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DH

DoubleVerify Holdings, Inc. (DV)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered 11% YoY revenue growth to $188.6M and adjusted EBITDA of $65.9M (35% margin), with management raising FY25 adjusted EBITDA margin guidance to ~33% and setting Q4 revenue guidance at $207–$211M and adjusted EBITDA $77–$81M .
  • Results underperformed S&P Global consensus: revenue $190.2M* vs $188.6M actual, and Primary EPS $0.27* vs $0.22 actual (non-GAAP diluted) — while EBITDA consensus was $62.2M* vs $36.3M* actual; the company-reported adjusted EBITDA was stronger at $65.9M .
  • Management cited retail softness as the key headwind, but emphasized AI-driven product innovation (DV AI Verification), rapid social activation scaling (DV Authentic AdVantage), and new CTV solutions (Verified Streaming TV, Do Not Air lists) as catalysts for 2026 .
  • Capital deployment remained active: DV repurchased 3.3M shares for $50.1M in Q3; $90.0M remains authorized under the program, supporting per‑share value compounding .

Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Adjusted profitability and margin execution: Adjusted EBITDA of $65.9M and 35% margin exceeded the high end of guidance, supported by AI-driven efficiency and disciplined costs. CFO raised FY25 margin guidance from ~32% to ~33% (“base case” for FY26) .
  • Social and CTV product momentum: DV launched DV AI Verification (Agent ID Measurement, AI SlopStopper), scaled DV Authentic AdVantage with ~$8M ACV in weeks, and introduced Verified Streaming TV measurement and pre-bid segments with Do Not Air automation, plus an IMDb data integration .
  • Customer retention/expansion: Zero churn among top 100 customers; advertisers >$200K grew 11% YoY to 347; supply-side revenue +27% YoY and retail media growth +30% YoY, with tags accepted across 149 networks/sites .

What Went Wrong

  • Revenue and EPS missed consensus: Q3 revenue $188.6M vs $190.2M* and Primary EPS $0.22 vs $0.27*, reflecting softer retail spend and mix impacts; EBITDA consensus vs actual diverged, while company-reported adjusted EBITDA was strong .
  • Retail vertical headwinds: Management flagged broad-based retail softness (tariffs and macro disruptions), embedding muted retail spend into Q4 guidance .
  • Sequential plateauing and MTF pressure: Q3 revenue was essentially flat sequentially; measured transaction fees (MTF) declined 4% YoY even as MTM volume rose 12% YoY, highlighting product/geographic mix effects .

Values retrieved from S&P Global.

Financial Results

Core Metrics by Quarter

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$165.1 $189.0 $188.6
GAAP Diluted EPS ($)$0.01 $0.05 $0.06
Adjusted EBITDA ($USD Millions)$44.7 $57.3 $65.9
Adjusted EBITDA Margin (%)27% 30% 35%

Revenue by Customer Type (Trend)

Revenue Line ($USD Millions)Q1 2025Q2 2025Q3 2025
Activation$95.2 $108.9 $106.7
Measurement$53.4 $62.9 $63.8
Supply-side$16.5 $17.2 $18.1
Total Revenue$165.1 $189.0 $188.6

KPIs (Q3 2025 YoY and Mix)

KPIQ3 2025
Total revenue YoY growth+11%
MTM (Media Transactions Measured) YoY+12%
MTF (Measured Transaction Fee) YoY−4%
Social Measurement Revenue YoY+9%
International Measurement Revenue YoY+2%
CTV MTM YoY+30%
Supply-side Revenue YoY+27%
Gross Revenue Retention>95%

Q3 2025 vs. S&P Global Consensus

MetricConsensus EstimateActual
Revenue ($USD Millions)$190.2*$188.6
Primary EPS ($)$0.27*$0.22 (Non-GAAP diluted)
EBITDA ($USD Millions)$62.2*$36.3*

Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue Growth (%)FY 2025~15% (Aug 5) ~14% (Nov 7) Lowered
Adjusted EBITDA Margin (%)FY 2025~32% (Aug 5) ~33% (Nov 7) Raised
Revenue ($USD Millions)Q4 2025—$207–$211 Set
Adjusted EBITDA ($USD Millions)Q4 2025—$77–$81 (38% margin mid-point) Set
Revenue less Cost of Sales Margin (%)Q4 2025—80%–82% expected Set
Stock-based Compensation ($USD Millions)Q4 2025—$25–$28 Set
Diluted Shares (Millions)Q4 2025—163–165 Set

