All right, I think we'll get started. Thank you everyone for being here. I'm Mark Kelley, Stifel's Internet Analyst, for those of you who I haven't met. Very excited to have Integral Ad Science with us today. We've got Lisa Utzschneider, who's the company's CEO, and Tania Secor, who is the company's CFO. So thank you both for being here. Hi, Mark. Thanks for having us. Of course. For those of you who don't know IAS, they are a leading global media measurement and optimization platform in the digital advertising landscape. They help you navigate things like brand safety and suitability, invalid traffic and fraud, and a bunch of other things, like attention, some other newer products that they have. And that's pretty much across all of digital advertising. You know, everything from social, retail media networks, open web, CTV, things like that. So, we're gonna dive into some topics here, today, and I wanna start with... I'm not gonna rehash everything from the first quarter, but you obviously had a, you know, a good Q1. It was better than the guide. You raised the full year outlook. It sounds like the advertising backdrop is stable to improving, but anything else that you would call out in terms of drivers for the re-acceleration that you're expecting in the back half of the year? And then maybe what's the mix between measurement and optimization as we progress? Sure. So we reported a solid Q1 guide. A couple of tailwinds to call out. We're seeing strength in measurement, and in particular, in social, as more and more advertisers are adopting our brand safety suitability solution within the live feeds of the social platforms, including TikTok, Meta, and YouTube. From a vertical perspective, we are diverse across all of the verticals. In particular, where we're seeing strength with the verticals in measurement include CPG, retail, and tech telco. And then another bright spot for Q1 is our publisher growth, and we saw a double-digit growth with our publishers, the publisher business, and in particular, with Publica, which is our leading CTV platform. All right, perfect. If we could focus just on optimization, I guess, what will drive optimization growth beyond 2024, you know, once we start looking out a little, a little farther? Yeah, we have, we spoke to it on the call. We have a robust product roadmap, especially for the back half of the year when it comes to optimization. Just to remind everyone, optimization is our programmatic offering, and we offer both pre-bid programmatic solutions, post-bid, which is measurement. And when you take a look at our robust product roadmap, it's a couple of key pre-bid segments and technologies that our brands have been asking for, things like MFA detection. So that's an area that drives a lot of inefficiency for brands as they run their digital ads on what I call clickbait sites. We've rolled out MFA detection, both pre-bid and post-bid. We spoke to it on the call, that we had 100 campaigns running in the beta. We saw really nice results with the beta, rolled the product to GA. That's out running, and we're driving the adoption. Secondly, attention is another area where our brands are very leaned into, is a better understanding of the attention that they're gaining with the creative ads that they're running. What differentiates our attention product is we partner with Lumen, which is a third-party eye-tracking technology, and we have attention out the door. Another product is Misinformation. We were thrilled to announce the launch of Misinformation in April both on TikTok, on Meta, and the open web. It's an area that brands have been asking for, in particular, get the product out before the U.S. elections. We're seeing nice adoption with this Misinformation, and another call-out is our direct competitor doesn't have Misinformation. The final area of optimization is Total Visibility. We see great green shoots with Total Visibility. It is a differentiated product at IAS, and what it does is it provides greater transparency into Supply Path Optimization, as marketers are leaning into more solutions that extend verification into performance. And Total Visibility does just that, and the brands are loving the product, and we're seeing greater adoption. I would add on to that, what we're seeing in the numbers is an acceleration of our optimization revenue growth in the second quarter. It's expected to more than double the growth rate in the first quarter for optimization. And then, as we move through the year, we're expecting continued acceleration of optimization for all of the reasons that Lisa just talked about, which brings us to the full year outlook. Our midpoint of our revenue growth rate and our guidance is 13% for 2024. We expect social and measurement to be the main driver of that, with higher than 13% growth across measurement, but we are still expecting double-digit growth in optimization fueled by all of these initiatives. Slightly lower than the 13%, but still double-digit. All right, perfect. Yeah. Thank you for that. One quick—there’s a lot of acronyms in tech, you know, and in ad tech. MFA, Made For Advertising websites. So- Yeah ... you click on a slide deck, there's every slide has a thousand ads on it. People are trying to mitigate advertising on those sites, just to give you some alphabet soup. I wanna go back to Q1, again, or Q4. You know, you called out some pricing pressure with a handful of clients on the measurement side, more on the legacy product side. It seems like that transition went as planned or maybe even a little bit better, and it's probably a moot point right now, but is that a fair characterization of how things have transpired? Yeah, that's right. It was ring-fenced, the situation. We were able to renew all of the advertisers. It was less than a dozen. Also important to note, 2024, with those renewals, we were able to extend the volume commitments, expand the commitments, and then also land the full year, which is factored into our full year guide, net revenue positive. I think, I