DoubleVerify Holdings, Inc. Q3 FY2021 Earnings Call

Good afternoon, and welcome to DoubleVerify's third quarter 2021 earnings conference call. With us today are Mark Zagorski, CEO; and Nicola Allais, CFO. Today's press release and this call may contain forward-looking statements that are subject to inherent risks, uncertainties, and changes and reflect our current expectations and the information currently available to us, and our actual results could differ materially. For more information, please refer to the risk factors in our recent SEC filings, including our S-1 registration statement. In addition, our discussion today will include references to certain supplemental non-GAAP financial measures and should be considered in addition to and not as a substitute for our GAAP results. Reconciliations to the most comparable GAAP measures are available in today's earnings press release, which is available on our Investor Relations website at ir.doubleverify.com. Also, during the call today, we will be referring to a slide deck posted on our website. With that, I will turn it over to Mark.

Thanks, Tejal, and good afternoon, everyone. We are excited to share with you our third quarter results, expectations for the full year, and additional detail on recent strategic investments we’ve made. We grew the third quarter revenue by 36% to $83.1 million, achieving the top end of our revenue guidance range. We grew third quarter adjusted EBITDA by 82% to $26.4 million, representing 32% EBITDA margins and exceeding the top end of our guidance range. Advertiser Programmatic, Advertiser Direct and Supply Side revenue all delivered double-digit year-over-year growth. Our core revenue growth continues to be driven by our product success in fast-growing sectors such as Programmatic, Social and CTV and a global expansion strategy that’s winning large, enterprise clients in a growing number of international markets. We’ve had a great year so far. Revenue in the first 9 months of 2021 grew 37% year-over-year. Adjusted EBITDA grew 52% year-over-year. We were not impacted by Apple’s App Tracking Transparency changes because our measurement and pre-bid targeting solutions do not rely on cookies or individual identifiers. Additionally, because we verify, target and measure nearly everywhere that digital ad spending occurs, we are largely insulated from platform-specific supply and demand fluctuations. Our fixed fee solutions follow the spend. In addition to generating strong core revenue growth, we are focused on investing in long-term strategic initiatives that expand our product leadership and deepen our coverage in fast-growing sectors. In doing so, we not only increase our potential total addressable market (TAM) and create broader upsell opportunities with current clients, but we also further enhance our ability to optimize their advertising outcomes. On that front, we are excited to announce our second strategic investment of the year, the acquisition of OpenSlate, having just completed our acquisition of Meetrics in the third quarter. I would like to spend a few minutes on how both of these transactions enhance DV’s customer value proposition and cement our market leadership. Acquiring OpenSlate will help us drive better outcomes for advertisers by providing pre-campaign targeting and brand suitability solutions that integrate with our measurement tools and increase our total coverage across key CTV and social platforms. OpenSlate’s pre-campaign solutions perfectly complement DV’s post-campaign measurement capabilities on CTV and social platforms such as YouTube, Facebook, and TikTok. Integrating the two provides advertisers with unparalleled end-to-end brand safety, suitability, and contextual optimization. No other company will be able to deliver a fully owned and integrated solution across these leading social and CTV walled gardens. We’ve seen the power of integrating pre-bid and post-bid solutions on the open internet with the success of DV’s programmatic tools, including Authentic Brand Suitability. The efficacy in driving powerful outcomes by connecting pre-bid and post-bid capabilities has driven stickier client relationships and expanded our revenue opportunities. Today, nearly all of our Top 100 customers use DV for both pre-bid programmatic targeting and post-bid quality measurement for their media buys on the open internet. And half of our total revenue now comes from our pre-bid solutions. We expect the acquisition of OpenSlate will help expand our existing social and CTV coverage and customer base. OpenSlate has the most sophisticated contextual targeting technology and the widest coverage across YouTube and TikTok in the industry. DV has achieved exponential growth in social and CTV revenue since 2018 with our post-bid measurement solutions. Our YouTube revenues have increased more than six-fold while our Facebook revenues have increased five-fold over the last four years. YouTube and Facebook are expected to represent nearly 15% of our total 2021 revenue on a combined basis. Adding pre-campaign targeting via OpenSlate only increases our revenue growth potential from these and other fast-growing CTV and social platforms. OpenSlate has won the trust of the leading agency holding companies and over 200 large global brands including Procter & Gamble, Coca-Cola, Kimberly-Clark, Nestle, Sony, Unilever, and Volkswagen. We see significant revenue opportunities to cross-sell OpenSlate and DV’s solutions across our combined customer base, offering advertisers a unique, integrated solution that drives better advertising outcomes. OpenSlate also aligns with DV’s core value of providing unbiased, objective third-party measurement that is independent of the media transaction. Additionally, neither company relies on persistent tracking technologies, such as third-party cookies or mobile device IDs like Apple’s IDFA. These shared principles, market-leading technology, and deep social and CTV coverage make OpenSlate a strong strategic fit for DV. We are excited to unlock meaningful, new growth opportunities that will be created by bringing the businesses together. Our other recent strategic investment was the acquisition of Meetrics, a leading European ad verification company. Meetrics provides DoubleVerify with a strong operating platform and experienced sales, product, and engineering teams as well as the opportunity to scale existing customer relationships through access to DV’s global capabilities. Global revenue growth continues to be a focus for DV as we see ample opportunities for market share expansion outside of the Americas. As we continued to execute our global expansion strategy, we grew third quarter EMEA revenues by 44% year-over-year and APAC revenues by 96% year-over-year. In the third quarter, we won the global business mandates of key European advertisers including Burberry, Patek Philippe, and HRA Pharma as we continue to see our investments in international markets deliver results. Other key expansions and new logo wins include Facebook, now known as Meta, Sony Japan, Disney Studios, TJX, American Family Insurance, Dropbox, Afterpay ANZ, and Peloton Global. This exceptional number of Q3 deals further positions us for growth into 2022. The addressable market for DV’s solutions remains significant and approximately 64% of the new enterprise logos that we won in Q3 were greenfield. Direct revenue outside of the Americas grew 60% year-over-year in the third quarter, representing approximately 25% of direct revenue and exemplifying the expanding opportunity for our solutions in markets around the globe. The market penetration of our social solutions remained a highlight for DV in the third quarter as we grew social volume by 83% year-over-year. A recent milestone in our social coverage was the launch of our partnership with TikTok to measure viewability, fraud, and in-geo impressions across the TikTok platform. This development combined with the new solutions we gain through the acquisition of OpenSlate, will position DV as the only company to offer brand safety controls and comprehensive quality measurement coverage across TikTok. We believe there is significant growth potential for our solutions as advertisers continue to invest in the TikTok platform, which is expected to expand beyond 1 billion users each month. Turning to CTV, our products continue to gain traction in one of the fastest-growing segments of the advertising market. DoubleVerify grew third quarter CTV volumes by 41% year-over-year driven by DV Video Complete, which remains the only solution that allows brands to effectively block brand suitability and fraud violations on CTV. DV remains the most MRC accredited verification platform for CTV. As the cost per advertising impression remains high on CTV compared to other formats, it's increasingly attracting fraud, a challenge to the industry, and an area we are committed to addressing. In August, our fraud lab uncovered and neutralized SmokeScreen, an advertising fraud scheme which caused screensavers to hijack CTV devices and generate ad impressions, even when the screen was off. While DV neutralized SmokeScreen for our clients and partners, helping them avoid wasted investment, the scheme remains active on unprotected CTV platforms, generating up to 10 million fraudulent requests per day and costing unprotected advertisers millions of dollars per month. Switching our focus to programmatic revenue growth, Authentic Brand Suitability or ABS, grew 64% year-over-year driven by its continued adoption on major buying platforms, most notably Google’s DV360 and The Trade Desk. And, although still nascent, our newest programmatic pre-bid solution, DV Custom Contextual, saw a 60% sequential increase in the number of advertisers using the product since last quarter. We are encouraged by its early growth trajectory and continued adoption on platforms like The Trade Desk and Amazon. In summary, Q3 was another strong quarter for DV. Our core revenue growth continues to be driven by advertiser demand to solve the fundamental challenge of optimizing ad spend while protecting brand integrity in an increasingly complex digital ad ecosystem. DoubleVerify supports this imperative across the fastest-growing channels, geographies, and platforms. The acquisitions of Meetrics and OpenSlate will expand our ability to drive better advertising outcomes on a broader scale, differentiating our platform and making DoubleVerify solutions even more essential for our customers. We couldn’t be more excited about the growth opportunities ahead. With that, I’ll turn it over to Nicola.

