Hi, everybody. This is Omar Jessop. I'm a Senior Analyst at Bank of America, covering internet. I cover a number of companies active in the advertising technology space, such as AppLovin, DoubleVerify, Unity, Magnite, Digital Turbine, and a couple of others. Today I have a company I've been very interested in for quite a long time, DoubleVerify, and the CFO, Nicola Allais. DoubleVerify has been active on the conference circuit. I want to take a high-level view with this conversation, because I think a lot of investors are going to be interested once DoubleVerify's revenue starts to accelerate again. I want to take a second to remind everybody that this was a very high growth company at one point. Hopefully we'll discover a little bit in this conversation, what was repeatable during that high growth period and what was potentially unrepeatable during that high growth period, so investors can think about the next high growth period. I'm going to frame this conversation chronologically, Nicola. Yeah. There was the first phase in the open web scaling period, roughly 2019-2023. DoubleVerify's activation segment, I think compounded at very high rates, something like 30%-40% or something like that. Really high for four years. Even the non-ABS portfolio grew very quickly. I think it was sort of around 20%-23%. Right. Amazing growth. You became a much bigger company. During that period, you consistently raised guidance and beat expectations. There seemed to be a second phase, more of a transition period between 2024 and 2026 when growth slowed. I wanted to be very explicit about what changed, what the market got wrong, and how DV executed. There's a third phase, which is now kind of looking forward. Let's dig into the current portfolio and think about how you think of guidance. Let's go ahead and start just really as a kind of a background, that hyper-growth era. Right. Can you look back at that era and they had one specific product that grew like gangbusters, Authentic Brand Suitability, 75% CAGR. Yeah between 2019 and 2023. It was a new product, I think, in 2019 at the time. The reason I wanted to focus on that is because it gives me the intuition that your business is very much a product portfolio driven business, and if you find the right product for the right market, you can really change the game. Yeah. Right. When you look back at that period, what were the two or three biggest drivers of DoubleVerify's growth? Yeah. For those here who may be new to the story, just one minute as to what DoubleVerify does. DoubleVerify helps advertisers make sure that their ads in the digital ecosystem are placement environments that are brand safe, fraud free, in the right geography, and viewed by a human. We do that for advertisers wherever they spend. The idea for DoubleVerify is to verify wherever the advertiser is spending their dollars. The period that you just mentioned, Omar, is a little bit of where the dollars were at the time, which was in the open web, and we were scaling with our clients. There was hypergrowth in the open web. We had the right products, for us to be able to create sticky relationships with our clients as they were spending more and more through channels that were new to the open web. You mentioned Authentic Brand Suitability. That is a product that was in the programmatic space of open web, which is where the dollars shifted to, in that period. We don't control where advertisers are spending their dollars. We want to be able to verify wherever they're spending. At the time, they were spending a lot through the programmatic channels, and Authentic Brand Suitability was a perfect product for the advertisers to be able to use our services. What Authentic Brand Suitability does is on the programmatic side of the business, it allows advertisers to evaluate an ad impression even before they buy it. Even before they buy, the advertiser can use Authentic Brand Suitability to say, "This is going to be a good impression for me or a bad impression for me." That's naturally where the advertisers want to be. They want to be able to avoid spending dollars if they know it's going to be in the wrong space for them. The growth that we saw, the way we think about the growth vectors that we have is, you're correct that it's product driven, but it's also vertical driven. In the history of the company, we went deep in open web because that's where the advertisers were spending. We're now entering a phase where we're going to look at replicating that for social. I'm sure we'll talk about it. Soon thereafter, we will be doing the same thing for AI. For us, it's where can we verify? Do we have access to the vertical? Can we do it for every single dollar the advertiser is spending? Your product developers came up with that product. Yeah. Can you tell us a little bit about how they were thinking at the time and what that process was to come up with such a gangbuster product? Yeah. They could potentially do it again. What is that process? Yeah. The company started with measurement products. Measurement is very simple. An ad runs, we tell the advertiser how the ad did. Advertisers like that, of course, would rather have the information available before they actually did. What Authentic Brand Suitability did, what our product development team realized was that they could use the information that we were capturing on the measurement side to create a product on the programmatic side, pre-bid side. Authentic Brand Suitability captures the data that we collect anyway on the measurement side and creates a loop so that the advertiser can feed what they learn post-running the ad into a product