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1、UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2021orTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the tr
2、ansition period from _ to _Commission File Number:001-40557INTEGRAL AD SCIENCE HOLDING CORP.(Exact name of registrant as specified in its charter)Delaware83-0731995(State or Other Jurisdiction of Incorporation or Organization)(I.R.S.Employer Identification No.)Not applicable1(Address of Principal Ex
3、ecutive Offices)(Zip Code)(646)278-4871(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading SymbolName of each exchange on which registeredCommon Stock,$0.001 par value per shareIASThe NASDAQ Stock Market LLCSecurities
4、 registered pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.
5、Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to su
6、ch filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period
7、that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated
8、 filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-Accelerated FilerSmaller reporting companyEmerging growth company If an emerging growth company,indicate by check mark if the registrant has elected not to
9、use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicated by check mark whether the registrant has filed a report on and attestation to it managements assessment of the effectiveness of its
10、internal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes
11、 No As of June 30,2021,the aggregate market value of the common stock beneficially held by non-affiliates of the registrant was approximately$820 million based on the closing sales price of the common stock as reported on Nasdaq.On March 2,2022,the registrant had 154,441,589 shares of common stock,$
12、0.001 par value,outstanding.1 Any stockholder or other communication required to be sent to our principal executive offices may be directed to our mailing address:99 Wall Street,#1950,New York,NY 10005DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrants Proxy Statement relating to the 2022
13、 Annual Meeting of Stockholders are incorporated by reference in Part III of this Annual Report on Form 10-K.This Proxy Statement will be filed with the Securities and Exchange Commission within 120 days of the registrants fiscal year ended December 31,2021.TABLE OF CONTENTSPageForward Looking State
14、ments .4Part I.Item 1.Business .6Item 1A.Risk Factors .21Item 1B.Unresolved Staff Comments .67Item 2.Properties .68Item 3.Legal Properties .68Item 4.Mine Safety Disclosures .68Part II.Item 5.Market for Registrants Common Equity Related Stockholder Matters and Issuer Purchases of Equity Securities .6
15、8Item 6.Reserved .70Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations .70Item 7A.Quantitative and Qualitative Disclosures About Market Risk .88Item 8.Financial Statements and Supplementary Data .89Item 9.Changes in and Disagreements with Accountants on Accou
16、nting and Financial Disclosure .131Item 9A.Controls and Procures .131Item 9B.Other Information .132Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections .132Part III.Item 10.Directors,Executive Officers and Corporate Governance .132Item 11.Executive Compensation .132Item 12.Sec
17、urity Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .132Item 13.Certain Relationships and Related Transactions,and Director Independence .133Item 14.Principal Accounting Fees and Services .133Part IV.Item 15.Exhibits,Financial Statement Schedules .133Item 16.F
18、orm 10-K Summary .135Signatures .136INTEGRAL AD SCIENCE HOLDING CORP.FORM 10-KFor the Fiscal Year Ended December 31,2021TABLE OF CONTENTS3FORWARD-LOOKING STATEMENTSThis Annual Report on Form 10-K contains forward-looking statements that are subject to risks and uncertainties.All statements other tha
19、n statements of historical fact included in this Annual Report are forward-looking statements.Forward-looking statements give our current expectations and projections relating to our financial condition,results of operations,plans,objectives,future performance and business.You can identify forward-l
20、ooking statements by the fact that they do not relate strictly to historical or current facts.These statements may include words such as“anticipate,”“estimate,”“expect,”“project,”“plan,”“intend,”“believe,”“may,”“will,”“should,”“can have,”“likely,”and other words and terms of similar meaning in conne
21、ction with any discussion of the timing or nature of future operating or financial performance or other events.For example,all statements we make relating to our estimated and projected costs,expenditures,cash flows,growth rates and financial results or our plans and objectives for future operations
22、,growth initiatives,or strategies are forward-looking statements.All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected,including:the adverse effect on our business,operating results,financial condition,and
23、 prospects from the current COVID-19 pandemic and related economic downturns;our dependence on the overall demand for advertising;a failure to innovate or make the right investment decisions;our failure to maintain or achieve industry accreditation standards;our ability to compete successfully with
24、our current or future competitors in an intensely competitive market;our dependence on integrations with advertising platforms,digital service providers(“DSPs”),and proprietary platforms that we do not control;our international expansion;our ability to expand into new channels;our ability to sustain
25、 our profitability and revenue growth rate decline;risks that our customers do not pay or choose to dispute their invoices;risks of material changes to revenue share agreements with certain DSPs;our ability to effectively manage our growth;the impact that any acquisitions we have completed in the pa
