Total revenue increased 8% to $114.5 million Net loss of $1.3 million at a 1% net loss margin; adjusted EBITDA of $33.1 million at a 29% margin  Introduces positive second quarter outlook and raises full-year outlook NEW YORK, May 9, 2024 /PRNewswire/ -- Integral Ad Science Holding Corp. (NASDAQ:IAS), a leading global media measurement and optimization platform, today announced financial results for the first quarter ended March 31, 2024. "Our first quarter results exceeded our expectations. We expect favorable demand trends for our industry-leading products in the second quarter, and we are raising our full year outlook," said Lisa Utzschneider, CEO of IAS. "We benefited from strong social media revenue growth of 40% in our measurement business in the first quarter as we increased availability of our Total Media Quality (TMQ) product across the major social media platforms. We have also established several industry-first partnerships which reinforce demand for the accuracy and sophistication of our innovative AI-backed solutions and the trust the leading platforms, marketers, and publishers place in IAS. We have a robust product pipeline that we expect will drive performance in the back half of 2024 across several fast-growing channels." First Quarter 2024 Financial Highlights Total revenue was $114.5 million, an 8% increase compared to $106.1 million in the prior-year period. Optimization revenue was $52.5 million, a 3% increase compared to $51.0 million in the prior-year period. Measurement revenue was $46.3 million, a 14% increase compared to $40.7 million in the prior-year period. Publisher revenue was $15.8 million, a 10% increase compared to $14.4 million in the prior-year period. International revenue, excluding the Americas, was $36.0 million, a 13% increase compared to $31.9 million in the prior-year period, or 31% of total revenue for the first quarter of 2024. Gross profit was $88.4 million, a 5% increase compared to $84.4 million in the prior-year period. Gross profit margin was 77% for the first quarter of 2024. Net loss was $1.3 million, or $0.01 per share, compared to net income of $3.1 million, or $0.02 per share, in the prior-year-period. Net loss margin was 1% for the first quarter of 2024. Adjusted EBITDA* was $33.1 million compared to $34.1 million in the prior-year period. Adjusted EBITDA* margin was 29% for the first quarter of 2024. Cash and cash equivalents were $83.9 million at March 31, 2024. Recent Business Highlights Meta Expansion - IAS launched its AI-driven Total Media Quality (TMQ) brand safety and suitability measurement product across Facebook and Instagram Feed and Reels on February 5th. During the quarter, IAS expanded its solutions with Meta to include 21 new languages for a total of 28 supported languages. In April, IAS expanded to include GARM-aligned misinformation measurement capability. TikTok Expanded Markets and Capabilities - In April, IAS expanded its global industry-leading brand safety and suitability measurement on TikTok including Vertical Sensitivity/Category Exclusion segments, expanded coverage to 11 new countries, Automated Suitability Profiles and enhanced reporting. Snap Partnership - In March, IAS expanded its partnership with Snap and will be the first to provide AI-driven brand safety and suitability measurement for advertisers. By integrating IAS's TMQ product, advertisers now have access to increased transparency across their Snapchat campaigns. X Expansion - In February, IAS launched its exclusive pre-bid product with X, providing the opportunity for U.S. advertisers to opt-in to activate pre-bid IAS Optimization for X on the Vertical Video product. IAS classifies vertical video ad adjacencies for brand safety and suitability aligned to the GARM framework, giving advertisers maximum control over where their ads appear on the X vertical video feed. Roblox Integration - In May, IAS announced its first-to-market integration with Roblox to provide 3D in-experience viewability and IVT measurement. Netflix CTV Attention Measurement - IAS collaborated with Netflix to provide CTV attention measurement with IAS Quality Attention to demonstrate the effectiveness of Netflix's ad- supported attention metrics, including across international markets. YouTube MRC Accreditation - In March, IAS earned MRC accreditation for its integrated third-party