Integral Ad Science Holding Corp.

Good day and thank you for standing by. Welcome to the IAS Q3 2024 earnings 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 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. 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 of Investor Relations. Please go ahead.

Thank you. Good afternoon, and welcome to the IAS 2024 Third 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 third quarter call. We reported a double-digit increase in total revenue for the quarter with growth across our optimization, measurement, and publisher businesses. We also advanced our technology and product innovation, expanded platform partnerships, including our first-to-market meta-optimization solution, won new customers, including from Oracle, and announced strategic senior-level hires. While we made significant progress towards positioning IES for long-term sustainable performance, our third-quarter revenue growth of 11% was limited by a slowdown in volume growth in the near term most notably in CPG and retail. As a result, we are taking a prudent approach to our fourth quarter and full year outlook and expect fourth quarter revenue growth of 11% consistent with the third quarter. The fourth quarter is expected to represent approximately 28% of full year 2024 revenue on par with last year's fourth quarter contribution. We exceeded our adjusted EBITDA expectations for the third quarter by diligently managing our costs. We reported a record third quarter adjusted EBITDA margin of 38%, which we expect to maintain in the fourth quarter. IES is a market leader based on our differentiated technology, including our suite of AI-backed products and our ability to deliver greater ROI and efficiency to brands on their advertising spend. In recent months, we have enhanced our executive leadership, platform partnerships, and product offerings to drive long-term growth. In September, we welcome Mark Hrabowski to IAS as Chief Operating Officer and Srishti Gupta as Chief Product Officer. The addition of Mark and Srishti to our leadership team strengthens our customer-first approach and advances our product development to meet the future needs of our customers and partners. Mark and Srishti's visionary leadership furthered IAS's commitment to customer obsession and superior product development. Mark brings extensive global leadership experience across the demand and supply sides of the advertising industry, spanning both enterprise and mid-market. He joined IAS from Oracle Advertising, where he led their global commercial organization for Oracle's advertising products, including Moat, DataLogix, BlueKai, and GrapeShot. He also brings senior-level leadership experience at Criteo, Perseo, and Yahoo. As COO, Mark leads our commercial organization encompassing global revenue, customer success, and marketing. Shristi has a proven track record of launching ad measurement and optimization products at global scale. At Amazon, Shristi spearheaded the creation of cross-channel measurement and optimization products. She also brings additional measurement experience from her tenure with IRI, now Sorkana, where she built products from the ground up. Most recently, she served as Chief Product Officer at ROCT, an e-commerce technology company, where she ensured a highly relevant experience across billions of e-commerce transactions. At IES, Shwisi leads our global product team, go-to-market initiatives, product marketing, and research and insights. Mark and Srisi have hit the ground running spending time with our customers, identifying opportunities to advance our go-to-market capabilities, and positioning IAS for success in 2025. We continue to maintain a strong pace of new business momentum, including greenfield opportunities with major global brands, as well as signed partnerships with advertisers, publishers, and platforms previously with Oracle. We won more than 75 new Oracle customers since June, representing a 72% win rate on Oracle opportunities in which we participated. We have hired over 30 former Oracle employees, which we believe gives us an advantage in securing and onboarding Oracle customers. New Oracle wins include brands such as Peacock, Heineken, and Emirates, platforms such as The Trade Desk, Quantcast, Nextdoor, Cargo, and Pandora, and publishers such as Dow Jones, Bloomberg, NASCAR, Condé Nast, and Triplelift. Let me provide some additional color on some of these recent wins. Peacock switched from Oracle Moat to IIS as part of the Moat deprecation, taking advantage of the seamless integration with auto-tagging and our CCB offerings. Heineken selected IES as their exclusive global strategic partner, replacing Oracle Moat. IES was awarded the opportunity based on our robust total visibility solution, which delivers transparency into media quality and costs across the programmatic supply chain, along with our full suite of core measurement solutions, including quality attention and sustainability. Emirates, the global airline based in Dubai, chose IAS as their global measurement and optimization provider following a competitive process. IAS won the Emirates opportunity based on our superior coverage, industry-leading CTV offerings, the strength of our product roadmap, commitment to technology innovation, and personal in-market service. In addition, we expanded our relationships with existing customers as part of several recent contract renewals. Volvo Cars renewed and expanded its global relationship with IAS. The expanded partnership includes post-bid total media quality, or TMQ, across social platforms, total visibility, and made-for-advertising reporting, as well as pre-bid brand safety, invalid traffic, and contextual avoidance. Opella, previously Sanofi CHC, a multinational healthcare company, renewed and expanded its global agreement with IAS. Our agreement with Opella now includes TMQ attention and sustainability measurement. Verizon recently expanded its relationship with IAS to include contextual avoidance across its business lines in the U.S. IAS's context control suite