DoubleVerify(US:DV)2025-11-07 14:00Financial Data and Key Metrics Changes - Revenue for Q3 2025 grew 11% year-over-year to $189 million, within guidance range [4][25] - Adjusted EBITDA margin reached 35%, exceeding expectations and demonstrating scalability [4][30] - Total advertiser revenue grew 10%, driven by increased volumes, while media transactions measured increased 12% year-over-year [26][28] - Adjusted EBITDA was approximately $66 million, reflecting strong profitability and cash generation [30][34] Business Line Data and Key Metrics Changes - Activation revenue grew 10% year-over-year, with ABS accounting for 54% of activation revenue and growing 12% [27][28] - Non-ABS activation revenue grew 8%, driven by demand for social activation solutions [28] - Measurement revenue grew 9% year-over-year, with social measurement accounting for 48% of total measurement revenue [28] Market Data and Key Metrics Changes - Social activation is growing at 20%, with strong early adoption of DV Authentic Advantage and Meta Pre-Bid solutions [9][10] - CTV measurement volumes grew 30% year-over-year, reflecting increased advertiser demand for transparency [17] - Supply-side revenue grew 27% in Q3, driven by growth on existing platforms and new partnerships [29] Company Strategy and Development Direction - The company aims to grow social, streaming TV, and AI verification solutions from under 30% of total revenue to approximately 50% [19][35] - Focus on innovation through AI and automation to enhance product offerings and operational efficiency [6][23] - Strategic partnerships with global leaders and expansion into new markets are key to driving future growth [21][22] Management's Comments on Operating Environment and Future Outlook - Management noted softer retail budgets impacting growth but highlighted strong performance in other core verticals [4][25] - The company expects continued double-digit revenue growth and strong profitability for the full year 2025 [30][34] - Future growth will be driven by the adoption of new solutions in social, CTV, and AI [39][52] Other Important Information - The company repurchased 3.3 million shares for $50 million in Q3, with $90 million remaining for additional repurchases [31][32] - Capital expenditures increased to approximately $12 million in Q3, reflecting investments in new solutions [30][32] Q&A Session Summary Question: Growth drivers for next year - Management indicated a base case scenario of 10% growth for 2026, driven by new solutions in social, CTV, and AI [38][39] Question: Softness in retail - The softness is broad-based across the retail vertical, impacting a large share of top spenders [44] Question: Impact of competitors leaving the market - The departure of less scaled competitors creates a more advantageous position for the company to invest and grow [49][50] Question: Client base and SMBs in CTV - The company sees opportunities in attracting SMBs into the CTV space, leveraging existing platforms for growth [56] Question: Scaling of Meta Pre-Bid and DV Authentic Advantage - Both products are expected to scale significantly, with strong early adoption and positive initial results [58][59]