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    Integral Ad Science Holding Corp (IAS)

    Q3 2024 Earnings Summary

    Reported on Apr 28, 2025 (After Market Close)
    Pre-Earnings Price$12.62Last close (Nov 12, 2024)
    Post-Earnings Price$11.00Open (Nov 13, 2024)
    Price Change
    $-1.62(-12.84%)

    What went well

    • Innovative product pipeline driving growth: The management highlighted robust launches such as prebid social optimization with positive beta feedback and plans to scale on platforms like Meta, TikTok, and LinkedIn, which they estimate could offer a 2x revenue opportunity compared to traditional post-bid measurement.
    • Strong Oracle integration fueling expansion: The team achieved a 72% win rate on Oracle opportunities, onboarding 75+ new Oracle customers, and is successfully integrating them for cross-sell and upsell across both measurement and optimization segments.
    • Value-based pricing and premium offerings: The executives emphasized a focus on value over price, noting that their differentiated optimization products command a premium pricing compared to measurement solutions, positioning the business to capture higher margins as customer adoption grows.

    What went wrong

    • Slower-than-expected ramp in new product adoption: Several executives noted that while the product roadmap is robust, the adoption of some newly launched products hasn’t met initial expectations, potentially delaying revenue acceleration.
    • Weaker advertiser spending in key segments: There was a noticeable dip in volume growth in CPG and retail sectors, driven by budget cuts and digital media spending delays, which could exert downward pressure on overall revenue.
    • Uncertainty in post-election recovery: The moderation in advertiser spend leading up to the U.S. elections coupled with cautious Q4 guidance indicates potential challenges in a timely rebound, adding uncertainty to future revenue growth.

    Q&A Summary

    1. 2025 Outlook
      Q: Double-digit revenue growth for 2025?
      A: Management expects double-digit revenue growth in 2025 driven by scaling 2024 product launches, prebid advancements, and Oracle wins, with margins remaining robust.

    2. Oracle Integration
      Q: How are Oracle customers integrating?
      A: They successfully onboarded 75 new Oracle customers at a 72% win rate, ensuring these clients are active ahead of schedule to bolster Q4 results.

    3. Raised Pricing
      Q: Are you raising your prices?
      A: Management stressed that they focus on value over price, emphasizing superior technology and ROI rather than simply increasing prices.

    4. Pricing Leverage
      Q: What is the current pricing environment?
      A: They noted measurement CPMs are down 6%, yet maintain premium pricing in optimization—leveraging higher rates from prebid social for cross-selling opportunities.

    5. Prebid Feedback
      Q: Feedback on Meta prebid optimization?
      A: Early beta results have been very positive, with prebid on Meta now fully active and offering a potential 2x revenue opportunity compared to postbid tools.

    6. Optimization Growth
      Q: Will optimization grow double digits?
      A: They expect prebid social to drive double-digit growth in optimization, complemented by broader product adoption and Oracle contributions.

    7. Q4 Guidance/Pricing Pressure
      Q: What supports the Q4 revenue guidance?
      A: Q4 guidance expects 11% revenue growth despite softer CPG and retail volumes, while competitive pricing and strategic Oracle wins help mitigate pricing pressures.

    8. Publisher Revenue
      Q: How did publisher revenue perform?
      A: Publisher revenue accelerated by 26% this quarter, boosted by strong Publica CTV product growth, with expectations to moderate to mid-teen full-year expansion.

    9. Spending Dip
      Q: When did advertiser spend dip occur?
      A: A noticeable dip in volume began in mid-Q3, with August showing significant softness in CPG and retail segments.

    10. Oracle Evaluations
      Q: Are Oracle customers still evaluating?
      A: The team remains focused on further integrating and activating Oracle customers, leaving room for additional upsell opportunities.

    11. Product Adoption Pace
      Q: Why did new products ramp slower?
      A: Management attributed a slower-than-expected product adoption to budget cuts and delayed digital spending particularly in CPG and retail, despite strong overall product roadmaps.

    12. Prebid for Mid-market
      Q: Will mid-market adopt prebid tools?
      A: They see potential for mid-market performance-focused advertisers to adopt prebid optimization, though more performance data is expected to emerge in 2025.

    13. Google Curation
      Q: What role does IAS Curation play?
      A: IAS Curation, launched in Google Ad Manager, uses contextual data to consolidate high-quality inventory and strengthens its long-term partnership with Google.

    14. Gaming Integration
      Q: Any update on gaming platform integrations?
      A: The emerging gaming channel is progressing, with partnerships—such as with Roblox—highlighting its growing importance for future revenue.

    15. Ad Spend Bounce Back
      Q: Are advertisers bouncing back post-election?
      A: It’s still early; management noted that while spending slowed near the election, a rebound has not yet been observed.

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