mean, correct me if I'm wrong, but it sounds like your clients are also asking to renew for longer periods of time as well? That's right. Yeah. So with those renewals, with a handful of the advertisers, we extended the length of the contract, so if it had been a one-year, we extended it to a two-year, two- to three-year. Also, a few of the advertisers, we were able to extend the geographic footprint. And also important to note is we were able to hold the premium price on Total Media Quality, which is important, given the adoption rate, and also given that we launched the product in early February in Meta. Okay. All right, perfect. Your main competitor called out some headwinds, particularly in CPG and retail. You already said that was an area of strength for you right now. I guess, can you maybe talk about what you're seeing in those verticals? Any other trends you wanna call out? And your competitor also called out, you know, a shift towards social and CTV as a headwind. I guess, can you talk about what you're seeing in terms of budget shifts? Yeah, so, I had mentioned before, diversification of our business is really important to ensure we are scaling our business, drive accelerated growth. Across the top verticals and all of the verticals, it's highly diverse. We are seeing strength, like I said before, in CPG, tech, telco, and retail, in measurement in particular. And then the other thing to call out from an advertiser perspective, it's not highly concentrated. We're also ensuring that we have diversification across our advertiser base. The core advertiser base, of our business, we have relationships with over 2,000 advertisers, many of them are Fortune 500, and it's a highly sticky, loyal customer base, where our top 100 advertisers have been with IAS, on average, for 8 years. So we continue to focus again on driving value, investing in innovation, but ensuring diversification in the profile of the vertical mix, and also the advertiser mix. Okay. Maybe we can go back to social. A lot of focus from investors, particularly around Meta brand safety and suitability. It went live in Q1, as you just said. I guess, can you share some early learnings about client adoption of that product, and maybe how much of an impact that might have on the business, you know, near to medium term? Sure. Clients are embracing our Total Media Quality offering. TikTok, we launched last year with TMQ. We then rolled it out with YouTube, and really pleased to roll out TMQ in the live feed of Meta on February 5th. So the growth we're seeing in social is really being fueled by client embracing TMQ. In fact, in Meta overall, in the first quarter, we saw a 50% increase in the volumes from Meta in the first quarter from the launch date of February 5th through the end of the quarter. As we think about the landscape for Meta, in particular, we've got over 100 clients who aren't just testing Meta in TMQ, in the live feed, they're embracing it, and we've negotiated a higher premium with those clients, driving incremental revenue from Meta and our TMQ offering. If you look out over the course of the year, assuming that 50% growth rate continues in Meta, just to size the Meta opportunity, and you have... You know, Meta is just over 40% of our social media revenue. We had $86 million of social media revenue in 2023. That implies a $15 million approximate increase in Meta revenue in 2024. So really strong embrace. Clients are excited about the quality of the tech, the classification, and willing to pay a premium for our TMQ offering. Okay. All right, perfect. Maybe we can go to TikTok. You're available in a ton of countries, a bunch of different languages. I guess, can you talk about what is adoption like, maybe across different regions? And I guess, what's gonna move the dial for you from here? Sure. So we're pleased with our partnership with TikTok. We now have TMQ available in over 60 markets, 34 languages. The Fortune 500 brands, they love global and scalable because the more we can offer to TMQ around the world, global brands like Coke, they drive that adoption. The majority of our revenue with TikTok is international. Again, a demonstration of the importance of getting that language translation out. And the other thing to note is that the TMQ product, it is more granular, it's more sophisticated. We are classifying video, image, audio, text, within the live feeds of TikTok, YouTube, and Meta, and we are proving out with data. TikTok alone, and we're seeing 3x lift in higher quality media, which leads to higher ROI for the brand. So the brands are very pleased with the result of the product, the performance that they're seeing, with the product, and we'll just continue, to scale, the language and market penetration. Okay. Then maybe to round out the social topic, Snapchat and X, you seem to have first-mover advantage there. I guess, how were you able to integrate earlier than your competitors, and what does that first mover advantage offer you? Sure. So X, we have an exclusive partnership with X that was announced last August. It's an annual partnership where we offer pre-bid brand safety and suitability in what they call the immersive feed. So we're classifying the feed within X. I think the primary reason why IAS was selected is because of the sophistication of our classification tech. And Snap, we were thrilled also to announce to be selected to launch brand safety and suitability on Snap, and that's in the back half of this year. Okay. I want to switch to CTV. My first question is a little bit nuanced, so bear with me for a quick second. But, CTV's still kind of early, and early on in CTV, you have a lot of direct deals, where you have the advertiser calling the publisher or maybe choosing a very specific show or content, where you kinda know the audience. In that environment, it seems to me that maybe your tools aren't as much of a, a requirement or need for advertisers, but the industry is moving in your favor, where things become more programmatic, where you're bidding on