Good day, and thank you for being here. Welcome to the comScore Second Quarter 2023 Financial Results. Please note that today's conference is being recorded. I will now turn the call over to John Tinker, Head of Investor Relations. Please proceed.

Thank you, operator. Before we begin our prepared remarks, I'd like to remind all of you that the following discussion contains forward-looking statements. These forward-looking statements include comments about our plans, expectations, and prospects and are based on our view as of today, August 8, 2023. Our actual results in future periods may differ materially from those currently expected because of a number of risks and uncertainties. These risks and uncertainties include those outlined in our 10-K, 10-Q, and other filings with the SEC, which you can find on our website or at www.sec.gov. We disclaim any duty or obligation to update our forward-looking statements to reflect new information after today's call. We'll be discussing non-GAAP measures during this call, for which we have provided reconciliations in today's press release and on our website. Please note that we will be referring to slides on this call, which are also available on our website, www.comscore.com, under Investor Relations, Events & Presentations. I'll now turn the call over to comScore's Chief Executive Officer, John Carpenter. John?

Thanks, John, and good evening, everyone. Thanks a lot for joining us to talk about our second quarter this evening. Our results in the quarter are solid, and while the end markets we serve continue to experience softness, particularly in the ad markets, our results across a number of areas in our business are encouraging. We delivered revenue growth of 2.5% over the second quarter of last year and saw sequential growth over the first quarter of this year. Local TV continues to show strength, and our digital business was up for the first time in 5 quarters, led by strength in our Activation product, which was up by over 30%. As we've discussed previously, this team is focused on delivering scalable profitable growth, and in the second quarter, we printed adjusted EBITDA growth of 125% after adjusting for foreign exchange, clear signs that we're moving in the right direction. I continue to believe that our opportunity to drive meaningful growth and deliver value for our stakeholders is significant. The challenges that our clients are faced with include the continued fragmentation of media from traditional channels to more digital programmatic channels, coupled with the proliferation of signal loss throughout the digital ecosystem that has created an audience addressability gap approaching nearly 70%; and finally, a lack of accountability across advertising that's fueling billions of dollars in waste. These are all problems that comScore is uniquely positioned to help solve. Our audience intelligence footprint across digital, video, and connected TV as well as web, mobile, and linear is unmatched. Due to over 10,000 publisher integrations and the trillions of signals we collect, we have massive scale and a trusted methodology that is both solving the audience signal loss problem and helping close the addressability gap. Until now, our massive scale has made comScore a stable, reliable audience measurement partner who's more granular and accurate than the competition. But the industry needs more than that in the age of signal loss, and that's why we're invested in making our data actionable. Our AI-driven Predictive Audiences segment empowers advertisers to maximize reach regardless of whether IDs are present or not. In fact, a recent case study showed our AI-enabled Predictive Audiences product reached nearly double the incremental users versus ID-based segments. Signal loss isn't a someday problem. It's one that every advertiser is dealing with now, and comScore is unique in our ability to help them solve for it. We also have the linear footprint that can provide both transparent and accurate reach and frequency to our clients, providing data that is 93% accurate to final posting data within 48 hours across all 41,704 ZIP codes and 210 local markets. Our depth in understanding audiences with precision in every market and ZIP code is valuable for advertisers who want to maximize reach and eliminate waste. While you've heard me speak about our digital and linear data assets many times, we're finding new ways to use them to create value and solve problems for our clients. One of the things that I'm most excited about is the innovation and transformation I'm seeing when we bring our digital, linear, and cross-screen capabilities together. While we're still in the early innings here, results are encouraging. With best-of-breed measurement approaches in both digital and linear, comScore is positioned to make advertisers more efficient and to bring a new level of insight to the delivery of cross-screen incrementality. With our assets, clients can guarantee deduplicated reach across digital and traditional video channels optimizing in-flight campaigns in ways that help them eliminate wasted ad spend and inventory. I want to be clear. We're committed to delivering products and solutions that help our clients solve the big problems and challenges facing their businesses. The product capabilities that we've talked about, coupled with the continued execution like we had in the second quarter, gives me confidence that we're focused on the things that matter most to our clients and our stakeholders. With that, let me turn it over to Mary Margaret to discuss our second quarter results in more detail.

