DoubleVerify Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
July 31, 2023

There are 12 speakers on the call.

Operator

Greetings, and welcome to the DoubleVerify Second Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Tazal Engman, Senior Vice President of Investor Relations.

Operator

Thank you. You may begin.

Speaker 1

Good afternoon, and welcome to Double Verify's Q2 2023 earnings conference call. With us today are Mark Zugorski, 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 Form 10 Q and our Annual Report on Form 10 ks. 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.

Speaker 1

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.

Speaker 2

Thanks, Sejal, and thank you all for joining us today. I'm excited to discuss our Q2 results and to share the significant progress we've made across multiple fronts From product innovation and channel expansion to new enterprise logo wins and international growth as DV continues to fire on all cylinders. In addition, I'd like to discuss our pending acquisition of Sibids, a global leader in AI powered digital campaign optimization. Sibid's AI makes DV data more impactful and accelerates our evolution from protection to performance. This transformative acquisition Combines our media quality and performance data with Sibids AI powered real time optimization algorithms to drive superior ad KPIs and tangible business outcomes for advertisers.

Speaker 2

Sibids will help make our sizable and successful activation business bigger and even more essential for marketers and significantly differentiate our programmatic offering in the marketplace. But first, let's talk about the quarter. We grew 2nd quarter revenue by 22% to nearly $134,000,000 above the midpoint of our guidance range. We achieved 2nd quarter adjusted EBITDA of $40,000,000 representing 30% adjusted EBITDA margins and exceeding the top end of our guidance range. Revenue in the 1st 6 months of 2023 grew 24% against an elevated 43% prior year growth rate.

Speaker 2

The key drivers of our first half twenty twenty three revenue growth including continued strong adoption and expansion of our ABS product, increased social platform coverage and volume, and a growing number of international wins with key global customers. TV remained highly profitable and continue to generate Strong cash flow from operations. We delivered approximately $25,000,000 of net income and generated over $32,000,000 of net cash from operations in the first half of twenty twenty three. Our customer win and expansion momentum continued in the second quarter. We won several large new enterprise logos, including Uber Brand Marketing, Sam's Club, Pizza Hut, Revlon, Liberty Mutual and Bose in the United States, Lululemon and UNICEF in EMEA, Spotify and MENAT and the Ministry of Foreign Affairs in Japan notable existing customer expansions include De Beers activating DV measurement data across multiple international markets Swarovski, activating DV's measurement and prescreen social solutions in Japan and Avis adopting ABS in the United States.

Speaker 2

Our win rate across all opportunities remained above 80% with 54% of our 2nd quarter wins being greenfield, which we define as wins where the advertiser wasn't using third party tools for the business at DD1. The high growth rate of greenfield wins speaks to the underpenetrated TAM that continues to fuel DV's growth. We expect new client wins to propel our successful land and expand strategy through which we grew the number of advertiser customers generating more than $200,000 over the last 12 months by 20% year over year. In addition to generating strong core revenue growth, we remain focused on investing in long term strategic initiatives that leverage our core verification offering to evolve our customer value proposition from protecting media spend to optimizing media performance. Our verification business continues to create a proprietary data asset of unparalleled scale and granularity.

Speaker 2

DV analyzes approximately 300,000,000,000 data transactions, including 60 years of video content on a daily basis. Our investments in performance solutions have leveraged this vast data asset to create measurement products such as DV Authentic Attention as well as Prebid programmatic tools such as ABS that are based on aggregated measurement data and contextual intelligence. The acquisition of Sibids represents the latest and potentially most impactful of these evolutionary investments to unlock even greater value and these proprietary data assets. Scibids is a cutting edge Paris based startup founded by a team of data science PhDs and machine learning engineers who are driven to bring programmatic advertising into the AI age. Sibids builds independent AI that automates and optimizes programmatic buying of digital ad campaigns agnostically across demand side platforms.

Speaker 2

Their AI dynamically generates Custom bidding algorithms aligned with client KPIs and desired outcomes. SciBid's powerful and sophisticated machine learning technology Can dynamically action DV's granular measurement data within a programmatic ad campaign. DV and Sibid's combined customer value proposition is to deliver industry leading campaign performance based on bespoke ad KPIs or business outcomes by offering continuous feedback loop between activation, measurement and optimization. This loop is powered by Saibid's AI technology and DV's trusted media quality and performance data that is comprehensive, granular, now actionable in real time. For example, Sibids can dynamically optimize advertiser campaign performance against customizable KPIs and desire business outcomes using dd's authentic attention measurement data.

Speaker 2

The algorithmic bidding function that Sibids builds can deliver results that far outstrip static programmatic segments, ushering in a new era for results driven advertisers. In addition to dd's proprietary data, Sibid is able to ingest a wide range of data points, including first party data, 3rd party contextual data, alternative media quality and performance measurement data, programmatic bid stream data and pricing data, all to help inform advertisers' programmatic strategies in a way that maximizes campaign performance. This means that even if an advertiser is not a DV measurement customer, we can still help them deliver powerful results from their programmatic spend. And that ad spend can be across any of the major DSPs where Sibids complements their platforms and has seamless integrations, including The Trade Desk, Google's DV360, Microsoft Xandr, Comcast Beeswax and the mobile platform Kaizen. We've seen the power of Sibid's AI technology firsthand.

Speaker 2

In partnership with Sibid, we recently launched the DD algorithmic optimizer, Where Saibid's AI ingests impression level DD authentic attention data and campaign cost data, enabling advertisers In the results of the initial tests, on average, we observed a 45% reduction in media CPMs, a 63% increase in attention levels and a 95% increase in Impressions 1. The SiBids acquisition also has the potential to enhance and differentiate dd's measurement business. Not only will our existing measurement data Significantly more actionable and impactful in programmatic activation applications, but Sibed's AI will also help enhance And effectiveness of measurement datasets such as authentic attention. By weighting attention signals Against conversions and other ROI measures, DV can construct customized measurement metrics based on specific KPIs and or verticals. Simply put, the results of algorithmic optimization and activation applications will help enhance The construction of a truly differentiated measurement dataset.

Speaker 2

CIBED shares dd's values of transparency, independence And innovation. Both companies are ad server and DSP agnostic and do not buy or sell media. Both companies' solutions are privacy forward and don't use persistent tracking technologies such as third party cookies or Apple's IDFA. And both companies have a legacy of leaning into machine learning based AI. Scibids will bring nearly 20 data scientists and engineers to DV, which will augment and accelerate our existing machine learning programs with critical AI talent that is difficult to source.

