Integral Ad Science Q1 2025 Earnings Report

Integral Ad Science EPS Results

• Actual EPS: $0.05
• Consensus EPS: $0.03
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: N/A

Integral Ad Science Revenue Results

• Actual Revenue: $134.07 million
• Expected Revenue: $129.20 million
• Beat/Miss: Beat by +$4.86 million
• YoY Revenue Growth: N/A

Integral Ad Science Announcement Details

• Quarter: Q1 2025
• Date: 5/12/2025
• Time: After Market Closes
• Conference Call Date: Monday, May 12, 2025
• Conference Call Time: 5:00PM ET

Integral Ad Science (NASDAQ:IAS) operates as a digital advertising verification company in the United States, the United Kingdom, France, Ireland, Germany, Italy, Singapore, Australia, Japan, India, and the Nordics. The company provides IAS Signal, a cloud-based technology platform that offers return on ad spend needs; and deliver independent measurement and verification of digital advertising across devices, channels, and formats, including desktop, mobile, connected TV, social, display, and video. Its digital media quality solutions offer ad fraud detection and prevention, viewability, brand safety and suitability, contextual targeting, inventory yield management, and reporting. In addition, the company offers Quality Impressions, a metric designed to verify that digital ads are served to a real person rather than a bot, viewable on-screen, and presented in a brand-safe and suitable environment in the correct geography; Context Control solution that delivers contextual targeting and brand suitability capabilities; pre-bid programmatic and post-bid verification solutions for advertisers; and optimization and verification solutions for publishers. It serves advertisers and agencies, publishers, and supply side platforms. The company was founded in 2009 and is headquartered in New York, New York.

Integral Ad Science Q1 2025 Earnings Call Transcript

Key Takeaways

• IAS delivered 17% year-over-year revenue growth in Q1 2025, beating guidance, and achieved a 31% adjusted EBITDA margin.
• The company rolled out its Dynamic Performance Profiles (DPP) and TMP optimization suite—case studies show DPP boosted conversion rates by 34% and eCPM efficiency by 26%.
• Pre-bid social optimization expanded to Meta, TikTok, Reddit and Nextdoor, with initial studies showing advertisers can save up to 2x their investment and social measurement grew 15%.
• Publisher revenue rose 33% as Publica’s CTV yield-boosting features gained traction and new partnerships launched on platforms like Spotify and Roblox.
• Management raised its full-year 2025 outlook to $590M–$600M in revenue (12% growth) and a 35% adjusted EBITDA margin.

Presentation

[Operator]

Good day and thank you for standing by. Welcome to the IAS Q1 twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.

[Operator]

I would now like to hand the conference over to your first speaker today, Jonathan Schafer, SVP of Investor Relations. Please begin.

[Jonathan Schaffer, SVP - IR at Integral Ad Science]

Thank you. Good afternoon, and welcome to the IAS First Quarter twenty twenty five Financial Results Conference Call. I'm joined today by Lisa Utzschneider, CEO and Jill Putman, Interim CFO. Before we begin, please note that today's call and prepared remarks contain forward looking statements. We refer you to the company's filings with the SEC posted on our Investor Relations site at investors.integralads.com for more details about important risks and uncertainties that could cause actual results to differ materially from our expectations.

[Jonathan Schaffer, SVP - IR at Integral Ad Science]

We will also refer to non GAAP measures on today's call. A reconciliation of non GAAP measures to the most directly comparable GAAP measures is contained in today's earnings release available on our Investor Relations site. All financial comparisons, unless noted otherwise, are based on the prior year period. So with these formalities out of the way, I'd now like to turn the call over to our CEO, Lisa Utzschneider. Lisa, you may begin.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Thank you, Jonathan. Welcome, everyone, to our twenty twenty five first quarter call. Our first quarter results build on our positive momentum from the fourth quarter. We are setting clear expectations and delivering on them. We reported 17% revenue growth in the first quarter, ahead of our prior outlook of a 13% increase at the midpoint of our guide.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

We achieved an adjusted EBITDA margin of 31%. We are executing on our business strategy as we lean into our competitive differentiators. We are advancing our leading AI backed technology, leveraging our first to market platform partnerships and expanding our reach across channels and geographies with an 18% increase in revenue outside of The Americas in the first quarter. By closely listening to the voice of the customer, we are innovating and creating value across product and technology, while maintaining a high bar for quality and reliability. We believe that our customer value proposition focused on driving ROI and greater efficiencies continues to resonate with marketers in the current environment.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

As a result, we expect double digit profitable growth in the second quarter and for the full year 2025. On our last call, we discussed three priorities for our 2025 product roadmap: performance, reach and innovation. Starting with performance, we are all in on increasing ROI for advertisers. Last month, we announced the availability of Dynamic Performance Profiles, or DPP. DPP is designed to help advertisers realize maximum performance across their media buys.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Powered by our proprietary total visibility product, DPP uses

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Visibility DPP An ISK study of an advertiser's conversion based campaign in APAC Last December revealed that DPP activated campaigns increased conversion rates for this customer by 34% and ECPM efficiency by 26%. DPP is an essential component of our Total Media performance, or TMP suite of pre bid optimization products, designed to maximize ad performance while protecting brand equity. Within our TMP suite, we are also launching in the second quarter audience enriched contextual targeting segments, which demonstrates our commitment to delivering advanced performance enhancing tools. We expect these segments to reach high value targeted audiences with a contextual first solution to enhance scale and performance. Customers can activate segments in DSPs to reach their target audience where they are most engaged.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

