Fresh off its IPO in April, ad verification provider DoubleVerify saw its revenue increase 44% to $76.5 million year-over-year in Q2, fueled by the growth of programmatic.
DoubleVerify took in $37.9 million in programmatic revenue in Q2 – a 57% increase from the same period last year – largely driven by its Authentic Brand Safety (ABS) premium solution, a prebid targeting tool launched for buyers in 2018.
It also reported 89% growth in CTV, which now accounts for 30% of revenue in its direct-side video business. Social transactions grew 100%, and business continues to expand internationally.
DoubleVerify reported a net income loss of $12.6 million, due to $18.9 million in one-time transaction costs associated with the IPO.
DoubleVerify – founded in 2008 – had one of the biggest IPOs in recent memory when it opened nearly 30% above its IPO price at $35 per share, valuing the company at more than $5 billion.
Although the company beat earnings estimates, shares of DoubleVerify fell 2.51% in after-hours trading Thursday and dipped 3% Friday.
Key Growth Areas
DoubleVerify is working with more programmatic campaigns, even as direct campaigns continue to grow, just at a slow pace.
Revenue from direct deals with advertisers – in which DoubleVerify charges a CPM fee for impressions it analyzes – climbed a slower 34% to $31.7 million.
“The shift towards programmatic versus direct will continue to increase, and you should see programmatic as a percent of revenue continue to expand in Q3,” CFO Nicola Allais said. “But we're not seeing any sort of degradation on the direct side – we have large enterprise wins that have come in in the first half of the year that will also contribute to growth.”
Those wins include Diageo, BMW, Philip Morris International, Grupo Bimbo and Bumble overseas, while in the US new clients include Progressive, Target, Zaxby’s, CarGurus and Truist.
DoubleVerify has also been pushing into the sell side – it purchased Ad-Juster in 2019 – and supply-side revenue increased 35% to $7 million.
DoubleVerify has benefited from the rise of CTV and a demand for digital video solutions during the COVID-19 pandemic. Increased ad spending has created more opportunities for fraud – and the need for fraud protection – in the space, CEO Mark Zagorski said.
The number of media transactions the company measures for social increased by 100%, thanks to relationships with partners like Instagram, Twitter, Snap and YouTube.
A new social platform is joining the list: TikTok
DoubleVerify launched a viewability and fraud solution in open beta with TikTok in 14 markets, which is expected to fully roll out in Q4. The product was developed based on advertiser demand to verify the nascent social platform as it becomes a part of marketers’ media plans.
With Google planning to phase out third-party cookies beginning in 2023, Zagorski said contextual targeting is top of mind among advertisers, and the number of clients using DoubleVerify’s cookieless DV Custom Contextual tool more than doubled in Q2.
Zagorski cited the solution as an example of how DoubleVerify is using its core assets to drive performance-based outcomes at a “premium rate.”
“A lot of this upsell into contextual is working with our core clients,” he said.
In Q3, DoubleVerify expects to generate $81-$83 million in revenue, and $325-$330 million in revenue for the full year.
“We've raised our full-year revenue guidance and are excited about DV’s long-term growth trajectory,” Zagorski said. Performance-based solutions, instead of ones based purely on verifying media impressions, will unlock growth, he said, because they “[create] stickier relationships with advertiser partners and greater opportunities to generate revenue.”