that's rebidding. That loop is a loop that the product team has been able now to replicate in social. In social, which is now the next phase of growth for the company, we've been able to create that loop again. In order to use an equivalent of Authentic Brand Suitability in social, you need to use our measurement product because that's the data that feeds the product. That loop is very unique, and it's really at the core of what we do to be able to help the advertisers both pre- and post. The product team really thinks about all that all day long to try to replicate that loop. One part of the equation that we haven't talked about is integrations. In the open web, it's easy to launch a product. Information is available. What is a little bit trickier to do on the social platform is that you need to integrate with every single platform. That is where the product team gets very creative, right? It's what kind of information is going to be available to us from the social platforms, and what are we going to be able to do with that level of information? You mentioned a period in the last 24 months. It's been a very critical period from a product perspective because the walled gardens have granted us access. They have finally provided information that allows us to create an Authentic Brand Suitability like product for social. Before we move on to, obviously, that's important, I still think there's some good information we can get from looking at the past, which is how do your product developers know what your customers want right now? What's that partnership like during the development process? Are there surveys? Are there initial tests with a small set of customers, or do you just sort of know what they want? How is that knowledge of your customer enhanced now that you've been through this cycle once? One of the key things for DoubleVerify is we work with the largest brands in the world, right? Out of the 1,000 largest global brands in the world, we work with about half of them right now, and the number is growing. What that allows us to have is a commercial relationship with a client where we understand what they're looking for, and that informs how the product development team thinks about what the next product might be. This will be quarterly business reviews with a client, where we hear about their pain points, and we tell them the types of products that we're working through. That partnership then engages the advertisers to then speak to the platforms to say, "Hey, what DoubleVerify provides is actually something that's really necessary for us." They become kind of the spokespeople for verification to be available in all the verticals. It's a back and forth. We like to do tests. If we're able to get to a test period of our product, we have a high likelihood of winning that engagement because our products are superior in terms of brand safety and suitability and the levers that the advertiser can turn. That relationship with a client is really what's going to lead us to how we do AI and how we do verification AI. The partners that we have with the advertisers are really the front line, talking to the platform and saying, "Hey, we need verification to be able to spend dollars on your platform. Got it. Looking forward. Yeah. I think your suite of tools for measurement on social sort of started, I think it was beginning of 2025 with measurement, and it took a little while to get the pre-bid up and running. It's up and running now, and you're scaling. I assume that was also done in partnership with your advertiser clients, right? Correct. You have pretty good visibility to that. The key part of that conversation, why social only now, right? 70% of all digital ad spend. Why are we talking about verifying into the social platforms today? It's been a vector for a very long time. The reason why we're talking about it now is because the social platforms ultimately agreed that verification was useful in their space, right? This is not the open web where you can just build a product. You need access to data. That's where the advertisers played a large role. They said, "Okay, we're not going to spend a lot on social until you have verification available." We now have the tools to replicate what we did in the open web on social, and that's, as you said, only in the last 24 months. Got it. Let's now kind of maybe talk a little bit about your 2026 guidance, I think is what a lot of investors are interested in. The stock is trading really cheap. Yep. Let me ask it a different way. I think you guided 8%-10% revenue growth for 2026. Yep. Can you talk about the growth drivers factored into that guidance and some of the ways you're driving the bottom line improvement? Sure. The foundation for the model is Net Revenue Retention. We exited last year with 109% Net Revenue Retention, and the reason why that is because our clients stay with us for a very long time. The average tenure of our top 75 clients is over eight years, and the average spend by client has increased. The top 100 clients used to spend $2.2 million a few years ago. They now spend $4.3 million a year with us. The basis for the model is NRR, and last year we exited the year at 109. You'd say, why are we guiding to 8%-10%? We're in a time where we have just launched our social product. They're growing much faster than that rate. In Q1, we grew 23% social measurement. We grew over 90% for social activation, of course, off smaller base. That's the driver of what is going to become the overall driver of the company once it scales. To answer your question, we start with 109%, which is the NRR. We have inside the business channels that are