DoubleVerify Holdings, Inc.

Ladies and gentlemen, thank you for your patience. Please remain on the line. Your conference will begin momentarily. Again, we do appreciate your patience. Please remain on the line. Your conference will begin shortly. Thank you. The End Thank you. Thank you. Good day, ladies and gentlemen, and welcome to the Double Verify Third Quarter 2021 Financial Results Conference Call. All lines have been placed in the listen-only mode, and the floor will be open for questions and comments following the presentation. If you should require assistance throughout this conference, please press star zero on your telephone keypad to reach a live operator. It is now my pleasure to turn the floor over to your host, Tijal Ingman, Investor Relations.

Good afternoon and welcome to Double Verify's third quarter 2021 earnings conference call. With us today are Mark Zagorski, CEO, and Nicola Elias, CFO. Today's press release and this call may contain forward-looking statements that are subject to inherent risks, uncertainties, and changes, and reflect our current expectations and the information currently available to us, and our actual results could differ materially. For more information, please refer to the risk factors in our recent SEC filings, including our S-1 registration statement. In addition, our discussion today will include references to certain supplemental non-GAAP financial measures and should be considered in addition to and not as a substitute for our GAAP results. Reconciliations 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. Also during the call today, we'll be referring to a slide deck posted on our website. With that, I'll turn it over to Mark.

