Q1 2025 Integral Ad Science Holding Corp Earnings Call
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Speaker Change: Good day and thank you for standing by welcome to the I S. Q1, 2025 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 one on your telephone you will then hear an automated message advising that you're here.
It is raised.
Speaker Change: Our one one 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 F B P.
Speaker Change: The relations please begin.
Speaker Change: Thank you good afternoon, and welcome to the first quarter of 2025 financial results Conference call I'm joined today by at least a Schneider CEO NGL Putman interim CFO.
Speaker Change: 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 Investor <unk> integral AD dot 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.
Speaker Change: Reconciliation of non-GAAP measures to the most directly comparable GAAP measures is contained in today's earnings release available on our Investor Relations site.
Speaker Change: All financial comparisons unless noted otherwise are based on the prior year period.
Speaker Change: So with these formalities out of the way I'd now like to turn the call over to our CEO Lisa Snyder.
Speaker Change: Lisa you may begin.
Lisa Snyder: Thank you Jonathan welcome everyone to our 2025 first quarter call. Our first quarter results build on our positive momentum from the fourth quarter, we are setting clear expectations and delivering on that.
Lisa Snyder: We reported 17% revenue growth in the first quarter ahead of our prior outlook of a 13% increase at the midpoint of our guide.
We achieved an adjusted EBITDA margin of 31%.
Lisa Snyder: We are executing on our business strategy as we lean into our competitive differentiator.
Lisa Snyder: We are advancing our leading AI backed technology, leveraging our first chip market platform partnerships and expanding our reach across channels and geographies with an 18% increase in revenue outside of the Americas in the first quarter.
Lisa Snyder: By closely listening to the voice of the customer, we are innovating and creating value across product and technology, while maintaining a high bar for quality and reliability.
Lisa Snyder: We believe that our customer value proposition focused on driving ROI and greater efficiencies continues to resonate with marketers in the current environment.
Lisa Snyder: As a result, we expect double digit profitable growth in the second quarter and for the full year 2025.
Lisa Snyder: On our last call we discussed three priorities for 2025 product roadmap performance reach and innovation.
Lisa Snyder: Starting with performance we are all in on increasing ROI for advertisers.
Lisa Snyder: Last month, we announced the availability of dynamic performance profiles or D. P. P.
Lisa Snyder: D. P. P is designed to help advertisers realize maximum performance across our media buys powered.
Lisa Snyder: Powered by our proprietary total visibility product G. P. P uses customer outcome data to automatically identify unbundled top performing contextual targeting segments.
Lisa Snyder: And I S case study of an advertiser's conversion based campaign in APAC last December reveal that J P. P. Activated campaigns increased conversion rates for this customer by 34% and E. C. P. M efficiency by 26% D. P. P is an essential component of our.
Lisa Snyder: Total media performance or TMP suite of pre bid optimization products designed to maximize our performance while protecting brand equity.
Lisa Snyder: Within our T. M. P suite. We are also launching in the second quarter audience, and rich contextual targeting segments, which demonstrates our commitment to delivering advanced performance enhancing tools. We expect these segments to reach high value targeted audiences with the contextual first solution to enhance scale and performance.
Lisa Snyder: Formats cut.
Lisa Snyder: Customers can activate segments and DSP to reach their target audience, where they are most engaged in March we conducted a case study in partnership with the customer in the travel vertical and found that placements with audience and which segments drove a 159% higher success rate at 72%.
Lisa Snyder: Lower costs.
We are also broadening our reach with the major platforms and protecting customers brand equity wherever they invest.
Lisa Snyder: In the first quarter, we launched new features and increased global availability for a content block. This optimization solution that matter in April we announced general availability of pre bid video level exclusion lists and chick Todd as part of our social optimization offering the expansion followed successful texting.
Lisa Snyder: On the platform.
Lisa Snyder: Advertisers on tick tock can now benefit from pre bid granular exclusion empowered by I S. As AI backed multimedia technology, giving them greater control over their advertising investments.
Lisa Snyder: In April we announced the expansion of our partnership with Rite aid to include view ability and invalid traffic our IPG measurement.
Lisa Snyder: <unk> capabilities complement our earlier integration of our total media quality or T M Q brand safety and suitability measurement on the platform.
Lisa Snyder: Advertisers now have access to third party campaign insights backed by trusted and transparent metrics to help brands safe garden's scale across rather.
Lisa Snyder: Last week, we announced the strategic first to market partnership with next door, the Central neighborhood network, establishing I, yes, as the provider of prepaid brand safety and suitability optimization on the platform.
Lisa Snyder: Using AI driven multi media technology.
Lisa Snyder: Yes, we'll offer advertisers an additional layer of third party transparency and suitability for their next door campaign, we continue to expand our partnership with the general availability of T. M. Two for next door expected in the second half of 2025.
Lisa Snyder: Our pre bid optimization solutions on the social platforms are shown to improve performance and ROI for advertisers.
Lisa Snyder: According to initial Ias studies advertisers annual savings can reach as high as to ask their investments when using our social optimization solutions.
