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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good day, and thank you for standing by. Welcome to the IAS 2023 First Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded.
I would now like to hand the conference over to your speaker today, Jonathan Schaffer, VP of Investor Relations with IAS. Please go ahead.
Thank you. Good afternoon, and welcome to the IAS 2023 first quarter financial results conference call. I’m joined today by Lisa Utzschneider, CEO, and Tania Secor, CFO.
Before we begin, please note that today’s call and prepared remarks contain forward-looking statements. We refer you to the company’s filings with the SEC, posted on our Investor Relations site at investors.integralads.com for more details about important risks and uncertainties that could cause actual results to differ materially from our expectations.
We will also refer to non-GAAP measures on today’s call. A reconciliation of non-GAAP measures to the most directly comparable GAAP measures is contained in today’s earnings release available on our Investor Relations. All financial comparisons, unless noted otherwise, are based on the prior-year period.
So with these formalities out of the way, I’d now like to turn the call over to our CEO, Lisa Utzschneider. Lisa, you may begin.
Thanks, Jonathan, and welcome everyone to our 2023 first quarter earnings call. We accelerated our business momentum in the first quarter as demand for our mission-critical products increased. Results exceeded our prior guidance for both revenue and adjusted EBITDA.
In addition, we are raising our financial outlook for the full year. Revenue increased 19% to $106.1 million dollars in the first quarter ahead of our forecast of $102 million to $104 million. We benefited from strong seasonal demand from marketer campaigns in support of March Madness, tax preparation, and new content releases across our streaming partners.
In addition, recent new business wins contributed to performance in the period. Adjusted EBITDA reached $34.1 million at a 32% margin. We also achieved net income profitability for the fifth straight quarter.
IAS is a customer obsessed, global technology company. We are launching innovative and scalable products at high velocity, and we continue to invest in engineering and data science talent. Science is in our name, and we are leading with the most advanced AI and ML technologies.
Everything we build is global, scalable and repeatable. A great example of this is the roll-out of our Total Media Quality, TMQ solution, which delivers comprehensive analysis of content across major platforms in over 90 languages.
Our partnership with TikTok ramped up in the first quarter driven by marketer adoption of our end-to-end measurement solutions. Active post-bid campaigns were up 33% in the first quarter compared to the fourth quarter of 2022.
We currently operate in seven markets and three languages with TikTok. We are expanding rapidly into over 30 new markets over the next several weeks, well ahead of our prior expectation of an additional 20 markets by year-end.
Earlier this week, IAS announced that its brand safety and suitability reporting on YouTube will now be aligned to the Global Alliance for Responsible Media, or GARM, framework. As a result, IAS will offer more granular reporting for campaigns on YouTube.
With Meta, we’re excited to continue our partnership and value their commitment to implementing suitability controls and verification for Feed. We look forward to the expansion of Feed verification to all badged partners later this year.
Last quarter, we announced our expansion into third-party brand safety and suitability measurement in Twitter’s live feed in the U.S. We look forward to expanding our capabilities with Twitter globally into new markets including Australia, the UK, and Canada. We are investing in ease-of-use and activation of our programmatic solutions.
We are enhancing the customer experience via a superior user interface, increased functionality, and expanded reporting capabilities. During the first quarter, we integrated our Quality Sync pre-bid product into DSPs including Yahoo! and MediaMath, joining other major DSPs. Quality Sync helps marketers optimize media spend and campaign outcomes by reaching higher quality impressions.
In addition, strong adoption of Context Control continues to fuel our programmatic growth. We’re also developing attention metrics to help marketers better optimize their media spend and achieve targeted outcomes, while building a framework of strategic partners whose unique strengths will further enhance our product offerings.
This week, IAS announced a strategic partnership with U.K.-based Lumen Research, a global attention technology company specializing in cutting edge eye tracking solutions. By combining IAS’s attention capabilities and actionable data with Lumen’s eye-tracking expertise, our customers will have an even more powerful way to track, which impressions have captured attention and are likely to drive a business result.
We are also actively participating in the IAB working groups and with the Media Rating Council, or MRC, on the ongoing development of expanded standards in this area. In our recent whitepaper Taking Action on Attention, we analyzed millions of advertising data signals refined by machine-learning models.