inventory. You're not quite sure what platform it is, who's watching, things like that. I think that's a tailwind to your business. I guess, can you maybe walk us through, A, do I have that right? A- and B, I guess, when do you see CTV being more of an important driver for your business, just generally speaking? Yeah, great question. So at the end of the day at IAS, our job is to help the CMOs sleep easier at night, right? That's our job, and when you take a look at CTV and the opportunity of CTV and what you just described, there's premium CTV inventory, and in a future state, biddable, programmatic CTV inventory. We play both spaces. We'll play in both spaces. So in premium inventory, think about Netflix. So last year, IAS launched, was one of the verification measurement partners selected by Netflix to launch when they launched their ad-supported channel across a dozen markets. We offer viewability and invalid traffic in Netflix for their premium inventory. We help the brands sleep easy with that. But to your point, and I know Netflix recently announced opening up to other DSPs, opening up the programmatic spigot, we will absolutely play there, and I would argue that brands, in terms of sleeping easy at night and making sure that their brands are protected, programmatic CTV and offering all of our solutions within that channel will be a tailwind for our business, and we look forward to working with the Netflix of the world and all the other programmatic CTV platforms, and offering all of the great solutions that we offer. Yeah, one of your solutions is Publica? That's right. Can you just describe what Publica is, and why... Well, A, your competitor doesn't have anything similar to that? Like, why is that a differentiator for your, your platform? Sure. So Publica, IAS, we acquired Publica the summer of 2021, shortly after taking IAS public, and you're absolutely right, that Publica is a differentiated asset for IAS and for our customers that our direct competitor doesn't have. And so what Publica brings to the table, it's a couple of things in the CTV landscape: a unified ad auction, so helping, for example, the OEMs of the world, think of Samsung, think of Vizio, helping Samsung drive higher yield, monetize their programmatic CTV inventory within the Samsung platform. We also serve ads within Samsung's platform, and we're able to stitch creative real-time within the live stream of Samsung. So what that means for Samsung is all the things that I had mentioned in terms of driving yield and monetization, ensuring it's a better user experience when they're viewing CTV ads. But also, it gives IAS access to massive amounts of programmatic CTV inventory and really interesting data. And so we're so pleased with the momentum of Publica, with the demand that we're seeing. This was reflected in our Q1 results. As we mentioned, double-digit growth with our publisher business, and we'll continue to partner with the other OEMs of the world to help drive up yield for them, too. Okay. All right, thank you. Let's switch to... I know we talked about international a little bit, but maybe can we talk just more broadly beyond the TikTok question that I asked you? You have a bigger international footprint than your main competitor. I guess, what are you seeing in terms of adoption of some of your products, and, and maybe more of the, the premium products, like TMQ, et cetera? Yeah, sure. So in addition to the sophistication of our technology, and a lot of our products are backed by AI, that's a big differentiator for us in these jump balls we're in. Second differentiator is our international footprint, and exactly what you said, Mark, we have a larger footprint. We have been integrated in EMEA and APAC longer. What that means is deep partnerships with the major brands, deep partnerships with holdcos. But what's also really important is that we continue to invest in emerging markets: Latin America, Southeast Asia, India.... because what's critical is that as we roll out our differentiated products, they're global, they're scalable, and they're repeatable, so that the brands, like a Coke, can adopt the same product, the same technology, ensure there's accuracy in the technology wherever they're running digital advertising globally. TMQ is a great example where even when you step back and look at the largest social platforms between Meta and TikTok and YouTube, there's a sizable user base internationally that are on these social platforms. Everyone knows the accelerated growth of short-form video today. That's why you see this uptick from Meta Reels, YouTube Shorts, TikTok, because consumers, they're creating user-generated content. They're creating the videos, sharing, consuming the video, and for exactly that reason, that's why you're seeing, on a macro level, shifts of the brands' budgets into social platforms. But the brands wanna rest assured it's brand safe and suitable when they're running our technology. Okay. One other thing to add, sorry, with TMQ, is everything that we're running on the social platforms today. It's all post-bid. So speaking of potential tailwinds and potential greenfields, pre-bid, we're not even running it. Yeah. Yeah. You're seeing this in our numbers. So in Q1, revenue from outside of the Americas, so EMEA and APAC, grew at 13%, much faster than our overall growth rate, given the trends that Lisa talked about, with international clients really embracing our social media offerings. We also have put some really important, sizable new logo wins on the board internationally over the past couple quarters, and that's also showing up in our higher revenue growth in Q1. I think increasingly, deals are becoming more global- Global. -instead of dual sourced. Yeah. Right, yeah. Yeah, we've got the footprint. In fact, 42% of our measurement revenue, half of which is social, came from outside of the Americas. Okay. All right, thank you. I wanna pause quickly just to make sure there aren't any questions in the audience. Feel free to raise your hand if