Integral Ad Science Holding Corp. (NASDAQ:IAS) Q4 2022 Earnings Call Transcript

Integral Ad Science Holding Corp. (NASDAQ:IAS) Q4 2022 Earnings Call Transcript March 2, 2023

Operator: Thank you for standing by, and welcome to IAS Fourth Quarter and Full Year 2022 Financial Results Conference Call. At this time all participants are in a listen-only mode. I would now like to hand the call over to Jonathan Schaffer, Vice President, Investor Relations. Please go ahead.

Jonathan Schaffer: Thank you. Good afternoon, and welcome to the IAS 2022 fourth quarter and full year financial results conference call. I’m joined today by Lisa Utzschneider, CEO; and Tania Secor, CFO. Before we begin, please note that today’s call and prepared remarks contain forward-looking statements. We refer you to the company’s filings with the SEC, posted on our Investor Relations site at investors.integralads.com, for more details about important risks and uncertainties that could cause actual results to differ materially from our expectations. We will also refer to non-GAAP measures on today’s call. A reconciliation of non-GAAP measures to the most directly comparable GAAP measures is contained in today’s earnings release available on our Investor Relations site.

All financial comparisons, unless noted otherwise, are based on the prior-year period. So, with these formalities out of the way, I’d now like to turn the call over to our CEO, Lisa Utzschneider. Lisa, you may begin.

Lisa Utzschneider: Thanks Jonathan. And welcome everyone to our 2022 fourth quarter and full year call. We reported a strong fourth quarter with revenue growth of 15% at a 34% adjusted EBITDA margin. Revenue of $117.4 million exceeded our forecast of $111 million to $113 million. For the full year, revenue grew 26% to $408.3 million at a 31% adjusted EBITDA margin. Today’s results demonstrate our ability to deliver profitable growth at greater scale. I am proud of the entire IAS team for what we accomplished together in 2022. By prioritizing technology and product innovation, superior customer service, and deep partner integrations, we ended the year with positive business momentum heading into 2023. Let me start with a few highlights from 2022.

We invested in our platform partnerships and product expansion in programmatic, social, and connected TV. We signed 12 new global partnerships, broadening our measurement capabilities and reach to benefit our marketers. In 2022, we won several large multi-year deals including JP Morgan Chase, LinkedIn, Progressive, and Kimberly-Clark. Today, we are excited to announce several new competitive wins that reinforce our standing in the market as a leading provider and formidable competitor. Ford, Hershey, Bel and Kering selected IAS after extensive tech and product due diligence versus other competitors. As these are major global wins with marquee brands, we’d like to walk you through why they chose to partner with IAS. Ford selected IAS as their global ad verification partner.

We expect to expand our coverage with Ford from 17 to over 50 markets, including the U.S. which had been serviced by an incumbent provider. We are proud that our robust brand safety technology continues to attract new customers. Hershey chose IAS based on our differentiated CTV technology, campaign automation, and high standard of service. Bel, a world leader in branded cheese including Babybel, and a major player in the healthy snacking segment, awarded IAS with a global deal. Bel was impressed by IAS’ measurement capabilities, our integrations with the leading tech partners, and our superior customer service. Kering, a major worldwide luxury group with notable brands such as Gucci and Yves Saint Laurent, signed a global deal with IAS in the first quarter of 2023.

We clinched this win as a result of our leadership in the luxury vertical, superior technology, integrations with Google, and exceptional client support. Our enhanced go-to-market strategy under our new Chief Commercial Officer is yielding returns as highlighted by these global brand wins. We are the leading global provider of digital media quality with the largest international footprint. In 2022, we expanded our global presence in markets including India, Indonesia, South Korea, Taiwan, Vietnam, Denmark, and Norway. We recently opened a new office in Dublin, Ireland focused on engineering and technical services. Lastly, we enhanced our senior leadership team with key appointments including Tania Secor as CFO, who joins us today. We increased our employee count to 835, up 10% year-over-year.