Lisa Snyder: In May we announced the launch of our pre screen brand safety solution, where Google search partner network with this launch we will provide advertisers with greater control over their investments before their ads are shown across the search partner network.
Lisa Snyder: We are scaling quality think prepaid segment adoption on the leading gsp's with quality think advertisers can automatically sync their prepaid and postpaid settings across all channels for programmatic buys we are generating traction with Amazon DSP launched late last year as well as display and video <unk>.
Lisa Snyder: <unk> launched in the first quarter. According to an Ias study campaigns using quality seeing benefit from lower contextual brand safety and ICT fail rates lower fill rates result, 58% lower cost per conversion, helping brands boost our ROI and media efficiency.
Lisa Snyder: In 2025, we are optimizing our go to market strategy to provide superior global support and service to an ever increasing set of customers. We are expanding our reach across market segments channels and geographies, we are expanding our reach and performance offerings within the mid market segment mid market.
Lisa Snyder: Customers require streamlined impactful and easier activate solutions and we are delivering just that including chrome management powered by our next generation signal experience built with the <unk> future in mind.
Lisa Snyder: We continue to invest in growing media channels, including audio and gaming last week I S announced with Spotify, the launch of new brand safety and suitability targeting and measurement tools for podcast advertisers for the Spotify audience network there.
Lisa Snyder: <unk> solution includes pre big classification, and tailored targeting to safeguard brand reputation, while driving ROI and April roadblocks announced that I S. Full offer coverage across media quality and performance solutions, including fraud brand safety and suitability and view ability.
Lisa Snyder: Turning to our focus on innovation, our AI and data strategy, our core investment areas for I guess, a is an integral part of our DNA empowers. The majority of our products today AI plays a critical role in how we operate increasing velocity by streamlining workflows, enabling scale through.
Lisa Snyder: Automation, and personalization and improving accuracy by identifying patterns and insights that inform better decision, we apply AI within 10 notches to move faster, but to solve problems more effectively.
Lisa Snyder: I enhances how we build analyze and deliver while ensuring that human judgment transparency and responsibility remains central to everything we do.
Lisa Snyder: Our differentiated data fuels AI investments by our customers to enable them to maximize the value of quality media signals in April we announced the launch of our impression feed and an innovative approach to monetizing impression level data advertisers and agencies can use the impression feeds granular metrics.
Lisa Snyder: To gain transparency into their digital advertising investments.
Lisa Snyder: Our publisher business is another Great example of how Ias innovate ias's publicly capabilities set us apart in the CTV market. We're scaling product features built to increase bidding competition in that auctions and therefore to increase deal for publishers. We are also enabling publishers to match.
Lisa Snyder: <unk> supply path optimization by providing them with the optionality to connect directly with their demand sources. These differentiated solutions highlighted synergies between Ias in public and the power of our publisher facing technology.
Lisa Snyder: Turning to our new business momentum, we have secured several new wins and renewals in key verticals customers cite several reasons for partnering with Ias such as our advanced technology ease of activation and superior global customer service Zen.
Lisa Snyder: <unk>, a global fashion luxury company, establishing an exclusive agreement with I S and expanded their global partnership to include Ias's measurement and optimization solutions I asked will provide T M to social optimization and attention there.
Lisa Snyder: When you're selected I guess based on the accuracy of our classification technology.
Lisa Snyder: This win reinforces ies's leadership in the luxury goods vertical along with expanded partnerships with as Florida, Luxottica and product announced on last quarter's call.
Lisa Snyder: <unk> Sporting goods company picked <unk> as their global verification provider for a full suite of measurement offerings, including T. M. Q. After previously working with Oracle. We won this partnership based on the ease of activation and use of our products as well as the superiority of our tech and detailed report.
Lisa Snyder: Adding capabilities Axa, one of the world's leading insurance companies renewed their partnership with Ias. Following an extensive diligence process, our established relationship and high service levels enabled <unk> to maintain its position as axis preferred advair application provider this room.
Lisa Snyder: The World continues our track record of success in France, with global brands, including Renault a pillar still lantus in L V M H.
Lisa Snyder: We added a new partner and secured a major renewal and the chocolate and confectionery vertical increasing our global leadership in the sector with partnerships with eight of the top 10 producers worldwide lots.
Lisa Snyder: Lastly, we are ramping our new clients that selected Ias falling oracle's, except from the advertising business. We are increasing adoption of our premium T. M Q product for brand safety and suitability along with our optimization offerings, we expect to grow the scope of these relationships as we build trust through actionable.
Lisa Snyder: Data that drives superior results.
Lisa Snyder: We exceeded our expectations for the first quarter and advanced our 2025 product roadmap with a focus on performance reached an innovation by executing on these priorities and offering differentiated products, we are creating a flywheel effect to drive superior performance for our customers.
Lisa Snyder: We expect profitable growth in 2025, as we partner with marketers to achieve their goals with that I'll turn the call over to Joe to review the financials, and then I'll comment on our outlook.
Joe: Thanks, Lisa and welcome everyone, we reported a strong quarter and we're pleased with how we executed on our top priorities.
Joe: Based on our current outlook, we expect to deliver double digit profitable growth.
