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INTEGRAL AD SCIENCE HOLDING CORP. (IAS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue grew 14% to $153.0M and adjusted EBITDA rose 29% to $61.4M (40% margin), above the company’s prior Q4 guidance ($148–$150M revenue; $55–$57M adj. EBITDA), driven by double-digit gains across optimization, measurement, and publisher .
  • Net income was $15.3M (10% margin) and diluted EPS was $0.09; gross margin was 78% vs 80% in Q3 and 79% in Q2 as mix shifted and hosting costs normalized .
  • Management introduced 2025 guidance calling for $588–$600M revenue and $202–$210M adjusted EBITDA and Q1 2025 guidance of $128–$131M revenue and $38–$40M adjusted EBITDA; gross margin targeted at 77–79% in 2025 .
  • Stock-relevant catalysts: first-to-market pre-bid optimization on Meta (71% reduction in wasted spend) and expanding integrations (DV360, Amazon DSP), continued Oracle customer wins, and strong CTV momentum via Publica’s new auction features; management emphasized 2025 double-digit growth expectation .

What Went Well and What Went Wrong

What Went Well

  • Pre-bid social optimization ramp: Meta selected IAS as beta partner; early adopters saw a 71% reduction in wasted ad spend, supporting higher-value optimization monetization in 2025 .
  • Publisher/CTV momentum: Publisher revenue +30% YoY in Q4 to $23.4M, helped by new Publica features that increase bidding competition and political spend; management expects growth to outpace broader CTV rates in 2025 .
  • Oracle wins and onboarding: 75+ Oracle customers won with ~72% win rate; onboarding and activation progressed in Q4, with cross-sell opportunities in brand safety/suitability and mid-market channels .

What Went Wrong

  • Gross margin compression: 78% in Q4 vs 80% in Q3, reflecting mix and cost dynamics; full-year target remains 77–79% in 2025 .
  • Softer ad spend/mix prior quarter: Q3 was impacted by slower volume growth in CPG/retail, lower-than-expected monetization of new products, and pre-election brand spend softness, which carried prudence into the company’s Q4 outlook process .
  • Pricing pressure in measurement during Oracle transition: Competitive jump-ball pricing on measurement (average CPM down 6% YoY in Q3), though optimization rates remained steady and carry premium pricing .

Financial Results

Consolidated Performance vs Prior Periods

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$129.0 $133.5 $153.0
Gross Profit Margin %79% 80% 78%
Adjusted EBITDA ($USD Millions)$46.2 $50.6 $61.4
Adjusted EBITDA Margin %36% 38% 40%
Net Income ($USD Millions)$7.7 $16.1 $15.3
Diluted EPS ($)$0.05 $0.10 $0.09
Net Income Margin %6% 12% 10%

Note: Prior-year Q4 revenue was $134.3M (+14% YoY); adjusted EBITDA $47.5M (+29% YoY) .

Segment Revenue Breakdown

Segment ($USD Millions)Q2 2024Q3 2024Q4 2024
Optimization$58.5 $61.1 $70.6
Measurement$52.7 $52.9 $59.1
Publisher$17.8 $19.5 $23.4

KPIs and Mix

KPI/MetricQ2 2024Q3 2024Q4 2024
Social media as % of Measurement53% 55% 54%
Social media as % of Total Revenue22% 22% 21%
Video as % of Measurement53% 56% 56%
International Revenue ($)$40.1 $40.8 $49.0
International % of Total31% 31% 32%
Advertiser NRR112% (TTM) 108% (TTM) 107% (TTM; adv only)
Large Advertising Customers (# >$200k)232 232 237
Diluted Weighted Avg Shares163.7M 165.1M 166.5M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)Q1 2025N/A$128–$131 Introduced
Adjusted EBITDA ($M)Q1 2025N/A$38–$40 Introduced
Revenue ($M)FY 2025N/A$588–$600 Introduced
Adjusted EBITDA ($M)FY 2025N/A$202–$210 Introduced
Gross Margin %FY 2025N/A77–79% Introduced
Stock-based compensation ($M)Q1 2025N/A$15–$17 Introduced
Stock-based compensation ($M)FY 2025N/A$77–$81 Introduced
Weighted avg shares (M)Q1 2025N/A163–164 Introduced
Weighted avg shares (M)FY 2025N/A165–167 Introduced
Effective tax rateFY 2025N/A~30% Introduced
Revenue ($M)Q4 2024$148–$150 Actual $153.0 Raised vs guide
Adjusted EBITDA ($M)Q4 2024$55–$57 Actual $61.4 Raised vs guide