At the same time, we realigned our resources to drive greater efficiencies. Now let’s review some of the key growth drivers of our business including programmatic, social, and CTV. In programmatic, contextual and non-contextual revenue increased in the quarter. Context Control contributed approximately $86 million to total revenue in 2022. Marketers value our solutions to avoid inappropriate content and target high performing content to maximize engagement with consumers. They are also prioritizing efficiency and automation in the current environment. As a result, marketers are shifting budgets to programmatic and relying on IAS to drive higher return on their ad spend. Our Quality Sync pre-bid product, which is integrated with large DSPs including The Trade Desk, enables partners to leverage our contextual tools in an efficient way.

In addition, Total Visibility, our quality path optimization solution, helps customers increase efficiency and improve ROI in their programmatic ad spend. Our attention metrics help marketers optimize their buying decisions based on placement and media partner at the campaign level. Our research conducted in 2022 demonstrates that there is a 180% lift in return on ad spend for in-view ads versus not-in-view. In addition, we found that there’s a 171% increase in conversions for impressions with time-in-view greater than 15 seconds. In social media, we are accelerating growth based on our advanced multimedia classification, or MMC, technology and platform expansions. As a reminder, our MMC technology powers content-level brand safety solutions at scale; it maps frame by frame, video-level data to the Global Alliance for Responsible Media, or GARM brand safety categories: Our TikTok offering includes a full end-to-end measurement suite in TikTok’s For You feed.

We’re driving customer adoption of our TikTok offering with active post-bid campaigns up 54% in the fourth quarter compared to the third quarter. In 2023, we aim to scale marketer demand for our TikTok solutions and expand availability into over 20 additional markets. IAS is excited to join the TikTok Marketing Partners Program as a badged measurement partner for their new Brand Safety & Suitability specialty. IAS was chosen thanks to our record of wins on TikTok and meeting their highest standard of measurement solutions. As a badged partner, IAS brings marketers a comprehensive set of media quality solutions to manage their advertising campaigns on TikTok. With Meta, we’re excited to continue our partnership and value their commitment to implementing suitability controls and verification for Feed.

With Twitter, we announced our expansion into third-party brand safety and suitability measurement in the U.S. With Tweet-level analysis, advertisers can better understand the content that appears adjacent to their ads on Twitter’s feed. This significant advancement now provides Twitter advertisers with reporting that is aligned with GARM brand safety and suitability risk levels. For broader analytics, advertisers can access campaign-level reporting for overall metrics. In CTV, we are leading with innovation and scale. We ensure trust, performance, and control to both buyers and sellers. We were delighted to announce that Netflix selected IAS as a transparency partner for their ad supported plan. We look forward to partnering with Netflix to provide viewability and invalid traffic verification of Netflix inventory.

By the end of 2023, 78% of CTV video ad spending in the U.S. is expected to be bought programmatically according to eMarketer. IAS is enabling marketers to increase their programmatic buying in CTV without sacrificing media quality. For CTV publishers, Publica provides yield through unified auctions, inventory management and ad stitching that enables CTV content and ads to be delivered in a seamless stream. Publica was recently named Best Video Ad Server in the AdWeek Readers Choice Awards. Publica is now making it possible for publishers to access IAS insights within the Publica UI. This enables streaming publishers to optimize their inventory around the trusted IAS metrics the buy side uses to inform their ad buying practices. This feedback loop of IAS data facilitates the buying and selling of CTV inventory at scale.

For marketers, we offer a single platform to verify, optimize, and measure addressable TV. IAS has created private marketplaces with over 90 publishers in 2022 to ensure greater transparency and access to higher quality CTV media. Marketers and publishers depend on our solutions to ensure their digital media quality needs are met. Retail media is an exciting opportunity for marketers and represented over $44 billion dollars in total ad spend in the U.S. in 2022 according to eMarketer. We provide measurement solutions in retail media across nine out of the top 10 largest networks. Measurement represents the starting point for IAS in retail media. We look forward to helping marketers fully realize the ROI potential in this high growth medium.

