DoubleVerify Holdings, Inc. Q4 FY2024 earnings call

• Revenue Growth: Total revenue grew 15% in 2024, driven by double-digit growth across all revenue lines.
• Customer Wins: Won an unprecedented number of large global enterprise customers in 2024 with a win rate above 80%.
• Supply Side Growth: Supply side revenue grew 25% in 2024, fueled by retail media platforms and new platform/publisher customers.
• Profitability: Delivered 33% adjusted EBITDA margin and $160 million in net cash from operating activities in 2024.
• Challenges: Navigated headwinds like scale back ad spend from 6 large customers and a significant customer spend reduction in Q4 2024 due to commodity costs.
• Product Innovations: Launched content level avoidance solutions for Meta and TikTok, acquired Scibids and Rockerbox to expand campaign optimization and performance measurement capabilities.
• Social Media Expansion: Launched pre-bid activation solutions for Meta and TikTok, with solid initial interest from customers.
• Sell-Side Solutions: Rolled out sell-side curation and decisioning solutions on major SSPs to drive higher attach rates.
• Rockerbox Acquisition: Agreed to acquire Rockerbox for $85 million, expected to contribute to measurement revenue in 2025.

In 2024, DoubleVerify grew total revenue by 15% year-over-year to $657 million. Activation revenue saw 13% growth for the full year, with 10% growth in the fourth quarter. Measurement revenue grew 15% for the full year, and 7% in the fourth quarter, with social measurement up 9%. Supply side revenue grew 25% year-over-year in 2024, with a 34% growth in Q4 2024. Retail Media Solution grew 36% in 2024. Social measurement revenue grew 27% in 2024, representing 48% of measurement revenue. CTV measurement impression volumes grew 66% in 2024, with CTV accounting for 11% of total measurement impression volume.

For Q1 2025, revenue is expected to range between $151 million and $155 million, with adjusted EBITDA between $37 million to $41 million. Full year 2025 revenue growth is expected to be approximately 10%, adjusting for headwinds and factoring in opportunities like social revenue growth, upselling premium solutions, and Rockerbox integration. Full year 2025 adjusted EBITDA margin is expected to be 32%.

• Customer Spend Reduction: One large customer significantly reduced spend due to commodity costs, impacting Q4 2024 results and excluded from 2025 guidance.
• Ad Spend Shifts: Shift of ad dollars from open web programmatic to proprietary platforms, limiting activation solutions availability.
• Macro Uncertainty: Post-election ad spend rebound not materializing, impacting Q4 2024 performance.

Q: Matt Swanson from RBC asks about the strategic rationale for acquiring Rockerbox and how it enhances the customer value proposition.

A: Mark Zagorski responds about how Rockerbox rounds out the end-to-end measurement solution, creates a differentiator, and leverages Scibids playbook for integration.

Q: Eric Sheridan from Goldman Sachs asks about AI's impact on the advertising ecosystem and margin trajectory.

A: Mark Zagorski discusses AI's role in product innovation and Nicola Allais comments on margin growth patterns and Rockerbox acquisition impact on margins.

Q: Youssef Squali from Truist Securities asks about business health and NCF.

A: Mark Zagorski and Nicola Allais address client challenges, TAM, and MTF drivers.

Q: Maria Ripps from Canaccord Genuity asks about the advertiser impacting Q4 results and social media ramp.

A: Mark Zagorski talks about the CPG customer-specific issue and social media activation ramp cadence.

Q: Andrew Boone from Citizens asks about Rockerbox and cost structure.

A: Mark Zagorski discusses Rockerbox's mid-market opportunity and cost structure's role in growth and margins.

Q: Brian Pitz from BMO Capital Markets asks about Oracle clients and CPG category.

A: Mark Zagorski and Nicola Allais provide updates on Oracle client onboarding and CPG category performance.

Q: Laura Martin from Needham & Company asks about product set breadth.

A: Mark Zagorski responds on how the product set covers advertiser needs for measurement, optimization, and brand safety.

Q: Arjun Bhatia from William Blair & Company asks about PMP and Meta SAC.

A: Mark Zagorski discusses PMP impact and Meta SAC's relation to content and brand safety.

Q: Andrew Marok from Raymond James asks about URL level reporting.

A: Mark Zagorski explains URL level reporting as a transparency initiative.

Q: Frank Joseph Surace from Barclays asks about the cohort of 6 customers in 2025 guide.

A: Nicola Allais discusses muted growth assumption for the cohort of 6 customers in 2025.

Q: Arti Vula from JPMorgan asks about macro demand factors and Home Depot/Dollar General wins.

A: Mark Zagorski addresses post-election ad spend impact and Home Depot/Dollar General deals' land and expand strategy.

Q: Alec Brondolo from Wells Fargo asks about Rockerbox's acquisition rationale.

A: Mark Zagorski explains Rockerbox's complementary capabilities and synergy with DoubleVerify's vision.

Q: Omar Dessouky from Bank of America asks about supply side business growth normalization.

A: Mark Zagorski discusses supply side growth drivers and normalized growth expectations.