growing extremely fast, but they're still on a small scale. Kind of comparing back to the ABS days. Sure. Right. ABS, I think probably opened a lot of new accounts for you. Yes. I guess the question now is this new product also going to open kind of new accounts for you? Or is it mainly increasing your share of wallet with your existing clients at this point, do you think? I think it's a good question. I think the motion of having pre-bid and post-bid for social is going to allow us to verify advertising spend for clients that we already have. It will be an upsell motion because now it's available. What is going to attract new clients is the new product that we've launched since. We've been talking up until now basically about verification, post-bid and pre-bid. We have, since over the last three years, we've acquired two companies that allow us to do not just verification but also optimization. That's a company that's called Scibids, where after we say to an advertiser, "Hey, this is a good impression for you to bid on," Scibids allows them to, even within that inventory, to bid against the ones that will actually optimize their return on investment. That's an optimization tool. Last year, we bought a company that is going to allow us to do proof. Not only verification, but optimization and now proof. The answer to your question is, I think the way we are going to continue to gain share is that we now have a three-pronged approach. It's not just verification. Verification, optimization, and proof is pretty unique in the market. No one else really has the breadth of those three products, and that's how we're kind of winning new clients. I'll give you one example. Yeah. This is a competitive market, and when an RFP comes up, we always go and we lead with verification, optimization, proof. There's a client that's using a peer verification part in the space, ran an RFP, decided they didn't want to switch their provider, but we were able to say to them, "Why don't you try optimization with us anyway?" Now we have their optimization business, not yet the verification business, and that allows us to create a relationship that at some point will get us the verification business too. Are we talking about kind of expanding past the kind of Fortune 500, or are we talking about competitive share gain? Yeah, that's a good question. First it is share gain. We work with half of the top 1,000 advertisers. Now that we have a differentiated product, we feel good about being able to win more of those clients. The bread and butter of our business is the large brands, because those are the brands that are the most keenly aware of what it means to have a brand safety violation. We do have businesses that's below the top 1,000 advertisers, and that generally comes through the DSP, the programmatic part of the business. We are active in there. We have specific teams that go after those clients to try to grow them into a larger engagement. Really, the larger part of our business is the top 1,000 clients. Now that we have this differentiated product, we think we can gain share there. Okay. Now your clients are large. They're quite interesting. Yeah. Right? Because you have sort of the CMO. Yep. You have international offices. Yeah. Right? Each of which do their own advertising thing. Yes. Within any client, there are multiple stakeholders. Yes, correct. Tell me how your portfolio potentially helps you kind of penetrate some of those pockets that you haven't been able to yet? Every client is a little bit different, I'll start by saying, some clients go the global mandate way of things, right? Everybody needs to use DV no matter where you are in the world, that becomes a global mandate that still requires us to go market by market to help turn on the product. Some of the clients will be more willing to let the markets decide which product, which verification partner to work with. It's obviously, we have a relationship at the CMO level, as you say. What we try to do is create the value proposition there so that they can engage every single market to turn on DoubleVerify. What we've done in the last three years is, our share of revenue outside the U.S. is small today. It's smaller than the share of dollars that are being spent outside of the U.S. in terms of digital advertising. Now we have the people on the ground to kind of win the on the ground RFPs and RFIs for clients that are, let's say, in APAC or in EMEA. That's going to continue to be a growth vector for us. The most important thing for us is to have the relationship at the brand. As some of you know, there's agencies involved in the space. Clients change agencies all the time. We want to have the relationship with the brand so that we can continue the relationship no matter which agency is also involved. Just maybe developing that a little bit. Do these big brands, are they familiar with both the frameworks of both you and your other primary competitors? It's sort of like Moody's and S&P ratings. Everybody knows the ratings methodology. Do they usually kind of only know one and there would be a switching cost, like to move to the other vendor? They will generally know all the players in the market. An RFP generally starts with two or three names of companies. There are a whole bunch of single point solutions also that get involved. I don't think that this is a known space. There are not a lot of players that do everything that we do. Every advertiser will know. I think the onus is on us to show the differentiation with optimization and proof to kind of gain a market differentiation that's not just about price for verification. That's been, the