Integral Ad Science Holding Corp. (NASDAQ:IAS) Q4 2024 Earnings Call Transcript

Integral Ad Science Holding Corp. (NASDAQ:IAS) Q4 2024 Earnings Call Transcript February 28, 2025

Jonathan Schaffer: Good morning and welcome to the IAS fourth quarter and full year 2024 financial results conference call. I’m joined today by Lisa Utzschneider, CEO, and Jill Puttman, Interim 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: Thank you, Jonathan. Welcome, everyone, to our 2024 fourth quarter and year-end call. We delivered positive fourth quarter results with double-digit revenue growth across our measurement, optimization, and publisher businesses. Revenue in the fourth quarter increased 14% to $153 million at a 40% adjusted EBITDA margin. Full year 2024 revenue grew 12% to $530.1 million at a 36% adjusted EBITDA margin. Our profitable growth in 2024 enabled us to significantly exceed the rule of 40 for the fourth consecutive year since our IPO in 2021. 2024 was a year of innovation, that we believe positions Integral Ad Science Holding Corp. for continued double-digit growth in 2025. We advanced our industry-leading technology, grew our relationships with key advertisers, platforms, and publishers, and enhanced our leadership team with the addition of a new chief operating officer and chief product officer.

We introduced several new capabilities in our core measurement offerings and increased our reach on key platforms to capture additional ad spend across channels. We also expanded our pre-bid optimization product suite to drive performance for advertisers. In 2024, we successfully scaled our premium AI-driven total media quality or TMQ measurement product in social media. We are integrated with major platforms including Meta, YouTube, TikTok, Snap, Pinterest, and most recently, Reddit, which we launched in December. Reddit selected Integral Ad Science Holding Corp. to integrate in their limited inventory safety tier based on our market-leading TMQ capabilities. We also closed the loop on the social platforms with the launch of our pre-bid optimization solution.

Advertisers on the leading social platforms can now optimize their ad placement, customize their suitability settings, eliminate waste, and drive higher returns on their ad spend. In October, Integral Ad Science Holding Corp. announced testing of a first market content level avoidance optimization solution for advertisers on Meta, across Facebook, Instagram feed, and Reels. During testing, our content block list solution on Meta delivered a 71% reduction in wasted ad spend on unsuitable content. Earlier this month, we announced new features and increased global availability for our content block list optimization solutions on Meta. We now support nine additional content categories for a total of 45 and six additional languages for a total of 34.

In addition, Integral Ad Science Holding Corp. is currently in alpha testing in partnership with TikTok for its new video exclusion list solution. Alpha participants can partner with us for both measurement and optimization on TikTok. We remain on track and look forward to delivering these social optimization capabilities on TikTok in the first half of 2025. In 2024, we launched our differentiated quality attention measurement product for advertisers, publishers, and SSPs. Quality attention is the first product to unify impression-level media quality signals and Lumen Research’s eye-tracking technology with machine learning. Brands can utilize these attention scores to drive up to a 130% lift in conversion rates for their ads when comparing high attention impressions versus low attention.

In the fourth quarter, we released our quality attention. With this pre-bid expansion, Integral Ad Science Holding Corp. now offers complete coverage for attention metrics across post-bid, pre-bid, and social media. We continue to roll out our quality sync pre-bid segment which is now available across all major DSPs. In the fourth quarter, we announced the availability of our quality sync pre-bid segment in Amazon DSP. We are delighted to continue this momentum in 2025 with the launch earlier this month of quality sync in Google Display and Video 360. With quality sync, advertisers can simplify their workflows by automatically syncing their pre-bid and post-bid settings across all channels for programmatic buys. In CTV, our clients are leaning into our solutions and integrating more deeply with our Publica and Integral Ad Science Holding Corp.

measurement offerings. According to eMarketer data, as of November 2024, the US CTV market is expected to reach over $47 billion by 2028. We are focused on driving publisher performance and increased efficiencies with Publica. On last quarter’s call, I discussed the introduction of new product features to increase bidding competition in ad auctions. These are powerful and superior product differentiators which, along with the contribution from Oracle wins, contributed to 30% publisher growth in the fourth quarter. We look forward to scaling the offering in 2025. Integral Ad Science Holding Corp. leads the industry globally with 32% of our fourth quarter revenue from markets outside of the Americas. We consistently find that our global coverage is a differentiating factor in winning RFPs across verticals.

