DoubleVerify Holdings, Inc.

Greetings and welcome to the Double Verify fourth quarter and full year 2024 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. Should anyone require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dejal Engman, Senior Vice President, Investor Relations. Thank you. You may begin.

Thank you, Operator. Good afternoon and welcome to Double Verify's fourth quarter and full year 2024 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 information currently available to us, and our actual results could defer materially. For more information, please refer to the risk factors in our recent SEC filings, including our annual report of Form 10-K. In addition, our discussions 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 the slide deck posted on our website. With that, I'll turn it over to Mark.

Thanks, Basil, and good afternoon, everyone. 2024 was a year of meaningful progress in the face of significant business and market challenges. We grew total revenue by 15% year-over-year to $657 million, powered by double-digit growth across all three revenue lines. We measured a record 8.3 trillion billable media transactions, a 19% increase year-over-year, demonstrating DD's unmatched scale across every digital media environment, format, and device. We won an unprecedented number of large global enterprise customers in 2024, further cementing our position as the trusted partner for the world's biggest brands. Our 2024 win rate remained above 80% across all opportunities, with Greenfield deals, where advertisers weren't previously using third-party tools, accounting for 64% of full-year wins. Major new partnerships with P&G, Microsoft, Google, Kellogg's, Kenview, DISH, National Bank of Canada, Bosch, and BetMGM highlight DV's continued industry leadership and reinforce the accelerating adoption of our solutions worldwide. Moreover, our growth extended beyond advertisers. Supply-side revenue grew 25% year-over-year, fueled by rising demand from retail media platforms and a record influx of platform and publisher customers. This momentum helped our business remain strong and profitable, delivering a 33% adjusted EBITDA margin and $160 million in net cash from operating activities in 2024, up 33% from last year. These results highlight our ability to execute effectively while also making the strategic investments necessary to leverage our unique data assets and client engagements and involved double verify for a partner that ensures media spend is protected to one that also measures performance and optimizes the effectiveness of that spend. Despite our successes, 2024 also tested our resilience and adaptability. Throughout the year, we navigated some isolated headwinds, including scaled back ad spend from six large customers. And in Q4, one of our largest customers, facing billions of dollars of sharply escalating commodity costs, dramatically reduced its spend with DV as part of a sweeping cost reduction initiative that also impacted their other advertising and marketing partners. Although this cluster has maintained limited engagement with DV while temporarily shifting to standard native tools within each tech platform, we have completely excluded them from our 2025 guidance to provide a realistic outlook for the year ahead. These factors, combined with the absence of a post-election rebound in ad spend, resulted in a disappointing Q4 that fell short of our expectations. Beyond these isolated customer challenges, we also saw the continued shift of ad dollars from open web programmatic to proprietary platforms like social, where most of our activation solutions were unavailable until early this year. And spending in private marketplaces, PMPs, and direct programmatic guarantee deals, or PGs, also started to accelerate, temporarily limiting advertisers' ability to attach DB solutions to every transaction. But let's be clear. These challenges do not define DB's long-term future. In fact, they have sharpened our strategy and fueled our drive for diversified growth and product innovation. We've taken decisive action to address these market shifts and will continue to do so. Our investments in pre-bid solutions across Meta and TikTok will position us for future social growth as dollars shift into proprietary platforms. Our recent launch of self-side curation and decisioning solutions on major SSPs will drive higher attach rates of DD data to PMP and PG deals, aligning with the evolution of the programmatic ecosystem. And with strategic acquisitions like DD SideBids and the newly acquired RockerVox, We're expanding further into performance measurement and optimization, unlocking an entirely new TAM of mid-market customers and lower funnel of direct response ad budgets. At the same time, we're accelerating revenue diversification by continuing to add large new customers. In 2024, we grew the number of customers generating over $200,000 of revenue to 331, up from 290 in 2023. We are executing with focus, adapting with speed, and positioning DB for long-term success. With these actions in motion and with less macro variability than we saw around the elections late in 2024, we are entering the year with confidence, ready to drive continued growth. These tactical moves are part of a larger strategic evolution to leverage DB's unmatched data scale, relentless innovation, and extensive client engagement to turn challenges into catalysts for future growth. Our vision is simple but powerful, to unify media quality, optimization, and performance measurement into a single platform to help advertisers maximize the effectiveness of every ad dollar. In a market increasingly driven by demands for efficiency and