Integral Ad Science (US:IAS)2025-05-12 20:17Part I Condensed Consolidated Financial Statements (Unaudited) The company reported a 17% year-over-year revenue increase to $134.1 million and swung to a net income of $8.0 million from a net loss of $1.3 million in the prior-year period Condensed Consolidated Statements of Operations (Q1 2025 vs Q1 2024) | (IN THOUSANDS, EXCEPT PER SHARE DATA) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | $134,066 | $114,530 | | Operating income | $11,451 | $537 | | Net income (loss) | $7,993 | $(1,255) | | Net income (loss) per share – diluted | $0.05 | $(0.01) | Condensed Consolidated Balance Sheets Highlights | (IN THOUSANDS) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $59,120 | $84,469 | | Total current assets | $238,342 | $254,457 | | Total assets | $1,132,352 | $1,151,571 | | Long-term debt, net | $14,305 | $34,189 | | Total liabilities | $97,326 | $143,560 | | Total stockholders' equity | $1,035,026 | $1,008,011 | Revenue by Channel (Q1 2025 vs Q1 2024) | (IN THOUSANDS) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Optimization revenue | $64,807 | $52,461 | | Measurement revenue | $48,371 | $46,315 | | Publisher revenue | $20,888 | $15,754 | | Total revenue | $134,066 | $114,530 | - Net cash provided by operating activities was $3.5 million, a significant improvement from a net cash use of ($1.1 million) in Q1 2024, with $18.8 million used in financing activities primarily for a $20.0 million repayment of long-term debt17171 - Subsequent to the quarter's end, the company granted RSUs and MSUs with aggregate grant date fair values of $36.3 million and $27.6 million, respectively, to employees and certain executive officers100 Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the 17% year-over-year revenue growth to strong performance in optimization (up 24%) and publisher (up 33%) revenues, achieving an operating income of $11.5 million and an Adjusted EBITDA of $41.5 million Key Performance Indicators | Metric | As of March 31, 2025 | As of March 31, 2024 | | :--- | :--- | :--- | | Net revenue retention of advertising customers | 109% | 113% | | Total number of large advertising customers | 239 | 227 | - Revenue growth was primarily driven by a 24% increase in optimization revenue ($12.3 million) and a 33% increase in publisher revenue ($5.1 million), while measurement revenue saw modest growth of 4% ($2.1 million)143144 - Operating expenses increased by 8% year-over-year, slower than revenue growth, with the largest increase in General & Administrative expenses, which rose 23% ($4.8 million) due to higher professional services and compensation costs141148 Adjusted EBITDA Reconciliation (Non-GAAP) | (IN THOUSANDS) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income (loss) | $7,993 | $(1,255) | | Adjustments (Depreciation, Stock Comp, etc.) | $33,522 | $34,305 | | Adjusted EBITDA | $41,515 | $33,050 | | Adjusted EBITDA margin | 31% | 29% | - The company's principal sources of liquidity are $59.1 million in cash and cash equivalents and an available revolving credit facility, with non-cancelable purchase commitments of approximately $363.3 million through 2029, primarily for hosting services157158 Quantitative and Qualitative Disclosures about Market Risk The company states that its market risk exposure, primarily from potential changes in inflation and interest rates, has not materially changed from the disclosures in its 2024 Annual Report on Form 10-K - There have been no material changes to market risks since the year-ended December 31, 2024179 Controls and Procedures Management, including the CEO and Interim CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025 - The Chief Executive Officer and Interim Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025179 - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls180 Part II Legal Proceedings The company reports that it is not currently involved in any legal proceedings that would be expected to have a material adverse effect on its business, financial condition, or operating results - As of the report date, the company is not a party to any legal proceeding that would, individually or in the aggregate, have a material adverse effect on its business184 Risk Factors This section directs readers to the company's Annual Report on Form 10-K for the year ended December 31, 2024, for a comprehensive discussion of material risk factors - For a discussion of material risk factors, the report refers to Part 1, Item 1A "Risk Factors" in the Annual Report on Form 10-K for the year ended December 31, 2024185 Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds during the quarter - None reported for the period186 Defaults Upon Senior Securities The company reported no defaults upon its senior securities - None reported187 Mine Safety Disclosures This item is not applicable to the company - Not applicable187 Other Information The company disclosed that no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement in the first quarter - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarter ended March 31, 2025188 - On May 7, 2025, the company amended the employment agreement of CEO Lisa Utzschneider, extending the term for salary continuation and COBRA coverage to 18 months upon a termination by the company without "cause" or a resignation by her for "good reason"189 Exhibits This section provides a list of all exhibits filed with the quarterly report, including certifications by the CEO and Interim CFO, and an amendment to the CEO's employment agreement - The list of exhibits includes the CEO and Interim CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2) and the amendment to the CEO's employment agreement (Exhibit 10.3)192