In March, we conducted a case study in partnership with a customer in the travel vertical, and found that placements with audience enriched segments drove a 159% higher success rate at 72% lower costs. We are also broadening our reach with the major platforms and protecting customers' brand equity wherever they invest. In the first quarter, we launched new features and increased global availability for our content block list optimization solution on Meta. In April, we announced general availability of pre bid video level exclusion lists on TikTok as part of our social optimization offering. The expansion follows successful texting on the platform.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Advertisers on TikTok can now benefit from pre bid granular exclusion powered by IAS' AI backed multimedia technology, giving them greater control over their advertising investments. In April, we announced the expansion of our partnership with Reddit to include viewability and invalid traffic or IPT measurement. These capabilities complement our earlier integration of our total media quality or TMQ brand safety and suitability measurement on the platform. Advertisers now have access to third party campaign insights backed by trusted and transparent metrics to help brands safeguard and scale across Reddit. Last week, we announced a strategic first to market partnership with Nextdoor, the essential neighborhood network, establishing IAS as the provider of pre bid brand safety and suitability optimization on the platform.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Using AI driven multimedia technology, IES will offer advertisers an additional layer of third party transparency and suitability for their Nextdoor campaigns. We continue expand our partnership with the general availability of TMQ for Nextdoor expected in the second half of twenty twenty five. Our pre bid optimization solutions on the social platforms are shown to improve performance and ROI for advertisers. According to initial IAS studies, advertisers' annual savings can reach as high as 2x their investments when using our social optimization solutions. In May, we announced the launch of our pre screen brand safety solution for Google Search Partner Network.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

With this launch, we will provide advertisers with greater control over their investments before their ads are shown across the search partner network. We are scaling Quality Sync Prebid segment adoption on the leading DSPs. With Quality Sync, advertisers can automatically sync their Prebid and Postbid settings across all channels for programmatic buys. We are generating traction with Amazon DSP launched late last year, as well as Display and Video three sixty launched in the first quarter. According to an IAS study, campaigns using Quality Sync benefit from lower contextual brand safety and IDT fail rates.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Lower fail rates result in 58% lower cost per conversion, helping brands boost ROI and media efficiency. In 2025, we are optimizing our go to market strategy to provide superior global support and service to an ever increasing set of customers. We are expanding our reach across market segments, channels and geographies. We are expanding our reach and performance offerings within the mid market segment. Mid market customers require streamlined, impactful and easy to activate solutions, and we are delivering just that, including pro measurement powered by our next generation signal experience, built with the agentic future in mind.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

We continue to invest in growing media channels, including audio and gaming. Last week, IES announced with Spotify the launch of new brand safety and suitability targeting and measurement tools for podcast advertisers for the Spotify audience network. This solution includes classification and tailored targeting to safeguard brand reputation while driving ROI. In April, Roblox announced that IES will offer coverage across media quality and performance solutions, including fraud, brand safety, and suitability, and viewability. Turning to our focus on innovation, our AI and data strategy are core investment areas for IAS.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

AI is an integral part of our DNA and powers the majority of our products. Today, AI plays a critical role in how we operate, increasing velocity by streamlining workflows, enabling scale through automation and personalization, and improving accuracy by identifying patterns and insights that inform better decisions. We apply AI with intent, not just to move faster, but to solve problems more effectively. AI enhances how we build, analyze, and deliver, while ensuring that human judgment, transparency, and responsibility remain central to everything we do. Our differentiated data fuels AI investments by our customers to enable them to maximize the value of quality media signals.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

In April, we announced the launch of our impression feed, an innovative approach to monetizing impression level data. Advertisers and agencies can use the impression feeds granular metrics to gain transparency into their digital advertising investments. Our publisher business is another great example of how IAS innovates. IAS' public capabilities set us apart in the CTV market. We are scaling product features built to increase bidding competition in ad auctions, and therefore to increase yield for publishers.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

We are also enabling publishers to maximize supply path optimization by providing them with optionality to connect directly with their demand sources. These differentiated solutions highlight the synergies between IES and Publica and the power of our publisher facing technology. Turning to our new business momentum, we have secured several new wins and renewals in key verticals. Customers cite several reasons for partnering with IES, such as our advanced technology, ease of activation, and superior global customer service. Xenia, a global fashion luxury company, established an exclusive agreement with IES and expanded their global partnership to include IES's measurement and optimization solutions.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

IES will provide TMQ, social optimization, and attention. Zenya selected IES based on the accuracy of our classification technology. This win reinforces IES' leadership in the luxury goods vertical, along with expanded partnerships with Essilor, Luxottica and Prada announced on last quarter's call. ASICs, a sporting goods company, picked IAS as their global verification provider for our full suite of measurement offerings, including TMQ, after previously working with Oracle. We won this partnership based on the ease of activation and use of our products, as well as the superiority of our tech and detailed reporting capabilities.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

AXA, one of the world's leading insurance companies, renewed their partnership with IAS, following an extensive diligence process. Our established relationship and high service levels enabled IAS to maintain its position as AXA's preferred ad verification provider. This renewal continues our track record of success in France with global brands including Renault, Opela, Stellantis, and LVMH. We added a new partner and secured a major renewal in the chocolate and confectionery vertical, increasing our global leadership in the sector with partnerships with eight of the top 10 producers worldwide. Lastly, we are ramping our new clients that selected IAS following Oracle's exit from the advertising business.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

We are increasing adoption of our premium TMQ product for brand safety and suitability, along with our optimization offerings. We expect to grow the scope of these relationships as we build trust through actionable data that drives superior results. We exceeded our expectations for the first quarter and advanced our 2025 product roadmap with a focus on performance, reach and innovation. By executing on these priorities and offering differentiated products, we are creating a flywheel effect to drive superior performance for our customers. We expect profitable growth in 2025 as we partner with marketers to achieve their goals.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

With that, I'll turn the call over to Jill to review the financials, and then I'll comment on our outlook.