players have been the same for 10+ years. I don't think the market has changed too much on that. Yeah, probably. Okay, got it. Yeah. Got it. Nicola, let's go product by product here. Thinking about the open web portfolio, you talked about Social being the driver of growth. Yeah. Is open web essentially stable? Is it flat declining? How do you guys think of that going forward? Yeah. Again, we want to verify where the dollars are going. We don't make the decision to say, we're more open web-focused or social-focused. What we know is that the advertisers are spending more on social. What's important for us is to have the tools there that we now have to be able to verify as more dollars go there. That's the part that we control, right? We control 23% growth in measurement for social, 90-plus% growth in social activation. The open web is still a vast environment. There are a lot of dollars that are going through it. Digital ad spend in total is going up single digit every year. We don't participate in the media buying. This is about us being available wherever the advertiser is going. Of course, open web is not growing as fast as social or CTV or soon AI. We need to remain involved in this space just because dollars are still going there, of course. For us, what we control is just being able to be available as the dollars move to social from mobile, online video, and display. Is it safe to say that you're sort of de-emphasizing R&D investment in that area because it's less high growth and allocating it more to these other high growth areas? Yeah. That's a very interesting question because what we do is we have a DV Authentic Ad metric that applies to any environment, right? The technology behind it is the same regardless of the environment. What's different is the integration into the different social platforms as opposed to open web. Whatever development we're doing for social applies to open web as well. We're launching an attention product that will work both open web or social. We're launching CTV do not air products that are currently bought through the open web channels. At some point, they might be bought directly, they might be bought differently, but right now, that's a product that's launching in the open web buying space. The emphasis on R&D is really how much better can our DV Authentic Ad become, and that applies wherever the advertiser is spending. We don't have really two teams, right? It's improve the product, and it will be applied wherever the advertiser is spending. Okay. Then, let's talk about Authentic Brand Suitability. Yeah. Are there any major unlocks that could drive another phase of big growth for that product? Yeah. I think it's been sort of mid-to-high single digits recently. Yeah. Authentic Brand Suitability is, if you think of the scale of the business, let's just talk a bit of numbers here. If you think of the measurement side of the business for open web is about $120 million or so. The Authentic Brand Suitability and core programmatic suitability products is over twice that amount. The reason why it's twice that amount is because the advertisers want to be able to prevent bidding on bad things, so they like that product, and it's also priced twice as much. That product is now over 70% penetrated in our top 500 clients. It's been a runaway success because we've talked about the power of the product. The next vectors of growth for that product is going to be new clients for sure because it is a pretty unique product. It's not really available in the market anyway. New clients and then continuing to kind of sell the product into the lower base. It is a premium priced product, so the ability for a client that, let's say, who's only spending in APAC on mobile for fraud, they might not be so interested in ABS. I think the answer to your question is very powerful. It's unique. The growth vector now that it's already 70%-plus penetration Fortune 500 is obviously not what it's meant to get us there. The real focus for us is replicate that one to two times ratio measurement to activation that we have on open web on social. Right now the activation on social is really, really small. Okay, social's growing very fast. Yeah. Are there any kind of bottlenecks to scaling at all at the moment that you're working on alleviating? If we were having this conversation 12 months ago, we would say the bottleneck was that we were not available to provide a pre-bid product that's akin to Authentic Brand Suitability. That has now been opened. We're able now to receive information, especially from Meta, which is a large player there, that allows us to do a pre-bid product for social that's close to what we do on the open web. It's not exactly the same because on open web you can actually bid on impressions with our data. On social it's a pre-screen tool. The unlock is we have a roadmap. We still need to integrate into TikTok to launch that product. We need to continue to refine the level of data that we get from Meta to create a really powerful product. Considering where we were 12 months ago where we had no data, we are in a much better position now to ramp that product. Got it. Let me ask you, we only have six minutes left here. I was wanting to talk about Authentic Ad, Scibids, Rockerbox, and Map, but then there's also this topic of the LLM platform advertising opportunities. Which of those two do you think is more important to address? Well, I think, for new investors, the LLM is the big opportunity next. Okay. Yeah. Well, let's talk about that. Yeah. How should investors think about advertising on LLM platforms as a source of growth for you? LLM is really exciting