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025 and Q2 2025)Current Period (Q3 2025)Trend
AI/Technology initiativesEarly success in social activation, Scibids AI; integration of Rockerbox outcomes in MAP Launch DV AI Verification (Agent ID Measurement, AI SlopStopper); agentic classification scaling productivity; AI-first efficiency to expand margins Accelerating innovation and margin leverage
Social ActivationBeta of DV Authentic AdVantage; Meta pre-bid gaining traction; social measurement +14% YoY in Q2 DV Authentic AdVantage ~$8M ACV in weeks; Meta pre-bid scaling to 56 advertisers, 20 of top 100; expanded content avoidance Scaling adoption and monetization
CTV/Streaming TVCTV MTM +45% YoY in Q2; pre-bid ABS adoption rising Verified Streaming TV measurement; pre-bid segments, automated Do Not Air lists; IMDb data integration; CTV MTM +30% YoY Monetization productization underway
Macro/Verticals (Retail)Resilience despite uncertainty; raised H2 outlook Retail softness broad-based; Q4 guidance embeds muted retail seasonality Headwind persists into Q4
Competitive landscapeUpselling Moat wins; strong enterprise pipeline DV advantaged vs debt-laden private competitor; Moat exit reduces scaled competition Favorable positioning
International GTMLocalized resources + centralized GTM; % of media pricing model Continued focus on social-driven markets; flexible pricing aiding adoption Steady optimization

Management Commentary

  • “We delivered 11% year-over-year growth... while leveraging AI to drive efficiencies... launching DV AI Verification... and our Verified Streaming TV solution... This reinforces DV’s position as the independent standard for trust and transparency across all digital media.” — CEO Mark Zagorski .
  • “Adjusted EBITDA of $66 million, or a 35% margin, exceeding the high end of our guidance range... For full-year 2025, we expect approximately 14% revenue growth and are raising our adjusted EBITDA margin guidance from 32% to 33%.” — CFO Nicola Allais .
  • “DV Authentic AdVantage... unifies pre-bid brand suitability, Scibids AI optimization, and post-bid measurement into one... Early adoption has been strong... delivering 24%–34% lower CPMs and 26%–50% higher impression volumes.” — CEO Mark Zagorski .
  • “We estimate roughly 15% of CTV impressions... wasted each quarter; our Verified Streaming TV helps ensure ads run in TV-like environments, with pre-bid targeting and automated do-not-air enforcement.” — CEO Mark Zagorski .

Q&A Highlights

  • Retail softness: Impact broad-based across the vertical; tariffs and macro disruptions cited; Q4 guide reflects muted retail into peak season .
  • Social scaling: Meta pre-bid approaching ~$7M run-rate with 56 advertisers; Authentic AdVantage ~$8M ACV in weeks; goal for pre-bid to match ~$40M post-bid Meta business over time .
  • CTV monetization: New measurement and pre-bid tools to capture value amid expanding supply; program-level do-not-air automation and quality enforcement positioned as differentiators .
  • Competitive dynamics: DV’s cash-generating, debt-free model vs. competitor going private with leverage; sustained investment in product/M&A supports durable growth .
  • Regulatory and platform risks: Pharma advertising remains strong despite review; TikTok domestic app transition would be manageable via APIs/blocklists with limited business impact .

Estimates Context

  • Q3 2025 revenue and EPS missed consensus (Revenue: $190.2M* vs $188.6M; Primary EPS: $0.27* vs $0.22). EBITDA consensus $62.2M* vs $36.3M* actual; company-reported adjusted EBITDA was $65.9M. Expect near-term estimate moderation on revenue/EPS given retail softness and sequential plateau, offset by upward margin bias from AI-driven efficiencies and cost discipline .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Margin expansion is a near-term support: DV raised FY25 adjusted EBITDA margin to ~33%; Q3 delivered 35% — AI-first operations should sustain margin resilience even if topline normalizes .
  • Product catalysts into 2026: DV AI Verification, Authentic AdVantage, and Verified Streaming TV create new monetization vectors across social/CTV; watch adoption ramp and pricing mix benefits .
  • Social activation scaling: Meta pre-bid and YouTube Authentic AdVantage are early but ramping; potential for pre-bid to approach post-bid scale over time, driving incremental growth .
  • CTV quality arbitrage: Verified Streaming TV and do-not-air automation address a large waste pool; pre-bid segments at major platforms broaden reach and monetization .
  • Retail softness is embedded in Q4: Near-term revenue variance risk remains, but supply-side and social activation offset, with stronger operating leverage providing downside protection .
  • Capital returns continue: $50.1M repurchased in Q3; $90M authorization remains — alongside robust cash generation and no long-term debt — providing per‑share support .
  • Trading angle: Expect sensitivity to social/CTV adoption updates and margin prints; upside if activation mix (premium pricing) deepens and retail stabilizes; caution on revenue/EPS vs consensus near-term given Q3 miss but margin outperformance trend .