Earnings Call Themes & Trends

TopicQ2 2024 (Previous Mentions)Q3 2024 (Previous Mentions)Q4 2024 (Current Period)Trend
AI/tech initiatives (TMQ, deepfake, Quality Attention)Launched first deepfake detection; expanded TMQ across platforms TMQ expansion on TikTok/YouTube; Quality Attention to publishers/SSPs ISO/IEC 42001 AI certification; Quality Attention optimization product; continued TMQ expansion Accelerating adoption
Pre-bid optimization & performancePre-bid on TikTok, X, LinkedIn; planning more First-to-market Meta pre-bid; IAS Curation with Google Ad Manager Meta pre-bid GA; DV360/Amazon DSP Quality Sync; early strong results Scaling; monetization ramp
Oracle transitionPursuing dozens of RFPs; hired >20 Oracle employees ~75 wins; 72% win rate; integration in Q4 guide Positive impact recognized; further cross-sell/up-sell Ongoing contribution
CTV/PublicaPublica double-digit growth; OEM partnerships (e.g., Samsung) New Publica features increasing auction competition; award recognition Publisher +30% YoY; Publica features driving growth; expect to outpace CTV market Strong momentum
International/China31% revenue outside Americas; strong social adoption Global wins and social adoption; platform expansions China expansion alpha via RTB Asia; APAC markets added Expansion underway
Macro/politicalOlympics/political moderate impact CPG/retail slowdown; pre-election softness Limited political impact; retail/CPG improvement; finance strong Stabilizing

Management Commentary

  • “We delivered positive fourth quarter results with double-digit revenue growth across our measurement, optimization and publisher businesses. Revenue in the fourth quarter increased 14%… at a 40% adjusted EBITDA margin.” — CEO Lisa Utzschneider .
  • “During testing, our content block list solution on Meta delivered a 71% reduction in wasted ad spend on unsuitable content.” — CEO Lisa Utzschneider .
  • “Publisher revenue increased 30%… driven by the adoption of new Publica product by large OEM partners as well as increased political spend.” — Interim CFO Jill Putman .
  • “In 2025, we expect to deliver double-digit profitable growth… and a 35% adjusted EBITDA margin at the midpoint.” — Interim CFO Jill Putman .

Q&A Highlights

  • Political and CTV: Political spend had limited advertiser headwinds and benefited publisher; shift to RTB in CTV is a tailwind for IAS and Publica, with 30% YoY publisher growth in Q4 .
  • Pricing dynamics: Competitive Oracle jump-ball pricing impacted measurement CPMs (down 6% in Q3), but optimization CPMs steady and premium-priced; cross-sell/up-sell strategy emphasized .
  • Pre-bid visibility: Pre-bid enhances planning transparency and visibility; early Meta GA ramp under way with strong initial outcomes; pre-bid opportunity estimated at 2x post-bid measurement over time .
  • 2025 segment outlook: Double-digit advertiser revenue growth expected; optimization growth to outpace overall; measurement single-digit Q1 with improvement through year; publisher double-digit growth .
  • China strategy: “Crawl-walk-run” approach focused on China-in and China-out opportunities; early alpha tests with RTB Asia; CPG and luxury vertical interest .

Estimates Context

  • S&P Global consensus estimates (EPS, revenue) were unavailable at this time; therefore, formal beat/miss vs Wall Street consensus cannot be assessed. Values were not retrievable due to an SPGI request limit error.
  • Company-level comparison: Q4 actuals exceeded internal guidance (revenue $153.0M vs $148–$150M; adjusted EBITDA $61.4M vs $55–$57M), suggesting upward pressure on near-term models; FY 2025 guide ($588–$600M revenue; $202–$210M adj. EBITDA) sets a double-digit growth baseline .

Key Takeaways for Investors

  • IAS delivered a clean Q4 beat vs company guidance with broad-based segment growth and a 40% adj. EBITDA margin, signaling strong execution into 2025 .
  • Pre-bid social optimization (Meta GA) and platform integrations (DV360, Amazon DSP) are strategic catalysts; early data (71% waste reduction) supports monetization expansion in optimization .
  • Publica’s product upgrades and OEM momentum drove publisher +30% YoY; management expects publisher/CTV growth to outpace the market in 2025 .
  • Oracle customer wins provide incremental revenue with embedded cross-sell into premium products (brand safety/suitability, attention, total visibility), supporting 2025 growth .
  • Mix-normalization and cost focus should keep gross margins within 77–79% in 2025 and adj. EBITDA ~35% at midpoint, maintaining Rule-of-40 discipline .
  • International/China expansion adds optionality; early alpha and APAC buildouts broaden footprint in social and verification .
  • Trading lens: Near-term sentiment likely tracks the ramp of pre-bid adoption, Oracle conversion pace, and CTV/Publica growth; watch Q1 guide delivery ($128–$131M) and evidence of reacceleration in measurement through 2025 .

Notes on Non-GAAP Adjustments

Adjusted EBITDA excludes depreciation/amortization, stock-based compensation, interest, taxes, acquisition/integration, FX, and one-time costs; reconciliations provided in the release .