26、st and may consummate in the future,strategic investments,or alliances may have on our business,financial condition,and results of operations;our ability to successfully execute our international plans;the risks associated with the seasonality of our market;our ability to maintain high impression vo
27、lumes;the difficulty in evaluating our future prospects given our short operating history;uncertainty in how the market for buying digital advertising verification solutions will evolve;our ability to provide digital or cross-platform analytics;.our ability to maintain our corporate culture;risks po
28、sed by earthquakes,fires,floods,and other natural catastrophic events;4 interruption by man-made problems such as terrorism,computer viruses,or social disruption;the risk of failures in the systems and infrastructure supporting our solutions and operations;our ability to avoid operational,technical,
29、and performance issues with our platform;risks associated with any unauthorized access to user,customer,or inventory and third-party provider data;our inability to use software licensed from third parties;our ability to provide the non-proprietary technology,software,products,and services that we us
30、e;the risk that we are sued by third parties for alleged infringement,misappropriation,or other violation of their proprietary rights;our ability to obtain,maintain,protect,or enforce intellectual property and proprietary rights that are important to our business;.our involvement in lawsuits to prot
31、ect or enforce our intellectual property;risks that our employees,consultants,or advisors have wrongfully used or disclosed alleged trade secrets of their current or former employers;risks that our trademarks and trade names are not adequately protected;the impact of unforeseen changes to privacy an
32、d data protection laws and regulation on digital advertising;the risk that a perceived failure to comply with laws and industry self-regulation may damage our reputation;and other factors disclosed in the section entitled“Risk Factors”and elsewhere in this Annual Report.We derive many of our forward
33、-looking statements from our operating budgets and forecasts,which are based on many detailed assumptions.While we believe that our assumptions are reasonable,we caution that it is very difficult to predict the impact of known factors,and it is impossible for us to anticipate all factors that could
34、affect our actual results.Important factors that could cause actual results to differ materially from our expectations,or cautionary statements,are disclosed under the sections entitled“Risk Factors”and“Managements Discussion and Analysis of Financial Condition and Results of Operations”in this Annu
35、al Report.All written and oral forward-looking statements attributable to us,or persons acting on our behalf,are expressly qualified in their entirety by these cautionary statements as well as other cautionary statements that are made from time to time in our other Securities and Exchange Commission
36、(SEC)filings and public communications.You should evaluate all forward-looking statements made in this Annual Report in the context of these risks and uncertainties.We caution you that the important factors referenced above may not contain all of the factors that are important to you.In addition,we
37、cannot assure you that we will realize the results or developments we expect or anticipate or,even if substantially realized,that they will result in the consequences or affect us or our operations in the way we expect.The forward-looking statements included in this Annual Report are made only as of
38、 the date hereof.We undertake no obligation to update or revise any forward-looking statement as a result of new information,future events or otherwise,except as otherwise required by law.5Part I.Item I.BusinessOur CompanyIntegral Ad Science Holding Corp.(together with its subsidiaries,IAS,the Compa
39、ny or we)is a leading digital media quality company offering advertising verification,optimization and contextual targeting services.Our mission is to be the global benchmark for trust and transparency in digital media quality for the worlds leading brands,publishers,and platforms.With our cloud-bas
40、ed technology platform and the actionable insights it provides,we deliver independent measurement and verification of digital advertising across all devices,channels,and formats,including desktop,mobile,connected TV(“CTV”),social,display,and video.Our proprietary and Media Rating Council(the“MRC”)ac
41、credited Quality Impressions metric is designed to verify that digital ads are served to a real person rather than a bot,viewable on-screen,and appear in a brand-safe and suitable environment in the correct geography.Without an independent evaluation of digital advertising quality,brands and their a
42、gencies previously relied on a wide range of publishers and ad platforms to self-report and measure the effectiveness of campaigns without a global benchmark to understand success.We are an independent,trusted partner for buyers and sellers of digital advertising to increase accountability,transpare
43、ncy,and effectiveness in the market.We help advertisers optimize their ad spend and better measure consumer engagement with campaigns across platforms,while enabling publishers to improve their inventory yield and revenue.As a leading digital media quality partner,we have deep integrations with all
44、the major advertising and technology platforms including Amazon,Facebook,Google,Instagram,LinkedIn,Microsoft,Pinterest,Snap,Spotify,TikTok,The Trade Desk,Twitter,Xandr,Yahoo,and YouTube.Our platform uses advanced artificial intelligence and machine learning technologies to process over 100 billion d
45、aily web transactions on average.With this data,we deliver real-time insights and analytics to our global customers through our easy-to-use reporting platform,IAS Signal,helping brands,agencies,publishers,and platform partners improve media quality and campaign performance.Customers currently activa