The report concluded that comprehensive media quality measurement and optimization solutions that leverage visibility, the surrounding ad environment, and ad interaction signals are core to driving attention.
IAS currently provides a custom report in our Signal UI that helps marketers understand these three components across their programmatic media spend. We are building on our leadership in ad verification in CTV. We believe we have the most robust and forward-thinking product portfolio, as well as global breadth and depth across all the major CTV ad supported platforms.
By combining IAS and Publica data, we provide marketers with transparency on where their ads are running in programmatic CTV. Publica was recently named Best Video Ad Platform in Digiday’s Video & TV Awards. In March, IAS launched viewability and invalid traffic verification for Netflix’s ad-supported plan.
IAS is ensuring that advertising campaigns running on Netflix are delivered fraud-free and are seen by real viewers. Verification on Netflix is now available in 12 markets globally and across all platforms.
We’re also excited to announce that Publica renewed its exclusive partnership with Samsung to be their primary CTV ad server helping them to power their ad break decisioning across Samsung TV Plus globally.
Our pre-bid solutions are now live with Xandr Invest DSP. These offerings ensure a marketer’s ads stop playing when the TV screen is off and provide metadata to better understand programmatic CTV spend.
Beyond CTV, we’re pleased to announce that Mail Metro Media, the UK-based global news publisher, is now using IAS Context Control as well as our publisher verification and optimization products.
IAS is ensuring that ads running on Mail Metro’s digital platforms can be properly seen by audiences, are fraud-free, and brand safe for advertisers. Our leading-edge technology, along with our energized sales effort is driving increased customer adoption and higher conversion of multi-year, multi-million dollar new business opportunities.
On last quarter’s call, I highlighted several major global brand wins including Ford, Hershey, Kering, and Bel. We are winning these deals after extensive head-to-head product and tech due diligence. We’re also focused on activating these wins faster, which is reflected in our first quarter results.
Most recently, Canva has selected IAS based on our actionable attention data, ability to drive greater efficiencies across programmatic buying, and enhanced CTV offerings as Canva shifts more budget to the space.
In addition, we won several new accounts outside the U.S. In Europe, BT selected IAS based on our differentiated product innovation. In APAC, we’re delighted to welcome Singapore Airlines and Panasonic. Our global presence stands as a key differentiator for IAS as marketers consolidate their buying decision around one provider across geographies.
In the first quarter, we accelerated revenue growth with double-digit gains in the Americas, EMEA, and APAC. Expanding on our existing relationship with Amazon, we announced recently that IAS is the first verification vendor whose suite of publisher optimization solutions are now available via Amazon Publisher Services or APS Connections Marketplace.
By leveraging their existing APS connection, publishers can easily discover and onboard new tech solutions with a streamlined and more efficient adoption and integration process. In March, the MRC granted continued accreditation of IAS’ core digital ad verification service. Since appointing Kevin Alvero as Chief Compliance Officer, we’ve intensified our efforts to grow our MRC accreditations. Kevin is a widely renowned industry authority who was at Nielsen for 20 years prior to joining IAS. We look forward to continuing to work closely with the MRC.
Finally, IAS went live with our previously announced partnership with Good-Loop. We are working with Good-Loop to enable marketers to measure the carbon emissions of their digital ad campaigns. We’re off to a strong start in 2023 with first quarter results ahead of our prior expectations. We are delivering superior products to our customers, and we are investing in our technology to support future growth initiatives with data as the foundation.
We have a robust new business pipeline, and we are benefiting from our enhanced go-to-market strategy. We are excited to host our first Analyst and Investor Day on June 13. We encourage you to join us in person at the Nasdaq MarketSite in New York City. The event will be a great opportunity to meet and hear from several members of the IAS senior leadership team on our strategy and vision. We’ll feature product demos that highlight our robust technology. We will also host an expert panel to provide insights into IAS and the broader digital media industry.
I’d like to thank everyone on today’s call for your ongoing support. I’ll now hand it over to Tania to review our financial results in detail.
Thanks, Lisa and welcome, everyone. We exceeded our expectations in the first quarter highlighted by accelerated year-over-year revenue growth of 19% and adjusted EBITDA margin expansion to 32%. As a result of our positive business momentum, we are raising our financial outlook for the full year.