Thank you, Mark, and good afternoon, everyone. Let me begin with a review of our quarterly performance before discussing our 2021 outlook and providing additional color on the OpenSlate acquisition. Our revenue performance in the third quarter reflects continued broad-based strength in advertiser, platform, and publisher demand for DV products. Each revenue type grew sequentially from the second to the third quarter, which is seasonally weaker. For the third quarter, our revenues were $83.1 million, up $22.1 million or 36% year-over-year. On a sequential basis, third quarter revenue grew nearly 9% and outperformed the 7% sequential growth we delivered in 2019. Revenue was driven by strong volume or MTM growth for both direct and programmatic. Gross revenue retention remained above 95%. Advertiser Programmatic revenue grew 49% in the third quarter year-over-year primarily driven by continued ABS adoption, particularly on DV360. As Mark mentioned, ABS delivered 64% year-over-year revenue growth in the quarter and now represents over 50% of programmatic revenue. To date, we have been successful at upselling this premium product to our existing customers, and we are now focused on making ABS the cornerstone of every RFP for prospective enterprise clients as well. Advertiser Direct revenue grew 23% year-over-year driven in part by large existing enterprise clients, including Unilever and Amazon, expanding DV’s coverage to international markets. We also benefited from newly signed clients, including Airbnb, Target, and Sony, ramping up their business with us. On the Supply-side, we recognized new revenue from MoPub, Taboola, and Tremor in the third quarter as we continue to expand partnerships with key platforms and publishers. Shifting to expenses, our cost of revenue increased by $4.4 million year-over-year in the third quarter, primarily due to an increase in costs from revenue-sharing arrangements with our programmatic partners as programmatic revenue grew as a percentage of total revenue. In addition, we continue, and intend to accelerate, our investments in cloud-based hosting solutions to provide the scale and flexibility necessary to support our geographic expansion. Our product development costs increased by $3.3 million while sales, marketing, and customer support expenses increased by $2.8 million year-over-year in the third quarter. Following a period of strong organic hiring and investments in the first part of the year, we are now focused on integrating engineering, product, and sales talent from our recently completed acquisition of Meetrics and from our pending acquisition of OpenSlate. While we anticipate realizing synergies by eliminating duplicative costs over time, we expect operating expenses to trend higher in the fourth quarter, which is reflected in our fourth quarter EBITDA guidance. Third quarter 2021 adjusted EBITDA was $26.4 million, up 82% year-over-year and representing a 32% adjusted EBITDA margin. Excluding the impact of $1.4 million of bad debt recoveries in the quarter, adjusted EBITDA would have been $25 million, representing a 30% margin. And finally, we delivered $7.9 million of net income, up 37% year-over-year. In terms of cash flow and balance sheet, we generated $58.4 million in cash from operating activities through the third quarter of 2021, as compared to $17.8 million through the third quarter of 2020. We had approximately $320 million of cash at the end of the quarter even after paying for the Meetrics acquisition in cash, and we continue to have zero debt on the balance sheet. We are acquiring OpenSlate debt-free, and expect to fund the $125 million cash portion of the acquisition with cash on hand. Now, turning to guidance. We expect fourth quarter revenue in the range of $98 to $103 million, which at the midpoint implies revenues of $100.5 million and growth of 28% year-over-year. We expect fourth quarter adjusted EBITDA in the range of $34 million to $36 million, which at the midpoint implies an increase of 27% year-over-year, and an adjusted EBITDA margin of 35%. The prudence in our fourth quarter outlook reflects the supply chain uncertainty and its impact on ad spend that some of our large CPG and auto customers have shared with us. Following our strong year-to-date performance, we are reiterating our full-year 2021 revenue guidance range of $325 million to $330 million, a year-over-year increase of 34% at the midpoint. We also continue to expect adjusted EBITDA in the range of $103 million to $105 million, a year-over-year increase of 42%, and an adjusted EBITDA margin of 32% at the midpoint. Finally, we expect our fourth quarter weighted average diluted shares outstanding to range between 166 million and 169 million shares. Turning to OpenSlate. As the acquisition has not yet closed, we do not expect OpenSlate to have a material financial impact on our 2021 results. And while we are not providing 2022 guidance here, we currently expect OpenSlate to contribute between $15 million and $18 million of revenue in 2022. The Company is near breakeven today and we expect to streamline operational costs over time by integrating the smaller-scale operation into our broader global infrastructure. And with that, we will open the line for questions. Operator, please go ahead.

