Integral Ad Science Holding Corp.

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

Thank you. Good afternoon, and welcome to the IAS 2024 Second Quarter Financial Results Conference Call. I'm joined today by Lisa Utschneider, CEO, and Tanya Secor, CFO. Before we begin, please note that today's call and prepared remarks contain forward-looking statements. We refer you to the company's filings with the SEC posted on our investor relations site at investors.integralads.com for more details about important risks and uncertainties that could cause actual results to differ materially from our expectations. We will also refer to non-GAAP measures on today's call. A reconciliation of non-GAAP measures to the most directly comparable GAAP measures is contained in today's earnings release available on our investor relations site. All financial comparisons, unless noted otherwise, are based on the prior year period. So with these formalities out of the way, I'd now like to turn the call over to our CEO, Lisa Utschneider. Lisa, you may begin.

Thank you, Jonathan. Welcome, everyone, to our 2024 second quarter call. I'm excited to discuss our strong second quarter results and increased outlook for the full year. On today's call, I'll review several growth drivers of our business, including key global customer wins, new and enhanced partnerships, our robust product pipeline, and the opportunity to pursue additional logo wins following Oracle's announcement to exit the advertising business. We extended our positive business momentum and exceeded our revenue and adjusted EBITDA guidance for the second quarter. Total revenue increased 14% to $129 million, ahead of our prior outlook of $125 to $127 million. We reported double-digit growth across all of our businesses in the second quarter, including optimization growth up 11%, measurement growth up 17%, and publisher growth up 12%. Adjusted EBITDA increased to $46.2 million at a 36% adjusted EBITDA margin. Once again, we are raising our full-year financial outlook to reflect our second quarter outperformance and our expectations for a strong second half of the year. We now expect 2024 revenue growth of 14% at the midpoint with an adjusted EBITDA margin of 34%, well above the rule of 40%. Our increased outlook for 2024 includes continued adoption of our leading social media offerings, the anticipated benefit from recently launched products, and the contribution from new logo wins. Marketers partner with IAS based on our leading AI-backed technology that delivers actionable data to drive superior results. They value our customer service, which includes the industry's largest global footprint with 31% of our revenue coming from outside of the Americas. International revenue has grown faster than overall revenue for the third consecutive quarter, driven by strong adoption of our social media offerings. We are excited to announce two recent major global brand wins in the important telecommunications vertical. Orange, the largest telecommunications provider in France, Selected IAS is its new partner over an incumbent provider. We were awarded this opportunity based on our differentiated products as well as our quality of service. Telefonica, a Spanish multinational telecommunications company, Selected IAS is one of its global strategic partners for both measurement and optimization solutions. Telefonica chose IAS based on our technology, innovation, and service. In addition, existing customers are growing with IAS. As discussed on last quarter's call, we've seen a 55% increase in average annual spend in year two of new contracts since 2019 based on our advertiser customer data. Stellantis, a leading global automaker, renewed and expanded its partnership with IAS. IAS is now the preferred global verification provider to Stellantis, growing our partnership beyond EMIAC. Our demonstrated product superiority helps secure this renewal and expansion. Perfetti Van Miel, one of the world's largest manufacturers and distributors of confectionery and chewing gum, has expanded its exclusive global verification partnership with IAS beyond EMEA to include the U.S. as well. Perfetti extended its partnership with IAS for several reasons, including the strength of our video measurement products. IES leads with innovation and trust. We prioritize our roadmap of highly advanced products and platform integrations informed by our close customer partnerships. Year-to-date, we've launched several AI-backed products to provide marketers with additional assurance and insight into the safety and efficacy of their advertising spend. By leaning into our deep technology assets, we are maintaining a high bar for product velocity and flexibility that is resonating with our customers and platform partners. We also remain steadfast in our commitment to the highest standards for the quality and accuracy of our products and our commitment to adhere to stringent principles and guidelines for the responsible use of AI. In June, we announced the availability of the industry's first deep fake detection offering. Currently in beta testing, the new offering is expected to help advertisers avoid running adjacent to deep fake content and to further verify the safety and suitability of their digital media investments through trusted and safe AI-powered technology. We were delighted to pull forward availability of deep fake detection to the first half of 2024 to meet high customer demand ahead of the Olympics and US elections. Made for advertising, MFA represents a major industry challenge for marketers seeking to avoid web pages created solely to serve ads and clutter sites with high ad density and high ad to content ratio as they can lead to lower