comScore, Inc.

No one else has the experience or has built a machine like Comscore has to provide a comprehensive level of media measurement across devices. This year, we have worked to perfect a national addressable advertising solution for this new media landscape. Our measurement provides impressions for national programmer minutes across the largest MVPDs along with connected TVs to provide the deepest well of information to measure national addressable ad inventory. This MVPD connected TV centric approach enables measurement for more than 50 million households, by far the largest footprint of addressable homes. We expect to operationalize this first independently measured national advertising system for buyers and sellers of addressable ads in 2021. This will allow advertisers to use a common impression level metric for national addressable inventory that also reconciles with non-addressable minutes and improves accountability across the ecosystem. as traditional average commercial ratings become less important. The demand for the addressable market is growing fast, representing a greenfield opportunity for Comscore. We believe we have a unique first mover advantage to capitalize on this in the incoming quarters. This quarter, with an eye toward cross-platform solutions, we expanded our connected TV measurement footprint with an agreement with Samba TV, one of the leading cross-screen data measurement companies in TV, providing information globally to us. Smart TVs are a piece of the data puzzle, and the addition of Samba to our portfolio of connected TV partners strengthens our cross-platform measurement capabilities and expands our footprint helping brands better quantify the impact of their advertising efforts across platforms. The launch of international connected TV measurement will begin in European markets, where we already have new customers with an aggressive expansion plan over time. Comscore's commitment to innovation continues with the rollout of new solutions to our customers. As we noted in a press release a few weeks ago, we expect to launch an array of new and enhanced products in 2021, including the integration of over 10 million additional households into our measurement footprint for Comscore TV. Our local and our national cross-platform solutions are national addressable solutions that will build on our local capabilities. the leading-edge first-party privacy-focused solutions for cookie-less world, and our outcome-based attribution product with LiveRamp. The motivation for these new products is clear. The growth of premium video across the ecosystem demands more accountability and better tools to monetize inventory. Comscore's Connected TV contextual activation solutions for both on-demand and live streaming allow clients to increase their monetization through enhanced direct sales, open exchange, and programmatic sales. This focus dovetails with our LiveRamp partnership to develop new and innovative privacy-focused services across the advertising ecosystem. Last month, we unveiled our next-generation outcome-based measurement, at a plus math powered by Comscore. This new offering marks the first go-to-market milestone with our expanded live ramp partnership to develop new and innovative services for the advertising ecosystem. Our partnership is already generating revenue, and we look forward to collaborating with them on additional projects in the coming quarter. I'd also like to remind you of the progress we're making with our expanded local TV offerings. As we look into 2021, we see three key drivers of growth for local. It's the Comcast data integration, which is on track for implementation by the end of this year, providing us with an unmatched measurement service offering over 70 million TV sets. QuickScore, providing viewership insights within 24 hours in the top local markets, the top 50 local markets. This product is available now and being met with excitement from our customers. And number three, Comscore's Consumer Intelligence for Local Markets, or CCI, a new solution that ties local shopping behavior segments to TV viewerships in category-specific segments in near real time. We expect CCI to be available by the end of the year. We expect all three of these enhancements to generate incremental revenue growth for us beginning in 2021. We also continue to invest in research and development for cross-platform measurement. During the quarter, Comscore was awarded three new U.S. patents, one for household device identification, one for device colocation identification, and a third for household viewership aggregation. These achievements highlight our commitment to develop and enhance cross-platform measurement solutions. Our IP portfolio now includes more than 70 U.S. patents. and underscores our privacy-conscious TV and digital product innovation as part of a comprehensive roadmap for delivering superior measurement in a cookie-less world. I would like to take this as an opportunity to highlight a Greenfield measurement opportunity for Comscore and gaming. Gaming has been trending upward as a percentage of media usage for years and has seen a remarkable shift in esports gaming live streaming behaviors during the pandemic. Total ad spending and partnership of esports increased over 40% over the past three years. Time spent viewing videos on desktops has increased nearly 200% over the past three years. Comscore has a unique opportunity and ability to measure gaming live streaming audiences. Earlier this year, we announced a partnership with Twitch to deliver live streaming audience measurement for esports gaming and enhancing the advertiser's ability to understand the vertical. Expect to hear more from us in the future about our gaming offerings. I'd like to take a moment to address our movie business. Movies continues to be impacted by theater closures globally, but we are seeing positive signs. In China and Japan, as an example, new releases are delivering large box office numbers. The industry clearly is not back to normal, but we believe it's not going away. We are the leader in box office measurement, and we believe the business can return to prior levels when the pandemic ends, but we think it will take us 12 to 18 months to get there. Finally, I'd like to note the recent successes with customer renewals and wins across our products week. This quarter, we secured new business with Newsbreak, Nextdoor, New Surf League, Raven, TrueXper Digital, and we expanded our relationship with Grand Media Holdings and Weigel Broadcasting for local TV. We secured an expansion with ESPN for the ACC network and also renewed the SEC network. We had an inspiring quarter with our agency Vertical. Canvas Worldwide, you might know them better as the agency for Honda and Kia Motors, expanded its national TV use cases with our solutions. For on-demand, we secured a renewal with STX Entertainment. Additionally, I'd like to highlight our exclusive currency deal with the Pinnacle Agency, a major independent agency representing WeatherTech and other large advertisers that signed and will be switching in January 2021 to exclusively using Comscore TV ratings. We also launched our advanced streaming behavioral segments in the TruOptic marketplace for our activation products and our movies business secured renewals with a number of clients, even during the pandemic. To wrap up, it was a solid quarter with customer wins and renewals, and we are excited for 2021. We are relentlessly innovating, developing new measurement products and services, while forging new relationships across the advertising ecosystem. Now I'd like to turn the call over to our Chief Financial Officer, Greg Fink. Greg?