[Jill Putman, Interim CFO & Director at Integral Ad Science]

Thanks, Lisa, and welcome, everyone. We reported a strong quarter, and we are pleased with how we executed on our top priorities. Based on our current outlook, we expect to deliver double digit profitable growth in the second quarter and for the full year. Total revenue in the first quarter increased 17% year over year to $134,100,000 ahead of our prior outlook of $128,000,000 to $131,000,000 During the quarter, we generated strong double digit growth in our optimization and publisher businesses with single digit growth in measurement. Our overall growth was driven by both expansion of our top accounts, as well as new logo wins.

[Jill Putman, Interim CFO & Director at Integral Ad Science]

In addition, we reported adjusted EBITDA of 41,500,000 at a 31% margin. Optimization revenue increased 24% to $64,800,000 in the first quarter. Optimization growth was fueled by several verticals, including financial services, particularly in insurance, as well as retail and travel and entertainment. New products, including expanded quality sync availability on Amazon DSP and DV360, also contributed to our strong optimization results. Measurement revenue increased 4% to $48,400,000 in the first quarter.

[Jill Putman, Interim CFO & Director at Integral Ad Science]

Looking at measurement revenue by channel, social media revenue increased 15% with strength in travel and entertainment. Social media represented 58% of measurement revenue and 21% of total revenue in the first quarter. Social growth in the quarter outpaced overall digital advertising spend with healthy demand for our TMQ product suite across our largest social platform. We continue to see a shift in advertiser spend for measurement to our premium optimization offering. As a result, open web revenue, which is primarily display, decreased single digits and represented 42% of measurement revenue.

[Jill Putman, Interim CFO & Director at Integral Ad Science]

Turning to measurement revenue by format. Video revenue increased 14% in the first quarter as a result of the growth in social media. Video accounted for 58% of measurement revenue, with display and other formats, including audio and gaming, representing the balance. Publisher revenue increased 33% to $20,900,000 resulting from ongoing adoption of new Publica products by large OEM partners. In addition, we saw growth in non CTV IAS publisher revenue that was attributable in part to the contribution from new Oracle customers.

[Jill Putman, Interim CFO & Director at Integral Ad Science]

Publisher revenue represented 16% of total first quarter revenue. Revenue outside of The Americas increased 18% in the first quarter to $42,700,000 representing 32% of total revenue in the first quarter, with strong double digit growth in EMEA. Gross profit for the first quarter was $103,900,000 at a 78% margin compared to 77% in the prior year period. On a combined basis, our operating expenses for the first quarter, excluding non cash expense items, grew 13% year over year to $62,500,000 Stock based compensation expense for the period was $15,500,000 in line with our prior outlook of $15,000,000 to $17,000,000 Adjusted EBITDA for the first quarter, which excludes stock based compensation and one time expenses, increased 26% to $41,500,000 above our prior outlook of 38,000,000 to $40,000,000 Adjusted EBITDA margin for the first quarter increased to 31% from 29% in the prior year period. Net income for the first quarter was $8,000,000 or $05 per share compared to a net loss of $1,300,000 or $01 per share in the first quarter of twenty twenty four.

[Jill Putman, Interim CFO & Director at Integral Ad Science]

Moving to our performance metrics. Our first quarter advertiser net revenue retention, or NRR, was 109%, up from 107% in the fourth quarter of twenty twenty four. The total number of large advertising customers, which includes both mid tier and top tier clients with annual revenue over $200,000 grew to two thirty nine compared to two twenty seven in the prior year period and up from two thirty seven in the fourth quarter of twenty twenty four. Revenue from large advertising customers was 84% of total advertising revenue on a trailing twelve month basis. Cash and cash equivalents at the end of the first quarter totaled $59,100,000 We further lowered our debt to $15,000,000 at the end of the first quarter.

[Jill Putman, Interim CFO & Director at Integral Ad Science]

We are closely monitoring the broader advertising environment. As such, Lisa will comment on our second quarter and full year outlook. Here are a few modeling points to consider. Second quarter stock based compensation expense is expected in the range of 19,000,000 to $21,000,000 and $72,500,000 to $75,500,000 for the full year. We expect weighted average shares outstanding for the second quarter in the range of 164,500,000.0 to 165,500,000.0 shares and 165,000,000 to 167,000,000 shares for the full year.