Total revenue in the first quarter increased to $106.1 million. Our revenue growth rate of 19% for the period accelerated from the 15% growth rate in the fourth quarter of 2022. We generated increased marketer demand across our product offerings in social media, video, and open web with a strong contribution from seasonal campaigns in the period.
In addition, recent new business wins added to our results. CPG, auto, and finance verticals performed well in the period. Programmatic revenue for the first quarter grew 26% year-over-year to $51.0 million, primarily attributable to Context Control. Context Control represented a similar percentage of programmatic revenue as in the fourth quarter of 2022.
Non-contextual programmatic revenue increased at a double-digit rate in the first quarter. Programmatic reached 56% of total revenue from advertisers in the first quarter versus 54% in the prior year period. We see opportunity for expansion of our Context Control business beyond the top 100 accounts, particularly in the midmarket, both in the U.S. and internationally.
We are also further developing other areas within programmatic, including our Total Visibility offering. Advertiser direct revenue, which includes social media platforms and open web, increased 18% year-over-year to $40.7 million. Social media revenue grew 25% and represented 43% of advertiser direct revenue in the first quarter, up from 42% in the fourth quarter of 2022.
Year-over-year growth was driven by customer adoption of our post-bid solutions for TikTok as well as revenue from our existing partnerships with Meta and YouTube, which continue to diversify and scale. Video, which commands a pricing premium to display, grew 25% in the quarter. Video accounted for 47% of advertiser direct revenue in the first quarter, unchanged from the fourth quarter of 2022.
On a combined basis, total revenue from advertisers, including programmatic and advertiser direct revenue, represented 86% of total first quarter revenue. Supply side revenue from publishers increased 2% to $14.4 million in the period.
Gains in Publica were partially offset by the performance of our non-CTV supply side businesses. Total supply side revenue represented 14% of total first quarter revenue. Revenue grew in all three regions in the first quarter. Revenue growth in the Americas accelerated to 23%, ahead of 19% growth in the fourth quarter of 2022, driven by gains in Context Control, TikTok, and Publica.
International revenue growth, excluding the Americas, accelerated to 11%, outpacing growth of 6% in the fourth quarter of 2022 fueled by new business wins, adoption of our offerings, and investments in emerging markets. Gross profit margin for the first quarter was 80% compared to 81% in the prior year period. Gross profit margin performance in the first quarter reflects investment in our data infrastructure and increased hosting costs. Gross profit margin was in-line with our prior outlook of 78% to 80%, which we continue to forecast throughout 2023. We expect to optimize the gross profit margin of our offerings as we scale over time.
Sales and marketing, technology and development, and general and administrative expenses combined increased 10% in the first quarter compared to the prior year period. Slower expense growth reflects our streamlined operations resulting from our recent restructuring efforts. We continue to prioritize our hiring as we focus on profitable growth. Higher stock-based compensation also drove the year-over-year increase. Stock-based compensation expense for the period was $11.3 million in-line with our prior expectation of $11 million to $13 million.
Adjusted EBITDA for the first quarter, which excludes stock-based compensation and one-time items, increased 37% year-over-year to $34.1 million. Adjusted EBITDA margin was 32% and exceeded expectations. Higher-than-expected revenue for the period, as well as increased operating efficiencies, contributed to our strong adjusted EBITDA margin in the first quarter. In addition, long-term investments in our technology and improved productivity of our engineering team resulted in increased capitalized expenses which contributed to margin performance. Net income for the first quarter was $3.1 million, or $0.02 cents per share. This marks our fifth consecutive quarter of net income profitability.
Turning to our performance metrics. First quarter net revenue retention, or NRR, was 118% reflecting our ability to grow with our customers. Total advertising customers was 2,100, essentially unchanged from the prior-year period. The total number of large advertising customers with annual revenue over $200,000 increased to 204 compared to 184 last year and up sequentially from 199 in the fourth quarter of 2022. We maintain a healthy balance sheet with strong cash flow conversion that provides us with financial flexibility to invest in the long-term growth of the business.