Thank you, Bill. Today, we reported third quarter revenue of $88 million, compared to $94.3 million in the third quarter of last year. Revenue from ratings and planning in the third quarter was $62.7 million compared to $65.3 million reported in the third quarter of last year. The decrease continues to be primarily from our syndicated digital products. While enterprise customer renewals continue to be strong, syndicated digital revenue declined year over year, representing 48% of our ratings and planning revenue in the quarter compared to 51% in the third quarter of 2019. However, sequentially, syndicated digital was down approximately 1% as we continued to sign new contracts from the exit of some competitors. National TV revenue was higher compared to the prior year as we realized revenue from live RAM. Revenue from analytics and optimization in the third quarter was 17.4 million compared to 18.3 million in the third quarter of last year. The decrease was due to lower custom digital marketing solutions revenue compared to the third quarter of last year and was in part offset by higher activation revenue. Movies reporting and analytics revenue in the third quarter was $7.8 million compared to $10.7 million in the prior year quarter. Revenue continues to be impacted by ongoing theater closures as a result of the pandemic. While the timing of theaters reopening at scale is uncertain, we do expect theater closures to continue to have an impact on movies revenue. Turning to operating costs, our core operating expenses, which includes cost of revenues, sales and marketing, R&D, and G&A, declined over 10 million year over year for the quarter. The significant reduction in operating costs relates to the actions we implemented throughout last year and further reductions we took in 2020. Cost of revenues decreased by $900,000 in the third quarter compared to the year-ago quarter due to lower headcount and professional fees. Selling and marketing expense declined $3.3 million as compared to the year-ago quarter, and R&D decreased $4.6 million from staffing reductions and decreases in most areas of our cost base. G&A expense for the third quarter decreased $1.9 million compared to the prior year quarter from lower headcount and professional fees. We do expect our costs to rise from these levels as we continue to expand our product offerings. Additionally, in the third quarter of 2020, we began to focus our hiring efforts to expand our capabilities in regions outside of the U.S. Over the long term, this will allow us to increase headcount to support the growth initiatives we've been putting in place throughout the year, while continuing to maintain our focus on cost. However, in the short term, we expect to have an increase in compensation expense as we work through this transition. In the third quarter, we reported a net loss of $11.1 million compared to a net loss of $10.6 million in the same period last year. For the third quarter, adjusted EBITDA was $7.3 million compared to $6.4 million for the same period last year. Despite the business challenges from the pandemic and lower revenues, We have generated nearly $23 million in adjusted EBITDA through the first nine months of 2020, compared to less than $1 million for the first nine months of last year. We ended the third quarter with total cash of $51.8 million, compared to $66.8 million at December 31, 2019. The decrease in cash was primarily a result of cash interest payments. Looking forward, we expect revenue to continue to be impacted by ad spending and movies. We are optimistic that new agreements and partnerships we have signed during 2020 will benefit us in the near and long term, particularly if the economic headwinds abate. However, we remain cautious about revenue growth until we have better visibility into ad spending and theater reopenings. Now let me turn it back to the operator to take questions.

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