you wanna ask anything. Think about it. Mm-hmm. I've got more to ask. Can we talk about capital allocation? I guess, what does the M&A pipeline look like? Where might we expect you to be focused, you know, in the near to medium term from an M&A perspective? Sure. To everything that we do, we apply the build, partner, buy lens. We have a strong track record of acquisitions. Since I've been at IAS, we've made four acquisitions, three out of the four are tech tuck-ins, the fourth being Publica, which we spoke to. We continue to kick tires and due diligence on various M&A and partner opportunities. A couple of interesting areas for us is in the data space, so data that could be additive to our focus on shifting from verification to performance and getting further down the funnel, where brands they really wanna understand: How is verification helping me sell more product? So looking at different interesting data sets, measurement data sets. In addition to that, performance marketing technology in general, that will be a shift that you continue to hear about, especially as we go after the mid-tier channel. Mid-tier marketers, that's north of the top 100 advertisers, they are very performance-based, and it's just so important that we continue to create that unlock of optimization for the mid-tier, marketers. And then, there's some interesting CTV technology that could be additive to our current CTV offering. Okay. Has nothing to do with M&A, but you brought up mid-tier. I know you have a strategy about going, you know, signing kinda mid-market ad agencies to get the whole, you know, all of their clients, I guess. Can you talk about that strategy a bit? I know it's fairly new, but- Yeah. How, um- So we define mid-tier north of our top 100 advertisers who spend between $200,000 and $1 million a year, and as I mentioned before, mid-tier, they're performance-based. They are performance marketers, and we've invested both on the back end, on our product capabilities. The Total Visibility product that I'd mentioned before is a real unlock for the mid-tier channel because it is so performance-based. So we're investing on the back end, product functionality, self-service, investing more self-service capabilities for mid-tier, as well as on the front end, and we have a dedicated mid-tier sales team. And where we're seeing nice penetration into mid-tier, exactly what you were saying, is pursuing the agencies that are beyond the six hold cos. These are agencies that might have 20, 25, 30 mid-tier advertisers within their portfolio and signing deals to unlock all 30 of the mid-tier advertisers. That's one way we're doing it at scale. Another thing that we called out in Q1 earnings is going after smaller DSPs, pharmaceutical DSPs, for example. We're definitely going hard at mid-tier, and both from the product perspective and then the sales motion. There are a lot of DSPs. There are a lot of DSPs to go after, yeah. ... Tania, we get the question quite a bit, like, about EBITDA to free cash flow conversion. What's the right way to think about that, over time, and I guess what are the factors that would, you know, move the needle- Sure. -on that? In addition to our very strong EBITDA margins, 34% last year, for example, we are converting to free cash flow. It's very strong. The last two years, our conversion rate has been between 45% and 60%, and we expect to be around the midpoint of that range in 2024. Okay. All right, perfect. Anything else we should think about in terms of your cash and debt? You paid down, you know, some of your debt last quarter. Is that more of a priority at this point, or I guess just bigger picture, what should we think about? The way we think about it is, we have a very flexible revolver facility. We can pay down the revolver with our excess cash, but that doesn't prohibit us from redrawing on that revolver to make investments in inorganic growth, for example. So last quarter, we did pay down $30 million. We continue to plan to pay down our debt. At this point, we only have net debt of $41 million, and it's an important thing to manage that revolver down to save on interest expense. We can redraw it as we continue to make investments in the business, as we continue to look at ways to invest in inorganic growth opportunities to drive shareholder value. Okay. I wanted to... This is completely off topic, but attention, we get a lot of questions about, you know, it's, it's a fairly new metric. You know, at what point does that become, like, a currency, so to speak? I guess, can you just talk about where we are in the adoption curve for attention as a metric, and, you know, are there industry bodies that are coming up with standardizations? I guess, can you walk us through that just a little bit? Yeah, good question. So, attention continues to be an important one metric in the story of outcomes. It's an important metric, and as I mentioned before, we launched our attention product. We're seeing really nice adoption rate, but we don't see attention as the end-all be-all. It's so important we continue to launch additional innovation and products like MFA, like misinformation, and attention is one important component of that. Okay, and last question from me. Cookie deprecation on Chrome keeps getting pushed out. We always get questions about who benefits, who maybe is negatively impacted. How would you describe how you're positioned, you know, once that actually does happen? Sure. We see the shift from cookie-based to cookie deprecation as a tailwind for our business. As we've shared in the past, we're very focused on the contextual. It's what and where did the ad run versus the who. We do not process consumer PII data, and our Context Control solution represents half of our programmatic revenue. So we're leaning in, you know, meet regularly with the Google Privacy Sandbox team, and we'll continue to double down in innovating in Context Control. Okay, I think we're out of time. So Lisa, Tania, thank you very much. Yeah. Thank you, Mark. Thanks so much.