DV Q1 Earnings Call: Revenue Growth Outpaces Expectations, Profitability Lags

Digital media measurement and analytics provider DoubleVerify (NYSE:DV) beat Wall Street’s revenue expectations in Q1 CY2025, with sales up 17.2% year on year to $165.1 million. Guidance for next quarter’s revenue was better than expected at $171 million at the midpoint, 1.1% above analysts’ estimates. Its non-GAAP profit of $0.05 per share was 66.1% below analysts’ consensus estimates.

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StockStory’s Take

DoubleVerify’s first quarter results were driven by increased adoption of its core verification solutions, expanded use of performance tools such as CyBids AI, and early traction in social media activation—particularly on Meta platforms. CEO Mark Zagorski highlighted that the company’s "solid performance in Q1 was driven by three key trends," including deeper engagement with existing customers, rapid scaling of new enterprise clients, and continued momentum in supply-side platform partnerships. Management also noted strong demand from advertisers seeking to protect brand integrity and optimize digital ad spend, with activation solutions and supply-side revenues experiencing notable growth. The addition of new global clients and expanded relationships with major brands contributed to the broadened revenue base, while the company’s “land and expand” strategy continued to deepen customer relationships.

Looking forward, DoubleVerify’s guidance is influenced by ongoing expansion in social media activation, upselling to large new customers, and integrating recent acquisitions such as RockerBox. While management stated that "business momentum remained steady through April, with no evidence of macroeconomic pressure affecting customer demand,” CFO Nicola Allais emphasized a prudent approach to guidance given broader economic uncertainties. The company expects continued adoption of its performance-driven solutions and new product launches—such as content-level pre-bid avoidance on Meta and expanded CTV measurement—to support future growth. However, management is also preparing for potential macro headwinds by maintaining operational focus and planning for a “transition year” in 2025, balancing investment in innovation with cost discipline.

Key Insights from Management’s Remarks

Management attributed the quarter’s revenue growth to both broader product adoption among existing clients and accelerated onboarding of new enterprise customers. The impact of early social activation efforts and a strong supply-side business were also highlighted.

• Broader product adoption: Existing customers expanded use of DoubleVerify’s verification and performance solutions, including SideBids AI and new social activation offerings, across more campaigns and channels.
• New enterprise wins: The company secured new global clients such as Pinterest, Chipotle, and Levi Strauss, while also expanding relationships with major brands like Nike and Kia. These engagements contributed to a 14% year-over-year increase in advertiser customers generating over $200,000 in annual revenue.
• Growth in social activation: Early launches of content-level pre-bid solutions on Meta (Facebook and Instagram) saw rapid uptake, with 20 customers activated within two months—including several major brands. Management also cited improvements in brand suitability for early adopters.
• CTV measurement expansion: Connected TV (CTV) measurement volumes grew 43% year-over-year, with significant focus on combating ad fraud and providing transparency for advertisers. Management noted the rising prevalence of sophisticated bot fraud in CTV environments and highlighted new partnerships and tools to address these challenges.
• Supply-side and retail media momentum: The supply-side business delivered 35% year-over-year growth, fueled by increased platform and publisher demand—including in retail media, where DoubleVerify’s measurement tags are now accepted across a growing number of networks and sites.

Drivers of Future Performance

DoubleVerify expects growth in social activation, deeper adoption by new enterprise clients, and broader product expansion to drive its outlook, though macroeconomic uncertainty remains a consideration.

• Social activation scaling: Management believes the continued rollout and adoption of social activation solutions—especially on platforms like Meta and TikTok—will support higher revenue growth, as these products address advertiser needs for brand safety and performance across social environments.
• Upselling and cross-product adoption: The company is focused on increasing penetration among recently signed large customers and upselling core solutions such as CyBids AI and RockerBox’s attribution tools. Management sees substantial opportunity, as many top customers still use fewer than half of DoubleVerify’s core products.
• Macroeconomic caution: While DoubleVerify has not yet observed a slowdown in customer demand, management is maintaining conservative full-year guidance due to broader economic uncertainties. The company is balancing ongoing investment in innovation and AI capabilities with operational efficiency to manage potential market volatility.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will monitor (1) the pace of adoption for new social activation products, especially on Meta and TikTok, (2) the impact of upselling and cross-product adoption among recently signed enterprise customers, and (3) the company’s ability to maintain supply-side and retail media momentum. Progress in integrating RockerBox and managing any macroeconomic headwinds will also be key indicators of strategic execution.

DoubleVerify currently trades at a forward price-to-sales ratio of 3.3×. At this valuation, is it a buy or sell post earnings? The answer lies in our full research report (it’s free).

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