In December, we announced plans to expand into China where we are currently in alpha testing. This initiative unlocks the world’s second-largest billion dollars in digital ad spend in 2024 according to eMarketer data as of November 2024. Integral Ad Science Holding Corp. will also offer local support to Chinese advertisers looking to grow their reach beyond China’s borders. The announcement follows the expansion of our operations in four key APAC markets, Hong Kong, Taiwan, Thailand, and Vietnam. Also in December, we announced an exclusive first-to-market partnership with Quai for Business, one of the most popular content communities and social platforms in Brazil, with one billion active users. Our brand safety and suitability measurement solutions including TMQ, are now available for advertisers on Quai in LatAm and APAC.

In 2024, we signed major new customer wins and renewals, including former Oracle customers across brands, platforms, and publishers. We are driving the integration and activation of these Oracle wins and seeing exciting opportunities to provide additional Integral Ad Science Holding Corp. capabilities to these customers. To this end, we have successfully onboarded over 30 previous hires from Oracle who bring extensive programmatic mid-market and data experience. Since our last call, we secured several new wins, including in the luxury, financial services, and automotive verticals as well as renewals and expansions with existing partners. Renault Nissan Mitsubishi, a strategic alliance between the three global automakers, renewed and expanded their multiyear global partnership with us to include TMQ, attention, and sustainability.

The renewal builds on our long-standing exclusive partnership with Renault and global relationships with Nissan and Mitsubishi based on our innovative product offerings and superior service. Marriott renewed their global social measurement partnership with us and switched to us from an incumbent provider for our optimization offerings. We were selected based on our differentiated total visibility offering, and our superior service. EssilorLuxottica, home to leading global vision care and eyewear brands, renewed and expanded its agreement with us. The renewal includes TMQ, attention sustainability, and total visibility, as well as our pre-bid social optimization offering. They value our service and consider us as a crucial partner in protecting their brand’s digital exposure.

Prada renewed their global partnership with us across our TMQ and attention offerings while expanding to include social. Prada trusts our technology and team to safeguard their brand and maximize the impact of their ads. All four of these renewals are a testament to our global leadership and the importance to brand marketers of our established coverage across markets. More than ever, brands are seeking both protection and performance solutions to drive efficiency and maximize outcomes on their ad spend. We believe we are proving that higher quality media leads to higher ROI for both large and mid-market customers. We are in the unparalleled position of seeing every digital media interaction with our measurement offerings. As a result, we can leverage insights and data to drive performance with our premium optimization products.

In 2025, we are focusing our product roadmap on three key objectives: delivering performance and ad effectiveness, expanding our reach to better serve our customers, and innovating further immediate efficiency and protection. We recently announced total media performance or TMP, a suite of pre-bid optimization insights products that maximize ad performance while protecting brand equity. The TMP suite includes dynamic performance profiles or DPP. DPP delivers performance or brand outcomes by automatically adjusting path and customer outcomes data. DPP is offered on all major DSPs through our pre-bid integration and is designed to seamlessly align pre and post-bid media quality controls. We are expanding our reach in several ways, including the scaling of our pre-bid optimization solution across the largest social platforms.

In addition, mid-market represents a meaningful opportunity. We have dedicated resources to developing products specifically for mid-market customers who require seamless self-serve solutions that are easy to activate. We are innovating our offerings to prioritize media efficiency and protection. In the fourth quarter, we launched Integral Ad Science Holding Corp. curation with Google Ad Manager. With our curation, advertisers can now consolidate bidding on high-quality inventory and precisely target contextually relevant content to drive efficiency for their ad buys. We look forward to expanding our curation to more SSPs in 2025. In CTV, we are excited to build on our momentum in this high-growth market. We are focused on helping advertisers extend the capabilities they use for open web and social media to drive efficiency and performance for their fast-growing CTV spend.

We expect to scale adoption of Publica’s new product features built to increase bidding competition in ad auctions. Integral Ad Science Holding Corp. and Publica will continue to focus on supply path optimization to connect buyers and sellers in the most efficient ways possible. Our AI and data strategy is critical to driving both product innovation and cost efficiency. We are advancing our data science capabilities by deploying cutting-edge AI models that are designed not only to accelerate time to market and scale new products but also to reduce processing costs. By harnessing the power of our data, we empower brands and publishers to unlock new innovative use cases to maximize ad performance and operational efficiency. We made significant progress in 2024 as we advanced our technology and deepened our partnerships across the online ecosystem.

In 2025, we believe we will see new opportunities to deploy our technology and deliver impact for brand marketers. We expect to deliver double-digit profitable growth in 2025 as we expand our coverage across formats, channels, and markets. Last month, we announced the appointment of Jill Puttman as interim chief financial officer. Jill has served as an Integral Ad Science Holding Corp. board member since 2021 and was also our audit committee chair. She is a proven finance leader with over 30 years of experience, including as CFO of Jamf Holding Corp. We thank Jill for stepping into the role, and we have engaged with an executive search firm to find a permanent CFO. With that, I’ll turn the call over to Jill to review the financials and then we’ll take your questions.