And our first question comes from Arjun Bhatia from William Blair. Go ahead, Arjun.

Yes. Thank you very much. I wanted to start maybe just with the OpenSlate acquisition. Can you just give us a sense for maybe the customer overlap that you have with OpenSlate? Obviously, the technology seemed complementary, but how many, if you can quantify in any way the number of joint customers? And then I would love to hear maybe just some commentary on the build versus buy, why did the acquisition make sense, and what's difficult about the technology itself that made this acquisition attractive? Thank you.

Thank you, Arjun. That's a great question. We're very excited about the OpenSlate acquisition, which sets us apart in the market as it gives us exclusive end-to-end pre-bid and post-bid measurement and verification across platforms like TikTok and YouTube. This significantly expands our coverage, allowing us to have unmatched reach across today's top platforms. It strengthens our narrative as a single platform where advertisers can feel assured that their investments are safe and that ads will be delivered in a brand-compatible and verified environment. When it comes to customers, we're even more enthusiastic. Although OpenSlate has impressive technology, as a smaller company, they have struggled to engage with numerous enterprise clients. Currently, we share about 60 clients, and with DoubleVerify working with over 1,000 brands globally, we see 940 additional potential customers to target, which is an exciting opportunity for us. The overlap is minimal, so our focus is on upselling. We've had a strong history of providing new solutions to current clients, which is truly exciting. Regarding the build versus buy debate, there are several factors to consider, including the urgency to enter the market. Platforms like TikTok and YouTube have exploded in popularity since the pandemic, leading to increased engagement. Being able to quickly implement a solution that enhances our post-bid measurement and helps improve results for advertisers without the delays associated with building the technology ourselves was crucial. This acquisition allows us to swiftly tap into these growing markets, solidifying our relationships with current clients as they make key decisions, and enables us to strategically use our available resources to drive significant growth over time.

Awesome. That's great to hear, and that's very helpful color, Mark. One more question if I can just on TikTok. Obviously, there's a lot of exciting things happening there. You have the new partnership. Now you have OpenSlate that gives you kind of a unique way to capture share there. Just give us a sense for how you're positioned to grow in the TikTok opportunity? And if there's any way you can help us frame the potential contribution over the next year or so now that you have some of these pieces in place to really attack that opportunity, that would be super helpful.

Yes. So, if you think about the way that the products are lining up, we recently announced the launch of our viewability and fraud solutions across TikTok. OpenSlate was one of the first partners in on brand safety. So, we've kind of got all the bases covered there with regard to pre-bid, brand safety, and post-bid measurement and verification on the viewability side. So, when we look at the completeness of solution, it's really exciting there. When we think about that platform in particular, and if you just kind of do some back-of-the-envelope math, you figure it's about a third the size of Facebook now in active users in the Americas. Right now, between Facebook and YouTube, they make up about 15% of our total revenue. So take half of that or so for Facebook, gives you about 7.5%. If you say they're a third of Facebook, you could see potentially this business being anywhere from 3% to 4% of our total revenue over time. So, I think when we look at the opportunity on that specific platform, we think there's a comparable opportunity to what we've seen with platforms like Facebook and YouTube just based on the scale of user engagement and the demand that we're seeing from our advertisers.

It's very helpful. Thank you very much, and congrats on the acquisition and the quarter.

Okay. Thanks.

And our next question comes from Andrew Boone from JMP Securities. Go, Andrew.

Hi. Good afternoon, and thanks for taking the questions. So, question number 1, first on Custom Contextual customers growing 60% quarter-over-quarter. That seems like a very good omen for 2022. So can you talk a little about the drivers behind the ads? And how do you move those customers more test budgets into something that's more persistent or is it more persistent today?

