DoubleVerify Holdings, Inc.

greetings and welcome to the double verify first quarter 2021 financial results at this time all participants are in a listen only mode a question and answer session will follow the formal presentation if anyone should require operator assistance during the conference please press star zero on your telephone keypad please note that this conference is being recorded i will now turn the call over to our host tasial engelman of Investor Relations. Thank you. You may begin.

Good afternoon, and thank you for joining us to discuss Double Verify's first quarter 2021 financial results. With me today is Mark Zygorski, CEO, and Nicola Elias, CFO. Before we begin, I'd like to remind everyone the statements made on this call and responses in Q&A today contain forward-looking statements. These forward-looking statements are subject to inherent risks, uncertainties, and changes, and reflect our current expectations based on our beliefs, assumptions, and information currently available to us as of today, May 25, 2021. Although we believe these expectations are reasonable, they are subject to change, and we undertake no obligation to revise any statements to reflect changes that occur after this call. You can find more information about these risks, uncertainties, and other factors that could cause actual results to differ materially from these forward-looking statements in our SEC filings, including our S-1 registration statement. In addition, our discussion today will include references to certain non-GAAP financial measures. These non-GAAP measures are presented for supplemental purposes and should be considered in addition to and not as a substitute for or in isolation from our GAAP results. Reconciliation to the most comparable GAAP measures are available in today's earnings press release which is available on our investor relations website at ir.doubleverify.com. With that, I'll turn it over to Mark.