Jill Puttman: Thanks, Lisa, and welcome, everyone. I’m excited to step in as interim CFO in addition to my role as an Integral Ad Science Holding Corp. Board member. I’ve been very impressed with the team and look forward to supporting the company through this transitional period. Let me walk through our 2024 fourth quarter results before turning to our financial outlook for the 2025 first quarter and full year. Total revenue in the fourth quarter increased 14% to $153 million, ahead of our prior outlook of $148 to $150 million. In addition, we achieved an adjusted EBITDA margin of 40% in the fourth quarter. For the full year 2024, total revenue increased 12% to $530.1 million, ahead of our prior outlook of $525 to $527 million.

2024 full year adjusted EBITDA was $191.3 million at a 36% margin. Fourth quarter revenue growth was driven by double-digit gains across all three of our major revenue categories. Advertisers spent in the retail and CPG verticals improved from the third quarter, and we saw continued strength in financial services. As Lisa noted, we began to recognize the positive impact of recently won Oracle business across our advertiser and publisher businesses. Optimization revenue grew 11% to $70.6 million in the fourth quarter. Improved advertiser spend on our leading optimization products drove volumes in both our contextual and non-contextual segments. Measurement revenue increased 12% to $59.1 million in the fourth quarter. Looking at measurement revenue by channel, social media revenue growth increased to 25% with continued adoption of TMQ across platforms, including Snap and Pinterest that were launched in the second half of the year.

Social media represented 54% of measurement revenue and 21% of total revenue in the fourth quarter. Open web revenue was consistent with the prior year period and represented 46% of measurement revenue. Turning to measurement revenue by format, video grew 14% in the fourth quarter and accounted for 56% of measurement revenue, with display representing 44% of measurement revenue. Publisher revenue increased 30% to $23.4 million driven by the adoption of new Publica products by large OEM partners as well as increased political spend. Publisher revenue represented 15% of total fourth quarter revenue. We continue to expand our international footprint, which is a key competitive differentiator as customers prioritize global coverage. International revenue growth accelerated in the fourth quarter, up 13% to $49 million or 32% of total revenue.

In addition, 45% of measurement revenue in the fourth quarter came from outside of the Americas. For the full year, 31% of revenue or $166 million came from outside of the Americas. Gross profit margin for the fourth quarter was 78%. Gross profit margin for the full year was 79%, at the high end of our prior outlook of 77-79%. On a combined basis, our operating expenses for the fourth quarter, excluding non-cash expense items, were flat year over year due primarily to increased capitalization of internally developed software and lower than anticipated bad debt expense. Stock-based compensation expense for the period was $13 million, lower than our prior outlook of $15 to $16 million. Adjusted EBITDA for the fourth quarter, which excludes stock-based compensation and one-time items, increased 29% to $61.4 million, above our prior outlook of $55 million to $57 million.

Adjusted EBITDA margin for the fourth quarter increased to 40% from 35% last year. Adjusted EBITDA for the full year 2024 increased 20% to $191.3 million at a 36% margin, up from $159.5 million at a 34% margin last year. Net income for the fourth quarter was $15.3 million or $0.09 per share compared to $10.2 million or $0.06 per share in the fourth quarter of 2023. Moving to our performance metrics, our fourth quarter advertiser net revenue retention or NRR was 107%, which reflects lower advertising revenue growth for the trailing twelve-month period. It excludes our publisher growth. The total number of large advertising customers, which includes both mid-tier and top-tier clients with annual revenue over $200,000, grew to 237 compared to 222 in the prior year period, and 232 in the 2024 third quarter.

Revenue from large customers was 85% of total advertising revenue on a trailing twelve-month basis, consistent with recent periods. We continue to generate strong cash flows and maintain a healthy balance sheet with cash and cash equivalents at the end of the fourth quarter of $84 million. During the quarter, we reduced our long-term debt by $30 million to $35 million. Turning to guidance, for the first quarter ending March 31, 2025, we expect total revenue in the range of $128 to $131 million or 13% year-over-year growth at the midpoint. We expect the quarterly revenue spread for 2025 to be similar to recent years. Adjusted EBITDA for the first quarter is expected in the range of $38 million to $40 million or 30% margin at the midpoint. For the full year 2025, our revenue outlook is $588 to $600 million or 12% year-over-year growth at the midpoint.

