comScore, Inc.

Hello, and thank you for standing by. Welcome to the ComScore Third Quarter 2022 Financial Results Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please press star 1-1 on your telephone, and you will hear an automated message advising your hand is raised. I apologize. Carol, could you please mute? Please keep in mind this conference is being recorded. I would now like to hand the conference over to your speaker, John Tinker, Vice President of Investor Relations. Please go ahead.

Thank you, Operator. Before we begin our prepared remarks, I'd like to remind all of you that the following discussion contains forward-looking statements. These forward-looking statements include comments about our plans, expectations, and prospects and are based on our view as of today, November 8, 2022. Our actual results in future periods differ materially from those currently expected because of a number of risks and uncertainties. These risks and uncertainties include those outlined in our 10-K and other filings with the SEC, which you can find on our website or at www.sec.gov. We disclaim any duty or obligation to update our forward-looking statements to reflect new information after today's call. We will be discussing non-GAAP measures during this call, which we have provided reconciliations in today's press release and on our website. Please note that we will be referring to slides on this call, which are also available on our website, www.comscore.com, and investor relations events and presentations. I'll now turn the call over to Comscore's Chief Executive Officer, John Carpenter. John.

Thanks everyone for joining us this afternoon. We've got a lot packed into the three months since our last call and I'm excited to update you on the progress that's been made across our organization. As I discussed in the second quarter earnings call, Comscore's got an unmatched data set which enables our entire business allowing us to measure media consumption across platforms and enables our clients to drive insights and outcomes based on what we as consumers are up to. We're adjusting data from more than 200 million mobile devices, 150 million desktops, and more than 50 million connected TVs. Additionally, we've got data coming into us daily from 75 million set-top boxes, And we're also the world's movie measurement company, tracking box office results across more than 175,000 screens at more than 30,000 theaters across 75 countries. All of those devices and screens give us an unmatched view into the hundreds of billions of hours of content consumption so far this year in the US. Through the first nine months of this year, US consumers viewed more than 170 billion hours of linear TV and spent over a billion hours watching movies. That's not at home on our couches, but back at the theaters. Audiences generated more than 200 billion engagements on social media, yielding more than 40 billion hours spent scrolling Instagram, tweeting, and going viral on TikTok. Consumers are also gaming more than ever, more than a billion hours, proving just how vital that medium is for marketers and advertisers. It's clear that today's consumer is more interconnected across all of these mediums than ever before. And at Comscore, we've got a lens into all of it. It's that holistic view of the consumer that allows us to understand and unpack the interconnected ways in which we, as consumers, interact with media that gives Comscore a unique advantage. And we're working hard to turn that advantage into growth. You'll recall from our second quarter earnings call that I talked about three primary arenas where Comscore needs to win in the near term. First, in local TV currency, in stabilizing our legacy digital products, and in innovating in the cross-platform space. And I'm excited to highlight the progress that we're making in all three areas. In the local TV measurement space, on our last call, we laid out the scale of the opportunity and the things that we needed to focus on in order to win. Started with the product side and delivering faster data, driving demand on the buy side, and expanding within the existing station groups that work with us today, and expanding and converting those who aren't working with us yet. We also know we need to be more interoperable, integrating things like advanced audiences into workflows on the buy and sell sides of advertising transactions. Before I get into some of the specific updates on those items, I was pleased that yesterday we were able to announce an extension of our preferred relationship with Charter under the terms of our data license agreement. Charter will continue to be a great partner in solidifying Comscore as the currency of choice for local audience measurement. On the product execution front, we knew that we needed to get faster when it comes to delivering our data to clients. In early September, we had our initial release of our pulse data, delivering content measurement data within 48 hours to all local markets. With this improvement, Comscore is the only measurement provider doing this. We heard our clients loud and clear that we need to deliver data faster so that they can optimize campaign delivery, and we've executed it. I'm pleased at how quickly we responded in my short tenure, but don't get me wrong, we aren't at the finish line. This is the first step as we continue to get faster and more nimble as an organization. When it comes to driving demand with agencies and brands, we've also made solid progress. In September, we announced an industry-first local TV currency partnership with Dentsu that will have them buying campaigns for their clients using advanced audiences, rather than standard age and gender demos. While buying advertising on advanced audiences has been happening at the national level for a few years now, Comscore is the only measurement company that can offer this in all local markets. And we're incredibly excited to partner with our friends at Dentsu to break new ground in local TV advertising. For those of you not familiar with what I mean by advanced audiences, Until recently, publishers and advertisers have transacted ad campaigns based on age and gender. So they target, let's say, women between the ages of 18 and 49, as an example, versus more intent-based or affinity-driven signals, such as what someone watches, what they search for, what social platforms they may be engaged on. And through their partnership with Comscore, Dentsu will be able to leverage more intent-based signals, giving their clients a much clearer picture of their audiences, allowing them to optimize creative executions, and drive better outcomes. Moving on, and with regards to our efforts to build momentum and traction with station groups, I'm excited to announce that we've reached an important expansion of our agreement with Scripps. This agreement expanded our relationship to include all of their local stations, adding 16 new markets to our existing partnership. The trust that the team at Scripps has placed in Comscore goes beyond buying Comscore TV for all of their local stations. They're also using us as currency across all those stations. With 85% of all local advertising spend coming from station groups inside the top 30, our partnerships like the one we just announced with Scripps, along with many others, are