I thought publishers don’t like verification companies?
On Tuesday, IAS reported Q3 earnings of $133.5 million, up 11% year-over-year. While the vast majority of that was advertiser-driven, the company also netted $19.5 million in publisher revenue, a 26% increase compared to $15.5 million in the same period the year prior.
The stock dropped from around $12.62 to just under $10.80 at the time of writing this. The drop seems to stem from IAS missing its Q3 projection. In its Q2 earnings report, the company estimated Q3 revenue in the $137 million and $139 million range, and full-year revenue between $538 million and $544 million. The company was off by about 3% in Q3, and adjusted its full-year projection down to $525-$527 million.
During its analyst Q&A, CEO Lisa Utzschneider explained the dip: “We did see a slowdown in volume growth, particularly in CPG and retail verticals. We attribute the slowdown to a few things: budget cuts, delays in digital media spend in these verticals, and also slower-than-expected ramp of new product adoption.”
Still, the publisher growth is notable. However, this growth is largely driven by Publica on the CTV side with OEMs, and according to IAS, the company “saw some benefit from political spend.” IAS also said that its non-CTV publisher business is growing, too.
Why This Matters:
IAS acquired CTV ad server Publica in 2021 to capitalize on the growth in CTV. “CTV viewership and programmatic advertising have skyrocketed, and by acquiring Publica, we’re accelerating our growth to offer publishers the tools to capitalize on this opportunity,” said Utzschneider at the time. That acquisition appears to be paying off, given the growth.
(IAS competitor DoubleVerify also saw big CTV growth, on the measurement side, in its Q3 report.)
Experts React:
Utzschneider highlighted Publica during her prepared remarks:
“In CTV, we are investing in all layers of the stack, including device, publisher, and delivery, with the goal of unlocking a projected $40 billion ad spend market by 2027 according to eMarketer. Our core customers are accessing the full suite of our Publica products, which allows us to drive even greater optimization across demand sources. We have introduced new product features to increase bidding competition in ad auctions.”
Our Take:
Earlier this month, Business Insider reported that private equity firm KKR might be looking to buy IAS. Both IAS and KKR declined to comment. Never a dull moment in this space!
