DoubleVerify Holdings Inc at JPMorgan Global Technology, Media and Communications Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : Okay, so let me begin with the dynamics behind your Q1. I think it was one of the best positive surprises that we had this entire earnings season, and when I kind of -- when I zoom out a little bit, I think back, revenue had been growing in the 20s, right? During 2023, it dropped to kind of a 10% to 15% range last year. You had had this cohort. You had a cohort of a handful of customers that they themselves were struggling with their own business. And then now we have this improvement. And again, pretty big positive surprise where you showed 17% growth in Q1. Can I ask you just at a high level, what do you think improved for the business during Q1? And I think we're all sort of wondering, why would that have happened? The headlines have obviously been very volatile around the trade and tariff. But business confidence was presumably in a kind of a worse place, right? In February and March, we would have thought than where it was in November, December. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 14, 2025 / 7:00PM, DV.N - DoubleVerify Holdings Inc at JPMorgan Global Technology, Media and Communications Conference

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : In social, that's something, to us, it has had fits and starts. It certainly holds a lot of promise. How would you sum up the Q1 performance, if we said customers adopting social activation on Meta? Was something -- was there any difference in kind of the lagging indicators, the leading indicators, the vibes you were seeing from customers?

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : And I missed one comment you made there, Mark. The 20 new accounts you closed on -- that was on Meta social activation and that was since when?

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : That's since February, okay.

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : And then when you mentioned -- you were talking about, I think, Kenvue and Microsoft. But also more broadly, you were talking about rapid scaling by new customers. What -- to see that in Q1, can you -- it's hard for me, I think, externally to understand. What are they scaling more rapidly and why? Can you give any insight into that?

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : So it was kind of internal execution more than the external customer pacing? Or is it kind of dependent on --

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : Yes, okay. And then Nicola, there was also this comment that the business momentum remained steady through April. You had said that on the earnings call. But then you did not elect to pass through the Q1 upside to the full year, but that's been very common across our coverage. I think it's a wise move. Do you think that that is buying you -- does that buy you a little cushion to maybe kind of observe any macroeconomic softness that you haven't seen yet in the back half of the year? I know it's hard to know.

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : Yes, okay. Great to hear that in your words. So the coming back again, and I think trying to zoom out a little on the -- as you know, I'm not really an advertising industry expert. But we just -- when you go through a period like this, we have just so much stock market volatility. The headline -- a new tweet can kind of change the narrative over the weekend or between the morning and the afternoon. And then we did see a bunch of sensitive industries that had preannouncements or clearly had issues. The airlines, retailers, energy, and I think it's a pretty good bet that you're doing business with all of these industries. What do you think is going to determine whether they pull back on advertising spend this year or kind of stay the course?

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : Okay, so what you see in terms of the activities in your dashboard, it's not as volatile as what we see in the stock market for the reasons you described? Do you think then -- I mean, is it fair to say they're going to look? As they digest all the headlines and whatever each of your brands is expecting for the year, are they going to look at the verification piece as a must-have type of insurance for them this year?

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : Okay. And I want to come back to the performance vector, including Scibids and Rockerbox. I want to do that in maybe about five minutes. Can I ask you first about -- Nicola, about some of the price and volume trends? When we look at the media transactions measured or which we think of as a volume part of the equation, it grew 19% last year. The measured transaction fee or the price, right, was -- it fell about 4%. And so I think our simplistic view of it is then, well, what happened is the -- you had advertisers that are -- they're scanning a lot more of the impressions, and they're doing that through DoubleVerify. And then the unit cost kind of came down a little. Can you unpack that unit pricing trend? Because I think the -- there's a difference in whether -- there's a scenario where it's mix shift, and there's a scenario where it is kind of like-for-like. And I think we're operating under the notion, it's really the first thing. The former is happening, not the latter. Is that correct? Is that correct and how do we know?

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : Does -- are you able to speak -- should we assume that that general kind of change in direction continues? I know you've got -- it sounds like moat might be at a downward drag and then somewhere improving. But the geo mix and the other product mix, should we kind of pencil in the same thing?