Thanks, Tejal, and good afternoon, everyone. We're excited to share with you our third quarter results, expectations for the full year, and additional detail on recent strategic investments we've made. We grew the third quarter revenue by 36% to $83.1 million, achieving the top end of our revenue guidance range. We grew third quarter adjusted EBITDA by 82% to $26.4 million, representing 32% EBITDA margins and exceeding the top end of our guidance range. Advertiser programmatic, advertiser direct, and supply side revenue all delivered double-digit year-over-year growth. Our core revenue growth continues to be driven by our product success in fast-growing sectors such as programmatic, social, and CTV, and a global expansion strategy that's winning large enterprise clients in a growing number of international markets. We've had a great year so far. Revenue in the first nine months of 2021 grew 37% year over year. Adjusted EBITDA grew 52% year over year. We were not impacted by Apple's app tracking transparency changes because our measurement and pre-bid targeting solutions do not rely on cookies or individual identifiers. Additionally, because we verify, target, and measure nearly everywhere that digital ad dollars are spent, we are largely insulated from platform-specific supply and demand fluctuations. Our fixed fee solutions follow the spend. In addition to generating strong core revenue growth, we are focused on investing in long-term strategic initiatives that expand our product leadership and deepen our coverage in fast-growing sectors. In doing so, we not only increase our potential TAM and create broader upsell opportunities with current clients, but we also further enhance our ability to optimize their advertising outcomes. On that front, we're excited to announce our second strategic investment of the year, the acquisition of OpenSlate, having just completed our acquisition of Metrix in the third quarter. I'd like to spend a few minutes on how both of these transactions enhance DV's customer value proposition and cement our market leadership. Acquiring OpenSlate will help us drive better outcomes for advertisers by providing pre-campaign targeting and brand suitability solutions that integrate with our measurement tools and increase our total coverage across key CTV and social platforms. OpenSlate's pre-campaign solutions perfectly complement DV's post-campaign measurement capabilities on CTV and social platforms such as YouTube, Facebook, and TikTok. Integrating the two provides advertisers with unparalleled end-to-end brand safety, suitability, and contextual optimization. No other company will be able to deliver a fully owned and integrated solution across these leading social and CTV walled gardens. We've seen the power of integrating pre-bid and post-bid solutions on the open internet with the success of DV's programmatic tools, including authentic brand suitability. The efficacy in driving powerful outcomes by connecting pre-bid and post-bid capabilities has driven stickier client relationships and expanded our revenue opportunities. Today, nearly all of our top 100 customers use DV for both pre-bid programmatic targeting and post-bid quality measurement for their media buys on the open internet. And half of our total revenue now comes from our pre-bid solutions. We expect the acquisition of OpenSlate will help expand our existing social and CTV coverage and customer base. OpenSlate has the most sophisticated contextual targeting technology and the widest coverage across YouTube and TikTok in the industry. TV has achieved exponential growth in social and CTV revenue since 2018 with our post-bid measurement solutions. Our YouTube revenues have increased more than six-fold, while our Facebook revenues have increased five-fold over the last four years. YouTube and Facebook are expected to represent nearly 15% of our total 2021 revenue on a combined basis. Adding pre-campaign targeting via OpenSlate only increases our revenue growth potential from these and other fast-growing CTV and social platforms. OpenSlate has won the trust of the leading agency holding companies and over 200 large global brands, including Procter & Gamble, Coca-Cola, Kimberly Clark, Nestle, Sony, Unilever, and Volkswagen. We see significant revenue opportunities to cross-sell OpenSlate and DV's solutions across our combined customer base, offering advertisers a unique integrated solution that drives better advertising outcomes. OpenSlate also aligns with DV's core value of providing unbiased, objective, third-party measurement that is independent of the media transaction. Additionally, Neither company relies on persistent tracking technologies such as third-party cookies or mobile device IDs like Apple's IDFA. These shared principles, market-leading technology, and deep social and CTV coverage make OpenSlate a strong strategic fit for DV. We're excited to unlock meaningful new growth opportunities that will be created by bringing businesses together. Our other recent strategic investment was the acquisition of Metrix, a leading European ad verification company. Metrix provides double verify with a strong operating platform and experienced sales, product, and engineering teams, as well as the opportunity to scale existing customer relationships through access to DV's global capabilities. Global revenue growth continues to be a focus for DV as we see ample opportunities for the market share expansion outside of the Americas. As we continue to execute our global expansion strategy, we grew third-quartier media revenues by 44% year-over-year and APAC revenues by 96% year-over-year. In the third quarter, we won the global business mandates of key European advertisers, including Burberry, Patek Philippe, and HRA Pharma, as we continue to see our investments in international markets deliver results. Other key expansions and new logo wins include Facebook, now known as Meta, Sony Japan, Disney Studios, TJX, American Family Insurance, Dropbox, Afterpay, ANZ, and Peloton Global. This exceptional number of Q3 deals further position us for growth in 2022. The addressable market for DV solutions remains significant, and approximately 64% of the new enterprise logos that we've won in Q3 were Greenfields. Direct revenue outside of the Americas grew 60% year-over-year in the third quarter, representing approximately 25% of direct revenue and exemplifying the expanding opportunity for our solutions in markets around the globe. The market penetration of our social solutions remained a highlight for DV in the third quarter as we grew social volume by 83% year-over-year. A recent milestone in our social coverage was the launch of our partnership with TikTok, to measure viewability, fraud, and NGO impressions across the TikTok platform. This development, combined with the new solutions we gained through the acquisition of OpenSlate, will position DV as the only company to offer brand safety controls and comprehensive quality measurement coverage across TikTok. We believe there is significant growth potential for our solutions as advertisers continue to invest in the TikTok platform, Turning to CTV, our products continue to gain traction in one of the fastest growing segments of the advertising market. Double Verify grew third quarter CTV volumes by 41% year over year, driven by DV Video Complete, which remains the only solution that allows brands to effectively block brand suitability and fraud violations on CTV. DV remains the most MRC accredited verification platform for CTV. As the cost per advertising impression remains high on CTV compared to other formats, it's increasingly attracting fraud, a challenge to the industry and an area where we are committed to addressing. In August, our Fraud Lab uncovered a neutralized smoke screen, an advertising fraud scheme which caused screensavers to hijack CTV devices and generate ad impressions even when the screen was off. While DV neutralized smoke screen for our clients and partners, helping them avoid wasted investments, the scheme remains active on unprotected CTV platforms, generating up to 10 million fraudulent requests per day and costing unprotected advertisers millions of dollars per month. Switching our focus to programmatic revenue growth, authentic brand suitability, or ABS, grew 64% year-over-year, driven by its continued adoption on major buying platforms, most notably Google's DB360 and the Trade Desk. And Although still nascent, our newest programmatic pre-bid solution, DV Custom Contextual, saw a 60% sequential increase in the number of advertisers using the product since last quarter. We are encouraged by its early growth trajectory and continued adoption of platforms like the Trade Desk and Amazon. In summary, Q3 was another strong quarter for DB. Our core revenue growth continues to be driven by advertiser demand to solve the fundamental challenge of optimizing ad spend while protecting brand integrity in an increasingly complex digital ad ecosystem. Double Verify supports this imperative across the fastest growing channels, geographies, and platforms. The acquisitions of Metrix and OpenSlate will expand our ability to drive better advertising outcomes on a broader scale differentiating our platform, and making double verified solutions even more essential for our customers. We couldn't be more excited about the growth opportunities ahead. With that, I'll turn it over to Nicola.