calculation and reporting of YouTube video viewability for desktop and mobile including web and app using Google's Ads Data Hub for Measurement Partners (ADH-MP). SIVT MRC Accreditation - In April, IAS received accreditation for filtration of sophisticated invalid traffic (SIVT) in CTV environments as applied to video impressions, viewable impressions and viewability related metrics. TrustArc Certification - In April, IAS received TrustArc's TRUSTe Responsible AI certification, demonstrating its commitment and alignment with the highest standards of AI governance. Financial Outlook "We expect to accelerate revenue growth and profitability from the first quarter in 2024 as we execute on our business plan," said Tania Secor, CFO of IAS. "In addition, we plan to expand adjusted EBITDA margins, invest for long-term sustainable growth, and lower debt." IAS is introducing the following financial outlook for the second quarter of 2024 and raising its full year 2024 revenue and adjusted EBITDA outlook: Second Quarter Ending June 30, 2024: Total revenue of $125 million to $127 million Adjusted EBITDA* of $37 million to $39 million Year Ending December 31, 2024: Total revenue of $533 million to $541 million Adjusted EBITDA* of $174 million to $180 million * See "Supplemental Disclosure Regarding Non-GAAP Financial Information" section herein for an explanation of these measures. IAS is unable to provide a reconciliation for forward-looking guidance of adjusted EBITDA and corresponding margin to net income (loss), the most closely comparable GAAP measures without unreasonable effort, because certain material reconciling items, such as depreciation and amortization, interest expense, income tax expense (benefit) and acquisition, restructuring and integration expenses, cannot be estimated due to factors outside of IAS's control and could have a material impact on the reported results. However, IAS estimates stock-based compensation expense for the second quarter of 2024 in the range of $15 million to $17 million and for the full year 2024 in the range of $63 million to $66 million.   INTEGRAL AD SCIENCE HOLDING CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE DATA) March 31, 2024 December 31, 2023 ASSETS Current assets: Cash and cash equivalents $           83,947 $          124,759 Restricted cash 298 54 Accounts receivable, net 67,764 74,609 Unbilled receivables 43,198 46,548 Prepaid expenses and other current assets 32,468 18,959 Total current assets 227,675 264,929 Property and equipment, net 4,088 3,769 Internal use software, net 43,729 40,301 Intangible assets, net 169,316 178,908 Goodwill 674,454 675,282 Operating lease right-of-use assets 19,766 21,668 Deferred tax asset, net 2,433 2,465 Other long-term assets 4,361 4,402 Total assets $      1,145,822 $       1,191,724 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $           42,176 $            72,232 Operating lease liabilities, current 9,119 9,435 Due to related party 83 121 Deferred revenue 1,318 682 Total current liabilities 52,696 82,470 Deferred tax liability, net 20,330 20,367 Long-term debt 123,841 153,725 Operating lease liabilities, non-current 17,707 19,523 Other long-term liabilities 6,172 6,183 Total liabilities 220,746 282,268 Commitments and Contingencies (Note 13) Stockholders' Equity Preferred Stock, $0.001 par value, 50,000,000 shares authorized at March 31, 2024; 0 shares issued and outstanding at March 31, 2024 and December 31, 2023. — — Common Stock, $0.001 par value, 500,000,000 shares authorized, 159,761,454 and 158,757,620 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively. 160 159 Additional paid-in-capital 919,192 901,259 Accumulated other comprehensive loss (1,975) (916) Retained earnings 7,699 8,954 Total stockholders' equity 925,076 909,456 Total liabilities and stockholders' equity $      1,145,822 $       1,191,724   INTEGRAL AD SCIENCE HOLDING CORP. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME(UNAUDITED) Three Months Ended March 31, (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) 2024 2023 Revenue $       114,530 $       106,092 Operating expenses: Cost of revenue (excluding depreciation and amortization shown below) 26,161 21,682 Sales and marketing 31,825 26,260 Technology and development 17,978 15,529 General and administrative 21,380 20,723 Depreciation and amortization 15,080