DoubleVerify (DV) Q3 2025 Earnings Call Transcript

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Call participants

• Chief Executive Officer — Mark Zagorski
• Chief Financial Officer — Nicola Allais

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Risks

• Chief Financial Officer Nicola Allais stated, “Q3 results reflect some disruption on the retail spend, right? And it is our largest — it’s one of our largest industry vertical. So it does have an impact on our results.” Guidance for Q4 also reflects “more muted spend from retail going into a season that would otherwise be strong for them.”
• Chief Financial Officer Nicola Allais described “higher tax expenses, which is largely driven by the tax impact of our lower share price and by higher stock-based compensation costs,” as a driver of lower GAAP net income in the quarter.

Takeaways

• Revenue — $189 million, up 11% year-over-year, landing within guidance.
• Adjusted EBITDA margin — 35%, above expectations and attributed to cost discipline, operating leverage, and efficiency gains.
• Customer retention — Zero churn among the top 100 customers, indicating stable core relationships.
• Media transactions measured (MTMs) — Increased 12% year-over-year; measured transaction fees (MTFs) declined 4% year-over-year, excluding the impact of one introductory fixed fee deal, due to product and geographic mix.
• Activation revenue — Grew 10% year-over-year; ABS segment comprised 54% of activation revenue and grew 12%.
• Social activation — Grew at 20%; DV Authentic AdVantage closed roughly $8 million in annual contract value within weeks of launch, driven by global consumer packaged goods (CPG) brands.
• Meta activation solutions — Advertisers live on Meta solutions increased to 56 from 26 sequentially; prebid attached to 6% of brand suitable measurement impressions on Meta.
• TikTok video exclusion list — Expanded 100-fold, reducing unsuitable content exposure by one-third for advertisers.
• CTV measurement volumes — Up 30% year-over-year, reflecting expanding verification footprint and demand.
• Programmatic video/display impressions — Grew at double-digit rates excluding CTV; 65% of open web media transactions measured occur on mobile.
• Supply side revenue — Increased 27% year-over-year, led by 30% growth in retail media; tags now accepted by 149 retail media networks, including 18 top platforms.
• Rockerbox contribution — Revenue in line with expectations; on track for approximately $8 million in 2025.
• Capital allocation — $50 million used to repurchase 3.3 million shares in Q3; $90 million remains authorized. Through September 30, $132 million spent to repurchase 8.4 million shares, more than offsetting 2025 stock-based compensation.
• Cash/balance sheet — Ended period with $201 million in cash and equivalents, no long-term debt.
• Q4 2025 guidance — Revenue expected between $207 million and $211 million (10% growth midpoint); adjusted EBITDA margin guidance 38% midpoint.
• Full year 2025 and 2026 margin guidance — Adjusted EBITDA margin raised to approximately 33% for 2025 and communicated as the base case for 2026.
• New product launches — DV AI Verification offering, including Agent ID Measurement and AI SlopStopper, is projected to double classification volume with fewer people, should achieve a fourfold gain in productivity per classification specialist by the end of 2026, and is expected to enable scaling of labeling volume by 260% and generating results 2,300x faster than human labeling, all while maintaining human-level accuracy at a lower cost.
• Segment revenue growth targets — Medium-term aim to grow social, streaming TV, and AI verification from under 30% to roughly 50% of total revenue.
• Share repurchases and M&A — $82 million (net of cash) used for Rockerbox acquisition to expand into AI-powered optimization and outcomes measurement.
• Equity incentive plan — New plan for 2026 expected to reduce annual stock-based compensation by 20%.
• Customer base expansion — Advertisers generating over $200,000 in annual revenue increased 11% year-over-year to 347.

Summary

Management highlighted diversified growth drivers anchored by the rapid uptake of newly launched AI, social, and CTV verification products, with DoubleVerify (DV 0.38%) Authentic AdVantage and Meta prebid solutions ramping faster than anticipated. The company reported continued double-digit revenue gains alongside margin expansion and highlighted efficacy gains via automation that enhance both operational leverage and product innovation. Executives set a medium-term target of increasing the revenue contribution of social, streaming TV, and AI verification to 50% to align with changing industry demand patterns and de-risk the overall revenue profile.