Yes. Thanks, Andrew, for the question. We like the traction the product is getting. And like all of our pre-bid or pre-filtering products, so ABS on the programmatic side, what we've just done with OpenSlate and now Custom Contextual, it ties really nicely to our post-bid measurement, building this kind of optimization cycle over time. So we know that once people start using those pre-bid solutions, it helps fortify and leverage our post-bid solutions as well. So it creates this virtuous cycle. On the contextual side, we've seen a lot of client uptake. We know that first takes the uptake and then the volume after that. So, as we see the number of clients using it increase as we saw last quarter, 60% sequentially, we know that puts us in a good position for 2022 as now dollars start rolling off other solutions to our solution. The nice part about a lot of these, what we call, again, pre-bid solutions that are on programmatic platforms, so ABS and then Contextual, is that the ability to move dollars to those solutions is pretty fluid. So, the stickiness comes with the post-bid measurement afterwards, but the fluidity of adoption and dollar flow into Contextual on the pre-bid side is pretty loose. And what that means is, we feel good about next year in Contextual's contribution to our growth next year as part of our overall pre-bid performance suite.

That makes sense. And my second question is around international. I think you talked about 60% growth in the quarter. Can you just provide a little bit more detail on just the go-to-market, whether that's more international kind of customers that are expanding into new markets or whether these are local wins? Just kind of help us understand the strength of international where you guys are finding success. Thank you so much.

Yes, we believe there is significant opportunity in international markets, which is one of the reasons we acquired Meetrics and completed that deal in the third quarter. So far this year, 55% of our new hires are based outside the U.S., and currently, 40% of our total workforce is international. This demonstrates our commitment to these markets. Our global clients are expanding and increasingly seeking enterprise solutions that work across various regions. For instance, companies like Unilever and Mondelez want systems that function effectively wherever they operate. Having personnel in these markets to provide support and optimize their advertising spending is crucial. Our international investments aim to bolster our enterprise clients, while also allowing us to engage with numerous local brands. Therefore, our strategy addresses both global clients through our GCAP team, which services enterprise clients worldwide, and local clients through our on-ground teams. Notable international clients include major names like Facebook and Disney Studios, as well as local brands like Patek Philippe from France and Afterpay in New Zealand and Australia. We view our local relationships as an extension of the connections we build with our enterprise clients in those regions.

Great. Thanks, Mark.

And our next question comes from Justin Patterson from KeyBanc. Go ahead, Justin.

Great. Thank you very much. Very impressive growth out of ABS. You did note the DSP additions during the quarter. Would love to hear more about just how we think about ABS's growth opportunity and just where you are in terms of client adoption from that product. So that's question number one. And then question number two, there's a lot of changes in the measurement ecosystem right now. I understand that iOS is not necessarily a headwind for your business. But I'm curious how everything from what's going on with measurement, so Nielsen, MRC, is creating opportunities for the business. Thank you.

Great. Great questions, Justin. Let me take on the ABS one first. I think that if you kind of put this in a baseball analogy, what inning are we in with ABS? I think in the Americas, as far as platform adoption, we're probably like in the seventh inning. We've got the big guys. We've got Google. We've got Trade Desk and Amazon all signed up with ABS. So, I think in the Americas, we are probably on the platform side well into the game. On the scale side, however, we think there's a significant amount of upside still to be made out of ABS just by volume and new client adoption on those platforms. So, we've opened the showrooms and now we are filling them with cars and people coming into those showrooms. So, I think we are probably still well into the early part of the game as far as how much volume can get on those platforms. And then one other consideration, too, is our next level of penetration on ABS from a platform perspective ties into the question Andrew just laid out, which is on a global perspective, we've got local DSPs that we would call them local here, but they're pretty dominant in the markets that they're in. Whether that's in APAC or parts of Eastern Europe or the Middle East, there are significant platforms in those areas that we still need to get distribution across, which I think can help those local clients too. So, net-net, we think there's a good amount of growth for ABS, both on a volume perspective and then outside of the U.S. from a platform distribution perspective. In regards to your second question, I mean, how much time do we have? Because we would love to talk all day about this. I think that you bring up some great points around what's going on in the measurement space. Everything from the decline of efficacy in panels, to the loss of accreditation on major platforms, to the real questioning of whether or not single platform antiquated currencies have a future. I mean, all of those things have thrown the measurement and performance market up for grabs. We think we're in a really good place to take advantage of that because at the end of the day, what advertisers are looking for is a proxy for an outcome. They've always used reach and frequency for that in the olden days of linear television. They're looking for new proxies that can help them drive those outcomes. DoubleVerify supplies those proxies. Whether we start with a base of evaluating media quality and saying, hey, this is actually a safe place for you to be, that's the first part of actually delivering a result which is saying, let's take the low-quality media off the table, and let's lead with the good media that you can buy against. Then, moving upstream to doing things like ensuring that they're targeting against the right contextual elements, moving into new metrics like the launch of our Authentic Attention solution. You're going to hear a lot about Attention over the next few quarters because advertisers are waking up to say, what are those other proxies that we want to have besides just knowing that this is a male and there are 50,000 males watching my show. I want to know how engaged they are and how that relates to selling a product. I think this all comes back down to what are those things that I can measure, what are those indicators of performance that will help me drive the outcome of selling a product. If you can't tell yet, we are super enthusiastic about the role that we can play. We think there is a huge amount of the market that’s up for grabs, and our investments in companies like OpenSlate and our continued investments in products like Authentic Attention, which will launch in CTV early next year, are places where we think we are going to take a bigger piece of that pie.