Speaker 2

To demonstrate the power of Sibids AI and explore the future of AI driven innovation at DV, Sibids and DV's executive leadership teams, Along with industry experts, we'll be hosting an in person Innovation Day for the investment community on Thursday, September 14, from 1 p. M. To 4 p. M. At The Standard Hotel in New York City.

Speaker 2

The event will also be webcast live. As you can tell, we're pretty excited about the opportunity SideBiz creates to help our customers harness the power of their DV data to optimize and maximize campaign performance. Acquiring this AI powered technology allows us to meaningful elevate our customer value proposition across activation and measurement, while also increasing our potential TAM with performance driven advertisers, creating broader upsell opportunities for current and new customers. I'd like to turn now to the key growth milestones we achieved since our last earnings call. I will discuss these in the context of our 3 core differentiators.

Speaker 2

Our rapidly growing scale, our focus on market defining innovation and the deep level of trust that we've built with our customers as an unbiased independent partner. Starting with our expanding coverage scale, we continue to grow our measurement breadth across key social platforms with a focus on short form video, which has a steep growth trajectory and an impressive ad load that offers a unique opportunity for advertisers and DV. HubSpot's State of Marketing 2023 study expects short form video to see the most growth of All marketing strategies this year as 1 in 5 marketers plan to leverage short form video for the first time in 2023. To that end, we are excited to expand our viewability offering on Meta to include measurement on Facebook and Instagram Reels, a rapidly growing short form video environment with a highly engaged user base. With reels plays exceeding 200,000,000,000 per day Across Facebook and Instagram, Reels is sought after by advertisers who can now leverage dd's viewability and fraud measurement technology for insights into which of their ads are being seen by real users and driving results for their campaigns.

Speaker 2

We're also excited to announce the expansion of our quality solution on YouTube to enable measurement on YouTube Shorts. DV's launch of viewability and fraud measurement Across YouTube Shorts inventory, we hope advertisers ensure that their ads are viewable and safe from fraud, thereby providing performance insights across a greater volume ad impressions on YouTube. To conclude on short form video, we continue to build momentum with TikTok, which contributed nearly a third of our social measurement revenue growth in the Q2 as customers rapidly activated the DV Authentic ad. We generated more TikTok revenue in the Q2 than we did in full year 2022 and TikTok remained our 3rd largest social revenue generator after Meta and YouTube. International markets fueled a good deal of our TikTok growth where we continue to focus Our language coverage and plan to be live with brand safety and suitability in 25 additional markets in the second half of the year.

Speaker 2

Overall, we grew social measurement volume by 41% year over year in the Q2. Our social revenue growth in dollar terms Continues to be led by advertisers leveraging our solutions on Meta, which generates almost half of our social measurement revenue. In addition to offering a greater breadth of verification coverage across its platform with reels, Meta remains committed to providing advertisers with a deeper level of Transparency through brand suitability controls and verification. We continue to engage Meta on brand suitability and verification and measurement solutions and look forward to rolling out an expanded DD authentic ad in the coming months. Turning to CTV scale, We grew CTV measurement volumes by 32% in the 2nd quarter, outpacing the 14% CTV revenue growth rate expected of the industry in 2023 according to IAB Research.

Speaker 2

And since we launched viewability verification and fraud protection coverage on Netflix As supported plan in March, we've seen 4 consecutive months of growth, both in the number of advertising using our solution and impression volumes. We expect long term growth as Netflix continues to innovate its advertiser offerings. In addition, We continue to scale across retail media networks, which generated 81% year over year revenue growth in the 2nd quarter, with revenue contribution across all three business lines. Our measurement tags are accepted on over 50 of the key global retail media networks and sites, including 12 of the top retail media platforms and 39 major retailers. Moreover, our partnerships are global With dd's measurement coverage of retail media spanning all major geographies, including the U.

Speaker 2

S, EMEA and APAC with international partners such as Sainsbury's, Citrus Ad and Zitcha working with DV for verification. Staying with scale across ad networks, we were excited to share the news last week of a new partnership with Uber's advertising platform to help advertisers verify their media spend and maximize campaign performance across the Uber Journeys ads format in the United States. Uber's mobility and ad inventory represents a new source of measurement impressions for DV across an ad network with growing scale and unique first party data. We look forward to bringing Uber's advertisers a higher level of trust and transparency as we broaden our quality coverage across another major tech platform. In addition to the supply side partnership, we are also excited to announce that we have added Uber to our roster of NASDAQ 100 Advertisers, which include the likes of Amazon, Meta, Airbnb and Adobe.

Speaker 2

Uber Brand Marketing selected DV as its exclusive measurement partner for its own media spend globally across all lines of business and geographies. This is another great example of the network effect between our platform and advertiser business. DV is uniquely positioned to be embedded in the world's largest advertising platforms as a as a verification partner and to be selected by the brands that power these platforms, including Amazon, Meta, Adobe and now Uber to verify and protect their own advertising spend. Shifting gears to scale through international business expansion, We've continued to grow our commercial footprint to 27 locations through the launch of business operations in Indonesia, the Philippines, Vietnam And 3 more locations in Europe. We grew international measurement revenue by 39% year over year in the second quarter with EMEA growing 33% and APAC delivering 50% growth.

Speaker 2

International growth has strongly rebounded as advertisers activate DV social solutions across more markets as we expand platform coverage and roll out additional language capabilities. Turning to innovation, we launched 2 new programmatic attention optimization solutions in the 2nd quarter. I touched on DV algorithmic optimizer, a product recently developed with Cybiz that puts DV clients at the forefront of using AI Power attention based bidding. We also launched the DV Universal Attention segment, which is a pre bid programmatic segment powered by best in class machine learning and data from DD Authentic Attention. In CTV, We found that attention measurement for CTV was the single most requested attention solution for advertisers.

Speaker 2

So we joined forces with TVision to develop a solution that will combine DV's scalable ad exposure data, including viewable time and fully on screen measurement With TVision's viewer presence and eyes on screen ad attention signals that will deliver the most holistic attention measurement solution for advertisers looking to gauge their performance on CTV. To conclude on the differentiated pillar of trust, We are pleased to be expanding our partnership with Roku as we work jointly to investigate and mitigate emerging ad fraud schemes in CTV, Following our successful neutralization of smokescreen, a sophisticated ad fraud scheme that targeted CTV devices, siphoning over $6,000,000 monthly from unprotected advertisers and publishers. In addition, DD's viewability and programmatic analytics are integrated with Roku's OneView platform with a plan to expand DD's quality and performance offerings in the coming months. Finally, we continue to demonstrate our commitment to providing identity independent, privacy forward, secure tools By completing several annual privacy focused third party attestations conducted by TrustArc and further expanding their scope to cover the full enterprise. These include TrustArc's international privacy verification and the APEC CBPR and APEC PRP certifications.

