DoubleVerify Holdings, Inc. Q3 FY2025 earnings call

1. Q3 reflected disciplined execution with revenue growth within guidance and adjusted EBITDA margin above expectations. Leveraging AI and automation for efficiency and profitability. 2. Upsell momentum strong, with AI-powered DV Authentic AdVantage closing ~$8 million in annual contract value. No churn among top 100 customers. 3. Innovation: Launched DV AI Verification offering, including Agent ID Measurement and AI SlopStopper. Using generative AI for classification to double volume and gain productivity. 4. Diversification: Social activation solutions growing, with DV Authentic AdVantage and Meta prebid scaling. CTV growth with new product launches for measurement and activation, including DV Verified Streaming TV measurement. Programmatic growth with healthy volume and supply side growth. 5. Monetization: Medium-term goal to grow social, streaming TV, and AI Verification solutions to ~50% of total revenue. Deepening relationships with global leaders and adding new enterprise customers.

Revenue grew 11% to $189 million. Adjusted EBITDA margin reached 35%. Activation revenue grew 10% year-over-year, with ABS (accounting for 54% of activation revenue) growing 12% year-over-year. Measurement revenue grew 9% year-over-year, with social measurement growing 9% and accounting for 48% of total measurement revenue. Supply side revenue grew 27% year-over-year driven by retail media growth.

1. Updated Q4 outlook: Revenue expected to range $207 million - $211 million (10% growth midpoint), adjusted EBITDA $77 million - $81 million (38% margin midpoint). 2. Full year 2025 guidance: ~14% year-over-year growth midpoint, raising adjusted EBITDA margin guidance to ~33%. Base case for 2026 margins at ~33% supported by cost discipline and AI efficiency.

1. Retail budgets softer due to market dynamics. 2. Uncertainty around platform AI engines and their impact on need for independent verification.

Q: Help sort out growth drivers for next year and incremental profitability/cash flow.

A: Base case 10% growth, upside from social, CTV, and AI solutions adoption. Margins to benefit from AI tools efficiency.

Q: Color on streaming TV product launches adoption and monetization.

A: CTV volume growth, new products like Verified Streaming TV measurement and automated Do Not Air list enabling extraction of value.

Q: Assumptions around economy for next year's growth.

A: Assumes macro not materially different, 10% growth base case.

Q: Impact of industry changes like competitor departure.

A: Advantageous position with ability to invest, maintain price, and grow solution set.

Q: Follow-up on Kenvue and health care segment.

A: Strong growth in health care, Kenvue continues to grow with expanded use of solutions.

Q: Client base and new products for SMBs.

A: New products can garner new customers, solutions provide transparency and value.

Q: Traffic and Gen AI verification.

A: Always identified nonhuman traffic, new Gen AI solutions provide greater transparency on agent engagement.

Q: Expansion on international and go-to-market.

A: Localized sales with centralized plan, different pricing models for social solutions.

Q: Go-to-market and value-based selling.

A: Bundling solutions, adaptable pricing to make introduction digestible.

Q: EBITDA margin and AI investment.

A: AI tools enable efficient investment, improve product and margins.

Q: TikTok and app launch impact.

A: Products transferable, not overly concerned, flexible with social platforms.

Q: CTV penetration and role in TV measurement.

A: Penetrated top platforms, play role in quality, transparency, and granular targeting.

Q: Impact of pharmaceutical advertising regulatory.

A: No significant drag, pharma spend continues strong.