Joe: Our second quarter and for the full year.
Joe: Total revenue in the first quarter increased 17% year over year to $134 $1 million ahead of our prior outlook of $128 million to $131 million.
Joe: During the quarter, we generated strong double digit growth in our optimization and publisher businesses with single digit growth in measurement.
Joe: Our overall growth was driven by both expansion of our top accounts as well as new logo wins.
Joe: In addition, we reported adjusted EBITDA of $41 $5 million and a 31% margin.
Joe: Optimization revenue increased 24% to $64 8 million in the first quarter opt.
Joe: Optimization growth was fueled by several verticals, including financial services, particularly in insurance as well as retail and travel and entertainment.
Joe: New products, including expanded quality think availability on Amazon DSP and <unk> hundred 60 also contributed to our strong optimization results.
Joe: Measurement revenue increased 4% to $48 $4 million in the first quarter looks.
Joe: Looking at measurement revenue by channel.
Joe: Media revenue increased 15% with strength in travel and entertainment.
Joe: Social media represented 58% of measurement revenue and 21% of total revenue in the first quarter.
Joe: They'll show growth in the quarter outpaced overall digital advertising spend with healthy demand for our <unk> product suite across our largest social platform.
Joe: We continue to see a shift in advertiser spend for measurement to a premium optimization offering.
Joe: As a result open web revenue, which is primarily display decreased single digits and represented 42% of measurement revenue.
Joe: Turning to measurement revenue by format video revenue increased 14% in the first quarter as a result of the growth in social media.
Joe: Video accounted for 58% of measurement revenue with display and other formats, including audio and gaming representing the balance.
Joe: Publishing revenue increased 33% to $29 million, resulting from ongoing adoption of new public of products and a large OEM partners.
Joe: In addition, we saw growth in non CTV I E S publisher revenue.
Joe: Was attributable in part to the contribution from new Oracle customer.
Joe: Publisher revenue represented 16% of total first quarter revenue.
Joe: Revenue outside of the Americas increased 18% in the first quarter to $42 $7 million.
Joe: Representing 32% of total revenue in the first quarter with strong double digit growth in EMEA.
Joe: Gross profit for the first quarter was $103 $9 million at a 78% margin compared to 77% in the prior year period.
Joe: On a combined basis, our operating expenses for the first quarter, excluding noncash expense items grew 13% year over year to $62 $5 million.
Joe: Stock based compensation expense for the period with $15 $5 million.
Joe: In line with our prior outlook of $15 million to $17 million.
Joe: Adjusted EBITDA for the first quarter, which excludes stock based compensation and one time expenses increased 26% to $41 $5 million above our prior outlook of $38 million to $40 million.
Adjusted EBITDA margin for the first quarter increased to 31% from 29% in the prior year period.
Joe: Net income for the first quarter was $8 million or <unk> <unk> per share compared to a net loss of $1 $3 million or one <unk> per share in the first quarter of 2024.
Joe: Moving to our performance metrics, our first quarter Advertiser net revenue retention or NR or <unk> was 109% up from 107% in the fourth quarter of 2024.
Joe: The total number of large advertising customers, which includes both mid tier and top tier clients with annual revenue over $200000 grew to 239 compared to 227 in the prior year period.
Joe: And up from 237 in the fourth quarter of 2024.
Joe: Revenue from large advertising customers was 84% of total advertising revenue on a trailing 12 month basis.
Joe: Cash and cash equivalents at the end of the first quarter totaled $59 1 million.
Joe: We further lowered our debt to $15 million at the end of the first quarter.
Joe: We are closely monitoring the broader advertising environment.
Lisa Snyder: Such Lisa will comment on our second quarter and full year outlook.
Joe: Here are a few modeling points to consider.
Joe: Second quarter stock based compensation expense is expected in the range of $19 million to $21 million.
Joe: And $72 five to $75 5 million for the full year.
Joe: We expect weighted average shares outstanding for the second quarter in the range of $164 five to 165 5 million shares.
Joe: And 165 to 167 million shares for the full year.
Joe: We expect an effective tax rate of approximately 30% for the full year 2025.
Joe: In conclusion, we executed on our priorities in the first quarter and delivered 17% revenue growth and a seasonally strong adjusted EBITDA margin of 31%.
Joe: We are planning for double digit profitable growth in the second quarter and for the full year.
Lisa Snyder: And with that I'll turn it back over to Lisa to discuss our outlook.
Lisa Snyder: Thanks, Joe we are raising the midpoint of our full year financial outlook to reflect our strong first quarter performance. Our guidance is based on brand spend in the current environment and ongoing budget shifts to our premium optimization offerings, we expect to deliver another year of double digit profitable.
Lisa Snyder: Growth.
Lisa Snyder: For the second quarter ending June 32025, we expect total revenue in the range of $142 million to $144 million or 11% year over year growth at the midpoint.
Adjusted EBITDA for the second quarter is expected to be in the range of $45 million to $47 million or 32% margin at the midpoint.
Lisa Snyder: For the full year 2025, we are increasing the midpoint of our revenue outlook to reflect our strong Q1 performance. We now expect revenue of $590 million to $600 million or 12% year over year growth at the midpoint. We are also raising the midpoint of our full.