Speaker 2

We remain the only company in the ad measurement and verification space to In addition, we have successfully achieved SOC 2 Type 2 Compliance and have been issued a report with no qualified opinion for the 4th consecutive year, Cementing DV as the leader when it comes to global data privacy compliance, data protection and information security, which is the foundation of trust upon which we've built our market leading technology. To conclude, we are successfully building on our Core differentiators of scale, innovation and trust and strategically positioning DV for industry leadership and market share growth for years to come. Our strategic investment in AI powered campaign optimization technology like Sibid's AI is expected to unlock new growth for our activation and our measurement business as we continue to create dynamic market leading solutions that drive real outcomes for our customers. We continue to expand coverage across social to provide advertisers with verification everywhere and for every ad impression. And we remain laser focused on growing and realizing our solid pipeline of new and expansionary deals that will create an even stronger long term growth trajectory for dd.

Speaker 2

With that, let me hand the call over to Nicola.

Speaker 3

Thank you, Mark, and good afternoon, everyone. We delivered strong revenue growth and strong profitability in the second quarter and the first half of the year in the face of elevated prior year growth rates. The business performed broadly in line with our 2nd quarter expectations. Revenue came in slightly above the midpoint of our guidance range, while adjusted EBITDA exceeded the top end. 2nd quarter revenue growth of 22% was driven by 29% growth in activation revenue, 16% growth in measurement revenue and 4% growth in supply side revenue.

Speaker 3

Advertiser revenue, which includes activation and measurement, grew 24% year over year and continued to be volume led. 2nd quarter volumes or MTMs were up 24% year over year, while price or MTF was unchanged. The price impact of the continued mix shift towards premium priced solutions and the ABS price bifurcation that was implemented this year Was offset by strong revenue growth in international, where our fixed fees are lower than in the U. S. Commensurate with media costs being lower in international markets.

Speaker 3

Additionally, the price bifurcation of our standard programmatic products last year contributed to 10% MTF growth in Q2 2022, creating a substantial prior year comparison. Activation revenue was led by ABS, our premium price solution, which delivered 51% revenue growth in the quarter and comprised 56% of activation revenue compared to 48% in the prior year period. ABS volumes were up 48% and the product fixed fee was 2% higher. ABS' growth was largely driven by existing ABS users continuing to expand their ABS usage with new advertiser activations also contributing to the growth. Turning to measurements, revenue grew 16% driven by 41% growth in social volumes with nearly half of our social revenue growth coming from markets across EMEA and APAC.

Speaker 3

Overall, international measurement revenue grew 39% as compared to 18% in the Q2 of last year, primarily driven by existing customers expanding their use of DV's solution on social platforms. International represented 27% of total measurement revenue in the 2nd quarter. We expect measurement growth to continue to be driven by existing customer expansion on social as we roll out the DV Authentic ad on meta reels and YouTube Shorts and expand language coverage on TikTok. We expect non social measurement growth to be mainly driven by new enterprise logo wins and therefore subject to the timing of when new customers sign, onboard and ramp their ad campaigns. Supply side revenue grew 4%.

Speaker 3

The majority of our supply side revenues generated by platforms, which include SSPs, DSPs, marketplaces, Ad exchanges and retail media networks. DV's successful platform offering is well penetrated across the ad tech ecosystem and we expect incremental revenue growth to come from the adoption of new product offerings such as DV's brand safety floor By existing platform customers as well as new wins such as Outbrain, we signed a multi year contract for brand safety and fraud avoidance in the 2nd quarter. Shifting to expenses, cost of revenue increased by approximately $7,000,000 primarily due to an increase in costs from revenue sharing arrangements with programmatic partners tied to higher programmatic revenue as well as an increase in cloud services costs. Revenue less cost of sales was 80% in the first half and is expected to remain relatively stable for the remainder of the year as we continue to invest in scaling the infrastructure needed to support our growth. Similar to the Q1, Product development expenses increased due to our ongoing investments in AI and machine learning engineering resources.

Speaker 3

Sales and marketing expenses increased as we launched business operations in several international markets, executing on the international business expansion plans we discussed last quarter. G and A expenses declined year over year due to lower compensation and insurance expense Despite a $1,500,000 increase in bad debt expense, primarily related to a reserve for the MediaMath bankruptcy. We continue to expect both sales and marketing and G and A to benefit from our growing scale. Total non GAAP operating expenses, which excludes stock based compensation and other items for comparability, grew 18% compared to our top line growth of 22%, reflecting the efficiency of our operating model as we scale. We achieved 2nd quarter adjusted EBITDA of $40,000,000 and adjusted EBITDA margins of 30%, partially due to G and A savings and a pace of hiring that was slightly slower than planned.

Speaker 3

We delivered approximately $13,000,000 of net income as compared to $10,000,000 in the prior year. Net operating cash flow was $32,000,000 in the first half of the year as compared to $27,000,000 in the first half of last year. Capital expenditure was approximately $8,000,000 in the first half of the year as compared to $14,000,000 in the first half of last year, which included the expansion of our global headquarters. We ended the quarter with approximately $295,000,000 in cash on hand. Turning to guidance, we expect 3rd quarter revenue in the range of $135,000,000 to $141,000,000 which at the midpoint implies growth of 23% year over year.

Speaker 3

We expect 3rd quarter adjusted EBITDA in the range of $39,000,000 to $41,000,000 which at the midpoint implies an EBITDA margin of 29%. For the Q3, we expect Stock based compensation to range between $15,000,000 $17,000,000 and weighted average diluted shares outstanding to range between 1 100 and 73,000,000 and 175,000,000 shares. Following a second quarter top line performance that was broadly in line with our expectations And accounting for some friction as a few of our large advertisers transition to new DSPs, we are reiterating our Full year 2023 revenue guidance range of $557,000,000 to $569,000,000 A year over year increase of 24% at the midpoint. We're also reiterating our adjusted EBITDA guidance $171,000,000 to $179,000,000 which continues to represent an adjusted EBITDA margin of 31% at the midpoint. Turning to Sibids, we have agreed to acquire this industry leading AI technology for $125,000,000 with a mix of cash and equity.

Speaker 3

Approximately $66,000,000 of the purchase price is expected to be paid in cash, which we will fund with cash on hand, and the remaining consideration will be paid in DV common stock. The deal is subject to customary adjustments and with potential additional consideration to be paid based on Saibid's achievement of certain performance milestones by year end 2023. While we're not providing 2024 guidance today, we expect Sibase to generate between $15,000,000 to $17,000,000 in 2024 based on a 30% to 40% year over year growth rate. The company is near breakeven today and we see the opportunity to scale Sibid's product across our customer base. We plan to enhance Siobid's platform and value proposition through investments in people, software, processes and systems and by building scalable data integrations between our 2 companies.