[Jill Putman, Interim CFO & Director at Integral Ad Science]

We expect an effective tax rate of approximately 30% for the full year 2025. In conclusion, we executed on our priorities in the first quarter and delivered 17% revenue growth at a seasonally strong adjusted EBITDA margin of 31%. We are planning for double digit profitable growth in the second quarter and for the full year. And with that, I'll turn it back over to Lisa to discuss our outlook.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Thanks, Jill. We are raising the midpoint of our full year financial outlook to reflect our strong first quarter performance. Our guidance is based on brand spend in the current environment and ongoing budget shifts to our premium optimization offerings. We expect to deliver another year of double digit profitable growth. For the second quarter ending 06/30/2025, we expect total revenue in the range of $142,000,000 to $144,000,000 or 11% year over year growth at the Adjusted EBITDA for the second quarter is expected to be in the range of 45,000,000 to $47,000,000 or a 32% margin at the midpoint.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

For the full year 2025, we are increasing the midpoint of our revenue outlook to reflect our strong Q1 performance. We now expect revenue of $590,000,000 to $600,000,000 or 12% year over year growth at the midpoint. We are also raising the midpoint of our full year 2025 adjusted EBITDA to be in the range of $2.00 4,000,000 to $210,000,000 or 35% margin at the midpoint. We expect to maintain gross margin for the full year 2025 in the range of 77% to 79%. And with that, we are now ready to take your questions.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Operator?

[Operator]

Thank you. And our first question will be coming from Andrew Merrick of Raymond James. Andrew, your line is open.

[Andrew Marok, Director at Raymond James Financial]

Hi, thanks for taking my questions. Maybe first, if we could talk about in the context of the current digital advertising market with the shorter visibility windows and such, just the, advertiser demand you're seeing, especially for the performance oriented solutions that you talked about at the at the beginning of the call.

[Operator]

This is your operator. Please stand by. Your conference will resume momentarily.

[Jonathan Schaffer, SVP - IR at Integral Ad Science]

Operator? Operator? It's Jared.

[Operator]

You can be heard. There is a slight echo. You may begin.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Okay. Okay. Okay. Okay.

[Jonathan Schaffer, SVP - IR at Integral Ad Science]

Operator, can you hear us now?

[Operator]

We're loud and clear. Thank you.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Okay. Thank you.

[Operator]

Ladies and

[Operator]

gentlemen, please stand by. You may begin. You may begin. You may begin.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Okay. Operator, can you hear me?

[Operator]

You are loud

[Operator]

and clear.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Okay.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

I'll respond to Andrew's question. Andrew, can you hear me?

[Andrew Marok, Director at Raymond James Financial]

I can hear you, yes.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Okay. So, let's get back to the current macro environment. So, as I was saying before, we've made a bet on performance. We talked about it in our previous earnings, Q4 earnings call. The three pillars of our product roadmap being performance, reach and outcomes.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

That bet on performance is absolutely paying off. You see in our Q1 results, both Q1, we put 17% up on the board for growth year over year. Optimization in particular, 24% growth. It's a reflection of the value that we're offering to brands as they're leaning into performance programmatic offerings that drive greater transparency, greater efficiency, and greater ROI. So, it's great to see that the brands are leaning in.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

We love the attach rate and the adoption that we're seeing with the product, and we'll continue to drive that value for our customers.

[Andrew Marok, Director at Raymond James Financial]

Thank you. And maybe at the risk of breaking the

[Andrew Marok, Director at Raymond James Financial]

call again, if I could get a quick

[Andrew Marok, Director at Raymond James Financial]

follow-up. You've I think

[Andrew Marok, Director at Raymond James Financial]

you've mentioned in the past, your open web display business, or your open web measurement business rather has been kind of been an onboarding point for for new clients. Is that still the case, Or are a lot of your newer clients going directly to things like social measurement and your optimization solutions? Thank you.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Yeah. Great. Great question. So, as we mentioned earlier on the call, we are seeing softness similar to across the Internet in open web display. We're pleased with our social measurement growth for Q1 being 15%, again, it's a testament to the value that we're driving to our advertisers.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

So we're seeing the advertisers continue to drive TMQ adoption across all the major social platforms, both here in The U. S. And internationally. We are seeing some shift in budgets from measurement to optimization, again, as brands are leaning into all things related to efficiency and ROI.

[Operator]

Thank you. And our next question will be coming from Jason Helfstein of Oppenheimer. Your line is open.

[Jason Helfstein, MD & Head - Internet at Oppenheimer & Co. Inc.]

Everybody, glad to hear you loud and clear. So first, just can we get some color on how you're thinking about second quarter by discipline? And I guess maybe, you know, when you talk about that, you know, in certain lines, there's a good amount of volatility quarter to quarter. And some of

[Jason Helfstein, MD & Head - Internet at Oppenheimer & Co. Inc.]

that goes away if we look at it

[Jason Helfstein, MD & Head - Internet at Oppenheimer & Co. Inc.]

on a two year stack, like optimization is pretty stable on a two year basis, but variable on a one year basis. So, just kind of maybe any color just around what you're looking for for the second quarter? And then just, like, when we think about the first quarter, any drivers that weighed a bit more in measurement growth? Was it legacy products or just more of a mix away from display? Thank you.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Jill, do you want to take Jason's first question? I'll take the second. Okay, I'll take it. I'll take both, Jason. All right, so your first question related to Q2 and the drivers that we're seeing in Q2.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

