Good morning, I'm Justin Patterson. I lead the Internet Research Team at KeyBanc. Really excited to have the team from IAS, Lisa and Tania, here with us this morning. Hi, Justin. Thanks for having us. Great to be here. Of course. Well, thank you for attending. Maybe to start off, for people who aren't familiar with IAS, could you provide an overview of the business, Lisa, and just the value proposition you provide to your advertisers? Sure. At IAS, we're a leading digital media quality company, and our customer base are advertisers. We work with over 2,000 advertisers worldwide. Think of Fortune 500 brands, and we ensure that their ads are viewed, viewed by humans, and run adjacent to brand-safe and brand-suitable content. Great. So let's just dive right into it. Q4 earnings season just happened. There was a lot of confusion just around the earnings prints. Perhaps Tania, could you talk through just what was going on from the pricing perspective, both from the measurement and optimization sides of the business? So we had a very strong fourth quarter with double-digit growth in terms of revenue, reported 35% EBITDA. We've prepared our guidance for a full year 2024, with 13% growth at the midpoint of the range and 33% margins. It's a strong combination of revenue and free cash flow. Lisa, did you want to talk about the pricing points? Sure, and, you're referring to Q1? That's right. Yeah. The guidance. Sure. So with our Q1 guide, typically, in our business, we always lead with our superior, differentiated products. Our products drive incredible value for brands and publishers. We did see a pricing dynamic with a handful of brands where we reduced price on mature measurement products. Mature measurement products are viewability and invalid traffic, in exchange for higher commitments in volume for 2024. In addition to that, with the handful of advertisers, we were able to expand the length of the contracts. If the contract was two years, lock the advertiser in for a three-year contract, and extend from a regional to a geographic commitment. And with that exchange of the price-volume dynamic that I spoke to, we will see a net positive revenue impact that is baked into our 2024 guide. Got it. So it sounds like what you're saying here, we should not perceive this as a price war in the market. Instead, this was a unique opportunity, lock in some volume, and have an NPV positive event, an economic positive for the business over the long term. Correct. It is economically, positive from net revenue perspective in our 2024 guide. That's correct. Got it. I think one source of the confusion around that for investors, you know, we just don't have that much public history for you in the market right now. You're still fairly new on the public markets. Is this a normal behavior within there, taking some pricing action, trade off a little bit of price to drive long-term value here, more volume commitments and exclusivity? So, as I mentioned before, we lead with superior products, differentiated products that drive high demand and high value for our customers. Also, historically, we have always held on price, because we're leading with our products and, showing that value. So again, this was a subset of our advertiser base, and again, it's net positive from a revenue perspective. Got it. So let's dive deeper into that product theme. Obviously, there's a lot of excitement around short-form video. You announced the Meta product just a short while ago. How are you thinking about this Meta opportunity and short-form video over the next few years? Sure, happy to take that. So, as brands, increasingly, they want to be where the users are, and where users are, are in the social platforms, especially engaging, creating, sharing short-form video. We launched a product called Total Media Quality, TMQ, in the live feed of TikTok last year, then launched in YouTube. We have an exclusive partnership with X, and we were thrilled to announce that we launched TMQ, at GA four weeks ago with Meta across Facebook, News Feed, Instagram, and Meta Reels. And just a reflection of the value and differentiation in our products, we're also thrilled to see the volumes. In the last four weeks since launching TMQ in Meta, we are seeing a 50% increase in Meta volumes overall, year-over-year. Oh, wow. And within that, just any verticals kind of adopting at a faster rate than some of the others? We're seeing, similar to the other social platforms, diversity in the verticals that are adopting. And as I mentioned before, we work with some of the largest global advertisers, brands like Nestlé and Coke, L'Oréal. And again, they're just thrilled that our differentiated, backed by AI, TMQ product is now available in Meta. Got it. So you said the AI word. I definitely want to come back to that. I would not be a good internet analyst if I didn't have one AI question, but I want to stick with social a little bit more. Tania, could you provide a sense of scale of just how big of a contributor social is today? ... Sure. So in 2023, social revenue was 18% of our total revenue, or $86 million. Really robust growth in the third quarter