46、te our solutions globally across 108 countries.We serve customers globally with 15 offices in 11 countries.Our efficient go-to-market strategy has fueled our growth and ability to serve 2,320 current customers,including both 2,073 advertising customers and 137 publisher customers,as of December 31,2
47、021.Our net revenue retention rates of advertising customers were 128%,108%and 112%for the years ended December 31,2021,2020 and 2019,respectively.For a definition of net revenue retention,see Part II,Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations.The dig
48、ital advertising market is expected to reach$785 billion in global spend by 2025,growing at a compound annual growth rate of 12%from 2021 to 2025,according to eMarketer.We intend to capitalize on this opportunity and several high growth segments including programmatic,contextual,social,and CTV.We be
49、lieve that growing our global customer base represents a significant long-term opportunity,especially for markets outside of the U.S.and Western Europe.6We have an attractive financial profile with a combination of growth and profitability.For the years ended December 31,2021,2020 and 2019,total rev
50、enues were$323.5 million,$240.6 million and$213.5 million,respectively.This represented 34%revenue growth from 2020 to 2021 and 13%revenue growth from 2019 to 2020.In addition,we have experienced growth in our cash flows from operations,generating$63.6 million and$33.9 million cash from operations,a
51、nd cash used in operations of$1.9 million for the years ended December 31,2021,2020 and 2019,respectively.This represented an 87%increase in cash from 2020 to 2021 and a 1,930%increase in cash from 2019 to 2020.For the years ended December 31,2021,2020 and 2019,our Net Losses were$52.4 million,$32.4
52、 million and$51.3 million,respectively.Our Net Loss margins for the years ended December 31,2021,2020 and 2019 were 16%,13%and 24%,respectively.As a result of our revenue growth and our ability to reduce costs and improve efficiencies,our adjusted EBITDA was$103.3 million,$56.4 million and$38.8 mill
53、ion,for the years ended December 31,2021,2020 and 2019,respectively.This represents an 83%increase from 2020 to 2021 and a 45%increase from 2019 to 2020.Our adjusted EBITDA margin was 32%,23%and 18%,for the years ended December 31,2021,2020 and 2019,respectively.For definitions of adjusted EBITDA an
54、d adjusted EBITDA margin,see Part II,Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations.Our IndustryWe believe that IAS is well-positioned to benefit from several significant digital marketing trends and shifts in consumer behavior,including:Significant Growt
55、h in Digital Media Usage and Ad Spend According to eMarketer,U.S.adults will spend over 13 hours per day with media in 2022,of which 62.3%will be spent with digital media.That share will increase to 63.7%by 2023.Additionally,eMarketer estimates that the global digital display,digital classifieds,and
56、 other digital market will surpass$340 billion in 2021 and will grow to over$380 billion by 2023.As consumers spend even more time online,we believe that this shift will fuel continued growth in ad spend across all digital channels.Increased Focus on Marketing Efficiency Marketers are increasingly a
57、ware of wasted media spend related to ad fraud(for example,when ads are served to bots or non-human traffic instead of real people)or viewability issues(for example,when ads are served but never viewed by a person).Juniper Research estimates advertisers will lose approximately$100 billion in annual
58、ad spend to ad fraud alone by 2024,an increase from approximately$42 billion in 2019.Importance of Brand Reputation Managing brand reputation is a top priority for many modern marketers.To fulfill their brand values and campaign objectives,more brands are focused on ensuring their ad campaigns run a
59、djacent to content that meets their specific standards.To achieve this,marketers are adopting scalable and customizable brand safety and brand suitability solutions to protect their brand reputation and increase campaign performance.According to a 2021 survey by Advertiser Perceptions,80%of those su
60、rveyed wanted greater oversight over where their ads appear.Acceleration of Ad-Supported Connected TV(“CTV”)According to eMarketer,consumers are watching more digital video and CTV programming,spending on average 56%of their total digital video time on CTV devices in 2022.The COVID-19 pandemic accel
61、erated what we believe will be ongoing consumer and advertiser adoption.According to eMarketer,U.S.CTV ad spend is expected to more than double from$14.4 billion in 2021 to$34.5 billion in 2025.With more CTV ad inventory available,we believe this will drive greater demand for verification solutions
62、to ensure that larger ad budgets are deployed effectively and efficiently.Changing Regulatory Landscape and Importance of Contextual Targeting With increased attention on user privacy and the deprecation of third-party cookies,context-based advertising has emerged as a necessary tool for brands.Upda
63、ted regulations,such as the general data protection regulation(GDPR)and the California Consumer Privacy Act(the CCPA),have increased complexity surrounding personal data and cookie usage.Our leading Context Control solution uses semantic language technology to determine the context,sentiment,and emo
64、tion of digital content.With these sophisticated tools available,we expect more advertisers to adopt contextual targeting instead of audience data.7Acceleration of Programmatic Advertising Programmatic advertising,the automated buying and selling of digital ads,has grown tremendously by helping mark