A couple of things to call out. We're seeing anticipating double digit growth in total advertiser revenue in the second quarter. Second thing to call out is we expect double digit optimization growth above the forecasted total Q2 revenue growth of 11% and the full year growth of 12%, but below the Q1 levels, because we saw such strength at that 24% for optimization. Also, in terms of measurement, we do expect single digit measurement growth in Q2, improving from the first quarter levels. You probably saw that at 4% for Q1.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

And then in terms of Publisher, another highlight for Q1 being 33%. In Q2, we do expect double digit revenue growth in the publisher revenue in Q2, but we do anticipate that growth to be below Q1 levels related to the timing of onboarding of Oracle customers. And then in terms of drivers for Q1 measurement growth, the thing I'll call out again is social growth being 15% is a highlight for the quarter. The way to think about that is we continue to grow our business both here in The U. S.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

And internationally. Outside of The Americas, another bright spot for the quarter was our international growth of 18%. And one of the drivers of that growth is as our large global advertisers continue to adopt TMQ in our international markets and emerging markets, that's driving the social measurement growth. And then the other call I'll say tied to the social growth is both on Meta and TikTok, as you know, two of the three largest social platforms. We do see north of 50% revenue on both Meta and TikTok internationally.

[Jason Helfstein, MD & Head - Internet at Oppenheimer & Co. Inc.]

And just can I follow-up? So, why did it slow though versus the 12% in the fourth quarter?

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

For the measurement growth?

[Jason Helfstein, MD & Head - Internet at Oppenheimer & Co. Inc.]

Correct. Yeah, yeah.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Yeah. So, you might remember, as we continue to cross sell and upsell TMQ with these large global advertisers in the international markets and emerging markets in particular, The emerging markets, and this is across the industry, this isn't just with IAS, tend to have smaller budgets, lower CPM. So, that is one of the reasons that you're seeing that from 12% to Q1 measurement growth.

[Jason Helfstein, MD & Head - Internet at Oppenheimer & Co. Inc.]

Thank you.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Thank you.

[Operator]

Thank you. Our next question will be coming from Mark Healy of Stifel. Your line is open, Mark.

[Mark Kelley, MD - Internet at Stifel Financial]

Great. Thank you very much. I was hoping maybe you could expand just a little bit on the mid market strategy that you alluded to, Lisa, in your prepared remarks. I know that's been part of the strategy here for a bit, so maybe a little bit more color on what changes you think you need to make, and is that feedback from some of the mid market agency deals and clients that you have already? And then second, I would also love to hear your thoughts just on the Google AdTech trial.

[Mark Kelley, MD - Internet at Stifel Financial]

Curious if you're seeing more interest in Publica as a result or maybe any other thoughts that you have there. That would be great. Thank you.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Yeah, thanks, Mark. I'll take both questions. So, couple of things about mid market. You might remember the way we define mid market is annual spend between 200 ks and a million. Mid market clients, these are performance based marketers who are focused on all the things related to ROI, driving efficiency, driving outcomes.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

And we've been very pleased with the growth that we're seeing in mid market, both in The U. S. And internationally. The area where mid market is really starting to pop is the adoption of our performance based products that we've launched both in the back last year and in the first half of twenty twenty five. All of our new products on our 2025 product road map, they've all been released to date, which is the fastest, the highest velocity we've seen in shipping products.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

And it's really resonating, especially with the mid market advertisers. Again, they're performance based. The other area where we're seeing nice growth in mid market is from Oracle clients. You might remember one of the customer types within the Oracle business are mid market accounts, and the team's doing a great job closing them, onboarding them, and lots of cross sell and up sell. So again, we're pleased with mid market.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

It's another important bet for 2025, a bet we've made both on the back end in beefing up our performance related products, investing in automation to make it much simpler for mid market accounts to activate the products. And then on the front end, continue to invest in a mid market sales team as well as the service team. In terms of the Google trials that have happened, I would say that it's too early to tell. With Publica in particular, the majority of our business is on the buy side, the demand side, but Publica represents the supply side, especially in CTV. And we're seeing strong growth in Publica.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

It's too soon to tell, but it could potentially be a tailwind for our business, should the publishers reassess their ad tech partners, depending on what the verdict is for Google.

[Mark Kelley, MD - Internet at Stifel Financial]

Great. Thank you, Lisa.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Yeah. Thanks, Mark.

[Operator]

Thank you. And one moment for our next question, which will be coming from James Heaney of Jefferies. Your line is open, James.

[James Heaney, SVP - Equity Research at Jefferies]

Great. Thank you, guys. I guess, sticking on the topic of Publica, you've been growing revenue now for last couple of quarters over around 30% year on year. Just interested to hear what's been driving that success? Anything specific on the product side or the go to market?

[James Heaney, SVP - Equity Research at Jefferies]

Just anything you'd call out on that. Thank you.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Yeah. Thanks for the question, James. So, few call outs on Publica. As I mentioned before, our 33% publisher revenue for Q1 is another highlight for the quarter that we're really proud of. Publica, it continues to be a great asset for the company.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Large OEMs, they continue to see the value of our highly differentiated Publica offerings. And one area in particular, we continue to invest in, I remember talking about this in last quarter's call, is introducing and refining product features to increase the bidding competition across the ad auctions. The OEMs, they love seeing the performance of these bidding enhancements that we're making, and we'll continue to invest in those features and additional features for Publica. The other thing I think it's important to call out is just the non CTV IES publisher continues to also be a strength in our portfolio of products. And it's just great to see the brands leaning into our IES publisher solutions.