Lisa Snyder: All year 2025, adjusted EBITDA to be in the range of $204 million to $210 million or 35% margin at the midpoint, we expect to maintain gross margin for the full year 2025, and the range of 77% to 79%.
Lisa Snyder: And with that we are now ready to take your questions operator.
Speaker Change: Thank you as a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile our Q&A roster.
Speaker Change: And our first question will be coming from Andrew Merrick of Raymond James Andrew Your line is open.
Andrew Merrick: Alright, Thanks for taking my questions, maybe first if we could talk about in the context of the current digital advertising market with the shorter visibility windows and such just the.
Andrew Merrick: Advertiser demand youre seeing especially for the performance oriented solutions that you talked about it at the beginning of the call.
Andrew Merrick: Okay.
Andrew Merrick: Yeah.
Andrew Merrick: Please standby.
Andrew Merrick: Yes.
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Andrew Merrick: <unk>.
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Andrew Merrick: Operator, operator in Europe.
Andrew Merrick: Yeah.
Andrew Merrick: You can't be heard there is a slight echo.
Andrew Merrick: You may begin.
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Andrew Merrick: [music].
Andrew Merrick: Okay.
Speaker Change: Ladies and gentlemen, please standby your conference will begin momentarily.
Speaker Change: Operator can you hear us now.
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Speaker Change: Ladies alright now please standby.
Speaker Change: You may begin you may begin.
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Speaker Change: Operator can you hear me you are allowing Florida.
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Speaker Change: Okay.
Speaker Change: Okay I'll respond to Andrew's question, Andrew can you hear me.
Andrew Merrick: I can hear you yes.
Andrew Merrick: Okay, So let's get back to the current macro environment.
Andrew Merrick: So as I was saying before.
Andrew Merrick: We've made a bet on performance, we talked about in our previous earnings our Q4 earnings call.
Andrew Merrick: Three pillars of our product roadmap being performance reached an outcomes that performance is absolutely paying off you see in our Q1 results both Q1.
Andrew Merrick: We put 17% up on the board for growth year over year optimization in particular, 24% growth. It's a reflection of the value that we're offering to brands as they're leaning into performance programmatic offerings that drive greater transparency.
Andrew Merrick: Greater efficiency and greater Rois. So it's great to see that the brands are leaning in we love the attach rate and the adoption that we're seeing with the product.
Andrew Merrick: And we'll continue to drive that value for our customers.
Speaker Change: Thank you and maybe at the risk of breaking the call again, if I could get a quick follow up.
Speaker Change: I think you've mentioned in the past you're open web display business.
Speaker Change: And what measurement business, rather has been kind of Onboarding point for new clients is that still the case or are a lot of your newer clients going directly to things like open for like social measurement and optimization solutions. Thank you.
Speaker Change: Yeah, Great Great question. So as we mentioned earlier on the call. We are seeing softness similar to across the Internet in open web display.
Speaker Change: We're pleased with our social measurement growth for Q1 being 15% against a testament to the value that we're driving to our advertisers. So we're seeing the advertisers continue to drive <unk> adoption across all the major social platforms.
Speaker Change: Both here in the U S and internationally, we are seeing some shift in budgets from measurement.
Speaker Change: Two optimization again as brands are leaning into all things related to efficiency and ROI.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: And our next question.
Speaker Change: Will be coming from Jason <unk> of Oppenheimer. Your line is open.
Speaker Change: Everybody good to hear.
Hear you loud and clear.
Speaker Change: First just can we get some color on how youre thinking about second quarter by discipline.
Speaker Change: And I guess, maybe when you talk about that.
Speaker Change: In certain lines, there's a good amount of like volatility quarter to quarter and some of that goes away. If we look at it on a two year stack like optimization is pretty stable on a two year basis, but variable on a one year basis, Theyre, just kind of and maybe any color.
Speaker Change: Just around what you're looking for for the second quarter, and then Jeff Hello.
Speaker Change: When we think about the first quarter any drivers that wait a bit more on measurement growth.
Speaker Change: Was like legacy products or just more of a mix away from this play.
Speaker Change: Yeah.
Gil: Gil do you want take Jason's first question I'll take the second.
Gil: Okay.
Gil: Okay.
Gil: Okay I'll take it I'll take both Jason.
Gil: Alright. So your first question related to our Q2 and the drivers that we're seeing in Q2.
Gil: A couple of things to call out.
Gil: Seeing anticipating double digit growth in total advertiser revenue in the second quarter second thing to call out is we expect double digit optimization growth above the forecasted total Q2 revenue growth of 11% in the full year growth of 12 <unk>.
Gil: But below the Q1 levels, because we saw such strength at that 24%.
Gil: For optimization.
Gil: Also in terms of measurement, we do expect single digit measurement growth in Q2, improving from the first quarter levels, you probably saw that at 4% for Q1.
Gil: And then in terms of publisher another highlight for Q1 being 33% in Q2, we do expect double digit.
Gil: Revenue growth in the publisher revenue in Q2, but.