Cash and cash equivalents at the end of the first quarter were $94.4 million. During the quarter, we reduced our long-term debt by $10 million to $215 million, resulting in net debt of $121 million. We are increasing our revenue and adjusted EBITDA outlook for the full year to reflect our first quarter outperformance and positive business momentum.
For the second quarter ending June 30, 2023, we expect total revenue in the range of $111 million to $113 million, or 12% year-over-year growth at the midpoint of the range. Adjusted EBITDA for the second quarter is expected in the range of $35 million to $37 million. For the full year 2023, we now expect total revenue in the range of $457 million to $465 million, or 13% year-over-year growth at the midpoint of the range, up from our prior guidance of $453 million to $463 million.
Adjusted EBITDA for 2023 is expected in the range of $147 million to $153 million, up from our prior guidance of $141 million to $149 million, which reflects a slight improvement in adjusted EBITDA margin compared to our prior outlook. Our updated adjusted EBITDA guidance reflects our increased revenue outlook, financial discipline driving organizational efficiencies, and an increase in the level of capitalized technology and development expense as a result of investments in our technology platform. We are reinvesting some of these benefits into strategic initiatives to support our long-term growth.
A few additional points. We expect second quarter year-over-year revenue growth of 12% at the midpoint, compared to higher Q1 growth, which benefited from seasonal campaigns as discussed. Advertiser direct revenue in the second quarter is expected to benefit from the ongoing ramp in adoption of our leading social media products as well as demand for our open web products from new advertiser customers. Balancing this, programmatic revenue growth in the second quarter is expected to reflect moderating Context Control growth as the business increases scale.
As mentioned, we expect gross profit margin in the range of 78% to 80% throughout the year. Second quarter stock-based compensation expense is expected in the range of $15.5 million to $17.5 million. Full-year stock-based compensation expense is expected in the range of $61 million to $64 million, lower than our previous guidance of $62 million to $66 million. We expect weighted average shares outstanding for the second quarter in the range of 155 million to 156 million shares, and 155 million to 157 million shares for the full year.
To conclude, we are pleased with our first quarter performance which sets the stage for profitable growth in 2023. We are generating positive business momentum highlighted by major wins that are already contributing to our results. We are excited to advance our partnerships with the major platforms which expand our addressable market opportunities. And we are realizing operating efficiencies while reinvesting in the business for long-term sustainable growth to benefit our customers and shareholders.
Lisa and I are now ready to take your questions. Operator?
Thank you. At this time, we’ll conduct the question-and-answer session. [Operator Instructions] Our first question is from James Heaney with Jefferies. Your line is now open.
Thanks for taking my questions. I have two. Tania, just looking at your Q2 guide, it implies a bit of a softer sequential growth compared to prior second quarters. Is there anything driving that, just anything on the macro? And then one for Lisa. Could you just talk about the opportunity to expand Context Control to mid-market accounts? We heard Tania mention it on the call, so just be great to hear about the traction that you’re seeing there. Thank you.
Sure. Hey, James. We were very pleased with our first quarter results driven by stronger than expected revenue from seasonal campaigns. This – and so we are expecting some deceleration from the higher than expected seasonal campaigns in Q1. And this trend is consistent with our prior expectation of higher Q1 growth versus the full year. And in the second quarter, our guidance reflects – we’re pleased to continue to guide double-digit revenue growth as you mentioned, 12% and strong profitability in the second quarter based on strong continued demand for our products.
Sure. Happy to take the second question about expanding Context Control to mid-market. We are seeing a nice uptick with mid-market adoption of Context Control, contextual avoidance in particular, both in the U.S. and EMEA. We’re also starting to see nice uptick for Context Control in international. Mid-market in particular, we define mid-market north of top 100 accounts, and where we’re really getting traction is with the independent agencies outside of the top six holdcos.
Thanks.
Thank you.
Thank you. [Operator Instructions] Our next question comes from Matt Cost with Morgan Stanley. Your line is now open.
Hi everybody. Thanks for taking the question. I guess just on the Amazon Publisher Services partnership I think was mentioned in the release. How needle moving do you think this can be for your go-to-market. And how long will it take you to assess whether you’re seeing more onboarding through that channel? Thanks.