Thank you, John. Total revenue for the second quarter was $93.7 million, up 2.5% from $91.4 million the same quarter a year ago. Cross Platform Solutions revenue of $41 million was up 3% from $39.8 million in the second quarter of 2022, primarily driven by double-digit growth in local TV and the continued strength of our movies business, which grew 5% to $8.8 million from $8.4 million a year ago. Revenue from Digital Ad Solutions of $52.6 million was up 2% compared to $51.6 million a year ago, primarily driven by an increase in usage of our Activation product. We also saw an increase in revenue for certain custom digital products as a result of higher deliverables for our enterprise customers. As John mentioned earlier, the end markets that we're serving are challenged, evidenced by recent earnings reports from some of our biggest clients and softer-than-expected upfront this year. We're certainly not immune to these macro factors, and these may have an impact on our business as we move into the third quarter. Adjusted EBITDA was $8.8 million, up 35% from the prior year quarter, resulting in an adjusted EBITDA margin of 9.4%. If you exclude the foreign exchange impact from adjusted EBITDA, this year's second quarter results of $9 million is up 125% over the prior year. This result is a testament to our continued focus on cost execution. Our core operating expenses were down 4% year-over-year, with a large part of that due to lower employee compensation. We are continuing to execute on the restructuring plan we put in place last year, as evidenced by the restructuring charge of $4.1 million we took in the second quarter, which is and will continue to contribute to lower operating costs as we move through the year. We're not done yet. We're diligently working to transform our business operations and to simplify our tech stack to drive additional efficiencies in the latter part of 2023 and into 2024. Regarding our full year guidance, we noted last quarter that there was pressure on the high end of our revenue growth range. Based on our current expectations, we're tightening our revenue guidance to the low end of the range with growth in the low single digits. For adjusted EBITDA, we remain confident in and are reaffirming the guidance we previously provided. With that, I'll turn it back over to John for closing remarks.

Before we wrap up, I want to take a moment to thank our employees who work tirelessly every day to deliver for our clients. Without them, none of what we've executed on or spoke about today would be possible. Thanks to everyone on the call for joining us this evening. We've got a tremendous opportunity in front of us, and I couldn't be more excited about our growth prospects and the value we can create for our shareholders. With that, operator, let's open it up for questions.

Your first question comes from the line of Jason Kreyer of Craig-Hallum.

The quarter to delay the dividend payment, it looks like probably until the end of the year. Just curious if you can unpack that decision, why you delayed that, the benefits of that and maybe any near-term uses of those funds.

Thank you for the question, Jason. As part of our ongoing discussions with our preferred shareholders about flexibility and freeing up capital for reinvestment in the business, they agreed to push the dividend out. They also provided us with some options regarding how that payment would be handled, which we announced earlier. This decision gives the company greater flexibility to execute the restructuring and transformation plan that is already in progress. The majority of that investment will focus on improving our technology infrastructure, investing in resources and engineering, enhancing our analytics, and strengthening our product capabilities so that we can continue to deliver on the initiatives I mentioned at the start of the call.

Okay. Perfect. And then you've talked about Proximic over the last couple of calls. It seems like you're seeing good results there. Can you talk maybe more about what the vision is there? I would imagine it's not a meaningful contributor to results today. But is there a point in time where you expect that to be a more meaningful contributor?

Yes, it's definitely a significant part of our revenue, and it's growing quickly. We are just beginning to see the potential of this capability when combined with our broader measurement solutions across both digital and linear. The synergy between insights, planning, activation, and measurement fits perfectly into the solutions we offer our clients. We are at the forefront of integrating what Proximic can provide in advanced audience segments alongside the advanced audience segments we offer in our linear comScore TV product. Additionally, it enhances comScore digital in light of the broader signal loss in the marketplace. I'm pleased with our progress on the product side, and the integrations we announced in the first quarter have set us up well, contributing to some of the growth we experienced in our second-quarter results.

John, one more just in terms of clarification. Last month, we saw a deal struck between Comcast and Nielsen. I think they expanded their relationship, and that included some local markets. I was under the impression that you were doing a lot of the local market stuff for Comcast or at least for NBCU. Curious if there's any change with your relationship with Comcast or NBCU after that deal was struck.

No, not at all. I think, in fact, NBC has leaned in quite a bit in terms of them leveraging comScore in the market for currency across their local suite. Let's remember, Nielsen has had that Comcast data for the better part of 5 years. So for us, this wasn't a surprise that they stated that they've had access to it for, gosh, the last handful of years easily. Our relationship with NBC is very, very strong, and we're pleased with the progress that we continue to make across not just local but other areas of their business in terms of helping them more broadly as it relates to cross-platform measurement capabilities.

Your next question comes from the line of Laura Martin of Needham.

You guys have done a great job of shortening the window between 2 weeks to, for now, 48 hours, and your accuracy at 93% is really impressive. However, a lot of your competitors in the marketplace are now doing real-time in-campaign measurements. Is that your next step? Do you have to get to that point in order to compete?