65、eters to optimize performance and pricing through real-time signals.According to eMarketer,U.S.programmatic digital display ad spending is expected to grow from$97 billion in 2021 to$133 billion in 2023,a compound annual growth rate(“CAGR”)of 23%.Programmatic buying enables advertisers to target the
66、 highest value inventory in real-time to reach their audience faster and more efficiently.However,programmatic advertising is heavily susceptible to fraud,viewability,and brand safety and suitability risks,given the speed and opacity of the transaction process.According to eMarketer,ad fraud ranked
67、as the second highest concern among programmatic advertisers.Our Market OpportunityWe believe there is significant market opportunity to provide advertisers,agencies,publishers,and platforms with measurement and verification solutions that address viewability,brand safety and suitability,ad fraud pr
68、evention,contextual targeting,reporting,and inventory yield management.Based on a March 2021 analysis by Frost&Sullivan,we estimate the global market opportunity for our ad verification solutions to be$9.5 billion and expect it to grow at a 16.2%CAGR from 2021 to 2025.In addition,we believe we are w
69、ell poised for further expansion into the contextual targeting and ad measurement and effectiveness markets.There are expansion opportunities beyond the existing use cases we currently serve such as providing measurement of ad effectiveness and efficiency to brands and helping them understand market
70、ing performance and targeting opportunities.Based on a March 2021 analysis by Frost&Sullivan,we estimate the global market opportunity of ad measurement and effectiveness solutions to be$6.3 billion and expect it to grow at a 20.5%CAGR from 2021 to 2025.Our statement that we are a leading digital me
71、dia quality and advertising verification company is based on an independent third party market study by Frost&Sullivan we commissioned.The study shows we are a leader in global market share by revenue,including leading in international markets such as Europe,Middle East,and Africa(EMEA)and Asia and
72、Pacific(APAC)by revenues in those regions,respectively.Our StrengthsWe believe that the following capabilities reflect our strengths and competitive advantages.Comprehensive suite of ad verification solutionsIAS Quality Impressions is our MRC-accredited,proprietary metric that ensures digital media
73、quality standards for advertising effectiveness.To achieve Quality Impressions,a digital ad must be served to a real person rather than a bot,viewable on-screen,and presented in a brand-safe and suitable environment,all within the desired campaign geography.Additionally,our leading contextual capabi
74、lity,Context Control,helps brands avoid and target content based on their specific values or campaign objectives.Our technology is designed to determine sentiment and emotional classification of content at a global scale.For publishers,we help them increase the monetization of their advertising inve
75、ntory.Our solutions are available across digital channels,ad formats,purchase methods,and devices.IAS also offers a Quality Attention metric,which is designed to measure attention by evaluating factors such as time-in-view(“TIV”)and share of screen.With Quality Attention,advertisers can optimize cam
76、paigns and maximize attention.Additionally,IAS offers a Quality cost per thousand impressions(CPM)metric,helping advertisers to understand the most cost efficient paths to the highest quality media,such as the achievement of Quality Impressions within programmatic environments such as Googles Digita
77、l and Video 360.8Integrations throughout the digital marketing ecosystemOperating globally,we are integrated directly with advertisers,publishers,and platforms including demand side platforms(“DSPs”)and ad networks to ensure our solutions are available regardless of where our customers decide to tra
78、nsact.Long-standing industry partnerships and relationshipsWe are a trusted partner to some of the largest technology and advertising platforms,improving the transparency and visibility of their media spend.Our integration partners,such as Google,Facebook,and Amazon account for the majority of digit
79、al advertising budgets and directly incorporate our solutions in their platforms to provide for independent verification,measurement,optimization,and insights required by the advertiser customers we serve.We do not generate material revenue directly from our arrangements with our integration partner
80、s.We generate revenue by charging a CPM based on the volume of purchased digital ads that we analyze for our advertiser and publisher customers,including customers that utilize our integration partners for their ad campaigns.Our solutions help advertisers to measure consumer interactions with their
81、brands across platforms.Additionally,we work closely with industry organizations and accreditation groups,including the Audit Bureau of Circulations(the“ABC”),the Global Alliance for Responsible Media(the“GARM”),the Interactive Advertising Bureau(the“IAB”),the MRC,and the Trustworthy Accountability
82、Group(the“TAG”).We are accredited by the ABC for viewability.We are also accredited by the MRC for our proprietary metric,Quality Impressions,as well as our Display and Video Total Impressions and Viewable Impression Statistics,Campaign Monitor and Firewall Verification Services,and Sophisticated In
83、valid Traffic Detection and Filtration.We have also achieved MRC accreditation for impression and viewability measurement and reporting of display and video ads across Facebook and Instagram.To extend and maintain our MRC accreditations,we participate in annual audits across our solutions that are c
84、onducted by an independent third-party and ensure we align with MRC standards.For 2021,IAS also completed the rigorous evaluations required to achieve recertification for TAGs Certified Against Fraud,Certified Against Piracy,and Brand Safety Certified Programs.Market leadership and trusted brandAdve