and fourth quarter of our social revenue. In the fourth quarter, social revenue grew 37%. And as we look out into 2024 and we factor into our guide, social will continue to be a large driver of our measurement growth. And, and just to elaborate on what Lisa was saying earlier about the TMQ launch in Meta earlier in February, we're seeing half of our advertisers on social are already advertising on Meta, so they're embracing the TMQ launch. And then the other half of our social advertisers today are not even advertising on Meta, and so they're also embracing the TMQ launch. So excited about the impact of Meta overall as we head into 2024. For sure, and it definitely feels like a good long-term driver, where even companies like Visa are now just figuring out, how do we engage more with short-form video? Because that's where Gen Z is, and that's where our audience is. So for a volume-based model, feels like a pretty big unlock the next few years. But going back to just your AI points within there, Lisa, you know, you're a product-first organization. What type of opportunities do you see AI creating for you over the next few years? Sure. So at IAS, we've been working with AI for several years. We're also investing heavily in our data science talent. This year, 30% of our engineering org will be made up of data scientists. We also hired an incredible data science leader from Meta, Kumaresh Singh, and many of the products we offer today are backed by AI. So I had already mentioned TMQ in the social platforms, our attention product that's also GA, MFA that we announced yesterday, Made For Advertising sites. Think of those sites that are highly dense in advertising, not a great user experience. So we'll continue to invest and leverage AI, again, to drive value. One particular product that brands have been clamoring for is misinformation and misinformation detection with the upcoming U.S. elections, and we're poised to launch misinformation in TikTok and Meta in the first half of the year. Oh, interesting. So maybe sticking with that one, how do you just think about election and misinformation as an opportunity for you? Since obviously it's gonna be a very volatile election period, to say the least, and it feels like that could be a pretty good funnel to drive some more brands on the platform. Sure. So as our brands like to tell us, "IAS, you're in the business of trust and transparency." And they trust us. They trust the accuracy and sophistication of our technology to ensure we are protecting their brand equity, brand reputation, especially in social platforms. That's a highly dynamic, user-generated environment. With misinformation, in particular, the brands do want to continue to invest in digital advertising this year during the U.S. elections. They just want to ensure that their brands are protected, so and not run their brands adjacent to misinformation. So by launching our AI-backed misinformation segment within the social platforms before the U.S. elections, again, we are enabling the brands to activate the misinformation segment and ensure we are protecting their brands as they engage with consumers. Got it. And the other product you mentioned a moment ago, The MFA, Made for Advertising product, find a lot of investors are still getting their arms around this particular piece of the internet puzzle. Could you talk a little bit more about just what The MFA product is solving and why advertisers might not want to be affiliated with some of those websites? Sure. So third-party research has deemed MFA, Made for Advertising sites, these are these, if you think about them as click fraud, like these sites that are created to generate a lot of fraudulent clicks. Advertisers absolutely do not want to invest in MFA sites. They care about efficiency, they care about ROI, they care about getting the most out of every advertiser dollar that they spend. And our MFA technology is able to detect when sites are too dense, there are too many ads running on the site, and we are able to flag that this is a site advertiser that is not a great place for you to advertise, again, because it's probably not viewed by a human, and not a great way, efficient way for you to invest in, in your advertising budget. So we're really excited about launching our MFA Detection segment and can't wait for advertisers to start adopting the product. Yeah, it'll be exciting to see. Yeah. One area where you have had some very solid product adoption in the last few years, CTV. When you look at the CTV landscape today, just what do you think are really the next key steps to keep delivering more advertiser value to advertisers through your CTV products? Sure. So, we refer to CTV as the long game. It's a $25 billion marketplace with lots of runway and upside. On the CTV front, we are partnered with players like Netflix, where we're providing our verification solution within their ad-supported tier. But what's really exciting is how many more partners are out there launching ad-supported channels that have yet to leverage verification. So a few examples that are top of mind, Amazon Video, Prime Video. I'm sure you saw