performance. Since launching our MFA ad-driven product in general availability in the second quarter, we are seeing 100% month-over-month growth in usage. As marketers seek to maximize their return on their digital ad investments across channels, we are extending our reach through new and enhanced platform and partner integrations. Social media represents a massive and sustainable market opportunity, and we have only just begun to scratch the surface. Social media increased to 53% of measurement revenue and 22% of total revenue in the second quarter. We believe our total media quality TMQ product suite provides marketers with unparalleled granularity and insights. Recently, we announced new platform partnerships with Pinterest, Reddit, and Snap. We also built on our existing integrations with platform partners, including Meta, YouTube, and TikTok, which offer our TMQ product suite. We continue to invest in our pre-bid optimization products in social media, including GARM, Global Alliance for Responsible Media. We currently provide pre-bid solutions across several of the largest social platforms, including X, where IAS was selected to be the first to market based on our leading AI capabilities and our TMQ product offering. In June, IAS expanded its brand safety and suitability measurement product for YouTube to include reporting for Performance Max and Demand Gen campaigns on Google Ads. Performance Max is Google's campaign type that enables advertisers to access all Google Ads inventory through a single unified campaign. Demand Gen is a new Google Ads solution that helps advertisers find and convert consumers with immersive, relevant, and visual creatives that grab attention and spur action in the right moment. During the second quarter, we expand our global reporting and insights now available for Amazon DSP media buys. Through a server-to-server integration on Amazon DSP, advertisers will now have access to measurement coverage for campaigns across Amazon custom audiences and Twitch inventory. IES's solutions available to advertisers and Amazon DSP include viewability, IVT, and brand safety and suitability. IES continues to lead the global market in CTV. We offer top-tier products, including granular measurement solutions at the content and channel level, optimization solutions for ad fraud protection, and MRC-accredited measurement metrics. Our CTV investments are yielding significant results with the majority of our clients using CTV optimization solutions, showing exceptional IVT pass rates. Additionally, Publica has introduced Creative Quality Assurance, which automatically adjusts ag creatives to meet the specific requirements of various CTV channels and apps. This innovation is designed to eliminate advertiser blind spots and enhances programmatic effectiveness, leading to greater reach and scale for advertisers and improve yield management for publishers. In June, Oracle announced they were exiting the advertising business at the end of September. I've highlighted several IAS customer wins in recent quarters where we displaced incumbent providers, including Oracle. Following Oracle's announcement, we are pursuing this unprecedented opportunity with ingenuity and resources at scale to offer our industry-leading capabilities and capture potential incremental revenue. We are currently involved with dozens of RFPs, and we are working closely with potential large and mid-sized partners on transition planning, including onboarding, integration, and support. We are addressing their needs with our products, tech, talent, and reputation for high integrity with a history of strong partnerships across the digital ecosystem. We have welcomed more than 20 Oracle advertising employees to IES since June. These new hires enhance our capabilities across functions, in addition to bringing relevant experience with some of the largest platforms, publishers, and brands. Our pursuit of the Oracle business is another example of one of our core values at IIS, our bias for action. We are doing what's right, not only for IIS, but for clients, partners, and the industry at large. The feedback we've received has been overwhelmingly positive, including at the Cannes Line Festival of Creativity, where we hosted over 200 meetings and panel discussions. Before closing, I would like to welcome Bob Lord as a new member of IES's expanded board of directors. Bob is a highly regarded technology leader with a wealth of experience in technology, digital media, data science, and enterprise SaaS. He currently serves as the chief executive officer of RWL Advisory LLC, a consulting and advisory services firm, and his career includes senior level roles at IBM, AOL, and Razorfish. We are excited to welcome Bob and expand our board to include another industry expert as we continue to innovate and drive forward the future of media measurement and optimization. In conclusion, we reported another positive quarter of innovation and execution. The investments we're making in technology are leading to higher customer engagement and increased demand for our products. Now that we're halfway through the year, we have greater visibility and even higher confidence in raising our full-year outlook. Our focus is on driving growth and continuing the momentum we've established. We have several tailwinds in our favor, including strong social media adoption, a robust product pipeline, new logo wins, and the opportunity to pursue additional revenue following Oracle's exit. We intend to deliver sustainable, profitable growth, and we look forward to keeping you updated on our progress. And with that, I'll turn the call over to Tanya to review the financials, and then we'll take your questions.