helps protect the Verizon brand across its programmatic channels. Verizon has been a valued IAS customer since 2016. and was most recently an early adopter of our total media quality product and major social platforms. IES is a trusted partner to brands as they embrace an omnichannel marketing strategy. TMQ, our AI-driven multimedia classification technology for social live feeds, continues to drive measurement performance. We have extended our TMQ capabilities on both new and existing platforms. With Meta, we are now supporting six additional languages for brand safety and suitability measurement for a total of 34 languages in over 100 countries. We recently expanded our TMQ offering on TikTok to include viewability, invalid traffic, and brand safety and suitability measurement across several new ad placements. These include TikTok's profile feed, following feed, search feed, and TikTok life. We are also expanding TMQ for TikTok, vertical sensitivity and category exclusion controls coverage to 75 plus markets by the end of 2024. In addition, we are live with TMQ on new platforms, including first to market with Snap, Pinterest, and Reddit scheduled to launch by the end of this year. At IAS, we lead with customer obsession. The voice of the customer informs everything we do. We build products based on customers' needs in areas that can drive accelerated revenue growth. Heading into this year's U.S. elections, marketers asked us to enhance our TMQ measurement offering to include misinformation detection in social media feeds, previously available only on the open web. We launched our misinformation detection capabilities on TikTok and Meta in April in advance of the general election and several months ahead of our nearest competitor. In September, we announced the launch of brand safety and suitability reporting for misinformation on YouTube. Pre-bid optimization in social media is another emerging area where we are meeting customer demand with industry-leading innovation. Using our pre-bid social products, brands can now optimize their ad placements, customize their suitability settings, eliminate waste, and increase ROI. The pre-bid solutions are integrated within our full optimization suite, so customers can apply their open web preferences seamlessly within social environments. Our differentiated classification technology has accelerated the rollout of our pre-bid optimization offering across the major social platforms. We were delighted that Meta selected IAS as their initial partner for the testing of our pre-bid optimization solutions on Meta. Our third-party content block listing solution for ads on Facebook and Instagram feed and reels offers global advertisers the ability to automatically avoid placing ads next to unsuitable content for their brands as aligned to industry standards. This launch closes the loop from pre-bid optimization to post-bid measurement on Meta. The launch of pre-bid optimization on Meta in October follows earlier pre-bid integrations with TikTok, LinkedIn, and X. Last month, we announced that we are currently in alpha testing in partnership with TikTok for our new video level exclusion list solution as we extend the reach of our pre-bid offerings on the platform. Pre-bid optimization more than doubles the size of our social opportunity and builds on our post-bid social media measurement revenue, which accounted for 22% of total revenue in the third quarter and over $100 million in annual revenue. Last week, we announced the launch of IAS Curation on Google Ad Manager. With IAS Curation, advertisers can now consolidate bidding on high-quality inventory and precisely target contextually relevant content to drive efficiency for their ad buys. This launch is the latest expansion of IAS's long-standing partnership with Google. IAS is currently the only verification provider supported in Google's curation launch. Last month, we announced the expansion of our quality attention post-bid measurement product to publishers and sell-side platforms. Leveraging our ML-backed models, quality attention weighs metrics into an actionable attention score which publishers and SSPs can use to take advantage of their best performing inventory. In CTV, we are investing in all layers of the stack, including device, publisher, and delivery with the goal of unlocking a projected $40 billion ad spend market by 2027, according to eMarketer. Our core customers are accessing the full suite of our publica products, which allows us to drive even greater optimization across demand sources. We have introduced new product features to increase bidding competition in ad auctions. Publica recently won the prestigious Video Week Award for Best CTV App Innovation, showcasing our superior technology and the commitment of our global team. Throughout 2024, we have also pursued strategic partnership discussions with prominent data providers, aiming to enrich our first-party media quality signals. We expect these collaborations will allow us to measure campaign outcomes at a deeper level while expanding IAS's monetization potential. Our goal is to enable advertisers to leverage IAS's data with trusted third-party data sets and optimize their campaigns to meet key performance objectives. This initiative underscores our commitment to providing measurable value and high-quality insights, and we look forward to building on our progress in 2025. To conclude, we deliver growth and profitability well above the rule of 40, and we're taking steps to improve business and performance. We've strengthened our senior leadership team with recent C-level appointments, and we are winning new revenue opportunities, including Oracle's former advertising customers. As highlighted by our first-to-market pre-bid optimization solution on Meta, we are leading with product innovation informed by the voice of the customer. We expect to benefit from these initiatives with a focus on delivering double-digit revenue growth in 2025. And with that, I'll turn the call over to Tanya to review the financials, and then we'll take your questions.