Great question, Matt. Yes, we were thrilled to announce that IAS was the first verification vendor whose suite of publisher optimization solutions are now available on APS. It enables publishers to easily discover and onboard new tech solutions. In terms of onboarding and timing, I would say the back half of this year will be steady onboarding, steady ramp and then we expect fuller adoption in 2024.
Great. Thank you.
Thank you.
[Operator Instructions] Our next question comes from Jason Helfstein with Oppenheimer. Your line is now open.
Thanks. Kind of a two-part question around connected TV. So first just on the Samsung partnership, is the primary benefit – is the main benefit to them choosing you to be their primary ad server that you can tell if the TV is actually on versus alternative ways to basically measure or kind of do – you do with connected TV. And then just talk about – I guess, we’re kind of going to get to the point maybe in a few more quarters where the growth of kind of Publica and CTV should offset some of the declines on the legacy supply side. So just kind of talk broadly how that product and you ultimately see connected TV kind of growing the supply side line of the model. Thank you.
Sure. Thanks for the questions, Jason. So yes, we were thrilled that we renewed our exclusive partnership with Samsung as their primary CTV ad server. To address your question about on/off, I mean, we have such an extensive strategic partnership with Samsung. In addition to serving their ads, we’re doing lots of other things to help Samsung better optimize and drive higher yields for their CTV ad inventory. And then in terms of our publisher revenue, we continue to see impressive growth from Publica. It represents a little more than half of our publisher business. And the Publica growth it was partially offset by our traditional non-CTV publisher offerings. So we’re feeling really bullish about the future of CTV, we are winning in CTV everywhere, and Publica absolutely is accelerating our growth with CTV, and we’re just seeing such great demand both from publishers and advertisers.
Thank you.
[Operator Instructions] Our next question comes from Brian Fitzgerald with Wells Fargo. Your line is now open.
Thanks guys. You had really nice acceleration in the advertiser direct segment this quarter and really notable uptick in the impression growth to 29%. You called out client growth in 10-Q, but wondering if you could also talk through the impact from emerging channels there. And maybe also what you saw from the overall volume dynamics on the market right now.
Sure. Happy to take that, Fitz. So we were very pleased with the uptick in advertiser direct revenue in Q1. That was fueled by the team putting a lot of new wins on the business. Couple of reasons why we did see that strong growth with ad direct. The first is just strong performance in social, notably TikTok and a few other of the social media platforms as well as seasonal campaigns. So think of Q1 seasonal events like Cold, flu March Madness and that also generated nice wins with advertising direct.
Got it. Thanks, Lisa.
Yes, thank you.
[Operator Instructions] Our next question comes from Mark Kelley with Stifel. Your line is now open.
Hey, great. Thank you very much. I wanted to get your thoughts on this attention partnership with Lumen, which is nice to see. And that approach is a little bit different than your main competitor, which doesn’t use eye tracking and things like that. I guess, what are the puts and takes between your methodology and some of the other ones that are out in the market? And then second, some of the categories that you called out as a bit stronger for you, like, autos and financials were weaker for some other folks in digital advertising. Curious if that’s a read through [indiscernible] wins that maybe you didn’t have last year. Thank you.
Great. Thanks, Mark. So happy to talk about attention and yes, we were thrilled to announce our partnership earlier this week with UK based Lumen Research. As it sounds like you read about it, Lumen is a global attention company that specializes in eye tracking. And the beauty of the partnership is we’re combining our attention technology with Lumen’s eye tracking capability. And what’s great is it’s what marketers are asking for that they want that combination of our attention data with Lumen’s focused data on eye tracking.
And what we’re finding the results so far, they look really strong that in view ads, they’re amounting to 64 times higher attention than those were not in view. Don’t really want to speak to our competitor’s offerings, because we’re just so focused on innovating of – on behalf of our advertisers. But again, we’re thrilled about the partnership and we’re thrilled to offer a differentiated attention solution to our customer base. In terms of the verticals, Tania, you want to take that question?