Full year 2025 adjusted EBITDA is expected in the range of $202 million to $210 million or a 35% margin at the midpoint. A few additional modeling points: we expect to maintain gross margin for the full year 2025 in the range of 77% to 79%. First quarter stock-based compensation expense is expected in the range of $15 million to $17 million and $77 million to $81 million for the full year. We expect weighted average shares outstanding for the first quarter in the range of 163 million and 165 million to 167 million shares for the full year. We expect an effective tax rate of approximately 30% for the year 2025. In conclusion, we report solid fourth quarter results which enabled us to achieve the rule of 48 for the full year 2024. In 2025, we will continue to invest in differentiated products while managing our costs.

Our 2025 outlook calls for double-digit revenue growth and strong adjusted EBITDA profitability. And with that, Lisa and I are now ready to take your questions.

Operator: To withdraw your question, please press star one one again. Our first question comes from the line of Mark Kelley with Stifel.

Q&A Session

Mark Kelley: Great. Thank you and good morning everyone. First of all, nice quarter, especially given what we’ve heard from the broader ad tech community over the last few weeks. So well done. First question is, you know, your main competitor called out political as a headwind. With brands really not coming back post-election, curious to hear what you saw in the quarter around political, and then just second question on CTV. You know, as CTV scales and continues to shift towards more real-time bidding and less on direct deals, I guess, how does that impact your business overall in terms of volume and pricing? Thank you very much.

Lisa Utzschneider: Good morning, Mark. Happy to take both questions. So the first one around political spending, a couple of callouts. The impact from political was limited to the lead-up to elections in November. On the advertiser business side, we did see some political headwinds. Well, the publisher side, it actually benefited from increased political spend. We were also pleased to see advertiser spends uptick in retail and CPG verticals. They improved in the fourth quarter with continued strength in the financial service sector. And with your second question related to CTV, the ongoing shift to real-time bidding, we actually see that as a tailwind for our business as we continue to invest in our CTV product offerings, especially in Publica as we noted in our fourth quarter results. We are seeing strength in publisher across the board, in particular CTV with a 30% year-over-year growth in the fourth quarter.

Mark Kelley: Great. Thank you, Lisa.

Operator: Our next question comes from the line of Youssef Squali with Truist.

Youssef Squali: Great, good morning, everyone. And, yeah, congrats on an impressive quarter, all things considered. Maybe just two questions on one on pricing. Can you maybe talk about what you’ve seen in pricing maybe delineating pricing and measurement, particularly from the moat wins versus non-moat clients? And then, still on the measurement, did measurement get a lift in growth from maybe having the pre-bid product on Meta in Q4 already, which was a bit ahead of where your competitor was? Thank you.

Lisa Utzschneider: Hi, Youssef. Thank you for the questions. So the first question related to pricing on measurement from moat versus non-moat. We were thrilled with the wins that we put up on the board during last year’s summer of Oracle. You might remember the win rate was north of 70% with 75 plus wins. It was a competitive jump ball situation. But we were able to demonstrate both with the differentiation of our products the value that we offer these new customers coming from we were able to see a high win rate. But there were pricing dynamics during those RFP jump balls. And then the second question related to the uptick in measurement, a couple of callouts there, we continue to see nice adoption of total media quality across all of our social platforms.

Where we’re seeing the adoption is within the top 100 advertising customers. Think of those as the enterprise accounts. Especially from top 51 to 100 advertisers. The sales teams are very focused on driving TMQ adoption across all the major markets for these global advertisers. The second call out with TMQ is we also announced last year in the back half of the year new social platforms that we rolled out TMQ. Including platforms like Snap, Pinterest, and Reddit, and being able to expand reach in new platforms, that’s also driving TMQ growth and adoption of our social measurement revenue. And then in terms of the launch of the pre-bid social optimization, we were thrilled when Meta selected Integral Ad Science Holding Corp. last summer. I’m sure you remember that.

They selected us to be the beta partner to co-build the pre-bid social optimization products. We launched it beta last September. We launched in fourth quarter GA. We’re very pleased with the ramp that we’re seeing in pre-bid social on Meta through the fourth quarter and into the first quarter. It’s early days with that launch, but a few things to call out in terms of what we’re learning is we’re seeing a 71% reduction in wasted ad spend in unsuitable content. With the brands that have adopted the product. Again, a demonstration of the value that we’re driving. But it’s early days. So the team, we’re just focused on driving the adoption, ensuring we’re demonstrating the value, and the other thing that’s important to call out is that the clients that are adopting the product, they’re already running our post-bid measurement solution on Meta.

And, again, we’re running the pre-bid social both on Meta and on TikTok.

Youssef Squali: Yep. Got it. Thank you, Lisa.

Operator: Our next question comes from Jason Helfstein with Oppenheimer.