[James Heaney, SVP - Equity Research at Jefferies]

Great, thank you.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Yeah, thanks.

[Operator]

And our next question will be coming from Youssef Squali of Truist Securities. Your line is open.

[Youssef Squali, MD & Head of Internet and Digital Media Research Group at Truist Securities]

Thank you so much. Hey Lisa, hey Jill. So, just double clicking on the measurement growth again at 4%. I think you said that open web revenues were down single digit percentage for the quarter on year on year basis. Can you maybe unpack the reasons for that?

[Youssef Squali, MD & Head of Internet and Digital Media Research Group at Truist Securities]

How much of that may have to do with maybe growing curation from SSDs or maybe some other things? Just trying to see whether this is a new trend that's likely to continue. Is this something that's gonna kind of inflect again next quarter, especially that you said next quarter's measurement growth should be improving versus that 4%? And then at a high level relative to your kind of your guidance this quarter versus prior quarter. And I'm talking more about your guidance for the full year.

[Youssef Squali, MD & Head of Internet and Digital Media Research Group at Truist Securities]

It looks like you beat Q1 by a bit more than you've raised your number for the year. Understand maybe the macro and the uncertainty around it may be the driver, but just would love to see or to hear if there is anything else going on there. Thank you.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Yeah, thanks for the question, Youssef. So, the first one around the measurement 4% growth in Q1, we delivered single digit growth in measurement as expected. And as I mentioned before, we're also pleased with that double digit 15% growth in social media. The reflection of open web down by single digits, we're seeing it across the industry that display across the digital ecosystem is down. I think it's just a reflection of what's happening at a macro level from a display perspective.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

But also, I want to reiterate the point I made earlier is we are seeing budget shifts from measurement to optimization. I think part of that has to do with macro environment as the brands continue to seek out differentiated solutions that drive performance, drive efficiency, drive ROI. So, think it's a combination of the two, of just display softness in the ecosystem, and then the brands doubling down on all things related to optimization. And then with their second question around the full year guide and beating Q1 more than the raise, There are a few points I'll make on that in terms of macroeconomic environment. The first is, as you know, we're customer obsessed at IAS.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

And over the last few weeks and months, we've been spending and I've personally been spending a lot of time with customers on the road, meeting with some of our largest advertisers, holdcos, publishers and platforms. And the feedback has been consistent in terms of how they view the macroeconomic conditions, the value that they're seeing in the products that we're offering, the fact that we're doubling down and providing greater transparency into all things related to programmatic. And based on all that feedback that we're receiving and the line of sight that we have to the forecast, that is why we set the guide the way that we set the guide.

[Youssef Squali, MD & Head of Internet and Digital Media Research Group at Truist Securities]

Okay, thank you, Lisa.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Yeah, thank you, Susan.

[Operator]

Thank you. And our next question will be coming from Rob Kulbreath of Evercore ISI. Your line is open, Rob.

[Robert Coolbrith, Vice President, Internet Equity Research at Evercore ISI]

Great, thank you very much. Wondering if you could talk about market response so far to pre bid optimization tools in social and if you could tell us whether that was maybe a factor in driving the strength in optimization in the quarter, if it's just too early. And then secondly, wanted to ask if you could maybe spend a minute or two just educating us on how you go to market with dynamic performance profiles and the other TPM products. Is that a play on curation by the SSPs? Is it something that's activated through the buy side?

[Robert Coolbrith, Vice President, Internet Equity Research at Evercore ISI]

Just anything more you can tell us about how you sort of go to market there? Thank you.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Yeah, sure. Thank you for both questions. So, in terms of pre bid social optimization, we're tracking in line with expectations. We're very pleased with the adoption rate that we're seeing in Prebid Social. We're also pleased with the ramp and the new features and increased global reach that we've continued to expand the product on all three of the major social platforms, Meta, TikTok and YouTube.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

We receive ongoing feedback from the advertisers who have adopted the product. They continue to see improved performance and ROI. And I know that we cited this stat earlier on the live call, but the brands that are using our social optimization solutions, they can see annual savings reach of 2x their ad investments. And they really appreciate the fact, especially during the macroeconomic conditions, that we are quantifying the ROI, we are quantifying the results that they're seeing. So, we expect to continue to scale pre bid in 2025, and we would anticipate more meaningful revenue in 2026.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

And then, in terms of the go to market with the curation products, there are a few things about that product that we've launched. Again, it's along the lines of leaning into all things related to performance and efficiency and ROI that we're delivering on behalf of the advertisers. The way it works is it's automated, optimized automation where we embed contextual segments at a pre bid level to help the advertisers find higher quality media automated that leads to higher outcomes, better outcomes for the brand.

[Robert Coolbrith, Vice President, Internet Equity Research at Evercore ISI]

Okay, got it. Thank you very much.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Yeah, thank you.

[Operator]

And our next question will be coming from Justin Patterson of KeyBanc. Your line is open, Justin.