85、rtisers and publishers value our independent verification offerings and our extensive industry thought leadership.We deliver valuable case studies,research,and whitepapers,in addition to participating in industry conferences and hosting proprietary events.In 2022,we expect to continue developing and
86、 releasing thought leadership research studies globally.Our semi-annual Media Quality Reports share unique insights extracted from the trillions of data events we measure globally each month,offering an industry barometer for ad buyers and sellers to benchmark the quality of their campaigns and inve
87、ntory.All of these thought leadership efforts are amplified and shared through our ongoing demand generation,content marketing,public relations,and social media to help ensure our solutions instill trust and confidence in the media buying process.Diverse,loyal,and global customer baseAs of December
88、31,2021,we successfully served 2,320 customers,consisting of 2,073 advertising customers and 137 publisher customers.We work with many of the largest,global marketers and media companies who want a single verification partner to serve their global needs.From 2012 through 2021,our average customer te
89、nure for our top 100 customers was 6.9 years.We have also grown our customer relationships over time by offering additional products.We define average revenue per top 100 customers as our total revenue from our top 100 customers by revenues in a given reporting period divided by 100.Large and growin
90、g dataset driving unique customer insightsWe collect trillions of data events per month,which provide us with a comprehensive view of digital ad transactions.Our data science capabilities harness unique,real-time insights for our customers to improve the effectiveness of their advertising campaigns.
91、Our platform and architecture are highly scalable and capable of ingesting 100 billion web transactions per day on average with exceptional performance and reliability.9Our Growth StrategyWe believe this is the early stage of our growth and that we are at an inflection point in the advertising indus
92、try.We intend to capitalize on our leading brand and competitive positioning to pursue several long-term growth strategies:Innovate and Develop New Products for Key High-Growth SegmentsProgrammatic.We aim to deliver greater transparency to programmatic ad buying via innovative solutions including co
93、ntextual targeting and brand safety and suitability.Social.We aim to develop deeper integrations with social platforms,also known as Walled Gardens,including feed-based brand safety and suitability,to deliver continued transparency to our customers.Connected TV.We plan to continue to expand our CTV-
94、specific verification solutions and contextual targeting capabilities to address the fast-growing CTV segment.In 2021,we acquired Publica LLC(Publica),a leading CTV ad platform.Adjacent Product Expansion.We plan to expand our platforms and integrations to address new verification and measurement nee
95、ds for our clients.Increase Sales Within Our Existing Customer Base We aim to increase the use of our products among existing customers across more campaigns and impressions.Given our comprehensive product portfolio,we believe we can cross-sell additional or new solutions to provide end-to-end cover
96、age to more clients from pre-bid viewability to post-buy verification,fraud prevention,safety,suitability,and targeting.Acquire New Customers and Increase Market Share We plan to work with the top 500 global advertisers by targeting high-spend verticals and brands with a natural sensitivity for bran
97、d safety,brand suitability,and return on ad spend(ROAS)needs.We believe we will increase our market share by strengthening our work with the leading social platforms,enhancing our programmatic solutions,deriving benefit from our broad global position,and leveraging our differentiated data science an
98、d market-leading contextual capabilities.Expand Customer Base Internationally Global marketers are investing in more sophisticated verification strategies and we believe there is growing demand for our solutions internationally,especially in the Latin America and APAC regions.Our SolutionsOur leadin
99、g digital media quality solutions address ad fraud detection and prevention,viewability,brand safety and suitability,contextual targeting,inventory yield management,and reporting.We are integrated into the digital ad buying and selling process to verify,measure campaign quality and reach,and improve
100、 results.We support all buying formats,including direct,programmatic,programmatic guaranteed,and private marketplaces.Our solutions support over 40 languages and span all advertising channels,including display,video,desktop,mobile browser and in-app,CTV,and social.Our MRC-accredited,proprietary Qual
101、ity Impressions metric is designed to verify that digital ads are served to a real person rather than a bot,viewable on-screen,and presented in a brand-safe and suitable environment in the correct geography.Launched in early 2020,our Context Control solution delivers contextual targeting and brand s
102、uitability capabilities.Context Control is powered by our cognitive semantic-based technology,helping advertisers achieve better contextual matching and brand suitability at scale.With over 300 contextual targeting and avoidance segments that can be customized,Context Control helps ensure ads are di
103、splayed in the best-suited environments.10Our ad verification solutions serve buyers and sellers.For advertisers,we provide pre-bid programmatic and post-bid verification solutions.For publishers,we provide optimization and verification solutions.Our solutions can measure and verify ad fraud,brand s