• CEO Mark Zagorski noted, “The number of advertisers generating over $200,000 in annual revenue grew by 11% year-over-year to 347, reflecting broader adoption, higher product penetration and increasing long-term value per client.”
• International business displayed year-to-year variability, with management deploying localized sales and new pricing models such as percentage-of-media in select markets to address regional differences in media buying and CPMs.
• Operational efficiency gains driven by AI tools are enabling greater reinvestment in both R&D and product launches without reducing EBITDA margin levels, per Chief Financial Officer Nicola Allais.
• CEO Mark Zagorski stated, “we’re now beginning to set the standard for trust and accountability in AI-powered media, positioning DV as the independent benchmark for verifying both human and AI-mediated engagement and content.”

Industry glossary

• ABS (Authentic Brand Suitability): DoubleVerify’s solution ensuring ads run in brand-appropriate digital environments, providing customizable brand safety controls for advertisers.
• MTMs (Media Transactions Measured): The volume of media events or impressions that DoubleVerify measures across platforms.
• MTFs (Measured Transaction Fees): Fees charged by DoubleVerify for each measured media transaction.
• Agentic classification system: DV’s generative AI-powered system that automatically creates, refines, and applies classification models to label media content and detect complex forms of digital engagement.
• CPG (Consumer Packaged Goods): Companies and products in the category of frequently purchased, branded consumer goods.
• Rockerbox: An acquired platform specializing in multi-touch attribution and measurement, integrated to support DV’s AI optimization and outcome measurement suite.
• SlopStopper: DV’s AI-powered tool for detecting and blocking synthetic or manipulated digital media in programmatic advertising.

Full Conference Call Transcript

Mark Zagorski: Thanks, Tejal. And thank you all for joining us today. Q3 reflected disciplined execution and resilient performance across the business. Revenue grew 11% to $189 million within our guidance range and adjusted EBITDA margin reached 35%, once again above expectations, demonstrating the scalability of our model. We’re leveraging automation and AI to drive structural efficiency and profitability, proving DV’s ability to deliver strong margins even in a dynamic ad market. During the quarter, market dynamics led to some retail budgets being softer, while growth in our other core verticals, including CPG, remained in line with expectations.

Upsell momentum stayed strong, led by early demand for our AI-powered DV Authentic AdVantage solution, which closed roughly $8 million in annual contract value after only its first few weeks in market, fueled by early adoption from global CPG leaders. We also maintained strong customer retention with 0 churn among our top 100 customers in Q3, underscoring the stability of our largest relationships. Core customer engagement and adoption rates remain healthy, and we continue to execute with discipline. At the same time, social and CTV are adding new growth and diversifying our revenue, strengthening the foundation for 2026.

To frame the quarter simply, DV’s growth drivers, AI-driven product innovation, margin expansion and customer success remain firmly in our control and on those levers we continue to deliver. Today, I’ll focus on 3 themes shaping our progress this quarter and beyond. First, innovation, how we’re harnessing AI and automation to launch new products for the AI era, advanced content classification and drive greater efficiency at scale. Second, diversification, how growth across social, streaming TV and programmatic is strengthening the durability of our model. And third, monetization, how we’re translating that innovation and diversification into sustained revenue growth, operating leverage and cash flow. Each of these themes builds on the next, starting with innovation.

At the center of innovation is AI, the engine behind our product development, precision and scale. AI is driving the next major transformation in digital media, fundamentally changing how content is created, distributed and consumed. Marketers, publishers and AI agents themselves are beginning to design advertising strategies around this new layer of engagement, and DV is already embedded within it, capturing proprietary data that reveals how this ecosystem is taking shape. Each month, we analyze nearly 2 billion automated agents, crawlers and bots, giving us unmatched visibility into how declared assistants like ChatGPT, Claude and Perplexity as well as undeclared or evasive bots and personal stopping agents, shape media performance.

These interactions represent an untapped opportunity for a marketer to LLM engagement that DV is driving to enhance and monetize. To meet this moment, this week, we launched the DV AI Verification offering. A group of tools built to empower advertisers in an AI-driven world. The suite includes DV’s Agent ID Measurement, which in its first generation, identifies, measures and classify declared and evasive AI activity. It also features DV’s AI SlopStopper, which detects and blocks synthetic or manipulated media across the programmatic open web with expansion to social underway.