that, Justin, where they launched late January, their ad-supported offering opt-out to 100 million subscribers. Prime Video has yet to leverage verification solutions. Other providers out there, like Disney+, offers an ad-supported channel, Paramount... I mean, I could keep going, but there's, again, so much opportunity. The brands that are investing in ad dollars in Netflix, they're very pleased with the solutions that we're offering on Netflix, and we're really looking forward to extend our offerings on the other platforms that I had mentioned. For sure. And just coming from the past session with Jeff at The Trade Desk, he was talking about his recent Forward TV event, and it sounds like just the degree of interest among a lot of the large publishers of opening up to programmatic is getting larger and larger. So it's a nice multi-year tailwind, like you said. Yeah, and, you know, the flip side of CTV is Publica, and Publica is a leading CTV platform. We acquired Publica two and a half years ago, and basically, what it gives IAS is access to massive amounts of programmatic CTV data that we can leverage to help brands have greater transparency to understand where their ads are running in programmatic CTV. So really excited about Publica and the innovation that we are providing to the publishers as well as to the brands. Got it. One more big picture, one from me before I flip to Tania with some more financial-centric questions. Retail media, obviously a big talking point. Talk about just your strategy of growing within that side of the vertical, since that will be a very big TAM the next few years. Yeah, that's also a topic du jour is retail media. Lots of opportunity and upside with retail media. We are integrated in nine out of the 10 top retail media players, where you have integrations both, in terms of, let's say, integrated into a Walmart, that we are offering our verification solutions within the Walmart platform. So Walmart, as their brands are running, advertising, they can assure it's adjacent to high-quality media, as well as retail medias as advertising partners, which Walmart is an advertising partner. So really excited about, retail media, especially both with large brands and, SMB mid-tier channel. Got it. So, Tania, coming back to you. Okay. You do have a nice reacceleration in your guidance this year. It sounds like some of that could be short-form video, new customers ramping up a little bit more, but would love to hear a little bit more about just what you think are the key drivers to getting back to reaccelerating growth this year. Sure. So in 2024, the midpoint of our guidance is 13% revenue growth. Q1 was 6% revenue growth. And as we move through the year, there's multiple factors that are driving our acceleration of growth through the year. It's a robust year for new product launches. Particularly, we talked about the launch of TMQ and Meta, continued sustainable growth in short-form video. We've talked about several exciting products, new products around our MFA offering, are made for advertising and our attention offering, and so we're seeing a strong year in terms of new products. Additional levers of growth are the volume expansion on some of the recent renewals that we talked about as well as new logo revenue. We announced three key wins on our last earnings call, the which will ramp in the second half of the year. And then finally, we have factored into our guide a modest impact from political spending in the second half of the year. Got it. And then thinking about the margin side, you've been remarkably consistent at 30%+ EBITDA margins the past few years, and that's against, you know, a healthy amount of R&D investment in there. So, you know, as you think about just the longer term in there, how do you think about that margin ceiling that you could reach? 2023, we delivered on 34% EBITDA margins, which was up a couple of hundred basis points from the prior year. In Q1, our midpoint of our guidance is 26% EBITDA margin, as we expect to see operating leverage as we move through each quarter of 2024 on ramping revenue. Our approach is a balance between driving revenue growth and being disciplined on costs and investing in key areas, particularly around R&D and data science, to continue our strong financial profile. Got it. Two more from me before I open it up to the audience. Net revenue retention generally been fairly healthy for the business. Mm-hmm. Just, how do you see that evolving over time? Yeah. So net revenue, our net revenue retention track record has been very strong. In the fourth quarter, we were at 116% net revenue retention, similar to third-quarter levels. We have a strong track record of being able to, on our existing customer base, upsell and cross-sell key products. 