[Justin Patterson, Managing Director at KeyBanc Capital Markets]

Great, thank you. Lisa, last call you talked about China as an opportunity, we're pursuing more. I realize everything's fluid right now, but I'm curious how your timeline and investment levels around China may have changed for the year. Thank you.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Yes. Thanks, Justin, for the question. So as you remember last quarter, we launched first to market in China. In fourth quarter, both the China in and the China out strategy, we are still alpha testing in China with luxury good customers, and we're receiving very encouraging feedback. We also have a strong pipeline of prominent global brands, both within luxury and CPG categories.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

And the other thing to know, and this was very exciting for the team, on April 1, we had our first IES China event in Shanghai with over 40 clients and agencies in attendance. And they were combinations, some of them focused on local advertising in China and then some of the larger global brands were there focused more on the China out strategy. We're also investing in growing headcount in support of our China based initiatives. So again, it's very early days in China, but we're really pleased with the level of interest and engagement, and we'll continue to running the alpha and providing value to the brands who are running the products.

[Operator]

Our next question will be

[Operator]

coming from Brian Pitts of BMO Capital Markets. Your line is open, Brian.

[Brian Pitz, Managing Director and Senior Analyst at BMO Capital Markets]

Thank you. Lisa, maybe two questions for me. Can you talk about traction on alternative platforms like gaming, given that Roblox has recently noted they're seeing more meaningful growth in their ad business that's new? And then as you look further out with the rise of AI agents, can you talk about how these agents who perform tasks on users

[Brian Pitz, Managing Director and Senior Analyst at BMO Capital Markets]

on

[Brian Pitz, Managing Director and Senior Analyst at BMO Capital Markets]

the Internet solutions, how are your viewability and maybe invalid traffic solutions becoming increasingly more important? Are those customers starting to talk to you more about looking into the future and how they're going to navigate some of those changes to the landscape? Thank you.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Yeah, sure, Brian. Thank you for both questions. So, gaming is an important channel, and Roblox is an important strategic partner. One thing to call out about Roblox is in April, we did announce that we were offering coverage on Roblox across media quality and performance solutions. And basically, what that means is offering fraud, brand safety, suitability and viewability on Roblox.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

We'll continue to test and learn with Roblox. When I think about gaming, it's not the top priority compared to the scale and reach of social platforms, but we'll continue to lean in with Roblox and test that capability. And then, in terms of AI and capabilities, as I mentioned earlier on the call, a few things to call out about AI. And at IES, we're an AI first company. We have been leveraging AI for years.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

AI powers the majority of our products, powers the majority actually of our new products in 2025. But what distinguishes IES in terms of the use of AI and how we use it, it's not just the presence of AI, but I'd say more importantly, how we're applying AI. And I'll walk you through a few cases of how we're using it. We're using AI strategically to produce measurable outcomes beyond automation. We also combine human judgment with machine learning, applying AI where it adds the most value for our customers.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

We leverage AI to accelerate execution. And then also, with everything that we do related to AI, we apply it responsibly with a clear focus on transparency, fairness, and trust. And to be clear, AI is not replacing how we work. It's an extension of what we can do as a company in driving value for our customers, And we treat it as a practical, ever evolving tool. So, we're really, really excited with how we're leveraging AI, how we continue to leverage it to drive differentiation and value for our customers.

[Brian Pitz, Managing Director and Senior Analyst at BMO Capital Markets]

Thank you.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Thank you.

[Operator]

And our next question will be coming from Jason Kreyer of Craig Hallum. Your line is open, Jason.

[Jason Kreyer, Senior Research Analyst at Craig-Hallum Capital Group LLC]

Great, thank you. Just one question on the customers you brought over from Oracle. How are those conversations progressing just across the cross sell opportunity? And are there any changes to what you would expect that contribution could look like over the next few

[Jason Kreyer, Senior Research Analyst at Craig-Hallum Capital Group LLC]

quarters? Thanks.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Yeah, thanks Jason. Happy to answer that question. So, couple of things on Oracle. You might remember last summer was the summer of Oracle. We were really pleased with our close rate of over 70%, bringing on 75 plus new accounts into IES.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Equally as excited about the fact that we hired over 30 employees from Oracle. So, since the back half of last year, the team, we've been very focused on onboarding these accounts, integrating the accounts, having them start utilizing our products. But I'd say also, more importantly, drives across sell and out sell. We're pleased with the stickiness that we've seen with the Oracle customers, their adoption of multiple products across the portfolio in all three of our business lines. And then the other thing I think is important to know is we are seeing a higher adoption of context control from the former GrapeShock clients than we are from non Oracle accounts.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

So this is just a great illustration, the story of Oracle, our ability to execute as a business, to quickly integrate dozens and dozens of accounts and drive extended and ongoing value as they adopt more and more products.

[Operator]

And one moment for our next question. Our next question will be coming from Mark Zatowicz. Your line is open.

[Mark Zgutowicz, Equity Research Analyst at The Benchmark Company LLC]

Thank you. Hi, Lisa. Just a couple quick specific ones for me. On open web, I'm curious what your 2Q and '25 guide implies for growth there. You talked about, I think you said a single digit growth number down single digits in 2Q.

[Mark Zgutowicz, Equity Research Analyst at The Benchmark Company LLC]

And if you can maybe quantify whether that's high single or low single, but just trying to get a sense of the trajectory there because it seems like it's come down a bit from fourth quarter. And then as it relates to Oracle incrementality in Q1, just curious sort of what the incrementality was there. You talked about 2Q being the growth in Publisher being a little bit less than 1Q due to less onboarding of Oracle. Just curious if that's a carry into the second half of the year in terms of Oracle specifically. And then also what's sort of implied for Oracle in your 'twenty five guide?