Jason Helfstein: Hi, thanks. Good morning, everyone. Two questions. So, Lisa, it would seem that pre-bid could have a much higher coverage I don’t want to say a hundred percent, but much higher coverage where relevant whereas post-bid and verification potentially is much smaller coverage similar to the way Nielsen measures TV with limited sampling. Given that I started with post-bid and is now expanding much more significantly with pre-bid across all the different areas you’ve talked about. How does it change your visibility in the long-term outlook for the business? And then second, Jill, could you perhaps give us your outlook for the full year by segment and format if you can give any color there? Thank you.

Lisa Utzschneider: Yeah. Thanks, Jason. Thank you for the question. So I’ll take the first question around pre-bid post-bid, and visibility that we have into the business. So a couple of things to call out there. The first is exactly to your question, we are doubling down and investing heavily in performance, and our performance capabilities in programmatic. As I mentioned earlier in the call in 2025, when we think about our product roadmap, we’re focused on three key objectives. That includes delivering performance as brands are doubling down on things like performance, efficiency, transparency, ROI. The second thing we’re focused on is expanding reach. Expanding reach both in terms of new platforms, new inventories, international expansion.

And then the third key area is innovation, both with media efficiency and protection. By leveraging AI. So we are all hands on deck when it comes to programmatic and performance. And in particular, linking performance and media cost data. And with that, because we’re doubling down on all things related to performance and pre-bid, we’re seeing really nice adoption from several key pre-bid products that we launched, total visibility being one of them. And because we’re seeing nice adoption of total visibility where we’re able to link up media quality signals with cost data, we are getting closer and a better understanding to advertisers and how they’re planning their pre-bid buying. And with that, it gives us greater visibility in terms of revenue forecast both on the post-bid side and the pre-bid side.

One other point tied to that, I made it earlier about social pre-bid and Meta. Is that advertisers who are adopting pre-bid social optimization in Meta, they have to be running post-bid measurement solutions on Meta. So with that, because we already know what they’re running post-bid and they’re adopting the pre-bid product, that’s another great example of how we’re seeing transparency, both at the pre-bid and post-bid level. Jill, would you like to take Jason’s second question?

Jill Puttman: Yeah. Sure. Hey. Good morning, Jason. As far as how we’re thinking about growth across the business in 2025, total advertiser revenue is expected to have double-digit growth. We’re seeing improved optimization performance in the first quarter relative to the fourth quarter, expect this growth rate to outpace both the Q1 and the full year guidance that we provided for the total revenue growth. For measurement, we expect single-digit growth in the first quarter that will be below the guide we’ve provided again for the total revenue with improvement throughout the full year. And then for publisher, we expect double-digit growth here as well in both Q1 and for the full year. And to outpace the forecasted CTV growth rates.

Jason Helfstein: Thank you.

Operator: Our next question comes from Raimo Lenschow with Barclays.

Raimo Lenschow: Thanks. Congrats for me as well and welcome, Jill. Lisa, one more on the industry. Since the election, we’ve obviously seen a change in terms of how some of the social media companies want to look at their content. Has that changed any discussions with clients? Because it does feel like that should kind of improve the standing for you guys. Tremendously because you can help them in the kind of more evolving environment there. And then I have one follow-up.

Lisa Utzschneider: Yeah. Thank you for the question, Raimo. So when you look back, CES is every year in early January, and it’s when we spend time with some of our biggest advertisers, the holding companies, the platform clients. And during that week, it was both when Meta announced that they were doing away with fact-checking, and then also, there was the unknown of whether or not TikTok would be banned in the US. And that gave us the opportunity to have many face-to-face discussions with our largest advertisers, and holding companies and have the conversation about their social strategy in 2025. And with that, it’s too early to say whether or not some of these shifts we’re seeing with the social platforms is an opportunity for Integral Ad Science Holding Corp.

But I will say our role in the digital ecosystem, our role in providing a best-in-class multimedia classification in all of the major live feeds of social platforms is a tailwind for our business. The brands were very clear during CES. Integral Ad Science Holding Corp., you’re in the business of trust. We trust the accuracy of your multimedia tech. We trust the efficiency, the velocity, the granularity of it, and they’re leaning into us to help navigate with them the environment that we’re operating in right now, and that’s a big reason why we continue to invest deeply in our tech.

Raimo Lenschow: Yeah. Perfect. Okay. Thank you. That’s very clear. And then another question on the Oracle wins. Like, can you talk a little bit about progression there? It does look like you’re having good progress here in terms of converting them and kind of getting them on the platform. But what’s the where are we on that journey? Thank you, and congrats again.