Speaker 3

We anticipate completing the transaction by the end of the Q3 and plan on updating 2023 guidance to reflect the impact of Cybex after the transaction has closed. To conclude, we delivered a strong first half and remain focused on successfully executing against our plan for the rest of the year. And with that, we will open the line for questions. Operator, please go ahead.

Operator

Thank you. We will now be conducting a question and answer Thank you. Our first question is from Michael Graham with Canaccord. Please proceed with your question. Hi, thank you and Congrats on the steady growth.

Operator

I wanted to dive into the AI topic and side bits for a minute. And Mark, you mentioned in the past that the interplay between measurement and activation is A key multiplier for your business. Can you just talk first about like how does Cybiz fit into your business model, should we think of it as another product like authentic attention that advertisers can use or is it going to be more integrated into your product roadmap? And then Just talk about more broadly how do you think it impacts your long term product roadmap?

Speaker 2

Yes. Thanks for the question, Michael. And it's as As you can tell by the call, we are really excited about this acquisition. I think the short answer is both. It is a separate product for us that we'll be able to leverage in Activation applications using our data for advertisers, as well as it has the ability to enhance, our entire product set By using some of the outputs of the learnings from the activation implementations to enhance our measurement I'd like to think of it as having to have 3 main buckets of impact on the business.

Speaker 2

The most obvious one is kind of on the revenue side, Great. On its own, it's a product that we'll be selling in conjunction with them and deliver to our data. But also, it's going to help us as a differentiated product set to sell enterprise customers, because the second bucket is really it's a huge differentiator for us. No other company in our space has a product like it, and it really sets apart our bundle of goods or basket of goods that we'll be able to sell folks. So It will drive revenue, it's a differentiator.

Speaker 2

And I think finally, it opens up new markets For us, we get a question a lot, how do you guys deal with, for example, performance based advertisers or Doctor folks. This really speaks to them because it is an activation tool set that can leverage our data, but do so against specific KPIs and those KPIs can be things like acquisitions or new customers, things like that. So I think it really hits those three marks, which is revenue, differentiation and kind of new market expansion. I like to think of it almost As a future ABS on steroids, right, it really has the ability to kind of drive optimization in a really unique way. Okay.

Operator

Thanks a lot for the extra color there, Mark.

Speaker 2

Got it.

Operator

Thank you. Our next question is from Matt Swanson with RBC Capital Markets, please proceed with your question.

Speaker 4

Yes. Thanks guys for taking the question. For Nikolay, you've got a history of being very pragmatic around guidance.

Operator

Could you just kind of talk

Speaker 4

to us about how you're thinking about the macro environment for the rest of And then maybe just given the durability of your volume based model, could you maybe help us think about how Potentially a better spending environment shows up in that MTM, MTF equation.

Speaker 3

Yes. I'll take the question, Matt. So as we've said since the beginning of the year, I think from our perspective, the macro to us It's something that is not providing strong tailwinds this year. We've taken sort of a conservative view And sort of a limited outlook view, right. So we're kind of looking at it on a quarter by quarter basis based on what we're to see the spending patterns of our advertisers.

Speaker 3

So we're not seeing it as a strong tailwind. This is certainly not something that we put into our Guidance consideration for the second half of the year. If there were improvements, I think what you would see is an NTM growth number that would be Above what we've able to achieve in Q2, which was still 24% growth in MTMs. So I think what you would see is an increase in the MTM part of our The MTF is actually a good story. It was unchanged this quarter just because our international growth is very strong And that has an impact on MTF, because the price of media outside of the U.

Speaker 3

S. Is obviously lower than in the U. S. But when you see a 39% growth in the rest of the world on the measurement side of the business, that's actually a positive, which has an impact on NTF of keeping it So if the market were to really rebound strongly, I think our assumption of no tailwinds returning to strong billings.

Speaker 4

That's really helpful. And if I could squeeze one in one for Mark. Greenfield wins still really impressive at 54%, Maybe like a slight step back than what we've seen in the last few quarters. Could you just kind of talk about the dynamics of the quarter, whether it be competitive, vertical, geo specific That led to that change or were the last few quarters of being high 60%, 70%? Was that more of the anomaly from a greenfield perspective?

Speaker 2

Yes, it's a great question, Matt. I mean, it was definitely a bit of a slide in the percentage of Kind of greenfield wins, I don't think I think it's a bit of an anomaly based on where we think the future lies, particularly around our activation business and the That being said, we still beat a lot of competitors and I think that's the good thing too. And then the one thing about being a competitive deal and this may reflect a little bit in some of the numbers we shared is that When you beat a competitor, you have to dislodge a product and it takes a bit longer to do so than just Turning somebody on from scratch, right, who's not using anything. So I think we love greenfield wins. We love competitive wins.

Speaker 2

All wins are good. Some take a bit longer to activate than others. And I'd say those are some cases the competitive wins.

Operator

Thank you. Our next question is from Laura Martin with Needham and Company. Please proceed with your question.

Speaker 5

Thank you. Okay. My first one is on attention. Mark, you're sort of been spearheading the pivot towards attention and it's been really great resonance. Love the deal with TVision because they're the other sort of leader.

Speaker 5

You guys are the tip of the spear in redefining attention. My question is, can you bring us up to date on this metric But secondly, my recollection is they're based on a panel. So I would love your thinking about why A panel plus your super high-tech is worth more than just your standalone solution to attention. That's my first.

Speaker 2

That's great. Great question, Laura. And yes, we really are pushing the boundaries on the attention definition. And I think the TVision deal is a good example of that. And The combination we've obviously had the combination of a gold star panel with the reach Granular data at scale is probably is the best solution you can put together out there.

Speaker 2

And the reason why is that panel that TVision leverages can provide us some really unique insights on behavior, particularly on the TV front, that you just can't get from a granular data set on its own. So I think it does add We baked an incredible cake and TVision adds this frosting that just makes it so much better and gives us an attention solution that really is unmatched. And I think when you combine that now with what we've been able to do or what we'll be able to do with the Cybiz And what we've already shown, we launched we announced that initial partnership with them little bit over a month ago and our initial trials on attention were really had some exceptional results. When you're looking at The number of 1 impression is increasing by over 90% with attention increasing Significantly as well. I think the combination of having a panel plus granular data solution on the metric side plus An algorithmically based optimization toolset on the activation side for attention, which no one else will have, That kind of puts us really in a very unique position around attention as we move from that whole area being accepted by the marketplace to actually being commercialized at scale.

