much of an impact on us, and since we're such a small part, our fee is such a small part of the overall transaction fee, you know, even if there's competition on their pricing, it doesn't really impact us much.

Speaker Change: Okay, so, you know, just since, you know, a lot of us are non-technical people when it comes to add tech. Different DSPs have slightly different functionality at times, some of which may be more or less complimentary to

Speaker Change: Doubleverify for either of those, depending on kind of that feature set for the DSP, or is it pretty standard across, you know, across the like, let's say the big four DSPs.

For more information visit www.FEMA.gov

Speaker Change: Yeah, I mean, you know, look, some DSPs, there are larger DSPs, for example, like Google that have embedded products that, you know, compete against us. So, if dollars are moving out of those platforms and to other platforms that don't have embedded products,

Speaker Change: It provides a better opportunity for us to sell through for sure.

Thank you.

Speaker Change: So, but I think the reality of it is, since we're selling directly to the brands, the brands are moving, you know, our data and our functionality to whatever DSP they choose, and I think that...

Speaker Change: You know, with the exception of maybe optimization, which goes outside of core verification, there's relatively little difference from platform to platform with regard to how our solutions might be employed.

kind of the addressable advertiser market.

Speaker Change: Something, you know, especially verification, is it going to become something that, you know, more middle-market advertisers are eventually going to be interested in, you know, based on what you see so far, like what are your predictions? Thank you very much, thank you very much.

Yeah Omar, it's a great take, I mean, as...

You know, creative tools.

for CTV become more ubiquitous and easier to use.

Speaker Change: and as the buying platforms become more self-serve and open to middle market, you're seeing an influx of customers that two years ago would never consider buying CTV.

Speaker Change: So I think that helps us, right? It may be taking dollars away, for example, from regional television or regional linear television that we've never had access to, as well as maybe some even performance advertisers.

Speaker Change: that were very focused on search or other capabilities that start moving into CTV, so it opens up our address will market.

Speaker Change: as you look at shoppable ads and shop CCTV, that helps as well.

Speaker Change: So, dollars moving into CTV definitely are an asset to us.

Speaker Change: and as we noted in the call, we're improving our CTV value prop to customers by launching more transparency assets in our CTV measurement and partner with companies like EDO who are doing performance-based and outcomes-based measurement, which we can implement tools like Cybids against to optimize that spend. So even when performance advertisers are looking to get CTV, we're going to play a bigger role in that as well.

Speaker Change: Okay, thanks, I'll ask some additional questions and the callbacks, appreciate it.

Great.

Speaker Change: Thank you. Our next question comes from the line of Alinda Lee with William Blair in Company. Please, we'll see you with your question.

Alinda Lee: Perfect, thank you. I hear everyone's congrats here. Mark, can you spend more on customer feedback so for a meta-activation? And I have a follow-up after.

Speaker Change: Yeah, the feedback on meta-activations has been really good. I mean, we've seen, as we noted in the call, some pretty significant improvements in brand suitability.

Speaker Change: Anywhere up to kind of nine points in positive movement. And I think it's a great result for us and our customers and a great result from that too. It helps customers feel much more comfortable in advertising on social. The feedback has been solid. It's a premium-priced product.

Speaker Change: which is great for us, again getting another activation product out there into the marketplace at a multiple of what we're getting paid for for measurement is a very good thing for us.

Speaker Change: So you know across the board we remain excited and as I noted before we're actually ahead of where we expected to be on the uptake of that product and the revenue we're generating.

Speaker Change: Awesome, and so 20 customers already activated so far on matter activation. What is the activation speed that we can expect moving forward?

Speaker Change: That's a great question. I mean, I think a lot of the folks that jumped on, we had primed early. We had mentioned, I think in our last quarterly call, that we had...

Speaker Change: to push to get some folks into measurement at the end of last year because we knew you had to be a meta-measurement customer to be an activation customer. So, you know, we had a really good pipeline starting out. I think we closed a lot of folks pretty early in the game. Do I think we're going to pace at that level? No.

Thank you.

Speaker Change: Potentially, things look good and we've got a great pipeline. I think the nice part for us now is we've got some really big top 20 customers of ours who are testing today and I think hopefully we'll be launching in the next quarter. So.

Speaker Change: You know, stay tuned for that. It was a great initial start. I think we've got good momentum behind it and some very large customers testing it out right now which could be impactful for the rest of the year.

Perfect. That's helpful. Thank you.

Sure.

Thank you.

Speaker Change: We have reached the end of the question and answer session. I would like to turn the floor back to CEO Mark Zagorski for close remarks.

Mark Zagorski: Thank you all for joining us today on this very busy afternoon of earnings reports. We appreciate your danger in sport and look forward to seeing your order upcoming Innovation Day in June . Thank you.

Mark Zagorski: Thank you, and this concludes today's other conference. You may disconnect your line at this time. Thank you for your participation.

Good-bye!

Speaker Change: Nikolai Alabayev, Mikhail Menshikov Ivan Borisov, L.A. L.A., graduation A maritime show A film by Nikolai Alabayev

Speaker Change: [music].