Summary
DoubleVerify reported second quarter revenue of $133.74 million, up 21.8% from the prior-year quarter. Year-to-date revenue reached $256.34 million, up 24.1%. The quarter's growth came primarily from a 24% increase in Media Transactions Measured, while the Measured Transaction Fee was unchanged. Operating income was $14.64 million, up 11.2%, and operating margin was 10.9%, down 1.0 percentage point. Net income came to $12.84 million, up 24.8%, while diluted EPS was $0.07, up 16.7%. For the year to date, operating income was $29.85 million, up 86.2%, net income was $25.01 million, up 68.2%, and diluted EPS was $0.15, up 66.7%. On a non-GAAP basis, adjusted EBITDA was $40.0 million, a 30% adjusted EBITDA margin.
Cash generation was uneven. Operating cash flow for the quarter was $10.74 million, down 62.7% from the prior-year quarter. For the year to date, operating cash flow was $32.16 million, up 21.1%. Capital expenditures were $3.57 million in the quarter, down 59.6%, and $7.67 million year to date, down 43.6%. The lower quarterly operating cash flow reflects working capital movements, including a build in receivables and prepaid assets. The company still ended the period with a debt-free balance sheet and a significant cash position. It had no outstanding debt under its New Revolving Credit Facility and $150.0 million undrawn as of June 30, 2023.
Operational momentum stayed tied to social, CTV and programmatic activation. Media Transactions Measured for Social rose 41%, and CTV rose 32%. Gross revenue retention remained above 95%. DoubleVerify added new enterprise customers, including Uber Brand Marketing, Sam's Club, Pizza Hut, Revlon, Bose and Ministry of Foreign Affairs, Japan, and expanded relationships with Avis and Swarovski. Product coverage widened to Facebook and Instagram Reels, YouTube Shorts, Masthead and In-feed Video. The company also signed a multi-year contract with Outbrain, partnered with TVision, and continued collaborating with Roku to investigate emerging CTV ad fraud schemes after the neutralization of SmokeScreen.
The strategic story centers on Scibids. DoubleVerify agreed to acquire the AI-powered campaign optimization company for $125 million in cash and stock, with about $66 million payable in cash and potential additional consideration tied to performance milestones. The deal is expected to close in the third quarter. Scibids clients include Allianz, Dell and Spotify. Management reiterated full-year 2023 guidance. For the third quarter, it guided revenue of $135 million to $141 million, up 23% at the midpoint, and adjusted EBITDA of $39 million to $41 million, a 29% margin at the midpoint. For the full year, it guided revenue of $557 million to $569 million, up 24% at the midpoint, and adjusted EBITDA of $171 million to $179 million, a 31% margin at the midpoint.
Risks are familiar but real. The company's forward-looking statement lists competition, system failures, security breaches, cyberattacks or natural disasters, economic downturns and unstable market conditions, data privacy legislation, international operations, open source software, public criticism of digital advertising technology, a limited operating history and potential revenue fluctuations. The MediaMath bankruptcy on June 30, 2023 led to a bad debt reserve and highlights counterparty risk among activation partners. The digital advertising market remains sensitive to platform changes and regulatory scrutiny. Even with strong growth in the year to date, the quarterly operating cash flow decline will keep scrutiny on cash conversion.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2023 | Q1 FY2023 | QoQ | Q2 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $133.7M | $122.6M | +9.1% | $109.8M | +21.8% |
| Gross profit | $107.6M | $98.6M | +9.0% | $91.0M | +18.2% |
| Gross margin | 80.4% | 80.5% | -0.0 pp | 82.8% | -2.4 pp |
| Research & development | $31.9M | $28.6M | +11.9% | $23.2M | +37.5% |
| Sales & marketing | $31.5M | $25.7M | +22.7% | $24.7M | +27.5% |
| General & administrative | $19.8M | $20.2M | -2.1% | $21.5M | -8.2% |
| Operating income (loss) | $14.6M | $15.2M | -3.7% | $13.2M | +11.2% |
| Operating margin | 10.9% | 12.4% | -1.5 pp | 12.0% | -1.0 pp |
| Net income (loss) | $12.8M | $12.2M | +5.5% | $10.3M | +24.8% |
| Net margin | 9.6% | 9.9% | -0.3 pp | 9.4% | +0.2 pp |
| Diluted EPS | $0.07 | $0.07 | ±$0.00 | $0.06 | +$0.01 |
Risks
Bad debt expenses increased by $1.5 million in the three months ended June 30, 2023 primarily related to a reserve for outstanding amounts owed by activation partner MediaMath Holdings, Inc., which filed for Chapter 11 bankruptcy protection on June 30, 2023.
Operating margin decreased to 10.9% in FY2023 Q2 from 12.0% in FY2022 Q2, down 1.0 pp, as cost of revenue rose 39% and product development expenses rose 38%, both faster than the 22% revenue increase in the quarter.
SaaS KPIs
All quarters →Adjusted EBITDA
Adjusted EBITDA Margin
Gross Revenue Retention
Media Transactions Measured (MTM) growth
Summary, forecast, risks and KPIs are extracted from DoubleVerify Holdings, Inc.'s SEC filings for Q2 FY2023 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.