DoubleVerify Holdings, Inc. Q1 FY2025 earnings

DoubleVerify reported first quarter 2025 revenue of $165.1 million, up 17% from $140.8 million in the prior year quarter. Net income fell to $2.4 million from $7.2 million, down 67%. Diluted earnings per share came in at $0.01, down 75% from $0.04. Operating income was $6.8 million, down 1.9% from $6.9 million, and operating margin slipped to 4.1% from 4.9%, a decline of 0.8 percentage points. The revenue gain did not carry through to the bottom line.

Non-GAAP profitability held up better. Adjusted EBITDA was $44.7 million, which represented a 27% adjusted EBITDA margin. Management tied the quarter to several operating metrics. Management cited broader adoption of verification and activation solutions, faster scaling from new enterprise customers, momentum with Scibids AI, and early success in social activation. Media Transactions Measured increased 22% year over year, while CTV Media Transactions Measured rose 43%. Measured Transaction Fee declined 6% year over year, excluding the impact of an introductory fixed fee deal for one large customer. Gross Revenue Retention stayed above 95%. New enterprise wins included Natura/Avon, Valvoline, and INEOS Grenadier, while Nike expanded its use of the platform. Product launches covered pre-screen brand safety and suitability on Google's Search Partner Network, viewability and invalid traffic measurement for Instagram Reels, a Video Exclusion List for TikTok, expanded TikTok measurement for Post-Roll and Smart+ campaigns, and 3D in-experience viewability and invalid traffic measurement on Roblox.

Capital allocation was active. DoubleVerify repurchased 5.2 million shares for $82.2 million during the first quarter of 2025 under both repurchase programs, including 4.0 million shares for $60.0 million under the New Repurchase Program. As of March 31, 2025, $140.0 million remained available under the $200.0 million New Repurchase Program. The company also repurchased 6.8 million shares for $128.0 million in 2024 and 1.1 million shares for $22.2 million in January 2025, fully using the original $150.0 million authorization. On March 13, 2025, it acquired Rockerbox for $82.6 million, net of cash acquired. Operating cash flow was $37.7 million, up 18.5% from $31.8 million. Capital expenditures were $6.3 million, down 1.7% from $6.4 million. The company said it had no outstanding debt under the New Revolving Credit Facility as of March 31, 2025, and the facility had a $200.0 million undrawn balance.

Guidance points to slower growth ahead. For the second quarter of 2025, DoubleVerify expects revenue of $169 million to $173 million, a year-over-year increase of 10% at the midpoint. Adjusted EBITDA is guided to $48 million to $52 million, a 29% margin at the midpoint. For the full year 2025, the company expects revenue growth of approximately 10% and an adjusted EBITDA margin of approximately 32%. The company did not reconcile adjusted EBITDA guidance to GAAP net income, citing an inability to quantify depreciation and amortization, acquisition-related costs, interest income, and income taxes without unreasonable effort. The company said such a reconciliation would imply a degree of precision that could be confusing or misleading to investors. Risks include a competitive market, rapid technological change, system failures, security breaches, economic downturns, collection risk, data privacy legislation, public criticism of digital advertising technology, international operations, open source software, limited operating history, and potential revenue fluctuations. The press release also points to the risk factors in the annual report on Form 10-K filed on February 27, 2025.