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : Okay, understood. Well said. I want to spend a moment as well on -- even if it's a bit in the rearview mirror. But the idiosyncratic behavior that you saw in this group of six customers was happening last year. And then I think more recently, you have the one that is reducing, I think, its social spend, right, because of their -- they had an increase in the commodity cost?

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : Across-the-board spend, okay. So there was this isolated behavior. It didn't seem like it was kind of contaminating into other customers. It seemed like it was kind of ring fenced off. Has that settled down? Or do you think -- and kind of going along with that, is there any risk of it in this kind of backdrop where you have the threat of a trade war at some level? We don't know at what level. Is there a risk of running into other companies that are seeing something similar?

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : Okay, understood. Those are some big logos as always. I want to go back to this whole thought around performance. We think back on DoubleVerify as being primarily a verification specialist. So the companies, they would think of DoubleVerify and they'd say, okay, brand safety and fraud prevention, keeping it very simplistically. And then you're pushing beyond verification. You're going into performance in analytics. And I think -- so rather than just kind of measuring what happened, like how do you affect -- we had talked about this before. It's the seatbelt, and then you want to become the navigation system in that whole analogy. What's the investment significance of it, and how do you operationalize it? Because I don't know to what extent -- do we want to boil it down to Scibids and Rockerbox versus something that is pretty big and overarching?

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : So part of what's happening in the background that has always been there is that you're measuring such a volume of -- you call it billable media transactions. That number was $8.3 trillion last year. By the way, we -- you don't usually see numbers in the trillions. And I actually stopped myself, and I said, I better go make sure that's not millions or billions. So trillions, can you make that tangible for the audience? Because the -- what is it -- what are the elements that you're measuring? And then can you take that? Can you repurpose the verification data and use that? Can you tie this in with measuring the performance? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 14, 2025 / 7:00PM, DV.N - DoubleVerify Holdings Inc at JPMorgan Global Technology, Media and Communications Conference

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : And if you are -- it's nice to see that how you can close the loop and how all that data is potentially synergistic. If you are successful in the long run in kind of growing this performance vision and closing the whole loop like that, what mix of business do you think it could become?

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : Okay, so if we step back, great to have a TAM of an additional $1 billion. We step back and kind of think about the -- I'm sorry, you said billions. When we step back and think about the broader kind of value prop and the differentiation that you've got -- and you're constantly mentioning Procter & Gamble, Microsoft and Google and Kellogg's. And on the earnings call, you were talking about Nike. It's a kind of who's who. You are still outgrowing your competitors, right? And your -- you have had a pretty -- you want a big chunk of the business. You're getting competitive displacements at a pretty regular cadence. There's a lot to like there. What do you think is the kind of bigger-picture differentiation that is attracting REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 14, 2025 / 7:00PM, DV.N - DoubleVerify Holdings Inc at JPMorgan Global Technology, Media and Communications Conference them like it is? I think back to the time of the IPO, we would hear a breadth of offering. We would hear global footprint. We would hear scale. What do you think is getting these deals over the finish line?

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : Can you give us a moment's worth of discussion on the impact that AI is going to have on the landscape? Because I want to also ask you at the Innovation Day coming up, and the two things are probably going to interrelate. But I think similar to what we see in security software, it's kind of creating challenges on both sides of the ledger. You've got AI can create this huge volume. It can auto-generate web content. You've got deepfake. You got fake videos out there. You've got AI bots that can mimic human behavior. And how are you telling now what is a human being and what is not? Can you speak to the -- not a lot of time left. Can you give us a moment on the challenge and the opportunity?

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : Yes, okay. And then finally, maybe 30 seconds on this. Tejal does a great job, with all respects, in all of our interactions. That includes the Innovation Day and highlighting it, making sure we're aware and making sure we're all going to be there. What do you think we should be looking for out of Innovation Day? Are there one or two topics or themes that you think are going to stand out or that you're most excited about? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 14, 2025 / 7:00PM, DV.N - DoubleVerify Holdings Inc at JPMorgan Global Technology, Media and Communications Conference

Question: Mark Murphy - JPMorgan Securities LLC - Analyst : Interesting financial future for the business, okay.