Gil: But we do anticipate that growth to be below Q1 levels related to the timing of onboarding of.
Gil: Oracle customers and then in terms of drivers for Q1 measurement growth.
Gil: The thing I'll call out again is a social growth being 15%.
Gil: Is a highlight for the quarter the way to think about that is we continue to grow our business. Both here in the U S and internationally outside of the Americas. Another bright spot for the quarter was our international growth of 18% and one of the drivers of.
Gil: That growth is as our large global advertisers continue to adopt <unk> in our international markets and emerging markets, that's driving the social measurement growth.
Speaker Change: And then the other caller I'll say tied to the social growth is both on meta and Tic Toc as you know two of the three largest.
Speaker Change: Social platforms, we do see north of 50% revenue on both.
Speaker Change: And Tic Toc internationally.
Speaker Change: And just can I follow up why did slowdown versus the 12% in the fourth.
Speaker Change: For the measurement growth correct.
Speaker Change: Yes, So you might remember as we continue to cross sell and up sell T. M. Two with these large global advertisers.
Speaker Change: In the international markets and emerging markets in particular, the emerging markets and this is across the industry that this isn't just with I S T.
Speaker Change: To have smaller budgets lower CPM. So that is one of the reasons that you're seeing.
Speaker Change: That 12.
Speaker Change: From 12% to Q1 measurement growth.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: And our next question will be coming from Mark Kelley of Stifel. Your line is open Mark.
Mark Kelley: Great. Thank you very much.
Speaker Change: But I was hoping maybe you could expand just a little bit on the mid market strategy that you alluded to Lisa.
Speaker Change: In your prepared remarks, I know that's been a part of the strategy here for a bit so maybe a little bit more color on.
Speaker Change: What changes you think you need to make is that feedback from some of the mid market agencies.
Speaker Change: Deals in clients that you have already.
Speaker Change: And then second.
Speaker Change: You know would also love to get your thoughts just on the Google AD Tech trial curious if youre seeing more interest in.
Speaker Change: Been public as a result, or maybe any other thoughts that you have there that would be great. Thank you.
Mark Kelley: Yeah. Thanks Mark.
Speaker Change: I'll take both questions. So.
Speaker Change: A couple of things about mid market you might remember the way we define mid market.
Speaker Change: <unk> is annual spend between 202 hundred cane 1 million mid market clients. These are performance based marketers who are focused on all the things related to rois driving efficiency.
Speaker Change: Driving outcomes and we've been very pleased with the growth that we're seeing in mid market both in the U S.
Speaker Change: And internationally.
Speaker Change: The area, where midmarket is really starting to pop is the adoption of our performance based products that we've launched both in the back half of last year and in the first half of 2025.
Speaker Change: All of our new products on our 2025, our product roadmap they've all been released.
Speaker Change: To date, which is the fastest has the highest velocity we've seen in shipping products and it's really resonating, especially with the mid market advertisers again their performance space.
Speaker Change: The other area, where we're seeing nice growth in mid market is from Oracle clients you might remember one of the customer types within the Oracle business or mid market accounts and the team's doing a great job.
Speaker Change: Closing them onboarding them and lots of cross sell and upsell. So again, we're pleased with market. It's another important that for 2025 a bet. We've made both on the backend in beefing up our performance related products investing in automation to.
Speaker Change: Make it much simpler for mid market accounts to activate them the products and then on the front and continue to invest in our mid market sales team as well as the service team.
In terms of the Google trials that have happened I would say that it's too early to tell.
Speaker Change:
Speaker Change: With publica in particular, you know the majority of our business is on the buy side, the demand side, but public or represents the.
Speaker Change: The supply side, especially in CTV and we're seeing strong growth in publica, it's too soon to tell.
Speaker Change: But it could potentially be a tailwind for our business should the publishers reassess.
Speaker Change: Their AD Tech partners, depending on what the verdict is for Google.
Lisa Snyder: Great. Thank you Lisa.
Speaker Change: Yeah. Thanks Mark.
Speaker Change: Thank you and one moment for our next question, which will be coming from James <unk> of Jefferies. Your line is open James.
Speaker Change: Great. Thank you guys I guess sticking on the topic.
Speaker Change: <unk> been growing revenue now for.
Speaker Change: Last couple of quarters around 30% year on year, just interested to hear what's been driving that success anything specific on the product side and the go to market just anything you'd call out in that thank you.
Speaker Change: Yeah.
Speaker Change: Thanks for the question James So few callouts on publica as I mentioned before our 33% publisher revenue for Q1 is another highlight for the quarter that we're really proud of our public as it continues to be a great asset for the company a large oh.
Speaker Change: <unk> continued to see the value of our highly differentiated publica offerings and one area in particular, we continue to invest and I remember talking about this in last quarter's call is introducing and refining product features to increase the bidding.
Speaker Change: Competition across the AD auctions, the Oems they love seeing the performance of.
Speaker Change: <unk>.
Speaker Change: And bidding enhancements that we're making and we'll continue to.
Speaker Change: Invest in those features and additional features for publica. The other thing I think it's important to call out is just the non CTV Ias publisher.