critical to our growth. This is exactly the kind of progress that's going to fuel our growth going forward, and I appreciate the leadership team at Scripps and their trust that they placed in Comscore, and I look forward to us delivering for them over this three-year agreement and beyond. So, look, hopefully this goes without saying, but I'm more bullish than ever in our prospects and local TV measurements. We've remained focused on the four things that I mentioned at the top, product execution, buy-side adoption, station group expansion, and interoperability. And as a result, we've made tangible progress in a very short period of time, We expect to deliver close to 25% year-over-year growth in local this year, driven by the hard work and focus of our teams and what they put in. This is the fastest growth rate we've had in local over the last several years and points to the momentum we're building. We're in the early inning still, but we're not slowing down. On the digital front, we've got three priorities that I talked about on the last call that we're focused on. First, executing on the integration of social to bring to market our total digital product suite. Second, we're focused on delivering industry-leading, cookie-free solutions. And finally, we've got a re-energized focus on the customer that's driven by a product-led strategy that has us automating for the future and delivering faster data. And on the topic of product synergy, we've launched and continue to enhance our total digital offering. Total digital brings together digital, connected TV, and social data in one place to deliver a more complete view of audiences to our clients. As an example, on this page, we're indexing TikTok users across popular streaming platforms, showing which streaming platforms TikTok users are most likely to be active on. As the hundreds of billions of hours in front of screens become more and more matrixed and interrelated, Reaching audiences requires an omni-channel approach that only Comscore has the data to power. This capability is up and running, and it's being leveraged today by many of our clients. In our activation business, Comscore is also leading the way, creating a completely new kind of targeting that helps fill the void created by third-party cookie deprecation and privacy changes that are taking place in the market. Our predictive audiences product delivers privacy-safe, cookie-free targeting that performs just as well as cookie-based targeting. In fact, in a trial over two quarters, our work with IBM and their agency APAR found that Comscore's predictive audiences outperformed all other targeting tactics. That innovation and performance has seen predictive audiences more than double year over year, and we expect that to continue. Building on that solution set here, you may recall that last summer we announced that the ANA had selected Comscore as the third-party measurement provider that they partner with on a proof of concept for cross-media measurement post-third-party cookie deprecation. This effort included the ANA, VAB, and the MRC, along with many market participants from the buy and sell side, as well as the walled gardens. We recently delivered this proof of concept, and I'm pleased to let you know that it showed that this privacy-forward approach that we're taking to measurement has been successful. In addition, this pilot was in line with our innovative approach that we're taking internally to cookie-less measurement. And you can look forward to us providing updates on the product outcomes as we head into 2023. So whether you're talking about measurement or activation, we're actively innovating and collaborating with the market to ensure that the post-cookie world is one that Comscore is positioned to lead. Moving on to talk about cross-platform innovation for a second. You've heard me mention a few times already today that Comscore has a complete, holistic view of audiences across devices and platforms. This positions us uniquely to deliver cross-platform measurement for our clients. In addition to the hundreds of millions of devices that we're collecting census-level data from, we also operate panels. Many folks are familiar with our digital panels that have long been part of our Media Metrics suite of products, but beyond that, we also have our Total Home panel, which is made up of more than 7,500 households in more than 100,000 devices. It captures all of the digital activity that's going on in the home, from traditional desktop activity, mobile devices, to connected TV, gaming, and all manner of smart devices. This holistic view of the household's activity, combined with Comscore's census and big data assets, provides unique insights into consumers' evolving digital behavior. And as we move into an increasingly privacy-conscious world, the context that the Total Home Panel provides is an amazing advantage for Comscore as we work to deliver a complete omnichannel view of audiences for our clients. It's an asset that has historically been under-monetized and under-recognized, and it provides Comscore with a unique lens into the household. It's one that we intend to personify and leverage more thoroughly in our methodology, and I expect you'll be hearing more from us on this capability as we evolve our cross-platform solutions. Within cross-platform, of course, our flagship product is the Comscore Campaign Ratings, or CCR, and we passed an important milestone this past quarter. As a reminder, CCR provides deduplicated reach for display and video advertising across desktop, mobile, linear, and connected TV, across all the platforms that you see listed on the slide here, along with many more. With the release of our new user interface this past quarter, CCR is now the only cross-platform campaign measurement product in market that can provide deduplicated reach across desktop, mobile, linear, and connected TV in one single report. No one else is doing this. Why does it matter? Well, look, if you plan a campaign to run across linear and connected TV and YouTube, you want to be able to see that one view of that campaign and its reach, not in three views that aren't deduplicated. And again, Comscore is the only one that's doing this in one singular report. We continue to enhance our product offering, and the feedback in the market has been positive. We'll continue to update you on the progress in the coming quarters. Look, before I turn it over to Mary Margaret for an update on our financial results, a result of our efforts to get more focused, we've also made improvements in the profitability profile of our business. I've said this before, but we know that cutting our way to growth is not a sustainable strategy to achieve long-term success. but neither is growth at all costs. We're committed to becoming a more profitable company and delivering free cash flow that can be reinvested back into the business in order to achieve our long-term growth objectives. There's more to do here, but we're committed to doing the hard work, and the results of these efforts are visible in our third quarter results and in the adjusted EBITDA margin rate goal that we've provided for 2023. This is a key strategic imperative, and we look forward to updating you on our progress as we move forward. With that, let me turn it over to Mary Margaret.