Great. Thank you.

And our next question comes from Michael Graham from Canaccord. Go ahead, Michael.

Thank you. OpenSlate sounds exciting. Just a comment maybe on how long you think it will take to integrate that into the product set? And then, Mark, just on the guidance and sort of the impact from supply chain with some of the CPG advertisers, do you think this is coming at a time when we are setting budgets for next year? Like are you worried about that for budgets for next year? Are you hearing from the advertisers that they think a lot of this will be behind them by the time we sort of get into the new calendar year? Just any high-level comments you have there would be helpful.

Sure. Thanks for the questions, Michael. So, on the integration process for OpenSlate, the nice part about the acquisition is that there's really no redundant functionality. So, we don't have to rip anything out or rebuild anything that we've already created to work with OpenSlate. We look at that integration to probably be over the next year or so, with different levels of platform functionality integration. Light integration first with UIs probably will be shared, and clients will be engaged with together from an operational perspective. But you're probably looking at a year for a full kind of system integration. Over that time, we will be working with our customers to ensure that the product that we put together between pre and post is something that actually helps them drive better results. So, more to come there on that front. Regarding the guidance, I will talk about this from a qualitative perspective, and maybe Nicola can jump in on a quantitative perspective. But we have a good roster of CPG clients. They make up a decent chunk of our client base. But as we've said before, we don't have a heavy concentration in any one area. We had talked, I think, a few quarters ago about travel, leisure, and entertainment. The nice part is, we've seen those industries all come back in Q3 and Q4. We provided some caution around whether or not they'd come back, and we've seen a nice balance back there. CPG is the latest area facing post-pandemic challenges. But the reality is, you bring up a great point that we think this is pretty short-lived. As a matter of fact, we know it's short-lived. The indications that we're getting early next year suggest they think they will shake off these supply chain issues, and we will be ready to move on. So, we don't see this as an ongoing drag in any way. We saw it as a relatively light temporal issue that we want to be cognizant of, and we are not overly concerned about it, but we want to certainly ensure that we keep everyone updated. Nicola, anything to add?

Yes, Michael, the only thing I would add is, what Mark said is reflecting what we did, which is we took a modest change to the fourth quarter revenue guidance just to be cautious based on what we heard from our customers. This is not just a macro consideration; it's really what the CPG customers are telling us. We are seeing it happening in October a little bit, and the guidance that we've put out there assumes that this will continue, not deteriorate for the rest of the quarter. As Mark said, we are not hearing or anticipating this to continue into 2022.

Okay. Thank you, guys.

Thank you. And our next question comes from Matt Hedberg from RBC Capital Markets. Go ahead, Matt.

Thank you for taking my question. Congratulations on the results. Mark, I have a question for you. Regarding reopening and people getting out and traveling, do you think that will have an impact? I'm considering it from your sales perspective. Perhaps building your pipeline with new customers; you have done well in acquiring new customers during the pandemic. I'm curious about your thoughts as we look ahead to 2022 in a more reopening phase.

Yes. It's a great question. Thanks, Matt. And it's one that we live every day. One of the things that we noted in the script is that in Q3, we closed more new logos than we have any time in the year, right? A lot of those closes are still being done remotely. These are brand-new clients, many of which we've never met before in person, and we are still closing deals. So, A, it's interesting how quickly the industry has adapted to buying and selling virtually because they know their spend is only increasing digitally, so they need to have that security and those performance drivers. When we look at the market opening up a bit, not that we need that to happen to drive pipeline because we don't, obviously. This year, we've closed 108 new logos so far this year, which is pretty exceptional. When we look at next year, we certainly want to do better, and we think we have the opportunity to do better with having people on the road. But we will see. I don't think that's going to be the deciding factor. We are going into 2022 with a really strong pipeline. We are super happy with where we sit today. I would say, I’ve only been here less than 18 months, but it's the best pipeline I've ever seen going into a new year. So, that is an absolute statement I can make, and we feel good about it.