Speaker 5

Super helpful, Mark. And then on Roku, it's all over your And my question to you is if I love Roku, great for me that you're doing all this work with them. My question to

Operator

you is if time is

Speaker 5

fixed, you charge $0.08 for measurement, $0.21 for activation. Why are you spending any time per impression, per 1,000 impressions? Why spend any time in CTV? Because for the same price, You can allocate that time to rolling out another Meta product or rolling out another TikTok product where you're getting lots of new impressions from both existing and new clients, Onshore and offshore, if you're just going to get a fixed fee, why spend any time in connected television where CPMs are $30 But there are not that many thousands. There's not that many impressions compared to social.

Speaker 5

So that's my second question. And thanks very much.

Speaker 2

It's a really interesting question, Laura. And I think the short answer is because our customers are there. And we want to create our driver has always been to measure every impression on every platform in any market anywhere Right. And CTV is part of that. And we want to have a basket of goods.

Speaker 2

So when an advertiser is spending on Roku We're spending on Meta, we're spending on the open Internet or buying programmatically that were there. So I think it's important for us to be in CTV. For sure, the volumes are very different than what you'd see, for example, in short form video, which has been a real Interesting growth area for us in areas like TikTok or Reels. For sure, the volumes are different there. However, an advertiser Says, we want DV everywhere, you need to be everywhere, and we want you across CTV.

Speaker 2

So I think It's part of this idea of having a basket of goods that covers all the bases, so that when we close an enterprise customer, an enterprise advertiser Like a Sam's Club or like an Uber and they're advertising across all these different venues, they want us there. I think it's really important.

Speaker 5

Thanks very much.

Operator

Thank you. Our next question is from Raimo Lenschow with Barclays. Please proceed with your question.

Speaker 6

Thank you. And sorry to go back to macro a little bit. If you think what you're seeing out in the world here, like There were other companies that reported this afternoon as well, where it looked like it was incrementally getting a little bit worse. Like, Can you just kind of I know you talked on the call about it, but like if you think about how you would characterize like what's going on out there, It felt like we had the trough at the beginning of the year, it got a little bit better. Is it getting a little bit worse that you kind of increased your caution?

Speaker 6

Or like How does it feel out there? Sorry, like I know you kind of tried to answer it already. I'm just trying to dig deeper. Thank you.

Speaker 3

Yes, Raimo, what I would say is, we haven't seen much of a change. I would say that what we've seen in the markets It's also the benefit of lower comps for some of these companies, which as you know, our model is Fairly steady in a good environment versus a bad environment, especially related to CPMs. So we have not seen A material change in the environment and we're taking a cautious approach towards it. The one number that we do Back is Magna and they published in June and then essentially changed their forecast for the year. So I would say those are the 2 things we're seeing, probably Some lower comps for some of the companies that are reporting and a general unchanged environment for us and our view that we'll take the tailwinds only when they really appear.

Speaker 6

Yes. Okay, perfect. And then how are you thinking about like your setup in terms of like like growth internationally was really strong. As we go further through this and people talk about soft lending, how do you think about that balance of like maintaining that high discipline around Margins and profit, which you do and well done, and also getting ready for any potential improvements in underlying business. Thank you.

Speaker 2

Yes, Raimo. I think we've been pretty clear that we've continued to invest even when the market has not been extraordinary. And I think that investment is going to pay off, whether it's our R and D expenses, which we continue to lean into to build new products, New coverage or the acquisitions that we just did, we are ready when the market tailwinds do materialize, take advantage of those. I think Even in cases where we're looking at some of the enterprise clients that we've added to our roster, their spend has been Relatively muted. I think when they're ready to start spending as well, you will be able to experience that.

Speaker 2

So Closing lots of deals now even if those deals aren't huge, and investing in our technology and spending money on acquisitions, All those things together are going to put us in a great position when that tailwind does hit.

Speaker 6

Okay, perfect. Thank you.

Operator

Thank you. Our next question is from Youssef Squali with Trim Securities. Please proceed with your questions. Excellent. Thank you so much.

Operator

So maybe one question for Mark and one for Nicolas. So Mark, Just going back to the Cybids acquisition, obviously congrats on it, but just kind of at a high level and I think you spoke about TAM expansion as a result of this, maybe can you just drill a little deeper into that how this kind of allows you to move into more kind of performance? And And if you can maybe quantify kind of the potential, Tim, and who are you also kind of competing with for this type of offering now that you're you've doubled down on AI as part of the offering. And then, Nicolas, can you maybe just Speak a little bit to your guide for the year, particularly around the second half and your expectations for growth in activation versus measurement? Thank you.

Speaker 2

Yes, some great questions, Youssef. So let me talk a little bit about You know, Saibed and what it does for business opportunities for us, with regard to expanding those opportunities, the first thing which I mentioned previously It opens up a whole new set of customers and those are customers who are really driven by Very specific performance KPIs, so direct marketers, those who are looking for who drive business based on a CPA or an acquisition based data point. A lot of those folks brand safety and suitability has been a consideration, but not an absolute, Right. So this gives us a new toolset to approach folks like that, that we can put it together A unique offering for them. So, A, it adds a whole new customer toolset new customer potential for us.

Speaker 2

The second is, if you think about what percentage of digital ad spend programmatic makes up, It's roughly 85% plus if you take search out of digital ad spend. We are still not even close to getting to that level of our business being at 85% of our revenue coming from programmatic. So I think this opens up New opportunities to take advantage of customers who are spending a significant portion of their business across programmatic. And then finally, When you think about it, one thing as I mentioned in the earnings call, it's great that we can leverage our data in Cybids and we've already done that. For example, across our attention data sets and we're doing it we're experimenting with some other data sets.

Speaker 2

But the great thing about Cybids Is that it can work with any data set, even our competitors' data sets, to optimize. So it gives us an entirely new group of customers that may not even be measurement customers for ours. Now we hope they will be down the road, as we sell them a complete package. But there are customers who may be using competitive data that can be potential customers. So if you think of that as far as ratcheting up our programmatic tool sets, Giving us an opportunity to talk to a different type of customer, Doctor customer, and then giving you a chance to talk to customers that aren't even DV measurement customers, I think it shows that there's real expansion opportunity for us.

Speaker 2

What that looks like, I mean, programmatic is multi $1,000,000,000 business. This is a take rate business. The Cybex business is take rate business. So Some percentage of that billions, we're not ready to put our finger on that just yet, but it's I think it's a big TAM expansion for us.