In emerging channels, we continue to make progress with Spotify in audio, launching the industry’s first third-party brand safety and suitability reporting tool for podcasts. In gaming, IAS announced its first-to-market partnership with Gadsme, a premium in-game advertising platform. IAS will verify Gadsme’s ad inventory globally and provide marketers with third-party viewability and invalid traffic reporting. Our products have never been more relevant as marketers lean into our differentiated solutions. IAS enables safe content to thrive which results in greater efficiency and return on ad spend for marketers and increased yield and optimization for publishers. Our model is highly differentiated as our pricing is independent of the media rate and negotiated eCPMS directly with marketers.

We’re a volume-based model and not immune to volatility in ad spend; however, the essential nature of our solutions provides us with some level of insulation. Building on our accomplishments in 2022, we plan to continue to innovate further on behalf of our customers with data as the foundation. Under the leadership of our new CTO, we are enhancing our tech stack for greater scale and the ability to access, process and analyze data to fuel superior results for marketers. This will enable us to support future growth and innovation in high growth areas. In conclusion, we made tremendous strides in 2022 to position IAS for long-term success. We strengthened our leadership team, invested in high-growth areas and solidified our partnerships. We are thrilled to extend our market presence with recent logo wins which highlights the success of our new go-to-market strategy.

I am excited to unleash the potential of IAS in 2023 and beyond. We are geared up and ready to go. Thanks to everyone on today’s call for your ongoing support. I’ll now turn it over to Tania. We are thrilled to have her on the team and she is making a tremendous impact already. Tania?

Tania Secor: Thanks, Lisa. I am delighted to speak with all of you on my first earnings call as CFO of IAS. Since joining, I’ve focused on getting to know what is a very impressive team, learning the products and executing on my responsibilities as CFO. I’m excited to partner with the leadership team to bring IAS’ operating plan to the next level. That requires focus and discipline in prioritizing IAS’ multiple growth levers and investments to drive durable, profitable growth. I bring a strong competitive drive and believe IAS has an incredible opportunity to win in a large and growing market. IAS represents a great fit given my background in both media and technology. Having spent the past five years at The Interpublic Group Companies, a top five advertising holding company, I bring a deep understanding of the media landscape that has enabled me to ramp quickly.

IAS has a strong customer value proposition and plays a mission-critical role in protecting and amplifying brands and maximizing return on ad spend. Now let’s turn to the financial results for the fourth quarter. Total revenue increased 15% year-over-year to $117.4 million and exceeded our upwardly revised guidance of $111 million to $113 million. Higher-than-expected revenue was across all of our offerings. In both the Advertiser Direct and Programmatic segments, we saw improvement in automotive and tech/telco, as well as a stronger-than-expected contribution from World Cup advertising campaigns. Higher-than-expected supply-side revenue was driven by continued demand for Publica’s CTV offerings. The fourth quarter is our seasonally largest quarter for revenue and reflects all organic growth for the first time since the completion of the Publica acquisition in the third quarter of 2021.

For the full year, total revenue increased 26% year-over-year to $408.3 million. 2022 revenue included a full-year contribution from Publica versus 2021, which only included a partial year from Publica. Programmatic revenue for the fourth quarter grew 30% year-over-year to $55.1 million. Programmatic growth was primarily attributable to continued adoption of context control, including our contextual avoidance solutions. Context control represented 47% of total programmatic revenue in the fourth quarter, compared to 45% in the third quarter of 2022 and 38% in the fourth quarter of 2021. Non-contextual programmatic revenue grew 17% year-over-year in the fourth quarter. Programmatic reached 55% of total revenue from advertisers in the quarter versus 49% in the prior year period.

Advertiser direct revenue, which includes open web and social platforms, increased 2% year-over-year to $44.7 million. Video, which commands a pricing premium to display, accounted for 47% of total advertiser direct revenue consistent with the third quarter of 2022. We expect video to continue to grow at a faster pace than display. Social media represented 42% of advertiser direct revenue in the period compared to 44% in the third quarter. This slight decline was a result of a stronger contribution from open web. On a combined basis, total revenue from advertisers, including advertiser direct and programmatic revenue, represented 85% of fourth quarter revenue. Supply side revenue from publishers increased to $17.6 million, including revenue from Publica.

