DoubleVerify(DV) - 2025 Q1 - Quarterly Results

Q1 2025 Earnings Release Overview Financial & Business Highlights The company reported strong Q1 2025 results with 17% revenue growth, driven by key client wins and product expansions Q1 2025 Financial Summary | Metric | Q1 2025 | YoY Change | | :--- | :--- | :--- | | Total Revenue | $165.1M | +17% | | Activation Revenue | $95.2M | +20% | | Measurement Revenue | $53.4M | +8% | | Supply-Side Revenue | $16.5M | +35% | | Net Income | $2.4M | -67% | | Adjusted EBITDA | $44.7M | +17% | | Adjusted EBITDA Margin | 27% | Flat | - The company achieved a Gross Revenue Retention rate of over 95% and secured new enterprise customers including Natura/Avon, Valvoline, and INEOS Grenadier, while expanding its relationship with Nike[6] - Significant product expansions were launched, including a brand safety solution for Google's Search Partner Network, viewability measurement on Instagram Reels, a Video Exclusion List on TikTok, and 3D in-experience measurement on Roblox[6] - Under its share repurchase programs, the company repurchased 5.2 million shares for $82.2 million in Q1 2025, with $140.0 million remaining available under the new $200.0 million program[6] Strategic Investments & Corporate Events The company acquired performance attribution firm Rockerbox for $82.6 million and announced an upcoming investor Innovation Day - On March 13, 2025, DoubleVerify acquired Rockerbox, Inc. for $82.6 million, net of cash acquired, to specialize in performance attribution, optimization, and marketing measurement[10] - An Innovation Day for investors will be held on Wednesday, June 11, at the New York Stock Exchange to showcase the company's strategy and products[10] Financial Guidance The company provided Q2 and full-year 2025 guidance, projecting approximately 10% annual revenue growth and a 32% Adjusted EBITDA margin 2025 Outlook | Guidance | Q2 2025 (Midpoint) | Full Year 2025 | | :--- | :--- | :--- | | Revenue | $171M (+10% YoY) | ~10% Growth | | Adjusted EBITDA | $50M | - | | Adjusted EBITDA Margin | 29% | ~32% | Financial Statements (Unaudited) Condensed Consolidated Balance Sheets Total assets decreased slightly to $1.25 billion, with cash reduced by the Rockerbox acquisition and share repurchases Balance Sheet Summary | (in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $156,360 | $292,820 | | Total assets | $1,248,995 | $1,276,210 | | Total liabilities | $216,562 | $192,751 | | Total stockholders' equity | $1,032,433 | $1,083,459 | Condensed Consolidated Statements of Operations Revenue grew 17% year-over-year, but net income declined significantly to $2.4 million due to higher operating and tax expenses Statement of Operations Summary | (in thousands, except per share) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $165,061 | $140,782 | | Income from operations | $6,763 | $6,895 | | Net income | $2,361 | $7,156 | | Diluted EPS | $0.01 | $0.04 | Condensed Consolidated Statements of Cash Flows A net cash decrease of $136.4 million resulted from significant cash outflows for investing and financing activities Cash Flow Summary | (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $37,663 | $31,774 | | Net cash used in investing activities | ($89,864) | ($38,604) | | Net cash used in financing activities | ($85,753) | ($912) | | Net decrease in cash | ($136,428) | ($8,119) | Supplemental Financial Information Revenue Breakdown Total revenue growth was fueled by strong performance in the Supply-side (35%) and Activation (20%) segments Revenue by Customer Type | Revenue by Customer Type (in thousands) | Q1 2025 | Q1 2024 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Activation | $95,172 | $79,322 | $15,850 | 20% | | Measurement | $53,430 | $49,275 | $4,155 | 8% | | Supply-side | $16,459 | $12,185 | $4,274 | 35% | | Total revenue | $165,061 | $140,782 | $24,279 | 17% | Reconciliation of Net Income to Adjusted EBITDA Adjusted EBITDA rose to $44.7 million with a stable 27% margin, reconciled from a GAAP Net Income of $2.4 million Adjusted EBITDA Reconciliation | Reconciliation (in thousands) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income | $2,361 | $7,156 | | Depreciation and amortization | $12,387 | $10,928 | | Stock-based compensation | $24,342 | $20,241 | | Income tax expense | $7,161 | $1,779 | | M&A and restructuring costs | $1,162 | $11 | | Adjusted EBITDA | $44,654 | $38,133 | | Adjusted EBITDA margin | 27% | 27% | Definitions and Disclosures Key Business Terms This section defines key operational metrics such as revenue types, retention rate, and media transaction volume - Activation revenue: Generated from verification of ads purchased through programmatic and social media platforms[14] - Measurement revenue: Generated from verification of ads purchased directly on digital media properties[14] - Supply-Side revenue: Generated from platforms and publishers using DV's data analytics for their ad inventory[15] - Media Transactions Measured (MTM): The volume of media transactions measured by DV's platform[16] Forward-Looking Statements This section contains a standard legal disclaimer cautioning that forward-looking statements are not guarantees of future performance - The company cautions that forward-looking statements, including financial guidance, are subject to known and unknown risks and are not a guarantee of future events, as actual results may differ materially[30] - Investors are directed to the company's Annual Report on Form 10-K for a more detailed discussion of risk factors[31]