Lisa Utzschneider: Yeah. Thank you. So with Oracle, and I spoke to you before, our win rate and the fact that fourth quarter you might remember Oracle, they shut down, shut off their solution to their entire customer base at the end of September. So the fourth quarter of 2024 was very much the quarter to drive the integrations, get all of the new customers on board, adopting our products, and where we see nice upsell, cross-sell opportunity is with the brands in particular. Because Oracle did not have a robust brand safety suitability solution. Also, important to call out where we see additional runway is in the mid-market channel. Oracle had a robust mid-market base, and it’s great to have Mark Robowsky on board as our COO who was formerly the global CRO of Oracle.

Who has a deep background in mid-market. Mid-market is an area that we’re investing heavily in. And then the third call out is we did have a few more wins with Oracle. Following our earnings call last November. In particular, in the luxury and finance services verticals.

Raimo Lenschow: Perfect. Well done. Thank you.

Operator: Our next question comes from Robert Coolbrith with Evercore ISI.

Robert Coolbrith: Thank you. Just wanted to ask a couple, please. Going back a number of years to the IPO, you had talked about performance measurement as a potential TAM expander. We’ve seen a competitor get involved in the MTA space just recently. And I think just generally across the industry, you’re seeing a lot of interest in incrementality. You talked a lot last quarter, I think, about your data assets in particular and how they can be leveraged over time. Is measurement or MTA an area that you’re looking at more closely? And anything you could tell us about that?

Lisa Utzschneider: Yeah, Robert. Thank you for the question. So as I mentioned before, we’re very focused on doubling down in performance and what I mean by performance is activation. Our working thesis is helping brands find higher quality media, leads to higher ROI. And the way we’re doing that is by leveraging the media quality signals, our contextual signals, and marrying that up with cost data tied to outcomes. In terms of our data assets, we have a robust data because we’re classifying so much data, billions and billions of web events every single day. And with our data assets, we’re doing a lot of interesting work right now layering our media quality data, with third-party audience signals and first-party brand signals. This is focusing on more of that performance activation that I spoke to before, and that’s our primary area of focus. In 2025 is performance and activation.

Robert Coolbrith: Got it. Thank you. And then second one, if I could ask, there have been a couple of recent industry developments we’ve been getting questions about. One is the Sinceera acquisition. And then secondly, Amazon had some, I think, some new page-level reporting. So we’ve been getting questions about that. Are you seeing any movement of the DSPs to be vertically integrated some part of verification? And what are you seeing there? Thank you.

Lisa Utzschneider: Sure. I’ll take both questions. Sinceera, so Sinceera has been a really important strategic partner for the company, powering several portions of several of our products, and we’ll continue in the first half to be a partner of ours. In the Amazon question, related to is it the level reporting? Are you referring to the URL transparency reporting?

Robert Coolbrith: Yes. That’s the one. Yep.

Lisa Utzschneider: Yeah. So with URL transparency, we actually have offered URL transparency since 2021. This is a capability that we’ve offered our customer base for several years. It’s an area we’ll continue to stay close to and innovate in.

Robert Coolbrith: Thank you so much.

Operator: Our next question comes from Justin Patterson with KeyBanc.

Justin Patterson: Great. Thank you. Lisa, could you talk about how you’re thinking about the pipeline for new business? This year versus prior years as you’ve introduced more products across the market, deepen these social capabilities. It seems like there might be an opportunity to just engage customers that you might not have been able to reach previously. Thank you.

Lisa Utzschneider: Yeah. Sure. Just thank you for the question. So I would say that question is tied to the three goals I spoke to before around performance, expanding reach, and innovation, it’s in the expansion of reach. So when you take a look at the robust, TAM, for the industry, there are a couple of levers that we’re going hard at. The first is our enterprise customers. Those are the top 100 advertisers. That’s all about cross-sell, upsell, launch innovative products, launch adoption, but more importantly, to continue the engagement with those top brands, is launching new channels, new platforms so that we’re expanding the volumes of inventory that the largest customers can adopt the products. Second, really important channel for Integral Ad Science Holding Corp.

that we are investing heavily this year is mid-market. There is tons of green space in mid-market. Both in the US and internationally. We define the market as customers who are spending between $200k and a million with us, with Mark on board as COO. We are investing both in the front end in investing in more sellers, more support, more technical support, and on the back end, performance really matters to the mid-market advertisers. So pouring fuel on our performance products, investing in automation and self-serve. So I would say it’s those two drivers for the pipeline. Enterprise is more of an expansion play. Mid-market, tons of new business. And then the third area that’s important to note that I called out in the script is expansion into emerging markets and new markets.

China being the most recent where we launched in December. And we’re currently in alpha both in a chat with a China in strategy and a China out.