104、afety,viewability,and geography for all digital ad campaigns.The acquisition of Context builds on our current,market-leading media classification and contextual targeting capabilities.We believe the integration of Contexts technology will enable our marketing partners to identify brand suitable cont
105、ent beyond standard frameworks and contextually target with granularity.Ad Fraud:Powered by artificial intelligence and machine learning technology,our solutions dynamically identify non-human traffic by automatically detecting new threats and uncommon patterns.We also provide malware analysis and r
106、everse engineering to uncover threats.Our three-pillar approach to provide highly accurate ad fraud detection and prevention,includes:Machine learning that uses big data to detect hidden,uncommon patterns;Rules-based detection that uses automated rule checks to identify invalid traffic sources;andTh
107、e IAS Threat Lab that employs malware analysis and reverse engineering to uncover emerging threats.Viewability:Our solutions measure whether an ad is viewable based on MRC standards,enabling advertisers to optimize media plans.Our comprehensive viewability capabilities:Offer customizable controls ba
108、sed on MRC standards as well as custom brand settings;Provide advanced metrics,including time-in-view and frequency performance benchmarks;andDeliver cross-channel and cross-device coverage including display and video;desktop,mobile,and CTV;open web and internet platforms;and mobile browser and in-a
109、pp.Brand Safety and Suitability:We help marketers manage their brand reputation and avoid issues by ensuring ads run adjacent to content that meets their specific standards.Our solutions include customized scoring and risk thresholds,pre-bid filtering and targeting,and post-bid blocking and monitori
110、ng.These tools can be customized to an advertisers specific risk tolerance with our granular content scoring across eight standard categories including adult,alcohol,gambling,hate speech,illegal downloads,illegal drugs,offensive language,and violence.Additionally,we offer advertisers even more flexi
111、bility and precise controls to avoid or target certain placements based on over 300 contextual categories,including:Topical:specific topics such as sensitive social issues or natural disasters;Verticalized:industry-specific coverage such as automotive,finance,and retail;andBrand-specific:negative se
112、ntiment associated with a specific brand name.Geography:With a significant and growing number of global customers,we serve many advertisers that target their campaigns to specific geographic regions based on the localized content or language of the ad,or for compliance requirements.With customers cu
113、rrently activating our solutions across 108 countries,we give advertisers confidence in their geographic targeting,ensuring that ads only run in their intended regions.Reporting:Our platform processes data in real-time to provide advanced analytics and reporting for our customers.Our specialized rep
114、orting via IAS Signal provides customers with a clear view of campaign performance including ad fraud,viewability,brand safety and suitability,and geography across all channels and formats.We produce specialized reports,offering in-depth insights and enabling our clients to take action to optimize t
115、heir media spend.11Advertiser solutionsOur pre-bid and post-bid verification solutions enable advertisers to measure campaign performance and value across viewability,ad fraud prevention,brand safety and suitability,and contextual targeting for ads on desktop,mobile in-app,social,and CTV platforms.F
116、or desktop,we also have the powerful ability to block ads in real-time and protect brands from fraud.Our pre-bid programmatic solution is directly integrated with DSPs to help optimize ROAS by directing budget to the best available inventory.It operates in the bid-stream in real-time where standard
117、and custom segments are built into the DSP to project which inventory will meet the advertisers brand safety and suitability criteria,be free from fraud,and be most viewable.We can also build in custom segments for targeting,which is increasingly important as the industry moves away from cookies and
118、 other forms of identity-based tracking.Our contextual ability is enabled through our deep integrations with all major DSPs.In addition,our targeting and pre-bid solutions extend to the social platforms.For example,in 2021,we acquired Publica and Context to help extend our contextual capabilities ac
119、ross a variety of platforms.Publisher solutionsOur solutions help hundreds of publishers globally deliver high quality ad inventory that is fraud free,viewable,brand safe and suitable,and geographically targeted.With our Context Control solution,we help publishers classify and package their inventor
120、y to showcase quality placements,increase site engagement,drive revenue,and reduce blocking.These tools also help to verify,optimize,and provide better matches between inventory and advertisers,ensuring publishers can maximize revenue and yield potential.Leveraging our data and insights,we also help
121、 supply-side platforms(SSPs),including ad networks and exchanges,to measure and validate their inventory quality.In 2021,we acquired Publica,a leading CTV ad platform,offering video publishers the ability to improve the performance of their content monetization strategies.Our PlatformIAS Signal is o
122、ur cloud-based technology platform that enables our customers to maximize their ROAS by verifying their ads,ensuring they are viewed by a real and targeted audience in a brand safe and suitable environment.We provide our customers with measurement,insights,and analytics,helping them improve media qu