We are pleased that Publica’s revenue contribution of $34 million in 2022 slightly exceeded our 8% target for the year. As Publica has been fully integrated, we will no longer be breaking out its contribution moving forward. Total supply side revenue represented 15% of total fourth quarter revenue. We continue to grow our leading global market presence. International revenue, excluding the Americas, increased 6% and represented 32% of total revenue in the fourth quarter. Our international business includes a lower mix of programmatic revenue, consistent with the industry. Gross profit margin for the fourth quarter was 81% compared to 84% in the prior year period, primarily reflecting increased hosting fees to support our premium offerings. For the full year, gross profit margin was 81% as expected.

Sales and marketing, technology and development, and general and administrative expenses combined, increased 16% in the fourth quarter compared to the prior year period. This increase was primarily due to higher stock-based compensation expense and restructuring charges, partially offset by compensation savings in December related to the restructuring. In the fourth quarter, we incurred $5.3 million of restructuring and related charges due to the termination of approximately 120 employees in December. This was consistent with our prior expectation of $5 million to $7 million. These expenses are excluded from adjusted EBITDA. Stock-based compensation expense for the period was $11.6 million compared to our prior expectation of $12 million to $13 million.

Turning to profitability and performance metrics; Adjusted EBITDA for the fourth quarter, which excludes stock-based compensation and one-time items, increased 20% year-over-year to $40 million. Adjusted EBITDA margin was 34% compared to the 33% midpoint of our prior guidance, due to stronger revenue in the fourth quarter. Foreign exchange, which is excluded from adjusted EBITDA, was a loss of $1.2 million in the quarter, down significantly from the third quarter loss of $4.1 million. Net income for the fourth quarter was $11.5 million, or $0.07 per share. We achieved net income profitability in every quarter of 2022. We believe adjusted EBITDA remains the best measure of profitability for the company. Fourth quarter net revenue retention or NRR was 118% reflecting our ability to grow with our customers.

Total advertising customers increased to 2,103 versus 2,073 last year. Total number of large advertising customers with annual revenue over $200,000 increased to 199 compared to 183 last year. We ended the year with a strengthened financial position. Cash generated from operations and after investments in 2022 was used to decrease long-term debt by $20 million, repurchase $24 million worth of IAS stock at a cost of $7.68 per share in the third quarter, and increase our cash balance by $14 million. Cash and cash equivalents at year-end were $87 million and debt was $223 million. In terms of capital allocation, our strong cash flows and balance sheet capacity provide us with significant financial flexibility to invest in the business, both organically and via strategic acquisitions.

As we look to 2023, we are monitoring the evolving digital media trends. While we continue to navigate the current macroeconomic environment, we believe we are well positioned to grow faster than the industry based on the value our products provide. For the first quarter ending March 31, 2023, we expect total revenue in the range of $102 million to $104 million. Adjusted EBITDA for the first quarter is expected in the range of $29 million to $31 million. For the full year 2023, we expect total revenue in the range of $453 million to $463 million. Adjusted EBITDA for 2023 is expected in the range of $141 million to $149 million. A few additional modeling points: for the full year 2023, we expect gross profit margin of approximately 78% to 80%, reflecting investment in our data infrastructure and increased hosting costs.

We expect to optimize the gross profit margin of these offerings as we scale over time. At the midpoint of our guidance, we expect adjusted EBITDA margin expansion in 2023. We expect increased operating leverage in 2023 as operating expenses, excluding stock-based compensation and one-time items, are expected to grow at a slower rate than revenue. This is due primarily to the December 2022 restructuring and our focus on efficiency and productivity. First quarter stock-based compensation expense is expected in the range of $11 million to $13 million. Full-year stock-based compensation expense is expected in the range of $62 million to $66 million. The increase compared to 2022 primarily reflects the incremental expense due to the second year of our annual RSU program.