Sure, yes. Mark, in terms of auto and finance, we were really pleased to see the strong results in those two verticals. I would say, there’s a couple things underlying that. And Fitz called this out earlier, we were really pleased on the ad direct side to see 29% volume increases in Q1. And that was a combination of a few things. One, the volume from social media, number two, our new wins are already starting to have an impact that we saw in Q1. And thirdly, particularly, on the finance side, some of the advertisers on the finance side were more seasonally driven in terms of Q1, but we were across the board with the areas I just highlighted, we’re really pleased with the strong growth on the ad direct side.
Really helpful. Thank you both.
[Operator Instructions] Our next question comes from Andrew Marok with Raymond James. Your line is now open.
Great. Thanks for taking my questions. One more on APS if I could, I guess, can you talk a little bit more about that partnership. I guess, kind what brought that about and what kind of walled gardener platform partnerships can that open up as like a demonstration of capabilities or a proof-of-concept? And then second on attention, you mentioned in the answer to the last question that you have marketers that are kind of clamoring for this type of attention data. Are there any commonalities in the types of advertisers or clients that you’re working with right now who are kind of seeking out that attention data, maybe more than others? Thank you.
Sure. So happy to answer the first question around APS. So the way to think about the APS integration and announcement, I mean, we have a deep strategic partnership with Amazon across multiple businesses of Amazon. In addition to our advertiser base of customers, we also have a deep publisher customer base. And this is something that our customers have been – our publisher customers have been asking for, is just a broader and wider scale and distribution play an opportunity to connect into APS and enabling publishers, so they can easily onboard new tech solutions with the streamlined and more efficient adoption and integration process. So we’re really excited to be the first verification vendor to announce our APS integration.
And then in terms of our investments in attention, another thing that we rolled out recently is a whitepaper all around attention and think of it as a thought leadership piece. And we’re getting such strong feedback from our advertisers about this whitepaper and the way we’re thinking about the attention model, its fit into three categories, and those categories include visibility, situation, and interaction.
And we are able to measure the attention in each of these areas. And again, combining up our overall attention data and marrying that with Lumen’s eye-tracking data. The way to think about attention two, its early days, it’s one really important part of outcomes, and especially during these macroeconomic times as advertisers are leaning in to understand ROI, efficiency, get closer to the ROI, ensure that every dollar that they invest, they’re understanding the ROI, investments and things like attention and overall performance and outcomes. It’s a core part of our strategy at IAS both this year and in future years.
Great. Thank you.
Yes. Thank you.
[Operator Instructions] Our next question comes from Justin Patterson with KeyBanc. Your line is now open.
Great. Thank you very much. I wanted to touch a little bit on just the tech investments you’re making for the year. I know that’s been a big strategic priority for you. How are you just with that transition and started to see the pace of product and feature velocity improved? Thank you.
Yes. Great question, Justin. So in terms of tech investments, we’re definitely firing on all cylinders. And a good example of that, and I know we spoke to it during the earlier call is Total Media Quality. And Total Media Quality, we’ve launched it in the social platforms both TikTok we announced earlier this week with YouTube.
And the beauty of Total Media Quality is we’re offering brand safety and brand suitability. And the adoption rate has been phenomenal. I’ll just take the example of TikTok. We’re actually ahead of our product roadmap schedule. We were scheduled to launch in 20 markets in Q2. We are already at 30 new markets.
We’ll be there over the next few weeks. And ultimately with our Total Media Quality product supporting 90 languages within these social platforms, we’re able to move at that velocity and that scale both by leveraging our AI and ML technologies, but also tapping into OpenAI and that’s something you keep hearing about from all the tech companies in their quarterly earnings calls. This quarter is just the power of AI and we’ll make sure that we are leveraging both our deep tech but also OpenAI and other open technology so that we can drive at speed and scale.
If I could add onto that Lisa as well. Justin, one thing I’m very pleased to see from a finance perspective is that we are continuing to hire in technology. We’re also driving more productivity across the organization and that’s contributing to our profitable growth across the quarter and also on a full year basis.
Thank you.
Thank you.
[Operator Instructions] Our next question comes from Raimo Lenschow with Barclays. Your line is now open.
Okay. Perfect. Thank you. Congrats for me as well. First question for Tania, if you look at the guidance, you pushed through the Q1 outperforms on revenue on EBITDA, you did kind of push up – pushed up a little bit more. What gave you that extra confidence there? And can you talk a little bit maybe about some of the initiatives here? And I have one follow-up.