Within Pinnacle, advertisers were able to view and act on this data in real time, quantifying AI impact and eliminating waste prebid, powering the AI SlopStopper and our broader contextual classification capabilities is our agentic classification system, which uses generative AI to automatically build and retrain thousands of models using DV’s proprietary data across programmatic and walled gardens. Rolling out this technology will enable us to double our classification volume with fewer people and should achieve a fourfold gain in productivity per classification specialists by the end of 2026. It also lets us scale labeling volume by 260% and generate results 2,300x faster than human labeling, all while maintaining human-level accuracy at lower cost.

Bottom line, we’re leveraging AI to not only innovate but also to expand margins, doing more, faster with fewer resources while simultaneously creating new monetization opportunities as AI agents play a larger role in digital advertising. Just as DV helped define transparency during the rise of programmatic as well as the emergence of ad-supported CTV, we’re now beginning to set the standard for trust and accountability in AI-powered media, positioning DV as the independent benchmark for verifying both human and AI-mediated engagement and content. Moving to our next growth engine diversification. Our progress in AI-powered innovation is driving customer adoption in social and CTV.

Beginning with social activation, both DV Authentic AdVantage and our Meta pre-screen solutions are off to solid starts, underscoring the demand for transparent performance-driven solutions in walled gardens. Social within activation is growing at 20% and remains one of our fastest-growing sectors. DV Authentic AdVantage, which launched on YouTube towards the end of September is a DV-exclusive solution that unifies prebid brand suitability, Scibids AI optimization and postbid measurement into one seamless automated workflow. Early adoption has been strong, led by major CPG brands, including Kraft Heinz and Haleon. Much like our flagship authentic brand suitability product, which was one of the most successful launches in DV’s history, Authentic AdVantage delivers measurable ROI right out of the gate.

In early CPG test, this solution delivered 24% to 34% lower CPMs and 26% to 50% higher impression volumes while maintaining or improving brand suitability. Continuing on social activation and turning to Meta, we significantly expanded content-level avoidance on Facebook and Instagram feeds and Reels nearly doubling our ability to filter our content on behalf of an advertiser’s suitability preferences across categories and markets. Revenue from Meta activation solutions continues to outpace expectations with 56 advertisers now live and in the early stages of scaling up from 26 last quarter. 20 of our top 100 customers now leverage our Meta activation solution, up from 13 in Q2 and usage is beginning to ramp.

Today, our prebid solution is attached to roughly 6% of our brand suitable measurement impressions on Meta, representing an upsell opportunity we expect to rise meaningfully as adoption deepens. On TikTok, we expanded our video exclusion list by 100x, significantly enhancing advertisers’ ability to proactively avoid unsuitable content and reducing their rate of unsuitable content by 1/3. Together, these advancements strengthen prescreen protection on the world’s largest social and video platforms and demonstrate our partners’ commitment to giving advertisers the tools they need to safeguard brand equity and improve contextual relevance at scale while still driving performance.

There’s been some debate about whether platform native AI optimization tools, those black box tools that automate targeting, creative and attribution could reduce the need for independent verification. The reality is while those systems optimize delivery, they don’t disclose where ads run or how suitability is maintained. In a sample of AI run social campaigns, we found brand suitability rates to be roughly 2 points lower than in non-AI campaigns. As these closed algorithms scale, advertisers are relying even more on DV for the transparency control that platforms don’t provide.

In our sample, our prebid protection was applied more than 3x as often on AI campaigns than on standard campaigns, evidence that advertisers see higher risk in these black box solutions and a greater need for safeguards. The takeaway is clear. As platform AI engines become more sophisticated, the need for an independent trusted verification becomes even more essential to ensure performance, suitability and accountability work together. Turning to social measurement. We continue to expand postbid coverage across the world’s largest social media environments, expanding our AI-powered brand suitability measurement to Meta Threads giving advertisers independent transparency on yet another fast-growing social media platform.

We also extended our brand suitability measurement on Snapchat to shows and publisher stories adding to our existing coverage of creator stories and spotlight and giving advertisers greater clarity across more premium inventory. Shifting to diversifying revenue through CTV growth, advertisers continue to describe the streaming landscape as fragmented and opaque. They often don’t know where their ads run, the quality of the content they appear in or even if those ads are viewable and paid attention to by a real human. In some cases, ads are intended for premium full episode TV experiences end up in mobile gaming apps like Solitaire or other non-TV environments.