Justin Patterson: Great. Thank you.

Operator: Our next question comes from James Heaney with Jefferies.

James Heaney: Great. Thanks for taking the question. How are you thinking about hiring, in 2025? I think we heard from Trade Desk about the desire to double the number of senior people within the organization. So we’d just be curious how you think philosophically about balancing profitability with the headcount needs to continue growing the business. Thank you.

Lisa Utzschneider: Yeah. Thank you for the question, James. So there are a couple of areas that we are focused on when it comes to hiring in 2025. And, again, these are the areas that drive accelerated growth for the company. Drive the greatest value for our customer base, and set us up for long-term profitable growth. So the first area is R&D. R&D and data science. Science is in the name of our company. We have differentiated tech and we will continue to invest in class engineers and data science to focus in particular on all things related to performance, classification, and leveraging AI. The second bucket of hiring is in sales. And go to market in particular performance, programmatic, and mid-market. So I would say those are the two areas. And then again, where we see opportunity to expand in new emerging markets, and it makes sense to put boots on the ground, we’ll continue to invest in emerging markets.

James Heaney: Great. Thank you.

Operator: Our next question comes from Andrew Marok with Raymond James.

Andrew Marok: Thank you for taking my question. We heard from your main competitor about a major CPG cuts going through some idiosyncratic issues and I’ve heard some shakiness in CPG and some other reports. Although, one of your answers to your previous questions seemed to indicate that CPG was doing pretty well for you. I guess from your seat, how’s your view on the health of the ad market and what’s baked into your Q1 or full-year assumptions around economic health and impacts of things like tariffs, etcetera? Thank you.

Lisa Utzschneider: Good morning, Andrew. Thank you for the question. So we are confident in the guide that we put out for Q1 and 2025. As you noted, in heading from Q3 into the fourth quarter, we start to see strength both in CPG, retail, financial services. Our vertical profile is fairly consistent and predictable. And also, when you take a look at the stickiness of our business, our top 100 advertisers have been with Integral Ad Science Holding Corp. for over eight years, and so we’re very leaned in to ensuring that we’re driving value for those top accounts. We’re keeping them in what I call the Integral Ad Science Holding Corp. boat, and we continue to bring new advertisers and publishers on board. And one more note about macro.

One more note that’s important. And I know I keep hitting the playing the performance drum. But performance efficiency, ROI, and ensuring that we are driving the value we are helping the brands drive better outcomes with the investments that we make in our solutions. We take the black box out of programmatic buying so they truly could lead to keeping them away from media wastage and drive higher ROI. It is just so critical that we continue to invest in this area because the brands are so laser-focused on ensuring that every dollar they invest in digital advertising, they see a higher return.

Andrew Marok: Great. Thank you.

Operator: Our next question comes from Omar Dessouky with Bank of America.

Omar Dessouky: Hi. Thanks for taking my question here. Lisa, I wanted to play the devil’s advocate for a minute here and ask more of a strategic competitive question. Given that the markets that you play in seem to be a two-horse race, you and DoubleVerify. And activation customers, you know, generally, are also measurement customers, and you have to have one in order to have the other. Why does it make sense to be first to market with activation solutions rather than be a fast follower? You know, and wait until, you know, the competition takes the risk of those products in the market, you know, and makes the investment. You know, to put those products in the market. You know, it would seem that there would be some kind of potential to, you know, perhaps, be more efficient, optimize, or, you know, scale back investment without losing market share. So, again, just playing the devil’s advocate here. Wanted to see how you think about that.

Lisa Utzschneider: Yeah. Thank you for the question, Omar. So on that one, what’s interesting about that question is we are a culture of test and learn. We’re a culture of planting seeds early, patiently testing and learning with our clients, invest in the product, ensure there’s a customer feedback loop so we can improve the product over time, and then launch it to GA. So, for example, my remarks before around activation our total visibility product, we’ve had that product in the market for several years. Did we have a big unveiling several years ago? No. It came off of the Immuno payments acquisition, that we actually made that acquisition before going public in 2021. And we quietly just built that activation engine over time did a lot of tests and learns, and last year is when we really started to see rapid adoption of the product.

And that’s how we’ll operate moving forward. So we’ll continue to invest in performance and activation. We build products and prioritize our product and tech roadmaps. Based on the feedback from our customers, and we’re hearing loud and clear from our customers right now they want Integral Ad Science Holding Corp. to play both in ensuring protecting brand equity and brand reputation, and in performance, and we’re doing both.

Omar Dessouky: So if I just interpret what you said, I mean, are you saying that there’s potentially a risk of market share loss if you’re not first to market? That’s really the question I’m asking. Like, how important is it to be first to market?