We expect weighted average shares outstanding for the first quarter in the range of 154 million to 155 million, and for the full year 155 million to 157 million shares. We’re very pleased with our fourth quarter performance, and we’re off to a strong start in the first quarter of 2023. We see tremendous opportunity for IAS’s products globally and continued demand for our differentiated offerings with several exciting new wins. We will continue to invest in tech innovation to enhance our value proposition for marketers and publishers. We will also maintain fiscal discipline to optimize our resources and deliver efficiencies in a dynamic environment. I’m excited to be part of the IAS team, and I look forward to engaging with all of you. Lisa and I are now ready to take your questions.

Operator?

Q&A Session

Operator: Our first question comes from the line of Jason Helfstein of Oppenheimer. Your question please, Jason.

Jason Helfstein: Thanks. Two questions. The first, Lisa, and just as we all think about the Internet advertising sector, we kind of think about like bracketing into three buckets, you have Tier 1, which is like meta and search. Then you have like kind of other platforms, we’ll call them like Tier 2 and then kind of like open web and display called Tier 3. And it seems that when you go into an ad recession, the cutbacks happened in reverse order, right? They cut back Tier 2 than Tier 3 and the last thing people cut back or advertisers is like meta and search. Given your exposure to those categories; do you think it’s fair to say that as a result of that, you saw cutbacks maybe earlier? And then as a result, as the spending comes back, you see kind of a greater rebound on the platforms that you serve the most? That’s my first question, and then I have a quick follow-up for Tania? Thanks.

Lisa Utzschneider: Okay. Thanks Jason. So the way to think about macroeconomic and the way marketers invest in digital advertising, I’ll say there are two buckets. The first is marketers want to go where the users are. And when you look at the trends right now, rapid explosive adoption of socials, all things related to social platforms; and secondly, streaming rapid adoption of CTV. Those are the two areas and platforms where IS, we are completely leaning in. They are core priorities for our 2023 product and tech road map, and we are innovating in both social and CTV, and that’s where marketers are investing their digital advertising. So I’d put both of those buckets in the Tier 1, those large major platforms. The second point I want to make is marketers, they’re investing more in video, again as where the users are going and how they’re consuming media, they want site, sound, emotion.

And when you take a look at our projections and where we are investing, we’re shifting from display to video, and we’ll continue to double down in video, both in Open Web and in the major platforms.

Jason Helfstein: And then, Tania, you just quick on the guide. You’re guiding first quarter for 15% growth, the full year for 12%. How are you thinking about the cadence by quarter? Are you assuming second quarter is a low point for growth? Or any other color there? Thanks.

Tania Secor: Sure. So our guide reflects a pretty strong momentum that we’re seeing right now as we head into the first quarter, continuing from the fourth quarter. And I would say, overall, our seasonality that we expect in 2023 should be similar to the seasonality we’ve seen in the past.

Jason Helfstein: Thank you.

Lisa Utzschneider: Thanks Jason.

Operator: Thank you. Our next question comes from the line of Mark Kelley of Stifel. Your question please Mark.

Mark Kelley: Great. Thank you very much. I just want to go back to the kind of macro bigger picture question. I’m just curious how conversations with advertisers have gone so far in 2023. Is there any improvement relative to December? Any more visibility on your end? And then second, happy to hear you talk about Retail Media a little bit more tonight. Can you maybe frame how large that channel is today? And what we can expect from a growth perspective for IAS over the next year or two? Thank you.

Lisa Utzschneider: Sure. Happy to take those, Mark. So in terms of marketers and you know we’ve talked about this. I personally spent a lot of time with marketers, with the agencies in the field. And I have to say, feedback from them is they’re optimistic about 2023 and the investments that they are making in digital advertising. But I will also say in this current macroeconomic environment that we’re all in, marketers are they’re doubling down in ROI. They’re doubling down in efficiency, and our products at IS have never been more relevant. So we are seeing optimism and we’ll just continue to innovate on behalf of marketers. And then in terms of retail media. Retail media, it’s also a top priority for us at IAS. It’s one of the fastest-growing emerging channels, and marketers are absolutely leaning into retail media networks and shifting their linear dollars into retail media.