Speaker 3

And Youssef, on your question about the second half and the mix of the business, we basically ended the first half with Roughly 30% growth on activation, roughly 20% on measurement. I think we are continuing to be excited about the contribution of ABS in the activation line and we're really excited about the contribution of social in the measurement line. So I think those 2 are good indicators of what we're thinking will continue in the second half. As a result, obviously you'll end up with activation representing a larger The key growth drivers of those two lines remain the same as what we see in the first half.

Operator

Okay. That's helpful color. Thank you both. Thank you. Our next question is from Eric Sheridan with Goldman Sachs.

Operator

Please proceed with your question.

Speaker 7

Thanks so much for taking the question. I wanted to focus on Slide 12 on the Retail Media Network disclosure that was in the deck for the earnings. Can you talk a little bit about maybe how we should be framing up the opportunities that you see when you lay out 12 retail media platforms, 39 retailers, The number of global partnerships, how should we be thinking about elements of both client growth, spend, scale building in that business on a multiyear view versus You've already seen in the recent past. Thanks so much.

Speaker 2

Yes, it's a great question, Eric. And I mean, obviously, Retail media networks continue to be a bright spot in our business, growing at over 80% this year. And The nice part about it for us is that it covers all three line items of our business, right? So we work with folks, Retail Media Networks, both on the measurement side, the activation side and the supply side. And I think we've kind of given Rough numbers on a quarterly basis what this looks like.

Speaker 2

Generally, it's grown In Q1, it grew over 100%. This quarter, it's grown over 80%. We're working with some of the biggest customer retail media networks out there like Target, Kroger, which we closed around this time last year, Macy's, Dollar General, Walmart, Amazon, I mean, big companies. What does this mean for us is potential upside. I mean, this was a business now, which I think is approaching Yes, dollars 30,000,000 $40,000,000 for us a year, which I think is pretty substantial coming from 0 just a few years ago.

Speaker 2

I think as that sector continues to grow and as these companies continue to be more sophisticated, our business opportunity Get stronger and stronger. The other thing it does is, we've got a really strong footprint of CPG companies that we work with. So folks like Colgate, Mondelez and Unilever, it just makes our connection with those folks that much stronger, Right. So those are traditional CPG companies, but they plug into these ad networks, these retail media networks. So it creates a Stickier relationship when we're touching both the retail media network and the CPG company as well.

Speaker 2

And so I think Our ability to grow here, I think, is continues to be strong, but it has a residual impact of really creating a stronger, more stickier offering for our overall business, particularly CPG Companies.

Operator

And maybe if I

Speaker 7

could just ask one follow-up there because this was kind of where I was going as well is the To the extent to which this acquisition you're doing today talks about pooling sort of your own data with third party data and you think about Elements of data that come in from the CPG world potentially into retail media, is this another AI optimization theme that we could see brought back some of these retail media networks? Thanks.

Speaker 2

Yes, yes, for sure. I mean, the way that Cybids works is it can look at multiple its multivariate decisioning on a single ad impression. And The ability to pull in some of this retail media data, for example, transaction data, or shopping cart data It is a real advantage for a model like that. So it definitely adds another play. And we continue to look at potential partnerships Customers that decide bids and AI bidding will work for and retail media is a nice one because retail media is driven by selling, right?

Speaker 2

It is a Your response and performance driven area and I think this fits quite nicely into that story.

Speaker 7

Great. Thank

Operator

you. Yes. Thank you. Our next question is from Vasily Karasyov with Cannonball Research. Please proceed with your question.

Speaker 8

Thank you. Good afternoon. I wanted to follow-up on what you said in your prepared remarks. So one is, I think you said that the results of the second quarter were broadly in line. So it sounded like it was not Quite as good as you expected.

Speaker 8

I wonder if you could go into a little more detail where the unexpected softness, I assume, occurred. And then the second comment I wanted to follow-up on is you said that there is some if I understood correctly, there is a disruption while Some advertisers are switching DSPs. So, two questions there. I Understood that you distribute by all major DSPs, so there shouldn't be much friction there. Is that correct?

Speaker 8

And also When that process is completed, should we see a benefit or some incremental lift to revenue Growth rate in the second half of the year, maybe Q4? Thank you.

Speaker 3

Yes. So let me take them in order. So I mean in Q2, we basically when we said we brought it in line is we slightly beat The midpoint of our guidance. And let me talk about the drivers of Q2 revenue, right, which is we saw the same drivers as we did in Q1. We had over 50% growth in ADS, 41% growth in social volumes, 39% growth in international.

Speaker 3

We saw a very strong of wins, client wins over 80%. What we did see in Q2 is a bit of an elongated ramp cycle for some of the large client wins that we had on the And so some of that revenue just took a little bit longer to get into the quarter. And that's essentially what we saw in And so that put us right at the midpoint of our guidance. And as we continue to I think we will kind of see a little bit of that elongated cycle to just see all of their campaigns coming up to speed,

Operator

So now in terms of what

Speaker 3

we see for the second half of the year, Let me just talk about the friction point that we made. We did have some large clients that were using Media Map as a DSP and those Naturally just need to transition to another DSP. They will. We're working with them, but there is a bit of a natural transition there going from one trading platform to the next. And so our guidance for the second half sort of takes that into account.

Speaker 3

And we did have some large clients that were using Media Map. So that's a little bit of As you pointed out, this is a point in time. So we don't anticipate in the mid to long term Any impact to the overall revenue trajectory is just for a point in time. It just might take a little bit of time to get to the new DSP. And then in terms of what we saw as positive, yes, Meta Reels and YouTube Shorts about So they were broadly kind of taken into account for what we were considering for SoCal revenue growth.

Speaker 3

The large and you know this already, obviously, the large The brand safety on meta which is still slated for next year into the revenue contribution.

Speaker 8

Thank you.

Operator

Thank you. Our next question is from Arjun Bhatia with William Blair. Please proceed with your question.

Speaker 9

Perfect. Thanks for taking the question. I wanted to ask about New form factors, Mark, as you kind of expand into new form factors on social with reels, right, so whether it's short form video or eventually to come with The news feed, what does the typical cadence of existing DV customers turning you on Look like? Is there a friction point where they're deciding do we turn on TV or are they doing a cost benefit? What is that decision making like and what does that timeline look like?

Speaker 2

Yes. It's interesting. What we've seen, for example, With the reels rollout, the friction has been pretty low. And I think because there's a significant amount of demand against that area. So we saw kind of a nice cadence of folks kind of turning on that additional coverage.