Speaker Change: Continues to also be a strength in our portfolio of products and it's just great to see the brands leaning into our Ias publisher solutions.
Speaker Change: Great. Thank you.
Speaker Change: Thanks.
Speaker Change: And our next question will be coming from Youssef Squali of true Securities. Your line is open.
Speaker Change: Thank you so much.
Speaker Change: Hey, Jill so maybe just double clicking on the measurement growth again at 4% I think you said that open web revenues were down single digit percentage.
Speaker Change: For the for the quarter on a year on year basis can you maybe unpack the reasons for that how much of that may have to do with maybe growing curation from FSP or maybe some other things just trying to see whether this is a new trend. That's likely to continue is this something thats going to kind of inflect again next quarter, especially that <unk>.
Speaker Change: You said next quarter's measurement and there should be improving versus up 4% and then at a high level.
Speaker Change: Relative to your kind of your guidance this quarter versus prior quarter and I'm talking more about your guidance for the full year. It looks like you beat Q1 by a bit more than you raised your number for the year.
Speaker Change: I understand maybe the macro uncertainty around it may be the driver, but just would love to see or to hear if there is anything else going on there. Thank you.
Speaker Change: Yeah. Thanks for the question uses so the first one around the measurement 4% growth in Q1.
Speaker Change: We delivered single digit growth in measurement as expected and as I mentioned before we're also pleased with that double digit 15% growth in social media.
Speaker Change: The reflection of open web down by single digits.
Speaker Change: We're seeing it across the industry that display across the digital ecosystem is down.
Speaker Change: I think it's just a reflection of what's happening at a macro level from a display perspective, but also want to reiterate the point I made earlier is we are seeing and budget shifts from measurement to optimization I think part of that has to do.
Speaker Change: With macro environment as the brands continue to seek out differentiated solutions that drive performance drive efficiency drive ROI. So I think it's a combination of the two up just display softness in the ecosystem and then the brands doubling down on all things.
Speaker Change: Related to optimization.
Speaker Change: And then.
Speaker Change: With their second question around the full year guide.
Speaker Change: And beating Q1 more than the raise.
Speaker Change: There are a few points I'll make on that in terms of macro economic environment.
Speaker Change: The first is as you know we're customer obsessed.
Speaker Change: And over the last few weeks and months, we've been spending and I've personally been spending a lot of time with customers on the road meeting with some of our largest advertisers hold COSE publishers and platforms and the feedback has been consistent in terms of.
How they view the macroeconomic conditions the value that that they're seeing in the products that we're offering the fact that we're doubling down and providing greater transparency into all things related to programmatic and based on all of that feedback that we're receiving and the line.
Speaker Change: <unk> site that we have to the forecast that is why we set the guide the way that we set the guidance.
Speaker Change: Yeah.
Lisa Snyder: Okay. Thank you Lisa.
Speaker Change: Yeah. Thanks.
Speaker Change: Thank you and our next question will be coming from Rob Kolbert of Evercore ISI. Your line is open Rob.
Speaker Change: Great. Thank you very much wondering if you could talk about market response, so far to previous observation tools and social and if you could tell us whether that was maybe a factor in driving the strength in optimization in the quarter or if it's just too early.
Speaker Change: And then secondly wanted to ask if you could maybe spend a minute or two just educating us on how your go to market with a dynamic performance profiles and the other CPM products is that a play on curation by the Isps as it's something that's activated through to the buy side just anything more you can tell us about how you sort of go to market. There. Thank you.
Yeah sure. Thank you for the for both questions. So in terms of pre bid social optimization.
Speaker Change: We're tracking in line with our expectations, we're very pleased with the adoption rate that we're seeing in pre bid social. We're also pleased with the ramp and the new features and increased global reach.
Speaker Change: That we've continued to expand.
Speaker Change: The products on all three of the major social platforms met us tick tock and Youtube, we receive ongoing feedback from the advertisers who have adopted the product. They continue to see improved performance and ROI and I know that we cited this stat earlier on.
Speaker Change: The live call, but the brands that are using our social optimization solutions. They can see annual savings reach of two X their AD investments and they really appreciate the fact, especially during the macro economic conditions that we are quantifying the rois we are.
Speaker Change: Quantifying the results that.
Speaker Change: They're seeing so we expect to continue to scale pre bid in 2025.
Speaker Change: And we would anticipate more meaningful revenue in 2026.
Speaker Change: And then in terms of the go to market with.
Speaker Change: With the curation products.
Speaker Change: There are a few things about that product that we've launched again, it's along the lines of leaning into all things related to performance and efficiency and ROI that we're delivering on behalf Oh.
Speaker Change: The advertisers.
Speaker Change: The way it works is it automated optimize automation, where we embed contextual segments.
Speaker Change: At a pre bid level to help the advertisers find higher quality media.
Speaker Change: Automated that leads to higher outcomes better outcomes for the brands.
Speaker Change: Okay got it. Thank you very much yeah. Thank you.
Speaker Change: And our next question will be coming from Justin Patterson of Keybanc. Your line is open Justin.