Thank you, Tejal. Good afternoon, everyone. I'm Mark Segorski, CEO of Double Verify. I'm excited to welcome you to our first-ever earnings call and to discuss our strong first quarter performance and optimistic outlook on the year ahead. Nicole will detail our business model and financial results, as well as provide guidance. Since this is our inaugural earnings call, before we dive into the numbers, I wanted to take a few minutes to talk about DoubleVerify and the core value proposition that continues to propel the success of our business. DV's story is one of sustained organic growth, helped along by sector tailwinds and a unique market-leading position and platform that creates exceptional expansion opportunities in the mid and long term. Double Verify's mission is to make digital advertising stronger, safer, and more secure. We believe the advertising dollars that support the creation of diverse, high-quality content and make it accessible to the widest audience possible depend on a transactional environment that is based on transparency and trust. Via our media quality verification and performance solutions, Double Verify creates greater advertising transparency and therefore protects the fair value exchange in the digital marketplace. In the process, we not only drive ROI for our brands, we ultimately keep money out of the hands of fraudsters who often act to undermine free markets. Further, we help advance social good by defunding misinformation and hate speech. This is important not just for our advertiser partners, but for everyone who participates in the digital ecosystem. Speaking of advertisers, our analytics platform has become a core utility for hundreds of leading global brands. From CPG companies such as Mondelez and Unilever to media and tech innovators like Comcast and Vodafone, our tools help maximize digital ad spend and optimize ad delivery. Double Verify's authentic ad metric has become industry currency, measuring whether digital advertising is displayed in a brand-safe, fraud-free environment is fully viewable and delivered in the desired geography. As an independent measurement company, we are unconflicted in our ability to verify everywhere. Our cookie-free solutions are implemented across the open Internet and in the walled gardens, in display, mobile, video, social, and CTV, and in direct and programmatic transactions. Our strong track record of driving bottom-line ROI for advertisers while creating a more secure digital ecosystem, has not only directly benefited our customers, it has supported a thriving digital ad market that continues to grow at a rapid pace. According to Magnet Global, digital ad spend, excluding search, is expected to grow by approximately 11% in 2021. And sectors such as CTV, social, and programmatic are growing significantly faster. As the global market remains largely underpenetrated, Ample white space combined with sector and market tailwinds provide us with significant opportunities for expansion. Now, let's dig into our strong results for the quarter. First quarter revenue grew 32% year-over-year, while adjusted EBITDA grew by a solid 41% year-over-year. Our top-line momentum continues to be driven by a focus on global expansion fueled by enterprise client wins, successful product adoption in fast-growing new sectors, and an ongoing focus on new solutions that leverage our deep data set to capitalize on evolution in the digital marketplace. Let me discuss each of these three revenue drivers in greater detail. Beginning with global expansion, we continue to gain market share by closing new enterprise clients who are adopting our core verification solutions in both emerging and established media markets. In the past few months, we notched new business wins with Unilever, UPS, Fujifilm Japan, Arnauts in Australia, and many others. When we win an enterprise client, most, if not all, of their measurable impressions run through our software platform, creating a sticky, long-term relationship that we continue to expand over time by upselling new solutions. These enterprise clients and many others contribute to our solid Q1 results and exceptionally strong revenue growth in both EMEA and APAC. We grew first quarter EMEA revenues by 65% year-over-year and APAC revenues by approximately 97% year-over-year. Overall, non-America's revenue grew nearly 76% year-over-year in the first quarter, representing approximately 25% of direct revenue and exemplifying the expanding opportunity for the application of our software in markets around the globe. Driving this commercial success is our investment in people and go-to-market infrastructure, as spearheaded by our newly appointed Global Chief Commercial Officer, Julie Edelman. Julie recently joined us from Google, where she managed some of their largest global clients, including P&G, Ford, GM Chrysler, and McDonald's. Since joining, Julie has led the launch of DV's Global Client and Agencies Partnerships team, which is responsible for driving growth with DV's largest customers, and ensuring seamless delivery of DB's comprehensive solutions. In addition, the expansion of our self-serve software tools and the launch of our DB University training program last quarter are helping to accelerate the scalability of our platform and increase the stickiness of our offering with key customers. As of the end of 2020, we have enjoyed an average tenure of 5.6 years with our top 75 clients. Additionally, earlier this month, we expanded our business into the Middle East, North Africa, and Turkey, also known as the MENA region. According to eMarketer, digital advertising spend in the region is expected to grow by 54% over the next two years, and we are well-positioned to take advantage of those local tailwinds. Moving on to our product successes in fast-growing new sectors, CTV, social, and programmatic continue to gain the lion's share of digital advertiser interest. Double-verified solutions have been focused on ensuring advertiser spend is securely optimized in these areas. In 2021, programmatic CTV ad spending is forecasted to grow by more than 40% year-over-year to nearly $11 billion in the United States, according to eMarketer. Because the cost per impression is relatively high on CTV compared to other formats, the incentives for fraud are obvious. Over the past 18 months, we've uncovered seven different fraud schemes targeting CTV devices. These schemes were part of one large coordinated fraud family identified as Octobot, which generated billions of ad calls and spoofed or imitated thousands of apps and millions of devices, all with the intention to defraud advertisers out of millions in revenue. These schemes may have cost unprotected advertisers tens of millions of dollars. Through our software platform, double-verified customers were fully protected from these issues and continue to be insulated against the new challenges that will likely emerge. With fraud being particularly rife in high-growing emerging media such as CTV, advertisers have increasingly turned to DV's sophisticated tools and algorithms to block new variants of fraud and to provide them with the confidence needed to make premium digital advertising investments. As a result, through our integrations with platforms such as Roku, Amazon, and Hulu, Double Verify grew CTV volumes by approximately 75% year-over-year in the first quarter, as advertisers and consumers continued to flock to the medium. In addition to CTV, social continues to be a fast-growing sector for the industry and for our business. Concern around brand safety across social networks has risen during the challenging social and political environment over the last 12 months, and advertisers have become increasingly focused on brand equity and reputation online. Double Verify's software platform delivers the widest set of MRC-accredited brand safety and suitability solutions available on the largest social network, Facebook. Social represented approximately 30% of our direct revenue in 2020, and our leadership position in this sector helps grow Double Verify's social product volume by nearly 75% year-over-year, in the first quarter of 2021. With the potential for additional coverage opportunities across social platform partners, we are optimistic about our prospects for continued growth in this sector. Finally, the success of our programmatic solutions has mirrored the rapid growth of our sector. In Q1, our programmatic business grew at a rate of 42% year-over-year, driven by growth in our premium-priced authentic brand safety solution, which grew at 124%. With the recent launch of Authentic Brand Safety on Google's DV360 platform, our industry-leading programmatic product is now available on programmatic buying platforms, which manage the vast majority of programmatic media buying in the U.S. The expansion of our solutions into CTV, social, and programmatic sectors, as well as roadmap investments into dynamic areas such as audio and gaming, underscore the extendability of our software platform into exciting emerging areas that require greater transparency and trust in order to confidently attract advertiser spend. Shifting to recent product launches and enhancements, DoubleVerify has had a strong track record of leveraging its incredibly valuable core data asset to innovate in new adjacencies. From programmatic authentic brand safety to CTV's video complete solution, we have repeatedly spun off successful solutions that help grow measured transaction fees what we call MTF, and drive organic revenue growth from our existing client base. Our two newest product launches include Custom Contextual and DV Authentic Attention. Our Custom Contextual product for programmatic advertisers delivers privacy-safe, cookie-free targeting by aligning ads to relevant content in order to maximize user engagement and drive conversion. What's unique in the industry about our solution is that it leverages the same content classification expertise that advertisers rely on to ensure their digital ad spend is brand safe and secure, and applies it towards positive targeting in order to optimize their ad delivery outcomes. The solution is now available on leading DSPs, including MediaMath, Verizon Media, and Zander, and we expect it to be widely available on the Trade Desk later this quarter. As the industry shifts away from third-party audience targeting due to increased privacy regulation and the decline of third-party cookies, alternative ways of driving performance are becoming increasingly critical. Through our custom contextual product and others in the pipeline, DV is well-positioned to take advantage of this change. Our second recent premium product extension, DV Authentic Attention, delivers a unique exposure plus engagement metric that enables global brands to benchmark top-performing sites and apps, evaluate cost-effective, high-performance private marketplace deals, and focus on the ad units that deliver the most impact. Mondelez International recently used DV Authentic Attention to evaluate and optimize the performance of a cross-platform display campaign for a popular snack brand. DV Authentic Attention Insights found that private marketplace packages flagged as high attention by our system outperformed open exchange inventory by 143% on the same campaign. Vodafone, another early adopter of DV authentic attention, found that ads characterized by high double verified engagement scores drove over 3.5 times higher rates of qualified traffic and sales conversion as compared with low engagement ads. It's exactly these kinds of positive ROI results that make us so essential to our customers and underscore the opportunity that exists with our new solutions. Although custom contextual and DV authentic attention have only just debuted, we expect these products, as well as other innovations that are currently in the pipeline, to support future fee growth. In summary, DoubleVerify remains uniquely positioned to solve the digital advertising ecosystem's need for independent, integrated, and standardized measurement of ads, particularly in a post-cookie world where our proprietary data set provides a unique value proposition. We had a great Q1, which continued to show the utility of our software solutions for the biggest brands in the world. Numerous additions to our roster of enterprise customers, accelerating traction in key global markets, and successful product investments in CTV, social, and programmatic continue to drive our ongoing growth story. Add to this the tailwinds from a post-COVID advertiser recovery, and we see a future with strong momentum expected to build into 2021 and beyond. With that, let me turn the call over to Nicola.