Speaker 2

Now one thing that's interesting to know is when you look at our coverage of Facebook customers, I think it's That are of our top 100 that are actually measuring against Facebook, it's only slightly about 50%. So we still got a good number A good amount of growth to just get folks to turn on anything across social. And I think that's where as Nicola noted, getting brand Safety and suitability across more of our social networks is going to be key. Right now, even with what we're doing across reels and what we'll be launching across YouTube Shorts, we're still talking viewability and invalid traffic. And I think the real value unlock on social is really around brand safety, which is what we saw on TikTok as we continue to grow So, I think the cadence of the, let's say, the easy products, The IVT and the Viewability products has been pretty good, but I think we still have got some growth to do when it comes to getting What folks really want, which is brand safety and suitability across social and I think we've got some nice opportunities there still to tap into.

Speaker 8

All right, perfect. That's super helpful.

Speaker 9

And then going to Saibed, it sounds like as you move more into performance, Especially with the Cybex acquisition, it seems like you might have a role to play in directing ad dollars and ad spend to Different DSPs and correct me if that's wrong, but how does that impact DV's role as an Independent player in this ecosystem, you are not a part of any conflict if advertisers decide to move Add dollars from one network to another.

Speaker 2

Yes, it's a great question, Arjun. And that would be really clear is that The acquisition of Sibids and Sibids' role in kind of the digital ecosystem is Creates no additional conflict and is actually is independent as we are in the media transaction. They work with Trade Desk and with DV360 and Xandr and Beeswax And probably more DSPs down the road, the idea is that they're a tool. They're a tool that can be implemented by an advertiser. It's technology that can be moved similar to our activation tools are currently Can be moved advertisers can move from platform to platform.

Speaker 2

So for us and for Cybids, the key will be to be everywhere, Right. To be agnostic to the platforms that we're on, and to make sure that wherever our advertisers want to spend, we have technology there. Very similar to our current activation business. So whether it's ABS or standard brand safety and suitability segments or our contextual targeting segments, we want those to be everywhere, and we want them to be fueled by DV data. So I think the independence of The acquisition of Cybd's doesn't change either our independence or theirs, and they've got great relationships with those platforms and have since the day

Operator

Thank you. Our next question is from Mark Kelley with Stifel. Please proceed with your question. Hey, great. Thanks very much.

Operator

A couple of quick ones just on side bids. I guess, you talked about getting access to new customers. Can you give us a sense for the types of customers you'll now have access to? Is it more small and medium business types of clients? Is it geographic specific given that they're based in France?

Operator

That's my first one. And then as a follow-up to that, I guess Your 30% to 40% growth rate assumption for next year for side business, does that bake in accelerating growth given that you've got a large sales force Or is that consistent with the current trends for the CybVid business? Thank you.

Speaker 2

Sure. So, on the customer side, I think it's less geography, even though it's always nice to have some more resources across EMEA, Considering that there is a little bit of a bounce back as we've shown in our numbers earlier, it's more and it's not really sized either. So what it is, is goals and KPIs. Advertisers who are looking for Specific drivers of results that may not be as concerned about viewability, for example, or Be as concerned about brand suitability, whereas brand safety maybe just be fine if their impressions go. It's an advertiser who's looking for less of a On off and more of a fluid, hey, I can take slightly less viewability or slightly less suitability for slightly higher performance.

Speaker 2

The way that the Sibez algos work is it's a dial as opposed to a directive, right? It's not black and white Saying yes or no, it is a continuum. And what that does is it opens up to lots of advertisers who again are very focused on performance as opposed to being 100% viewable or meeting specific viewability criteria. It's just a different type of advertiser, which I think is kind of interesting for us. The other aspect, and I did mention geography.

Speaker 2

It is interesting that 60% of their business comes from the rest of the world, which is a very a different ratio than our business currently. So it is nice having some contacts outside the U. S. Or some touch points outside the U. S, which this helps us as well.

Speaker 3

And on the question for the growth, the 30% to 40% growth is doesn't assume an accelerate growth. We're buying an early Sage Technology, we're going to spend a lot of time just making sure we understand the technology and how we integrate it into our own technology. So there will be growth above the standalone growth, but understand this is an early stage technology and their current revenue pattern is really dependent on a few clients. So this is about the technology, understanding how we're going to use it on our side. The revenue will grow In the future years, but this is really about technology first and foremost.

Operator

Okay, great. Thank you both. Yes. Thank you. Our next question is from Andrew Boone with JMP Securities.

Operator

Please proceed with your question.

Speaker 10

Good afternoon and thanks for taking my questions. I'll keep it to 1. I wanted to go back to Facebook. It sounds like social has some real tailwinds. And as we think about brand safety coming onto the feed for next year, Mark, there's the real potential that you guys could have a step function change in terms of revenue.

Speaker 10

And so the question is really you guys have held EBITDA margins at 30% and that's kind of how you guys have managed the business. If there was a step function change as we think about the potential of Facebook, would you be willing to let margins Expand or would you maybe reinvest now back into performance? How are you thinking about controlling kind of the EBITDA profile with the potential of a significant supply source coming online. Thanks so much.

Speaker 2

Yes. Thanks, Andrew. It's a great question. I think we've been pretty Adamant around this idea that we're going to continue to reinvest in the business. Now it doesn't mean that margins won't expand, a point here or there if we Do you open up a step function when it comes to an inventory source or a platform like Meta, But those platforms also come with some work and some scaling around it too.

Speaker 2

So I think we continue to focus on revenue and top line, keeping that EBITDA margin right in the sweet spot where we have it, so we can continue to invest. We talk a lot about land and expand, and we're still focused on landing Lots of customers, and I think as we've noted several times so far today, some of those customers may be totally new opportunities for us through Algorithmic fee based solutions. So we want to continue to invest there too. So I think we're going to keep that band fairly tight. As we like we said, we've done a pretty good job over the last 3 years keeping in that zone and I think we're going to stay in that zone.

Speaker 10

Thank you.

Speaker 2

Sure.

Operator

Thank you. Our next question is from Brian Fitzgerald with Wells Fargo. Please proceed with your question.

Speaker 4

Thanks guys. Maybe 2 really quick follow ups on Cybids, congratulation on the deal. I want to know maybe if you could explain a little bit how their custom algorithms work The bid algos from the DSPs, how they deal with advertisers who do use cookies and other identifiers. And then Quick clarification. Did you take a bad debt charge regarding MediaMath in 2Q?

Speaker 4

Or should we expect that in 3Q?

Speaker 3

Yes. I'll answer the second question first. We did take a charge in the 2nd quarter. Bad debt increased by $1,500,000 in the quarter versus And that includes the impact of media and math.

Speaker 6

Okay.

Speaker 2

Yes. And on the questions around SiBids and their So the custom algo works in conjunction with any additional optimization that the platforms may Forms may have embedded in themselves. So the leading platforms, so The Trade Desk And the Googles of the world have been very clear on that. They love this idea to bring your own algorithm and let it run against what you What are important to you as an advertiser want to bring and then they can help kind of clean up and optimize on top of that at the end as well. So there's A really nice complementary existence between these platforms and between the tool sets that it plays well.