for us and so the way to think about it for what we do is there's a $1 trillion of digital ad spend. There's about $400 billion that's search. Up until today, verification is not available on search. It's a one-player field. Verification is not available on the search part of the ecosystem. What LLMs will do is they will create a new environment, and we've heard some players saying OpenAI today will be $100 billion of ad spend on their platform alone in 2029 or 2030. We believe, and we're not the only ones, we think that the dollars that will first shift to LLMs are dollars that were on search. If that happens, that opens up the TAM for us. These will be new dollars that we have not been able to do up until today. The LLM platforms know they will need verification because it's a competitive space. Unlike search, this is a very competitive space. There are plenty of platforms, and in order to have advertisers who are currently testing it spend a lot of dollars, the advertisers that we have a relationship with will say to the platforms, "Hey, we need verification in here." It's a new environment. Brand suitability is a big deal. Those are conversations that are happening now. When those conversations unlock an opportunity for us to verify the inventory that's going there, it expands the TAM pretty dramatically for us. That's the next wave. We talk about open web, we talk about social, and now we're talking about LLM advertising that is a TAM expansion for us, which is very exciting. Okay. That is exciting. Yeah. Of course, we're interested in knowing when. When? Yes. Let's just maybe start off with the R&D process. Yeah. You're in an R&D process now, I assume, and you're already engaged with those LLM builders? Absolutely. Yes. Okay. The environment. What does product development look like? Product development for that environment is to learn the environment, to understand where the ads are going to be positioned, because it's a chat. Very specific to every single person. To learn the environment, to understand what the drivers of brand safety and suitability will be. We can do a lot of that work ourselves. We're just learning. Now, the interesting thing with the LLMs, the way it's set up today, is that unlike social, which is user-generated content that has many parameters, text, video, song, image. The chat environments right now are really text-driven, which is something that we've been doing for 10 plus years. In theory, that is an environment that we know very well and that allows us to do a lot of pre-work. We are speaking with some of the platforms right now to essentially understand how they're thinking about building their ad business. They don't have one today. They're turning to us and saying, "Hey, can you help us understand how we should think about how to build a business?" We're having those conversations that allow us to raise the awareness of verification. On the other side, the advertisers are testing dollars, but they've said very clearly they're not going to spend a lot into those platforms until there's verification. The answer as to when is hard to answer because there are competing priorities within the LLMs anyway. Those are active conversations right now. What do you think is the potential for self-verification? Because all of these platforms have their own tools. Sure. In whatever open web and social, they have their own tools which some advertisers don't trust, and that's why they have an independent source like you. Yeah. I guess, the high-level question here is how much will that new LLM space look like the other spaces that you've been in in terms of market structure? Yeah. Third-party independent verification is important to advertisers. They are today. We're now a business that's been scaling for several years, even though free tools are available on every single platform. You can go to a programmatic DSP and use their free tool to verify. You can give your money to Meta and allow Meta to say, "Don't worry, we'll take care of where your dollars are going to be spent." The reality is the advertiser wants a third party to make sure that what they're hearing from their platform is correct. That's one. Two is the advertisers want a measure that is the same across everywhere they spend. No single advertiser is just going to spend on the LLMs. They're going to spend across social, open web, and LLMs, which means that they want to be able to have a benchmark, like a DV product that says, "This is more brand safe," or, "This is not as brand safe." That allows them to make decision around spend. I think third party independent with a benchmark that's the same everywhere is really critical for the large brands. Maybe we can just finish on this last question here, Nicola. Yeah. When you say it's really critical, is it just really critical, or is it required? In some of my own expert readings, I've heard that in some cases it's actually in the corporate governance that they have to have third party verification. That's absolutely true. How widespread is that? I think, look, it is going to depend on every single advertiser. We are not a very expensive product compared to the amount of dollars that they are spending. The ratio of our cost to the media spend is small on purpose in a way, because it allows the CMO to say, "It is required. I don't want to be the one CMO that is not using verification and then has a brand safety violation that kills my brand reputation." Whether it is in the governance or not, I think every CMO of a sophisticated company will say, "I need this product. Okay. Well, listen here. Great. Appreciate it. Yes, thanks for having me.