The major difference lies in our digital products, where we can deliver results much closer to real time. With our in-flight linear optimization within 48 hours across all 210 markets, we truly stand out in terms of capability. Being able to achieve nearly 100% accuracy to final posting within that timeframe offers our clients significant flexibility to optimize in real time. Furthermore, when we add the ability to drive incremental reach, utilizing that 48-hour optimization for extensions to digital platforms like connected TV, it enhances our offering even more. Would you like to add anything, Carol?

Just to say the tie to local and national is really important.

Carol's point is that we have a unique methodology, which is a significant advantage when discussing how each of our markets contributes to a national total. It's not only about performance in all markets, but also about the capability to optimize national campaigns within 48 hours.

Okay. And then my second one is on the strikes. So you have this wonderful monopoly, my word, in the movie business, and it went through COVID, and I felt like it was coming back. And now we're in strikes for, depending on who you ask, anywhere from another 4 to 6 months. So the question is does this actually structurally hurt your movie income stream sort of forever. What's your point of view on that?

Yes. I mean it's unfortunate that the industry is kind of going through what it's going through. As it relates to our business, we don't see an immediate impact on the financial profile of what our guide implies or even into next year. I think should the strike start to carry out for long periods of time, and that ultimately impacts production at some point in the future, that may bleed into renewals that are out in those years. But it's not a remainder of '23 or even a '24 kind of issue for us, our business at least for now. Certainly something we're watching closely.

And your next question comes from the line of Surinder Thind of Jefferies LLC.

Start with a question around the use of AI for kind of filling in the signal loss and enhancing the measurement techniques here. When you take a step back, how much of an advancement is this over previous data and analytics techniques? Like how should we think about the point of competitive differentiation here?

Thank you for the question, Surinder. I see it as having two components. First, there's AI in relation to our predictive audience capability, and then there's the unique features of that product in the market. Our distinguishing factor compared to more standard contextual audience activation solutions is the extensive digital panel we possess. This panel provides us with valuable insights, allowing us to address the 70% gap in addressability within the digital ecosystem, specifically regarding audiences without IDs. We utilize our panel significantly in our predictive audience capabilities, which sets us apart. No one else has a panel of our scale, and it wouldn't be economically viable for others to invest in something similar. Our business benefits from being founded on our panel and the measurement standards that comScore has established, which we integrate into the Activation business. Regarding AI, it's essential to start by considering the data scale available for training purposes. Our substantial data scope serves as a significant differentiator compared to other players in the measurement field. This advantage applies not only to our predictive audiences but also to planning and utilizing AI to enhance measurement outcomes. Jon Lieberman and his team are actively developing our capabilities in this area. For me, the AI aspect hinges on the quality and scale of the dataset you have for training, and given our extensive data, this is a major advantage. We have vast amounts of continuous data from both digital and linear sources, which I believe is our most significant differentiator concerning overall AI capabilities.

Got it. And then when I think about the cross-platform measurement more broadly and I kind of look over the revenue trajectory over about the last 6 quarters or so, relatively stable. Can you kind of unpack the different moving pieces underneath? Obviously, you're seeing strong double-digit growth in some areas. But any additional color on what the puts and takes are?

Yes. I think really encouraged by the momentum that we continue to build across our local capabilities, and those local capabilities are, from my perspective, a real differentiator as it relates to how we deliver cross-platform and overall incrementality to our clients. Think about an advertiser that's running a campaign nationally across a suite of markets. Our local foundation allows us to take that campaign that's being run by an advertiser and highlight over or underperformance down to the ZIP code level. We can take that linear audience, suppress it, and use it to inform better connected TV purchase behavior through programmatic channels. That cross-screen incrementality capability is a big differentiator, and it starts from this local foundation that comScore has always been rooted in. I think we're just at the tip of the spear in terms of what our opportunity is on that front. It's showing up in our local performance and our performance in aspects of our digital business, which grew for the first time in the last 5 quarters, really, on the backs of activation and some of the early wins that we're starting to get against what I just spoke about.

Got it. And then the final question you called out syndicated digital as a bit of a headwind. Any additional color there or how we should be thinking about it quarter-over-quarter?

Yes. Our syndicated digital business remains a significant and vital part of our operations. I constantly remind the team that it is likely more important now than ever before, especially in light of the signal loss occurring across the ecosystem. We're seeing opportunities to enhance our client engagement and help them connect with their audiences in an environment where signal loss is widespread and CPMs are significantly lower. Our digital business is well-positioned for future growth, and we are still in the very early stages of realizing its potential. Expect to hear more from us in the coming quarter regarding our initiatives related to this aspect of the industry.

Thank you so much. And presenters, there are no further questions at this time. This concludes today's conference call. Thank you for participating, and you may now disconnect. Have a good day.

Thanks, everybody.