[Mark Zgutowicz, Equity Research Analyst at The Benchmark Company LLC]

Thank you.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Sure. Jill, do you want to take the first Yes.

[Jill Putman, Interim CFO & Director at Integral Ad Science]

Yeah, I'd be glad to. Hey, Mark, thanks. So as far as measurement assumptions for growth, we're assuming measurement will contribute to the total advertiser growth in the single digits, but improving off of the first quarter that was posted a 4%.

[Operator]

And one moment, Brian.

[Mark Zgutowicz, Equity Research Analyst at The Benchmark Company LLC]

Okay.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Yep.

[Mark Zgutowicz, Equity Research Analyst at The Benchmark Company LLC]

And then I guess specific, to OpenWeb, was just trying to get a sense of the trajectory of open web that's implied in your guidance for the year.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Yeah, I can take that. So, measurement improved from 4% in Q2 and full year to single digits. The other thing to call out is we'll be higher than 4% in second quarter and full year on measurement. Mid to high single digits is appropriate. And then in terms of publisher growth due to onboarding and Oracle timing, as I mentioned before, we're really pleased with the adoption, the integration and adoption we've seen across all of the Oracle customers we brought on board.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

With the publisher business in particular with Oracle, we expect continued strength in publisher revenue in Q2 at a lower rate than Q1 related to the timing of onboarding of the Oracle customers. And this is just the timing of the contracts and the timing of onboarding them.

[Mark Zgutowicz, Equity Research Analyst at The Benchmark Company LLC]

Okay. Thank you. Appreciate it.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Yeah. Thank you.

[Operator]

Thank you. One moment for

[Operator]

our next question, which will be

[Operator]

coming from Omar Dasuki of Bank of America. Your line is open, Omar.

[Omar Dessouky, Analyst at Bank of America]

Hi, there. I wanted to double click on your comment about continuing to invest in a mid market sales team. So how should we think about the ramp of that investment? Namely, is it sort of like a one time investment? Will you invest as you see growth?

[Omar Dessouky, Analyst at Bank of America]

And what is the ultimate size of this incremental sales force as compared to your existing sales force? Thanks.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Thanks, Omar, for the question. So, the way to think about the ramp of mid market, we're being thoughtful about the ramp of the sales team for a couple of reasons. Bringing them on board, training them to be able to sell our product, but quickly be able to start activating accounts, lighting them up and generating revenue. So the plan we have in place, it's several quarters of bringing these, I'll say, tranche of sales reps in and onboard them and ramp them. The other thing, and I've seen this in my many years of running sales teams, mid market and inside sales teams are as successful as the revenue they generate.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

So, there's got to be some form of self funded revenue model in place where the team has got to generate the revenue, put the numbers up on the board as we continue to fund headcount. In terms of comparing the size of mid market to our larger team, it's a fraction of the global enterprise team. But again, we're confident in this strategy and investing in mid market, especially as we're seeing the adoption rate that we're seeing and putting up numbers like 24% in optimization. So, we'll keep investing in the performance based products, in the automation and onboarding and training the sales team.

[Omar Dessouky, Analyst at Bank of America]

Okay, so that's very interesting. Thank you. It sounds like you're alluding to an inside sales model rather than like more of a high touch model for your larger clients. Let me know if I'm hearing that right. And how should we think about the sales cycles in mid market as compared to your existing clients?

[Omar Dessouky, Analyst at Bank of America]

Thanks. That's the line

[Omar Dessouky, Analyst at Bank of America]

with us.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Yeah, great question. Yep, so mid market, as I mentioned before, they're performance based advertisers. They're lower touch, simpler activation, simpler product offering, but very fast to activate and accelerate and get live. So, both in simplifying the optimization product offering, investing in automation, so it doesn't require lots of white glove treatment.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

They're more self serve clients. And then again, just ensuring that the products are driving the efficiency and ROI that they're looking for.

[Operator]

And I am showing no further questions at this time. I would now like to turn the call back to Lisa Schneider for closing remarks. Your line is open.

[Lisa Utzschneider, CEO & Director at Integral Ad Science]

Thanks everyone for joining We're off to a strong start in 2025, and we are executing on our growth strategy. We are leading with innovation and have launched several first to market products that are live across platforms. Thanks to the entire global IAS team for your efforts. Have a good night, everyone.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Participants

Executives

• Jonathan Schaffer, SVP - IR
• Lisa Utzschneider, CEO & Director
• Jill Putman, Interim CFO & Director

Analysts

• Andrew Marok, Director at Raymond James Financial
• Jason Helfstein, MD & Head - Internet at Oppenheimer & Co. Inc.
• Mark Kelley, MD - Internet at Stifel Financial
• James Heaney, SVP - Equity Research at Jefferies
• Youssef Squali, MD & Head of Internet and Digital Media Research Group at Truist Securities
• Robert Coolbrith, Vice President, Internet Equity Research at Evercore ISI
• Justin Patterson, Managing Director at KeyBanc Capital Markets
• Brian Pitz, Managing Director and Senior Analyst at BMO Capital Markets
• Jason Kreyer, Senior Research Analyst at Craig-Hallum Capital Group LLC
• Mark Zgutowicz, Equity Research Analyst at The Benchmark Company LLC
• Omar Dessouky, Analyst at Bank of America