Justin Patterson: Great. Thank you Lisa last call you talked about China as an opportunity we're pursuing suing more I realize everything is fluid right now, but I'm curious how your timeline investment levels around China may have changed for the year. Thank you.
Justin Patterson: Yeah. Thanks, Justin for the question. So as you remember last quarter, we launched first to market in China are in fourth quarter, both the China and in China out strategy, we're still alpha testing in China with luxury good customers.
Justin Patterson: And we're receiving very encouraging feedback.
Justin Patterson: We also have a strong pipeline of prominent global brands, both within luxury and CPG categories.
Justin Patterson: The other thing to know and this was very exciting for the team on April 1st we had our first Ias China event in.
Justin Patterson: In Shanghai with over 40 clients and agencies in attendance.
Justin Patterson: And they were combination some of them focused on local advertising in China and then some of the larger global brands, where there are focused more on the China out strategy. We're also investing in growing head count in support of our China based initiatives. So again.
It's very early days in China, but we're really pleased with the level of interest and engagement and we'll continue to running the alpha and providing value to the brands who are running the products.
Speaker Change: As a reminder to ask a question. Please press star one one on your Touchtone telephone and please wait for your name to be announced our next question will be coming from Brian Pitz of BMO capital markets. Your line is open Brian.
Brian Pitz: Thank you Lisa maybe two questions for me can you talk about traction on alternative platforms like gaming given that roadblocks as recently noted they are seeing more meaningful growth.
Brian Pitz: And their AD business, that's new and then as you look further out with the rise of AI agents can you talk about have these.
Brian Pitz: These agents who perform tests on users.
Brian Pitz: On the Internet solutions, how are your view ability and maybe invalid traffic solutions, becoming increasingly more important are those customers starting to talk to you more about.
Brian Pitz: Looking into the future and how theyre going to navigate some of those changes to the landscape. Thank you.
Speaker Change: Yeah sure Brian. Thank you for both questions. So gaming is an important channel and roblox is an important strategic partner one thing to call out about roadblocks is in April we did announce that we were offering coverage on <unk>.
Speaker Change: Roadblocks across media quality and performance solutions and basically what that means is offering fraud brand safety suitability.
Speaker Change: And view ability or roadblocks, we will continue to test and learn with roadblocks when.
Speaker Change: When I think about gaming, it's not the top priority compared to the scale and reach of social platforms, but we'll continue to lean in with roadblocks.
Speaker Change: And tests that capability.
Speaker Change: And then in terms of AI in capabilities as I mentioned earlier on the call a few things to call out about AI and Ies, where an AI first company, we have been leveraging AI for years AI powers, the majority of our products powers.
Speaker Change: The majority actually of our new products in 2025, but what distinguishes I guess in terms of the use of AI and how we use it it's not just the presence of AI, but I'd say more importantly, how we're applying AI and I'll walk you through a few cases.
Speaker Change: Pieces of how we're using it we're using AI strategically to produce measurable outcomes beyond automation. We also combine human judgment with machine learning applying AI, where it adds the most value for our customers we leverage AI to.
Speaker Change: Accelerating execution and then also with everything that we do related to AI, we apply it responsibly with a clear focus on transparency fairness and trust and to be clear AI is not replacing how we work. It's an extension of what we can do as the.
Speaker Change: Company and driving value for our customers and we treat it as a practical ever evolving tools. So we're really really excited with how we're leveraging AI, how we continue to leverage it to drive differentiation and value for our customers.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: And our next question will be coming from Jason <unk> of Craig Hallum. Your line is open Jason.
Speaker Change: Great. Thank you just one question on the customers you brought over from Oracle how are those conversations progressing just across the cross sell opportunity and are there any changes to what you would expect that contribution could look like over the next few quarters.
Speaker Change: Yes.
Jason Oppenheimer: Yeah. Thanks, Jason.
Jason Oppenheimer: Happy to answer that question. So couple of things on Oracle you might remember last summer was the summer of Oracle, we were really pleased with our close.
Jason Oppenheimer: Close rate of over 70%, bringing on 75, plus new accounts in two I S. Equally as excited about the fact that we hired over 30 employees.
Jason Oppenheimer: From Oracle so since the back half of last year. The team we've been very focused on Onboarding. These accounts integrating the accounts are having them.
Jason Oppenheimer: Start utilizing our products, but I would say also more importantly drive the cross sell and up sell we're pleased with the stickiness that we've seen with the Oracle customers their adoption of multiple products across the portfolio in all three of our business lines and then the other.
Jason Oppenheimer: Thing I think is important to know is we are seeing a higher adoption of context control from the former grapeshot clients than we are from non Oracle accounts. So if this is just a great illustration the story of Oracle.
Jason Oppenheimer: Our ability to execute as a business to quickly integrate dozens and dozens of accounts and drive extended and ongoing value as they adopt more and more products.
Jason Oppenheimer: And one moment for our next question.
Speaker Change: Our next question will be coming from Mark the Tobit. Your line is open.
Mark Kelley: Thank you Hi, Lisa just a couple.
Great.
Mark Kelley: Specific ones from me.