accountability, Doobie delivers the tools advertisers need to make every impression more impactful. Media quality has always been foundational to performance. It separates inventory with the potential to perform from inventory that never will. With our unique scale core data asset of essential signals like fraud prevention, brand suitability, viewability, attention, and context, DV gives advertisers the critical insights they need to invest with confidence. With the addition of Sybiz AI, we take campaign optimization to the next level, leveraging these and other data signals to drive advertiser KPIs more effectively than standard bidding algorithms can. Like the Sybiz acquisition, the pending acquisition of Rockerbox, a leader in marketing attribution and performance measurement, marks another important step forward for DV. By integrating Rockerbox's advanced attribution capabilities with DV's media quality data and Sybiz's AI optimization, we're giving advertisers a comprehensive, real-time view of media performance, enabling cross-platform adjustments for smarter spending and stronger outcomes. And it continues DV's legacy of powering media performance while remaining agnostic and independent to media channel and media investment. Expanding DV's capabilities to deliver a comprehensive end-to-end performance measurement solution meaningfully expands DV's total addressable market, unlocking access to mid-sized performance advertisers and direct response budgets. While Rockerbox's current client roster, which includes household names like Staples, Lowe's, Hotels, and Weight Watchers, has minimal overlap with DV's existing customers, around 200 of their target customers already partner with DV, This alignment opens the door for meaningful cross-sell opportunities and long-term revenue synergies, further enhancing the value we deliver to our customers. Driving media ROI is critical, and performance measurement is essential for all advertisers. By integrating Rockerbox's cross-channel attribution, DV's media quality analytics, and Cyber's AI-driven optimization, we're transforming fragmented marketing data into a unified, actionable intelligence platform. We've already seen a great example of this dynamic in action, with a direct-to-consumer brand that was using several of DV's media quality solutions and had also employed rocker blocks to track media spend performance. Their key conversion KPI was the cost of customer sign-ups for membership, and their goal was clear, reduce CPA. With DD SideBids optimization, the brand was able to optimize their bidding strategies, leveraging the CPA data measured in Rockerbox, integrating these real-time performance insights to dynamically adjust their bidding algorithms. The results were immediate, a nearly 40% reduction in CPA within the first eight weeks, followed by an additional 20% decrease in weeks 9 through 12. This is the power of a fully integrated performance measurement and optimization engine. delivering measurable business results at scale. The success highlights a larger shift in the industry. Advertisers need a unified data-driven approach to navigate an increasingly complex digital landscape. Together, we will provide advertisers with a single integrated solution to measure, optimize, and drive real business outcomes with greater efficiency in an increasingly complex digital landscape. To explore the future of measurement and data-driven innovation at DV and to highlight the role of Rockerbox cross-platform performance and measurement capabilities, DV's executive team, along with industry experts, will host an in-person innovation day for the investment community on Wednesday, June 11th from 1 p.m. to 4 p.m. at the New York Stock Exchange in New York City. The event will also be broadcast live. Now, Let's take a few minutes to dive into how we're evolving DD's strategic vision to drive long-term growth across social media, the open web, and CTV. Social media accounts for over 60% of digital ad spend, excluding search. Yet today, DV measures only about 5% of all U.S. social impressions, highlighting a massive growth opportunity. In 2024, we grew our social media measurement revenue by 27%, making it a nearly $110 million business for DV. That's more than double the $45 million it generated just three years ago in 2021, a testament to our relentless focus on expanding social media product and language coverage. A key part of ensuring continued future growth in social is expanding DV's value proposition from solely post-bid measurement to pre-bid activation, helping advertisers optimize their media investments before they are made. I'm thrilled to announce the launch of our content level avoidance solution for Meta's Facebook and Instagram feeds and reels, powered by DV's universal content intelligence, AI. This game-changing innovation ensures advertisers can proactively avoid unsuitable content while continuing to drive superior media performance. In partnership with Meta, we're delivering this solution at an incredible scale. What's more, by seamlessly integrating our content level avoidance controls with post-bid measurement tools, we've created a closed-loop system that ensures every ad delivers maximum impact. In addition, We've rolled out 30 new content-level avoidance categories, giving advertisers unprecedented control and precision in their campaigns across Facebook and Instagram feeds and reels. Similarly, we've launched TikTok's video exclusion list solution, powered by DV, and expanded alpha testing, empowering advertisers to proactively exclude videos flagged as unsuitable through our reporting, further strengthening our pre-bid coverage across social