We work with nine out of the top ten retail media platforms, including platforms like Walmart, Amazon, CVS, Walgreens, and we’ll continue to invest in retail media. In terms of size of the market, I mean, I think it’s been estimated north of a $50 billion marketplace. So huge opportunity, lots of greenfields in the retail media space.

Mark Kelley: Great. Thank you, Lisa.

Lisa Utzschneider: Yes thanks, Mark.

Operator: Thank you. Our next question comes from the line of James Heaney of Jefferies. Your question please James.

James Heaney: Great. Thank you, guys. What specifically caused the outperformance you saw in the fourth quarter? We’ve definitely heard a number of companies talk about December being a challenging month for advertising. So I would love to hear just your thoughts on what’s offset that weakness? Then my second question is just around context control, kind of what you’re seeing in Q4 and then so far early in Q1. Lisa, are there any mile markers or just adoption of where you’re going to be by the end of the year? Thank you.

Lisa Utzschneider : Yes, great questions. Thanks, James. So in terms of Q4 performance, we’re very pleased with our results for fourth quarter that we delivered 15% year-over-year growth. We saw performance across all of our business lines. And there are a couple of key verticals where we saw strength, and then I’m happy to end it to Tania, if you want to add some additional color on fourth quarter. But the verticals included automotive, we saw strength, tech telco as well as performance from the World Cup. Tania, do you want to add?

Tania Secor: Yes. I just would add two other things to that, Lisa. We also saw strong spend in the fourth quarter on the new logos from 2022 and contextual avoidance also contributed to the above expectation of performance on the programmatic side.

Lisa Utzschneider : Okay. Great. And James, to your second question around context control. A couple of callouts there. Our programmatic growth, it did exceed expectations for fourth quarter. We continue to see just rapid adoption of context control, represents 47% of programmatic in fourth quarter, up from 45% in third quarter. And we expect to continue to see strong growth in context control in 2023 both in terms of contextual avoidance, seeing healthy adoption both in the U.S. and international markets, EMEA in particular. And we’re also seeing a strong uptick with contextual targeting product, and we’ll continue to invest in our context control.

James Heaney: Great. Thank you.

Lisa Utzschneider : Thank you.

Operator: Thank you. Our next question comes from the line of Brian Fitzgerald of Wells Fargo. Your question, please, Brian.

Brian Fitzgerald: Thank you. We know it’s still early, but as premium CTV ramps, could you talk through the value add that you provide the marketing partners? Are you finding some of the viewability issues that you’ve talked about in the past as you’re delivering that value is resonating. Any sense of whether marketers or platforms want to go further with additional functionalities like brand safety and suitability?

Lisa Utzschneider: Sure. Happy to take that, Fitz. So we’re winning in CTV everywhere. We have global breadth and depth across all of the major CTV ad-supported platforms. And IAS, we’re the only provider with line of sight into the entire CTV ecosystem. And I have to say we have the most robust and forward-thinking product portfolio. And then the other thing that differentiates us, Fitz, in the CTV ecosystem, it’s our data. We have incredibly robust data from our Publica integration and our ability to combine our Publica data with our IAS data, we give greater transparency to marketers. So they have a better understanding of where their ads are running on programmatic CTV. So in terms of viewability, that’s what marketers are looking for as they definitely want to move more of their linear TV dollars over into programmatic CTV, but they just want the transparency and visibility to understand where their ads are running.

Brian Fitzgerald: Great, thanks Lisa. Appreciate it.

Lisa Utzschneider: Yes. Thanks Fitz.

Operator: Thank you. Our next question comes from the line of Andrew Marok of Raymond James. Please go ahead, Andrew.