In terms of specifically on the – on profitability, Raimo?
Yes, yes. Yes, yes.
Yes. So we were – we’re really pleased with Q1 coming in at 32%, which was up from 28% last year. We are – we saw in the quarter greater than expected productivity and efficiencies following the restructuring that we did in December. And like I said, we are continuing to invest in the business but we were really pleased to see that prove out in Q1, which gave us the confidence to up margin at the mid-point of our guide.
Okay. Perfect. Yes. And then Lisa, more a bigger picture question around that everyone in software that keeps asking more in on the Internet side as well, I guess with around OpenAI. Can you just talk a little bit about for your industry what that means? Like because it’s a kind of everyone keeps asking for all segments, but it’s – how do you think about it for your industry and the implications for you guys? Thank you.
Yes. Great question, Raimo. So again, as I had mentioned before, we’re AI, ML based companies. Science is in the name of Integral Ad Science. So we’re built off of technology and just leverage incredibly deep data insights. But in terms of the power of AI and OpenAI, the way we look at it is leveraging OpenAI when it is additive to our existing technology and products specs and ensuring that when we do leverage, it’s the right thing to do for our customers.
It is additive from a product functionality. And also it helps us like with that TikTok example, that speed to market matters and being able to launch a product like Total Media Quality and accelerate the roadmap and accelerate the ability to launch that product and get it to a place where we’re over 90 languages available.
That is incredibly powerful for our advertising customers. It’s incredibly powerful for the platforms that we partner with, and I see it as a win-win-win across the Board. So that’s how we’re thinking about OpenAI is just leveraging it when it’s additive to our existing technology.
Okay. Perfect. Thank you. Congrats on me as well.
Thank you.
Thank you.
[Operator Instructions] Our last question comes from Jason Kreyer with Craig-Hallum. Your line is now open.
Thank you. On the TikTok relationship, can you just talk more about where you’re expanding that? And then yesterday they announced a new publisher pulse solution. Curious if there’s a bigger fundamental opportunity for you guys there?
Yes. Great question. So with TikTok, we’re seeing incredible adoption both with our pre-bid and post-bid products. You might remember when we initially rolled it out, it was just in three markets, three languages, got it up to seven markets. We’re now on path to hit 30 markets and the back half of this year that scale – that global scale will be reaching even more markets.
We’re hearing strong feedback both from global marketing clients who are adopting TikTok and also local clients and local markets who are adopting the product. And again, I can’t emphasize enough the importance that we can roll out languages quickly because that will drive up the adoption rate for our global marketers who want our scalable global solutions to be wherever they’re running their advertising.
And they just want to ensure that where they’re running their ads, its brand safe and brand suitable. So I’m incredibly proud of our team. I’m proud of the fact that we are ahead of our Q2 product roadmap especially when it comes to TikTok and really looking forward to working with the other social platforms in expanding TMQ or when the social platforms open up their live feeds.
One follow-up on Context Control, we’ve heard some pushback from publishers that there’s a conflict of interest is contextual data is used for targeting or resold to advertisers. I’m just curious from your perspective, how you manage that relationships between the advertisers and the publishers with that contextual data.
Yes. Great question, Jason. So that was actually something that I remember was an issue. I mean, we’ve had Context Control for three years now. So in the early days of Context Control, I would hear some feedback from the publishers that they perceived it potentially as a conflict of interest. But the reality of the – is the publishers are our customers too. And we see we play a critical role with the publisher ecosystem to help publishers optimize their inventory, drive higher yield for their inventory so that their publishing sites are sticky. So it’s something that we don’t really hear much from publishers recently about conflict of interest with Context Control.
Perfect. Thank you.
Thank you.
At this time, I would now like to turn it back to Lisa Utzschneider, CEO for closing remarks.
Thanks, everyone for joining us on today’s call. We’re off to a great start in 2023 with positive business momentum heading into the second quarter. We are driving growth across our product portfolio with advanced technology and actionable data insights for our customers. We’re also excited to see our new business wins contributing to our performance. We’ll look forward to seeing you at our Analyst and Investor Day on June 13 in New York City. Thank you.
Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.