media. We've seen solid initial interest in both activation solutions with nearly 200 customers in our meta pipeline and several already launched and live in the weeks since the solution has been made available. Rockerbox will also play a role as we continue to grow our overall value proposition in social. By linking social performance and conversion data from Rockerbox with DV media quality data and optimizing against both via Sybiz, Advertisers will be able to eliminate waste, drive better engagement, and higher ROI, all while ensuring their ads appear in safe, high-quality environments. As we redefine how advertisers drive performance in social media, we remain as committed as ever to expanding our measurement coverage across key social media platforms with enhanced viewability and invalid traffic detection for display ads on Facebook Reels. On TikTok, we extended our brand safety solutions to 18 new international markets and introduced advanced vertical sensitivities tailored to local market needs. Finally, we recently expanded our viewability and brand safety coverage across additional formats on YouTube as well. Now, turning to the open web, the largest driver of DB's revenue across both activation and measurement, our performance solutions are already delivering strong results, even as they scale from relatively small base. In activation, DV side bids revenue grew over 50% year-over-year, surpassing the top end of our expectations. Since acquiring side bids in August of 2023, we've successfully upsold the solution to 79 DV customers, and 40 of our top 100 clients have started to use side bids AI to optimize their campaigns. On the measurement front, DV authentic attention continued its strong momentum, growing nearly 190% year-over-year. As I mentioned earlier, as advertisers increasingly shift their open web spend to PMPs and programmatic direct deals, we're leaning into this opportunity by deploying DV's activation solutions across numerous sell-side platforms. eMarketer projects U.S. programmatic display ad spending to grow just 4% for the open exchange, but over 30% for PMPs and programmatic direct deals between 2024 and 2026. We always drive to ensure DV data can be employed wherever and however advertisers focus their spend. So as advertisers increasingly prioritize curated inventory, they're turning to DV to help them achieve greater control, transparency, and performance. By leveraging our trusted brand safety, contextual viewability, and fraud data, DV delivers optimized inventory that powers smarter, more effective media investments through curated deals on the advertisers' preferred platforms. To that end, I'm excited to share that we launched an integration with Google Ad Manager, allowing programmatic buyers to seamlessly access DD's media quality data through curated inventory packages. This integration allows advertisers to source inventory that meets critical benchmarks for context, brand safety, and viewability, all while driving better performance at scale. By connecting directly with Google Ad Manager, we're making it easier than ever for advertisers to ensure their campaigns are optimized for safety and effectiveness, empowering them to achieve stronger results across the programmatic ecosystem. This is in addition to other self-led integrations we recently announced, including new solutions with Index Exchange and Criteo. Turning to CTV, our strategic vision is helping fill one of the most exciting growth opportunities in digital media. In 2024, we delivered impressive results in CTV, with measurement impression volumes growing 66% for the full year and 95% in the fourth quarter alone. This momentum drove a significant milestone. CTV accounted for 11% of DV's total measurement impression volume in 2024, more than doubling its 5% share in 2023. Our growing CTV base creates a significant future monetization opportunity for DV as we develop deeper content level contextual insights and stronger connectivity to outcomes data that drive performance. Turning to retail media networks, our supply side retail media solution grew 36% year-over-year in 2024, contributing to our overall supply side growth rate of 25% year-over-year. Led by our partnerships with the leading retail media platforms, our global reach and connectivity in retail media continues to expand. DV's measurement tags are now accepted on 124 key global retail media networks and sites, including 16 top retail media platforms and 108 major retailers, with close to half supporting DV measurement on their owned and operated properties. More broadly, on the supply side, we secured over a dozen new platform and publisher deals in Q4, including names like Newsweek and Ozone, underscoring the continued opportunity for DV to support leading open web publishers. As we wrap up, it's clear Double Verify continues to make meaningful progress to address our challenges while we lay the foundation for future growth. Looking ahead, our opportunity remains vast. We already work with nearly half of the world's top 1,000 advertisers, yet our revenue contribution represents less than half a percent of their total media spend, demonstrating the significant runway for growth within our existing customer base. Beyond that, we continue to expand and diversify our reach, evolving our solution set to power performance measurement, outcomes optimization, and attribution, while strengthening our presence with mid-market and direct response advertisers. With a strong and profitable core, an expanding customer base, and an unmatched commitment to quality innovation, DD is well-positioned to capture the opportunities ahead. With that, let me turn the call over to Nicola.