2024 will be a robust year as it relates to our new product launches with our existing clients. And then obviously, new logos is not in net revenue retention, but that's also a driver as well of revenue growth. Got it. And this one may be for both of you within there. Capital allocation. We've got a very solid track record of acquisitions, a growing cash position on the balance sheet. Talk about just what your capital allocation priorities are and how you think about build versus buy as a business. Sure. So we apply build, buy, or partner to everything that we look at in a product tech roadmap and innovation. We have an incredibly strong track record of making the right bets with acquisitions that we've made in the past. Since I joined IAS, we made four acquisitions, three tech tuck-ins, and one Publica, which I spoke to. We look at potential acquisitions, technology that is additive to our existing technology, technology that would accelerate our product roadmap. I could give you specific examples of the previous acquisitions that we made that were an unlock to accelerate value for our customers, and product roadmaps. But we're, again, we're really excited about our 2024 product tech roadmap and continue to explore opportunities out there, especially there's so much interesting technology. Great. I'll pause there. Do we have any questions from the audience? I'll go. I mean, just thinking of us as a public company, what do people not appreciate about the story, I guess? What's the things that people are still missing but after a quarter? Great question. I would say the sophistication and differentiation of our technology. I know we keep referring to AI, but we are so invested in leveraging AI to drive accuracy of our technology, efficiency within our technology, and also to crack the code in areas that no one else has solved for. Good example is misinformation. No one in the industry has solved, even the major tech platforms, misinformation. It's one of the number one pieces of feedback we hear from our customers, is how can you unlock misinformation and solve for it? So, we're really bullish about the power of AI, leaning hard into it, and that's a theme you'll continue to hear from IAS in the future. What is, what is your piece of the overall, total overall ad spend of a campaign? I mean, is it 1%, is it 2%? And so in that context, why would pricing be a lever to pull if it's like a really small portion of it? That's sort of my first question. Sure, sure. So we typically don't break out what is referred to as a take rate. Estimates have been between 1% and 3%. Okay ... of the advertising budget. In terms of your second question, tied to some of the pricing dynamics, again, to reiterate, the pricing dynamics that we saw were for mature products. This is viewability, invalid traffic, and what's really important is we continue to innovate and launch premium products that command a higher price point and drive attach rate of those premium products. What we were sharing around TMQ and the Meta launch is a reflection of that, and again, just continue to invest in differentiated products. The second question is: how much variability are you seeing in spend, like, beginning of the month to the end of the month, beginning of the quarter to the end of the quarter? So, you know, how much visibility do you have in the ability to step on the gas or pull back? Can I take that? Sure. Yeah, sure. So, we don't have variability within the month, but our visibility is strong one to two quarters out. Okay. Maybe sticking with another theme in there from the product side. One question we often get from investors is: this is a very brand-centric product, but can you reach the performance advertiser? Yes. When you look at that challenge, what, what do you think is the key unlock to that? Sure. So performance, efficiency, ROI is top of mind for the marketers, and we are very focused on offering products that drive performance for marketers. Our thesis as a company is that helping marketers drive, seek out, and find higher quality media leads to higher ROI, and especially in the programmatic space, we are doubled down on performance. Total Visibility is one product that is unlocking for brands. They're loving the adoption that they're seeing of Total Visibility, that we're providing transparency into supply path optimization so that advertisers are no longer feeling like programmatic is a black box. They understand the performance of their investments in the SSPs and seeing the performance with those investments. Got it. And then last one from me, I think before we run out of time. I know you're not affected by third-party cookies directly, but there's a lot of interest around the Privacy Sandbox, Google's actions. Is this an opportunity for you to just engage with more publishers, more advertisers, and just broaden, broaden your client base over the next year as signal is lost and people are looking for alternatives? Yeah. So, the cookie-less world that we're all heading into, we actually see that as a tailwind for our business, as advertisers are leaning into more sophisticated contextual solutions and moving away from solutions that are more targeting on specific audiences. Context Control falls in the sweet spot of the contextual world. It makes up over half of our programmatic revenue, and we're thrilled with the adoption rate that we're seeing with Context Control. Awesome. With that, we are out of time. Lisa, Tania, thank you so much for coming today.