DoubleVerify Reports First Quarter 2024 Financial Results
NEW YORK , May 07 /Businesswire/ - DoubleVerify (“DV”) (NYSE: DV), one of the leading software platforms for digital media measurement, data and analytics, today announced financial results for the first quarter ended March 31, 2024.
“We made solid progress across multiple growth vectors in the first quarter, ending the period above the high end of our guidance,” said Mark Zagorski, CEO of DoubleVerify. “We enhanced and scaled our independently accredited core verification and performance solutions across leading social and CTV platforms, grew the adoption and usage of Scibids AI, and expanded our international businesses through global partnerships with large new and existing advertisers, all of which drove strong revenue growth and profitability. Our solutions continue to deliver unparalleled utility and value by reducing media waste and maximizing campaign effectiveness, fostering expansion with existing customers, and attracting great new advertisers to DV.”
First Quarter 2024 Financial Highlights:
(All comparisons are to the first quarter of 2023)
- Total revenue of $140.8 million, an increase of 15%.
- Activation revenue of $79.3 million, an increase of 13%.
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Measurement revenue of $49.3 million, an increase of 19%.
- Social measurement revenue increased by 51%.
- International measurement revenue increased by 40%, with EMEA growth of 44% and APAC growth of 33%.
- Media Transactions Measured (“MTM”) for CTV increased by 45%.
- Supply-side revenue of $12.2 million, an increase of 8%.
- Net income of $7.2 million and adjusted EBITDA of $38.1 million, which represented a 27% adjusted EBITDA margin.
First Quarter and Recent Business Highlights:
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Grew Total Advertiser revenue by 16% year-over-year in the first quarter.
- MTM increased by 18% year-over-year.
- Measured Transaction Fee (MTF) declined 2% year over year primarily due to product mix. Measurement volumes, which are lower-priced than activation, increased relative to the prior-year period, driven by strong growth in social and international measurement.
- Continued to achieve a Gross Revenue Retention rate of over 95% in the first quarter.
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Drove global market share growth through product upsells, international expansion, and new enterprise logo wins. Notable first-quarter new business wins include:
- Expansions: Asda, Hyundai Motor Group and Audible by Amazon
- New enterprise customer wins: McAfee, Carlsberg, and Perigo
- Expanded brand safety and suitability measurement on Facebook and Instagram Feeds and Reels to 25 languages and extended viewability and fraud/IVT measurement coverage to Explore on Instagram.
- Expanded brand safety and suitability measurement on TikTok to Japan and Brazil and broadened Spanish coverage to include four Central American countries where TikTok has launched.
- Added 16 new brand safety and suitability categories to complement TikTok’s latest Inventory Filters, providing advertisers with enhanced measurement insights, greater protection across sensitive topics, and the ability to meet unique, industry vertical-specific brand requirements with increased precision.
- Expanded measurement capabilities on Amazon to offer media quality authentication on Amazon’s owned and operated ad-supported OTT and CTV inventory. Brands can benefit from DV’s fraud detection, in-geo measurement, and app-level suitability across devices, including desktop, mobile, and CTV. DV also enables marketers to measure Viewability and Attention across Amazon’s owned and operated, ad-supported CTV inventory.
- Partnered with Netflix to measure attention at the impression level with DV’s Authentic Attention® for CTV to showcase Netflix’s CTV Attention performance compared to other advertising-based video-on-demand (AVOD) apps and free ad-supported streaming television (FAST) channels.
- Launched program-level measurement solutions with a leading streaming platform across over-the-top (OTT) devices, including CTV, to enable advertisers to measure brand safety and suitability and content performance at the program level.
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Uncovered “FM Scam,” the second significant global scheme targeting audio spending after BeatSting. FM Scam spoofs a wide range of devices and audio players and generates up to 100 million monthly requests. During their peak, FM Scam and BeatSting cost unprotected advertisers more than a million dollars per month on a combined basis.
Accreditation and Certification Highlights:
- Achieved Media Rating Council® (MRC) accreditation for MRC for Video Viewability in the CTV environment. DV also expanded accreditations for its CTV pre-bid data segments to include property-level brand suitability, contextual, and Fully On-screen segments.
- First company to attain TrustArc’s TRUSTe Responsible AI Certification, demonstrating DV’s industry-leading commitment to AI governance and certifying its AI is valid, reliable, explainable, interpretable, accountable, transparent, privacy-enhanced, fair, safe, secure, and resilient.
“In the first quarter, we exceeded the top end of our guidance ranges on revenue and adjusted EBITDA, achieving year-over-year revenue growth of 15% and an adjusted EBITDA margin of 27% driven by continued product successes in fast-growing sectors, including Social,” said Nicola Allais, CFO of DoubleVerify. “We are adjusting our full-year 2024 guidance ranges to 17% revenue growth, and 31% adjusted EBITDA margins at the midpoints primarily due to uneven spending patterns among select large advertisers.”
Second Quarter and Full-Year 2024 Guidance:
DoubleVerify anticipates Revenue and Adjusted EBITDA to be in the following ranges:
Second Quarter 2024:
- Revenue of $152 to $156 million, a year-over-year increase of 15% at the midpoint.
- Adjusted EBITDA of $41 to $45 million, representing a 28% margin at the midpoint.
Full Year 2024:
- Revenue of $663 to $675 million, a year-over-year increase of 17% at the midpoint.
- Adjusted EBITDA of $199 to $211 million, representing a 31% margin at the midpoint.