That’s great. I can hear in your voice and congrats on OpenSlate. Seems like a really, really nice complement to what is obviously a very, very diverse platform already. Thanks a lot, guys. Congrats again.

Got it.

Thank you. And our next question comes from Mark Murphy from J.P. Morgan. Go ahead, Mark.

Thank you. This is Pinjalim sitting in for Mark. Congratulations on the quarter. Most of my questions have been answered, but I have one quick question about competition. DoubleVerify is clearly strengthening its position with acquisitions like OpenSlate and Meetrics. I would love to hear your thoughts on the competitive dynamics. How are your competitors responding to your emergence as a market leader?

Yes. It's a great question. We are laser-focused on having the broadest verification across the most platforms in the most markets across the most media. The acquisition of OpenSlate continues down that journey. Our focus on being independent, free of the media transaction, and ensuring that we are the company that not only is the largest but the least encumbered by any bias is a big deal for us. I think we're well on that way. When you look at and that's resonating with the people that we're talking to, both our current clients and new clients. When we look at the competitive takeaways that we've been able to do, it's been pretty extraordinary. I think we shared some stats in the past that over the last 18 months, we've won something like over 80% of our competitive tenders. When you look at some of the names we mentioned on this call, TD Bank, Sony Japan, Disney Studios, American Family Insurance, Dropbox, and Merck, these are all competitive sales we took away. From a competition perspective, we know that we haven't lost a top 100 client in the last 12 months. We continue to take clients away from our competitors, and we continue to live that mission of having an unbiased independent take with the most complete coverage across the most platforms of any other system out there. We feel good about where we stand against the competition. And it's not just about feeling good, it's about delivering results, and we're delivering results too.

That's great to hear. Nicola, one quick clarification. I think you said $16 million to $18 million from OpenSlate next year. Is there any contribution from OpenSlate or even Meetrics in Q4 at all?

For 2021, no, we haven't even closed the OpenSlate acquisition. So we're not banking on that at all, and Meetrics is not material.

And our next question comes from Youssef Squali from Truist Securities. Go ahead.

Yes, hi. This is Nick Cronin on for Youssef. Thanks for taking the question. So, volume has been the primary driver of growth for you. And as you look at pricing, particularly as media mix turns toward higher price CTV and other formats, how should we think about your ability to charge more per validated impression? Thanks.

Yes. So, you're right. MTM has been the main driver of our growth, but volume is what's been the main driver of our revenue generation. The fee part of our business, we have, up until now, looked to stay on a fixed fee model because that allows our customers to not think of us as part of their decision as to where to verify or not. That has allowed us to continue to grow with the volume. Now on the upsell opportunity, we are able to upcharge when we have premium products, which is what we're able to do with ABS. That overall has an impact that increases the MTF, our media transaction fee that we charge. You have a point about CPMs being higher and lower or our ability to charge more on a higher CPM. That opportunity remains. We know it's available and we obviously track it. At this point, we are still focused on being able to measure more and more of the volume. The opportunity will remain there as more impressions move to higher CPM-based opportunities. The upsell opportunity for us is still really large. As Mark mentioned, being able to upsell to ABS, which is a premium-priced product, that opportunity is still large. Custom Contextual will behave the same way. Now that, with the acquisition of OpenSlate, we will be able to add on more services to the same impression that we measure. So we see a lot of opportunity that way to increase the MTF.

Got it. That’s helpful. Thank you.

And there are no further questions. I would now like to turn the floor back over to CEO, Mark Zagorski, for closing remarks.

Thanks, everybody, for your questions. We can tell, the team here at DV is extremely enthusiastic about what the future holds for us. We continue to deliver strong revenue growth and profitability while executing key strategic initiatives, expanding product leadership, deepening our coverage in fast-growing sectors, and growing our global footprint. We expect to fuel our long-term growth trajectory and deliver better business outcomes for DV customers by driving media quality and performance everywhere. We appreciate your time and attention today and look forward to updating you all on future calls.