Integral Ad Science Holding Corp. (NASDAQ:IAS) Q2 2023 Earnings Call Transcript

Lisa Utzschneider: Sure. I’m happy to take that Matt. So, I agree that we’ve upped our velocity in terms of both product road map, deliverables, launching innovative products for our customers, and also the partnerships that we’ve announced. And one thing I do want to call out and I’m very proud of the team that four of the partnerships that we announced on today’s call are first to market. But when you take a look at revenue both product adoption leading to revenue, the way I’d think about it is the following. So with some of those big tech partners being: TikTok, so you take a look at TikTok we spoke to TikTok last quarter that we were ahead of the road map schedule rolled out in 30 markets on track for 40 markets year-end.

That — TikTok is a tailwind for our measurement revenue and we’re seeing nice both product adoption and revenue growth in the second quarter and the back half of the year. YouTube, so we had launched YouTube Shorts for example, Total Media Quality. We announced that product launch last quarter in 30 languages. I would say for YouTube back half of the year is adoption with 2024 revenue. Some of the newer product lines like Meta Reels. Everyone knows Meta hasn’t opened up their live feed yet. We anticipate that to happen by the end of this year. That revenue — that is product adoption back half of the year, leading with revenue following in 2024. So again it depends on both the scale of the platform how fast the products are adopting but also, I’d say, how fast we’re able to roll out in multiple international markets and offer language translation.

Matt Cost: Thank you.

Lisa Utzschneider: Thanks, Matt.

Operator: And our next question comes from Andrew Marok with Raymond James.

Andrew Marok: Thanks for taking my question. One on Context Control if I can. You mentioned on the call that Context Control growth had slowed coming off some strong performance recently. The hope was that maybe as avoidance adoption reached high levels the targeting would come in as another leg. I guess can you give us an update on where we are on targeting adoption and how the sales staff are finding selling that solution into customers? And can that reaccelerate optimization?

Lisa Utzschneider: Sure. Thank you, Andrew for the question. So a couple of things I’ll call out. First is optimization represents over 50% of our revenue from advertising from advertisers. And we saw maturing with Context Control growth as expected with double-digit growth in the period. Over 90 of our top 100 customers adopted our Context Control product. And in terms of verticals, where we see lots of adoption is the CPG vertical in particular new logos in CPG. That was partially offset by slower demand from tech and telco clients in the period. And when you take a look at our optimization growth in the back half of the year, we anticipate it will be along the same lines of what we saw in second quarter with possible upside.

And with everything I just walked you through the majority of our revenue is contextual avoidance. And for the overall Context Control products that’s where we see the majority of the adoption demand is the contextual avoidance of Context Control. We are still seeing demand for contextual targeting but it’s more contextual avoidance.

Andrew Marok : All right. Thank you And then another really quick one if I could. We’ve seen the MediaMath bankruptcy kind of cause some disruptions around the ad tech space. Any impact to IAS in 2Q? And to the extent that there was would there be any lingering impact beyond Q2?

Lisa Utzschneider: Andrew, there’s no impact to us no material impact to us from the MediaMath bankruptcy.

Andrew Marok: Great. Thank you.

Operator: Thanks, Andrew. One moment for our next question. And our next question comes from Mark Kelley with Stifel.