With respect to the Company’s expectations under "Second Quarter and Full Year 2024 Guidance" above, the Company has not reconciled the non-GAAP measure Adjusted EBITDA to the GAAP measure net income in this press release because the Company does not provide guidance for depreciation and amortization expense, acquisition-related costs, interest income, and income taxes on a consistent basis as the Company is unable to quantify these amounts without unreasonable efforts, which would be required to include a reconciliation of Adjusted EBITDA to GAAP net income. In addition, the Company believes such a reconciliation would imply a degree of precision that could be confusing or misleading to investors.
Conference Call, Webcast and Other Information
DoubleVerify will host a conference call and live webcast to discuss its first quarter 2024 financial results at 4:30 p.m. Eastern Time today, May 7, 2024. To access the conference call, dial (877) 841-2987 for the U.S. or Canada, or (215) 268-9878 for international callers. The webcast will be available live on the Investors section of the Company’s website at https://ir.doubleverify.com/. An archived webcast will be available approximately two hours after the conclusion of the live event.
In addition, DoubleVerify plans to post certain additional historical quarterly financial information on the investor relations portion of its website for easy access to investors.
Key Business Terms
Activation revenue is generated from the evaluation, verification and measurement of advertising impressions purchased through programmatic demand-side and social media platforms.
Measurement revenue is generated from the verification and measurement of advertising impressions that are directly purchased on digital media properties, including publishers and social media platforms.
Supply-Side revenue is generated from platforms and publisher partners who use DoubleVerify’s data analytics to evaluate, verify and measure their advertising inventory.
Gross Revenue Retention Rate is the total prior period revenue earned from advertiser customers, less the portion of prior period revenue attributable to lost advertiser customers, divided by the total prior period revenue from advertiser customers.
Media Transactions Measured (MTM) is the volume of media transactions that DoubleVerify’s software platform measures.
Measured Transaction Fee (MTF) is the fixed fee DoubleVerify charges per thousand Media Transactions Measured.
International Revenue Growth Rates are inclusive of foreign currency fluctuations.
DoubleVerify Holdings, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
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As of |
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As of |
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(in thousands, except per share data) |
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March 31, 2024 |
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December 31, 2023 |
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Assets: |
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Current assets |
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Cash and cash equivalents |
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$ |
302,017 |
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$ |
310,131 |
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Short-term investments |
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32,312 |
|
|
|
— |
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Trade receivables, net of allowances for doubtful accounts of $9,580 and $9,442 as of March 31, 2024 and December 31, 2023, respectively |
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195,638 |
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206,941 |
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Prepaid expenses and other current assets |
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20,356 |
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15,930 |
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Total current assets |
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550,323 |
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533,002 |
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Property, plant and equipment, net |
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60,851 |
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58,020 |
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Operating lease right-of-use assets, net |
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64,910 |
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60,470 |
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Goodwill |
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432,865 |
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436,008 |
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Intangible assets, net |
|
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132,815 |
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140,883 |
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Deferred tax assets |
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16,619 |
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13,077 |
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Other non-current assets |
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1,810 |
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1,571 |
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Total assets |
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$ |
1,260,193 |
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$ |
1,243,031 |
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Liabilities and Stockholders' Equity: |
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Current liabilities |
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Trade payables |
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$ |
12,761 |
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$ |
12,932 |
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Accrued expenses |
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34,218 |
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44,264 |
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Operating lease liabilities, current |
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9,844 |
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|
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9,029 |
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Income tax liabilities |
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6,064 |
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5,833 |
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Current portion of finance lease obligations |
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2,640 |
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2,934 |
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Other current liabilities |
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9,841 |
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8,863 |
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Total current liabilities |
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75,368 |
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83,855 |
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Operating lease liabilities, non-current |
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75,124 |
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71,563 |
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Finance lease obligations |
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2,344 |
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2,865 |
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Deferred tax liabilities |
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7,514 |
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8,119 |
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Other non-current liabilities |
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2,752 |
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2,690 |
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Total liabilities |
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163,102 |
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169,092 |
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Commitments and contingencies (Note 14) |
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Stockholders’ equity |
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Common stock, $0.001 par value, 1,000,000 shares authorized, 171,756 shares issued and 171,724 outstanding as of March 31, 2024; 1,000,000 shares authorized, 171,168 shares issued and 171,146 outstanding as of December 31, 2023 |
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172 |
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171 |
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Additional paid-in capital |
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899,354 |
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878,331 |
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Treasury stock, at cost, 32 shares and 22 shares as of March 31, 2024 and December 31, 2023, respectively |
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(1,146 |
) |
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(743 |
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Retained earnings |
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206,139 |
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198,983 |
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Accumulated other comprehensive loss, net of income taxes |
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(7,428 |
) |
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(2,803 |
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Total stockholders’ equity |
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1,097,091 |
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1,073,939 |
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Total liabilities and stockholders' equity |
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$ |
1,260,193 |
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$ |
1,243,031 |
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DoubleVerify Holdings, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) |
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Three Months Ended March 31, |
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(in thousands, except per share data) |
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2024 |
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2023 |
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Revenue |
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$ |
140,782 |
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$ |
122,594 |
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Cost of revenue (exclusive of depreciation and amortization shown separately below) |
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26,618 |
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23,952 |
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Product development |
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36,394 |
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28,555 |
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Sales, marketing and customer support |
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37,872 |
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25,712 |
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General and administrative |
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22,075 |
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20,188 |
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Depreciation and amortization |
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