Speaker 2

With regard to the data points that the advertisers are using, for the most part these well, they are not cookie based data points and particularly around the data that we're now plugging into these systems. So things like attention, data points like viewability and others are identifier free and cookie free. So They've maintained the same level of privacy friendliness that we've had to date, yet they still drive real KPIs. And I think It's a nice again complement to our business. We think this is a growing area that's going to not only kind of enhance our activation business, but as we've said, I think it has the ability to actually enhance our overall measurement business as well.

Speaker 4

Excellent. Thanks, Mark. Thanks, Nicole.

Operator

Thank you. Our next question is from Nick Dangliss with Stephens. Please proceed with your question.

Speaker 11

Hey, guys. Thanks a lot for getting me on here. Just a little bit deeper on Sibis, if you don't mind. I mean, so you mentioned Sibids, it automates and it optimizes programmatic buying across DSPs. I'm envisioning Saibid's technology is designed to deploy and allocate ad spend on behalf of the brand, You may be following a rule set across KPIs as dictated by the brand or agency.

Speaker 11

So effectively, I'm thinking AI trading here, but I I just want to understand if I'm correct in that if I'm understanding that correctly or not, or perhaps this technology is more designed to act like an AI assistant for traders. Just Any further deep dive here on how Sibis is deployed would be helpful.

Speaker 2

Yes. So it's the former versus the latter of what you mentioned. It's really focused on optimizing the bid, right, and ensuring that the media spend is allocated to the impressions that drive the highest return. So based on the KPIs that the advertiser is going after, how Hi, can I drive those KPIs, right? So how can I drive them based on the lowest potential price, right, that drives the And that's what it looks like?

Speaker 2

And the neat part about it is, it does it on every impression. So think of a decision engine that doesn't look at the campaign or doesn't look at The advertiser, it looks at every individual impression against that specific KPI and looks to maximize the bid or in this case minimize the bid to deliver the maximum return. That's what the logic does. That's the algorithm does. So it's plugged into the DSPs to make those decisions.

Speaker 2

So it's less of an it's not an assistant at all to a trader. It actually does the trading on its own and does the bid optimization on its own and runs and makes those decisions. So and like I said, The cool part for us is that we can start to load our data, our unique and proprietary data like attention data into these algos and have advertisers a static attention segment, for example.

Speaker 11

Got it. That's actually super helpful. And then just one follow-up, if I could. Just regard to the allegations that Google has been facing for some video ads delivered on 3rd party websites in Small windows and without audio, as I'm sure you know. I'm just curious if there are any implications here for DV, Like are you seeing advertisers potentially pull back on YouTube and redirect or perhaps it even it triggers advertisers to actually utilize Your Viewability Solutions more so just given the concern.

Speaker 11

Just any thoughts on implications of the recent development here?

Speaker 2

Yes. Look, obviously, it's definitely a challenging place For advertisers to be to try to figure out what exactly is the next step for them as they look at they want to continue to spend across Google properties. But it really begs the idea and the question around transparency and the role of third parties in that. We've worked really well with Google To provide an independent take on the GBP, YouTube kind of the issue that was surfaced, I think we've got a pretty extensive blog post in which we outline what we are able to deliver and what we see out there in the marketplace. And I think it always is it always begs the question as to making sure that The companies that are measuring and that are doing the analysis of the transaction are truly independent, are outside of the media And I think we've always taken that position, which is we work with everybody.

Speaker 2

We do so in a way that is accredited and we do so in a way that is independent. And I think our relationship with the advertiser is tantamount. That's who pays our bills and that's who we have to worry about every day. So we focus on trust. We focus on making sure that we're independent and we make us focus on providing up as much transparency as we can.

Speaker 2

So, we haven't seen any significant pull Across Google Properties, obviously, they had a great quarter as well. So our relationship with them remains strong and we remain both focused on the same thing, which is delivering great results to advertisers and doing so in a way that's transparent and leverages the technology that we've built.

Speaker 3

Great. Thanks, guys.

Operator

Thank you. Our next question is from Mark Murphy with JPMorgan. Please proceed with your question. Hi, this is Artie on for Mark Murphy. Congrats on the quarter.

Operator

First question is, I know you talked about the macro a little bit earlier. Anything worth calling out in terms of divergences among Customers in terms of sector?

Speaker 3

No, I mean, as you know, we are fairly diversified across most sectors. So So we haven't we didn't see anything that was significantly outweighing other sectors. We still remain very strong in CTG. We still we saw some good uptake on auto, which is one of our smaller segments. But in general, For us, we're so diversified that whether one segment goes up or down, it doesn't really impact our financials.

Speaker 3

We didn't really see anything that was materially different than the prior quarter.

Operator

Great. Thank you. And then one more, I'll step back into the queue. In terms of the ABS price verification, I know last time you guys said that was kind of frictionless and rolling out nicely. Does that continue to be the case or just anything worth calling out, given have a couple more months behind us?

Operator

Thank you.

Speaker 3

No, it's as we had planned. It was frictionless. It was a small amount based On the price of the product, so nothing new to report on that.

Operator

Thank you. There are no further questions at this time. I would like to hand the floor back Go ahead to Mark Legorski for closing comments.

Speaker 2

Thank you all for joining us this evening. We delivered Solid business momentum and couldn't be more excited about the opportunities that lie ahead. We look forward to seeing many of you at dd's Innovation Day in New York on September 14, where we plan to share our long term vision and strategy for AI powered innovation. Have a great evening everybody.

Operator

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Powered by Quartr

Key Takeaways

  • 22% revenue growth to nearly $134 million in Q2 and 30% adjusted EBITDA margin ( $40 million), both exceeding guidance.
  • The pending $125 million acquisition of Scibids will pair DV’s data with AI-powered optimization to accelerate the shift from media protection to performance.
  • Expanded verification coverage across social short-form (Meta Reels, YouTube Shorts, TikTok), CTV (Netflix, Roku) and 50+ retail media networks, driving 39% international measurement revenue growth.
  • Secured high-profile enterprise wins at an >80% win rate (54% greenfield) including Uber, Sam’s Club, Pizza Hut, Spotify and UNICEF, while customers spending >$200K rose 20% YoY.
  • Maintained disciplined outlook with Q3 revenue guidance of $135–141 million (+23%), full-year revenue $557–569 million (+24%) and a 31% adjusted EBITDA margin.
A.I. generated. May contain errors.
Earnings Conference Call
DoubleVerify Q2 2023
00:00 / 00:00