123、ality and campaign performance.We block fraudulent and brand unsafe inventory in real-time for open web.We also enable our clients to use real-time signals through DSPs to optimize their programmatic spend toward the highest quality inventory and target or avoid content based on custom settings.Our
124、platforms scalable and flexible design is central to our success,enabling us to tailor solutions for customers in a cost-effective manner,while delivering leading ad verification capabilities.Our feature-rich and customizable technology encompasses:ViewabilityDelivering cross-channel coverage includ
125、ing the leading internet platforms and cross-device capability including display and video;desktop,mobile,and CTV;open web and internet platforms;and browser and in-appProviding time-in-view and frequency performance benchmarks,enabling advertisers to optimize media plansOffering customizable contro
126、ls ranging from MRC viewability standards to custom brand standards12Ad FraudEmploying a three-pillar approach powered by scale and machine learning to provide highly accurate detection and prevention:Machine learning that uses big data to detect hidden,uncommon patternsRules-based detection that us
127、es automated rule checks to identify invalid traffic sourcesThe IAS Threat Lab that employs malware analysis and reverse engineering to uncover emerging threatsBrand Safety&SuitabilityProviding brand safety capabilities customizable to an advertisers specific risk tolerance through granular content
128、scoring across eight standard categories(i.e.,adult,alcohol,gambling,hate speech,illegal downloads,illegal drugs,offensive language,and violence),enabling brands to control the context in which their ads appearDelivering precise controls to advertisers and the flexibility to avoid or target certain
129、context through a multi-tier solution that offers over 300 categories:Standard control:content related to hate speech,violence,offensive language,and othersTopical control:specific topics such as sensitive social issues,pandemics,or natural disastersVerticalized control:industry-specific coverage su
130、ch as automotive,finance,pharmaceutical,and retail,among othersBrand specific control:negative sentiment associated with a specific brand nameOur contextual technology underlies our distinct brand safety and suitability capabilities.We have leading cognitive semantic-based solutions that enable cust
131、omers to match ads with relevant online content at the page level.Powered by a large knowledge graph,this semantic technology can detect sentiment and emotion.Through natural language understanding and machine cognition,our technology delivers near-human comprehension of online content,providing con
132、text at scale.Our platform offers comprehensive,real-time signals and measurement for programmatic advertising.This capability enables advertisers to optimize their programmatic buys pre-bid.Through a DSP,advertisers can use our real-time signals integrated in the transaction stream to optimize for
133、viewable,fraud-free,brand safe and suitable,and contextually relevant content.Technology operates at the core of our solutions,and innovation is deeply embedded throughout our corporate culture.Across our global footprint,we maintain a presence in key technology hubs across the world,including New Y
134、ork,NY,Chicago,IL,and Pune,India.As of December 31,2021,approximately 38%of our staff operate within a research and development function.We employ a global data science team to improve our competitive strength in the advertising technology market,enhance our software platforms,and deliver unique ins
135、ights for our customers.Our platform is capable of ingesting considerable volumes of unstructured and structured data and leverages our data science expertise to derive unique insights for our customers.As the advertising industry continues to rapidly evolve,we will facilitate the development and in
136、tegration of new features and solutions into our platform,ensuring we meet or exceed our customers requirements.Our platform is seamlessly integrated in key areas of the advertising ecosystem,including advertisers,publishers,social platforms such as YouTube and Facebook,and demand side and programma
137、tic platforms.We designed a feature-rich,intuitive user interface that can be accessed via self-serve or through our various partner interfaces.13We have invested in significant data science capabilities,applying artificial intelligence and machine learning to maintain and enhance the models underly
138、ing our solutions.This enables us to better analyze data and provide customers with critical insights.The application of our investments allow us to provide our customers with many benefits,including:Global reach,enabling us to provide ad verification internationally,regardless of language and witho
139、ut compromising latencyFlexible access,allowing our customers to use our solutions through direct and indirect channels due to our key technology integrations throughout the advertising ecosystemA seamless user interface that provides advertisers with important tools and analyticsIntegrations with w
140、idely deployed third-party technologies,such as Looker,a business intelligence software providing our customers with leading reporting and analytics capabilitiesThe ability to deploy our solutions in emerging digital channels.For example,CTV represents a new advertising medium and poses significant
141、challenges for advertisers and publishers.We first addressed this market need with the introduction of our first CTV solution in 2019.Following the acquisition of Publica,we have expanded our IAS Signal reporting platform and launched a new CTV dashboard that delivers highly advanced,live insights o
142、n media quality.Our TechnologyWe accelerate innovation through artificial intelligence and machine learning.With increasing market demand,we believe advanced verification solutions and other performance metrics to be powered by artificial intelligence and machine learning.This shift will benefit all