Lisa Utzschneider: I think it entirely depends on the product. And it depends on the opportunity. Integral Ad Science Holding Corp., historically, we’ve also had plenty of first to market. Meta being the most recent example the largest social platform selecting us. Because of our sophisticated technology, of course, we’re going to take advantage of that and launch a first to market product. But if there are other areas where it makes more sense to test and learn until we have a viable product in place, and we need to do both.

Omar Dessouky: Set. Thank you very much.

Operator: Thank you. Our next question comes from Jason Kreyer with Craig Hallum.

Jason Kreyer: Great. Thank you. Just want to double click on the ramp in publisher growth that you’ve seen over the last couple of quarters. Can you just highlight what Publica products are resonating that are driving that resurgence there?

Lisa Utzschneider: Yes. Thank you for the question, Jason. So with Publisher, again, we were pleased to see our 30% growth in the fourth quarter. And there are a couple of areas with Publica where we’re seeing a nice uptick. And keep in mind, publishers both Publica and offering our Integral Ad Science Holding Corp. solutions. But with Publica in particular and this is coming off the heels of you might remember we hired Cam Milley last June from FreeWheel who was our new Publica CRO. He has brought fresh perspective, really interesting innovative ideas, and is bringing the closer to the product team. And in particular, we’re seeing scaled adoption of Publica’s new product features that are built to increase bidding competition in the ad auctions. And we’re seeing nice adoption. We’re continuing to invest in Publica, which is a leading differentiated CTV platform. And when we’re ready to share more about Publica’s product portfolio will do just that.

Jason Kreyer: Thank you. Thank you.

Operator: This question comes from the line of Rob Sanderson with Loop Capital.

Rob Sanderson: Thank you. Thank you. Good morning, everybody. I wanted to ask a little bit more about your plans to expand into China. It can be a tricky market to penetrate. What can you say about your go-to-market strategy? You mentioned in the script you know, the size of the domestic market, but you also mentioned, you know, cross-border. Are you sort of going after the domestic China opportunity cross-border sellers, or both? And then in terms of strategic priority, Lisa, and you kind of listed emerging markets as, like, a point three in terms of you know, growth initiatives. Is that sort of the right framing of the strategic priority around China? Is it sort of know, we’ll put plant some seeds, see how they develop and maybe lean in more if it looks more promising or how should we think about your expansion into China?

Lisa Utzschneider: Sure. Thank you for the question. So on China, the way to think about exactly what you just said, planting seeds. Test and learn, we have the opportunity to be first in market in China. We announced it publicly in December of 2024. Partnership with RTB Asia. The way to think about our opportunity in China and we’ve been hearing loudly for some major global brands when are you going into China? But there are two sides to the China strategy. There’s China in and China out. China out is offering our verification solutions outside of China. For Chinese advertisers who are advertising to consumers outside of China. China in is for global brands, major global 500 brands where China is a really important market for them and they’re advertising in China and they want to leverage our verification solutions.

Two verticals in particular, that have been loud and clear about asking into China have been CPG and luxury. And as I mentioned before, we’re currently running an alpha in China. The way I view China, it is a long game. A long play. But, again, it’s in the spirit of our test and culture, planting the seeds early, having you know, doing seeing the product adoption, getting that adoption wheel, flying, and then, you know, launching a viable product over time in GA.

Rob Sanderson: In that context, Lisa, is there a third sort of opportunity? Like, you’re saying China in and China out, but what about you know, China to China? Is that something that is not on the plan for now? Is that something that may be in the future, or is that am I kind of not thinking about that in the framework you’re trying to articulate?

Lisa Utzschneider: Yeah. The way we view China in particular is crawl, walk, run. And the areas we’re focused on right now with our in and China out strategy that I spoke to before, those seem like the right seeds to plant. The right areas to focus on, especially with the big marketers. We’ve had several who have proactively raised their hands and say, yes. We would love to test with you in China. So we’re just focused on those two areas right now. As we continue to focus on our entire plan for 2025, and make sure that we hit our deliverables across our products in the roadmap.

Rob Sanderson: Thank you.

Operator: That concludes today’s question and answer session. I’d like to turn the call back to Lisa Utzschneider for closing remarks.

Lisa Utzschneider: Thank you everyone for joining today’s call. We were pleased to deliver positive results for the fourth quarter. Our 2025 financial outlook calls for double-digit revenue growth and strong profitability driven by our industry-leading technology and product innovation. I’d like to thank the entire Integral Ad Science Holding Corp. team for their hard work and dedication. We’ll be at two investor conferences in San Francisco next week and look forward to updating you on our progress. Have a great day and a great weekend.

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