Mark Kelley: On open web I am curious, what your <unk> and 'twenty five guide implies more.
Mark Kelley: Growth there.
Mark Kelley: I've talked about.
Mark Kelley: I think you said a.
Mark Kelley: Single digit growth number down single digits in <unk>, and if you could maybe quantify whether that's high single and low single, but just trying to get a sense of the trajectory there because it seems like it's come down.
Mark Kelley: It from fourth quarter and then.
Mark Kelley: As it relates to Oracle increments reality.
Mark Kelley: In Q1, I'm, just curious sort of what the incremental he was there you talked about <unk> being.
Mark Kelley: The growth in publisher.
Mark Kelley: Be a little bit less than <unk> <unk> due to less onboarding of Oracle just curious if that's a carry into the second half of the year.
Mark Kelley: In terms of Oracle, specifically and then also what what's sort of implied for Oracle in your 'twenty guidance. Thank you.
Mark Kelley: Sure.
Speaker Change: Jill do you.
Speaker Change: Do you want to take the first question, yes, yes, because he might think so as far as measurement.
Speaker Change: Samsung for for growth, where we're assuming measurement will contribute to the total advertiser growth in the single digits, but improving off of the fourth the first quarter that was posted a 4%.
Speaker Change: Okay.
Speaker Change: One moment alright, okay.
Yeah.
Speaker Change: Davidson.
Speaker Change: Yes go ahead, while I was just trying to I'm just trying to get a sense of the trajectory victory of open web that's implied in your.
Speaker Change: Guidance for the year.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Yeah, I can take that so measurement improved from fourth.
Speaker Change: From 4% in Q2 and full year to single digits are the other thing to call out it will be higher than 4% in second quarter and full year on measurement.
Speaker Change: Mid to high single digits is appropriate and then in terms of publisher growth due to Onboarding and Oracle timing.
Speaker Change: As I mentioned before we're really pleased with the adoption and the integration into auction we've seen across all of the Oracle customers we brought onboard.
Speaker Change: With the publisher.
Speaker Change: Business in particular with Oracle, we expect continued strength in publisher revenue in Q2 at a lower rate in Q1 related to the timing of Onboarding of the Oracle customers and this is just the timing of the contracts and the timing of Onboarding them.
Speaker Change: Right.
Speaker Change: Okay. Thank you appreciate it yeah. Thank you.
Speaker Change: Thank you one moment for our next question, which will be coming from Omar <unk> of Bank of America. Your line is open Omar.
Omar: Hi, there I wanted to double click on your comment about.
Speaker Change: Continuing to invest in our mid market sales team.
Omar: So how should we think about the ramp of that investment.
Omar: You know, namely is it sort of like a one time investment.
Omar: Will you invest as you see growth.
Omar: And what is the ultimate.
Omar: Size of this incremental sales force as compared to your existing sales force. Thanks.
Speaker Change: Thanks Omar for the question so the way to think about the ramp of mid market.
Omar: We're being thoughtful about the ramp of the sales team.
Omar: For a couple of reasons, bringing them onboard training them to be able to sell our product, but quickly be able to start activating accounts lighting them up and generating revenue. So the plan. We have in place is several quarters of bringing these I'll say tranche.
Omar: <unk> sales reps in.
Omar: And onboard them and ramp them the other thing and I've seen this in my many years of running sales teams mid market and inside sales teams are as successful as the revenue they generate so theres got to be some form of self funded revenue model in place where the team has got to <unk>.
Omar: Generally the revenue put the numbers up on the board as we continue to fund head count.
Omar: In terms of comparing the size of mid market to our larger team. It's a fraction of the global enterprise team.
Omar: But again, we're confident in this strategy and investing in the market, especially as we're seeing the.
Omar: The adoption rate that we're seeing and putting up numbers like 24% and optimization. So we'll keep investing in the performance based products in the automation and Onboarding and training the sales team.
Speaker Change: Okay. So that's very interesting thank you.
Speaker Change: It sounds like you are alluding to an inside sales model rather than.
Speaker Change: More of our high touch model for your larger clients, let me know if I'm hearing that right.
Speaker Change: And how.
Speaker Change: How should we think about the sales cycles and mid market as compare to your.
Speaker Change: Your existing clients.
Speaker Change: Yeah, Great question, Yeah, So mid market as I mentioned before they are performance based advertisers, they're lower touch.
Speaker Change: Simpler activation simpler product offering, but very fast to activate and accelerate and get live.
Speaker Change: Investments both in simplifying the optimization product offering investing in automation so it doesn't require.
Speaker Change: Lots of White glove treatment are there more self serve clients.
And then again, just ensuring that the products are driving the efficiency and ROI that they're looking for.
Speaker Change: And I am showing no further questions at this time I would now like to turn the call back to Lisa at Schneider for closing remarks. Your line is open.
Lisa Snyder: Thanks, everyone for joining today's call we're off to a strong start in 2025, and we are executing on our growth strategy. We are leading with innovation and have launched several first to market products that are live across platforms. Thanks to the entire global Ias team for your efforts have a good night everyone.
Lisa Snyder: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Lisa Snyder: Okay.
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