DoubleVerify Holdings: Strong Sales Performance and New AI Product Drive Growth
2023-07-30
In the recent earnings call meeting, Mark Zagorski, the CEO of a company, shared valuable insights on various aspects of the company's performance and strategy. One of the key highlights of the meeting was the company's strong sales performance and pipeline growth in the first quarter of the year. This positive trend indicates a promising outlook for the company's future.
A particularly interesting topic discussed during the meeting was the concept of attention metrics and the introduction of a new AI product. Mark Zagorski emphasized the importance of establishing a standardized definition for attention and engagement metrics, regardless of the methodology used to measure them. He believed that attention and engagement should be seen as finite metrics that can be consistently applied across different measurement approaches.
Furthermore, Mark highlighted the company's preference for census and impression-level methodology as the most reliable and robust way of measuring attention. This approach offers the highest level of effectiveness and efficiency. However, he also acknowledged that other panel-based methodologies could complement this approach.
The introduction of the new AI product was another significant development discussed in the meeting. Mark Zagorski drew parallels with the success of brand suitability and brand safety metrics in activation, emphasizing the potential of leveraging attention metrics for improved advertising effectiveness. This new product represents a significant step forward for the company in this regard.
From a market perspective, the company's outlook is positive, with a focus on leveraging their competitive advantages in sustainability and innovation. The company's key product, ABS, experienced exceptional growth with a 56% year-over-year increase in Q1, driving both market share and revenue. The company's unique offerings in attention, CTV viewability, and detecting TV off are seen as differentiators that help secure new deals.
Financially, the company's gross margin was 80% in Q1 and is expected to remain stable as they continue to invest in their infrastructure. This stability provides a solid foundation for the company's growth plans and market opportunities.
The key drivers of the company's business include the development and enhancement of core solutions, customer expansion through product upsell and geographic expansion, the introduction of new products and sectors, and overall revenue growth. These strategic initiatives are aimed at driving the company's success and maintaining a positive market outlook.
Looking ahead, the company has outlined several plans for its products and services. These include expanding their presence with Netflix in 12 markets, offering single solutions to clients initially and then expanding to other solutions, selling products across their six categories of solutions, and pricing the attention product as a CPM-based add-on to their verification and measurement solutions. The company also aims to leverage ROI as a key factor to win new clients and capitalize on newer performance-based solutions as selling points. Additionally, they plan to exploit opportunities created by launching new solutions to sell additional solutions across the board.
In terms of financial guidance, the company's outlook for the quarter and full year is positive. They expect revenue growth of 21% and adjusted EBITDA margin of 29% at the midpoint for the quarter. For the full year, they anticipate even stronger growth, with revenue expected to increase by 24% and adjusted EBITDA margin of 31% at the midpoint. These projections have been raised due to the company's strong first-quarter performance and optimistic outlook for the future.
The company has also made significant progress on its strategic initiatives, including investments in commercial resources outside of the U.S., a commercial reorganization, and improved sales performance. The measurement side of the business has also seen success, with the attention product gaining traction and generating increased volumes of tests and revenue compared to the previous year.
Overall, the company's financial results and strategic initiatives demonstrate their commitment to making the digital advertising ecosystem stronger, safer, and more secure. With strong sales performance, the introduction of innovative products, and a positive market outlook, the company is well-positioned for continued growth and success in the future.