This is a problem we estimate impacts roughly 15% of CTV impressions and waste over $1 billion of media spend each quarter, eroding trust as well as ROI. At the same time, advertisers still rely on manual time-consuming and error-prone workflows to manage Do Not Air brand suitability list leading to misplaced ads and misoptimizations at scale. We’ve said before that DV has not fully monetized its CTV exposure, and we’re now addressing that opportunity head on with 3 streaming TV specific product launches this quarter and with more to come in 2026.

On the measurement side, this week, we announced the launch of DV Verified Streaming TV measurement, a market-first capability that provides impression-level transparency across digital video campaigns helping advertisers ensure that ads are delivered in high-quality TV-like environments, not an outstream players on blog pages or in gaming apps, which too often pass as TV inventory in reseller channels in the open market and private marketplaces. We’re also extending our Verified Streaming TV capabilities into activation, launching prebid Verified Streaming TV segments across leading programmatic platforms such as The Trade Desk, Teads, StackAdapt, Microsoft Curate and Index Exchange allowing advertisers to target authentic streaming inventory in open market and PMP buys and avoid wasted delivery to rogue environments.

Additionally, in activation, we’ve launched prebid Do Not Air list for streaming TV with an ABS, modernizing what was once a manual spreadsheet based process and to one that automatically enforces brand compliance policies across streaming platforms at scale. And finally, we announced a new deal with entertainment database IMDb, leveraging authoritative metadata and popularity insights licensed from IMDb to enhance show-level transparency and classification for streaming TV. This partnership will help fuel agentic streaming TV contextual solutions that we’ll be launching in early 2026. Together, these innovations strengthen both sides of our CTV business, measurement and activation, giving advertisers the visibility, precision and performance they need as streaming becomes the centerpiece of digital media.

On measurement, our adoption continues to accelerate. In Q3, our CTV measurement volumes grew 30% year-over-year, reflecting the growing scale of our streaming verification footprint and growing advertiser demand for transparency in CTV. Turning to programmatic. We continue to see healthy volume growth across open web environments on mobile and desktop. Approximately 65% of the open web media transactions we measure today occur on mobile devices underscoring the increasingly app-centric nature of digital advertising. Excluding CTV, programmatically purchased video display impressions grew at double-digit rates in the third quarter and year-to-date in 2025 reflecting sustained advertiser demand for transparent, measurable and brand suitable media.

Programmatic display and video impression volumes continue to rise across high-quality content-rich publishers in categories like news, lifestyle, food and hobbies, where advertisers continue to find engaged brand-suitable audiences. On the supply side, growth was also a standout again this quarter, up 27% year-over-year, driven by continued momentum in retail media, which grew 30% year-over-year. DV’s tags are now accepted across 149 of the key global retail media networks and sites, including 18 of the top retail media platforms. We also added new platforms and publishers, including AMC, Univision, Comcast, Versant, Rumble, Wiley, Rakuten Viber. As we look ahead, all of these innovations are creating clear catalysts for our largest monetization streams, activation and measurement.

Our medium-term North Star is to grow social, streaming TV and AI Verification solutions from under 30% of total revenue today to roughly 50% while continuing to efficiently grow our other key sectors. Achieving this revenue mix will provide a more defensible and scalable platform for growth that more closely mirrors global digital ad spend allocation. In activation, our social products are already turning adoption into revenue. DV Authentic AdVantage and Meta prebid are scaling quickly driven by advertiser demand for transparent, performance-driven tools inside closed platforms.

And just a few weeks since the launch, DV Authentic AdVantage has closed nearly $8 million in expected annual contract value, while we expect Meta prebid to generate an annualized run rate of at least $7 million by this year’s end. Together, we believe these social activation solutions could represent a $120 million to $160 million annual revenue opportunity over the long term. In streaming TV, we expect our prebid Verified Streaming TV segments and Do Not Air list within ABS to add roughly $10 million in incremental annual activation revenue once fully ramped. Across measurement, we see upside from our AI Verification suite, Verified Streaming TV measurement and content-level transparency from partnerships like IMDb.

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