Andrew Marok: Thanks for taking my questions. Wanted to dig in a little bit maybe on the tech side of retail media and the kind of progress of innovation there? Because you’ve talked about in the past how, to some extent, some tech can be portable between social feeds, for instance, or video formats, but is retail media more of a ground-up build? Or do you have aspects of the platform that can kind of be repurposed to specifically suit retail media? And then I have a follow-up.

Lisa Utzschneider: Yes. Great question, Andrew. So the way we think about retail media and the tech requirements, it’s a few. There are a few steps involved. The first is integrations with the major retail media platforms, ideally server-to-server integrations that helps with data flow, it makes it more seamless and easier to scale. The other part of the integration is ensuring that our verification solutions are accessible to both the major marketers who are selling their products, both on the retail media platforms, that’s called the O&O inventory and off of the retail media platforms and being able to extend it into mid and smaller advertisers who are selling their products. But I have to say, with retail media, where I see the big opportunity is in the data and leveraging our differentiated data, I spoke to the data before in terms of our IS measurement data, combined with CTV data and being able to layer that data with the retail media networks and helping those advertisers running on the retail media networks find higher quality media, which leads to higher ROI that is nirvana for the marketers.

Andrew Marok: Great. That’s really helpful. One other thing I did want to ask about was what was really driving the uptick that we saw in the number of large customers in 4Q? Because I think the sequential increase there was notably higher than I think we’ve seen in the past.

Lisa Utzschneider: I want to make sure I understood the question, so large uptick of the larger customers in the fourth quarter.

Andrew Marok: In the large customers, yes, so 199 from 183 last year, 184 last quarter.

Lisa Utzschneider: Sure. Tania can take that one.

Tania Secor: Sure. Hi, Andrew. We had €“ we’re pleased to see the strong performance of our top advertisers in the quarter. We’ve got a very diverse base of advertisers with an eight-year tenure. And what is notable there is that one-third of those new accounts added were international clients.

Andrew Marok: Great. Thank you.

Lisa Utzschneider: Thanks, Andrew.

Operator: Thank you. Our next question comes from the line of Mark Mahaney of Evercore. Please go ahead, Mark.

Ian Peterson: This is Ian Peterson on for Mark. Just one quick question. I know you guys didn’t talk about in-app gaming at all or have it in the press release. Just curious if you guys could go over where you’re at in terms of in-app gaming? Should we expect any kind of meaningful contribution in 2023? And then I also have a follow-up. Thanks.

Lisa Utzschneider: Sure. Great question, Ian. So we’re very exciting about the gaming vertical. We see it as an important emerging vertical for our business. And the way to think about gaming in 2023 is this is a build year where we’re continuing to ensure our integrations are done, onboarding advertisers to our verification solutions on gaming. And I would expect in 2024, that’s where we would see meaningful revenue.

Ian Peterson: Great. Thanks. And then on the follow-up, apologize if this has been covered already. Looks like EMEA has been continued to grow strong Q3 and the Q4. I’m just curious on what you’re hearing in terms of like sentiment from advertisers there, especially just given all of the regulatory headwinds. Thanks.

Lisa Utzschneider: Sure. Yes, we’re excited that we are starting to see some strength coming out of EMEA in the fourth quarter. We saw it with some of those sizable wins that I called out. Two out of the four wins are actually headquartered in EMEA and we saw the uptick of 13% in the quarter highlighted by major win like carrying. Also it represented 32% of our revenue in the fourth quarter international in total. So we love the fact that we are seeing strength in the numbers in EMEA. It demonstrates our international footprint and the fact that more and more marketers are leaning into our solutions and seeing relevance with our products.

Operator: Thank you. I would now like to turn the conference back to Lisa Utzschneider for closing remarks. Madam?

Lisa Utzschneider: Thank you everyone for joining us on today’s call. We’re coming off a strong fourth quarter and we’re pleased with our start to the New Year with positive demand trends and major brand wins. It’s clear that marketers value our products, particularly in the current environment where return on ad spend is a top priority. We’ll look forward to seeing you at the upcoming investor events and to updating you on our progress. Thank you.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.