143、 stakeholders in the advertising ecosystem.Brands will be able to better understand the impact of their campaigns on consumers,agencies will be able to launch more effective and cost-efficient strategies,and publishers will be able to monetize their content more efficiently and drive more revenue.In
144、dependent digital media quality providers with the most data will be best positioned to win significant market share,because artificial intelligence and machine learning models make better predictions and decisions with higher volumes of data.We have made significant,recent investments in our techno
145、logy architecture to better align with our business model and client needs.We collect,analyze,and warehouse a massive amount of data.The advertising industry is seasonal,with peak demand for our solutions occurring towards the end of the calendar year,requiring technology that can scale up or down b
146、ased on demand.Today,our technology can deliver leading data management capabilities and real-time reporting in a highly flexible and cost-efficient manner.Features of our technology include:Scalability:We process on average 100 billion web transactions per day through our highly scalable,cloud-base
147、d technology platform.We use Amazon Web Services(“AWS”)public cloud to manage peak volumes driven by seasonality trends in advertising and to scale our global data efforts even faster.Our transition from legacy systems onto AWS has enabled a significantly more cost-effective operation and reduced ou
148、r dependence on expensive equipment and ongoing capital investment.Agility:Our flexible architecture enables us to push updates and facilitate enhancements to our platform in a timely manner.We can provision a new environment in a new geography within hours,providing a seamless process for our custo
149、mers,regardless of where they need our solutions.As part of our recent technology upgrade,we migrated our data to Snowflake,which collects our data in a single data warehouse,making our analytics capabilities more efficient,effective,and highly automated to provide real-time insights to our clients.
150、Upon receiving a client query,our platform ingests,sifts,analyzes,and outputs the data into a user-friendly analytics dashboard.14Reliability:Our platforms uptime during the year ending December 31,2021 exceeded 99.9%while delivering frequent updates and enhancements.We offer our clients best-in-cla
151、ss response times,regional support,and around the clock monitoring 365 days a year.We deploy an organized system of raising tickets and mapping issues to the right customer response team and the required escalation process when necessary.Security:We leverage internal security tools,AWS security,and
152、other leading third-party technologies to maximize security.We perform penetration tests and an independent audit every quarter.Our development security operations process analyzes security at an application level by performing a security check before code can be published to production.Edge Computi
153、ng:To maximize our customer experience,we utilize an edge computing framework to bring IAS applications closer to our clients data sources.We process and analyze information to allow for faster insights to improve business outcomes for our clients.Also,our edge computing architecture allows us to pr
154、ovision new global environments within a short period of time based on customer volumes and locations.Data Governance:Our data governance solution enables enterprises to comply with a broad range of regulatory requirements,such as the GDPR and the CCPA.We have developed and affirmed policies and sta
155、ndards for data management and security to help protect the integrity of our data assets.Components of our technology include:Data Ingestion:We have multiple systems that process large amounts of data that include:a large web crawling infrastructure that fetches hundreds of millions of web pages per
156、 day;edge measurement servers that collect thousands of data points per transaction;dedicated integrations with social platforms for data ingestion and exchange;and additional integrations to collect data from other applications such as mobile app stores and CTV stores.Data Transformation and Modeli
157、ng:Our cloud-based technology platform processes data in real-time using advanced artificial intelligence modeling techniques to improve client reporting.Our models are deployed in production,and regularly monitored and updated.They enable the predictions for brand safety and suitability,fraud,and v
158、iewability that we deliver to our customers.Real-Time Scoring:Our edge computing servers package the predictions of the models and serve them in real time,allowing us to score for brand safety,fraud,and viewability across channels and formats,pre-bid and post-bid,and buy-side and sell-side.Data Repo
159、rting:Our modernized data platform is capable of ingesting data in near real-time.We collect and store data in a centralized cloud-based data warehouse capable of numerous computations to provide critical data and analytics to our customers via our reporting platform as well as to our data science t
160、eam for machine learning model creation.Data Analytics:Our product and customer analytics produce specialized reports,offering in-depth insights enabling our clients to optimize their media spend.We offer a comprehensive framework for anomaly detection and application monitoring to ensure our produc
161、ts are always performing at an optimal level.Our CustomersWe have an attractive customer base that is global,diversified,and loyal.We define a“customer”as any advertiser account or publisher account that spends at least$3,000 in the trailing twelve months.As of December 31,2021,we had 2,320 customer
162、s,including 2,073 advertising customers and 137 publisher customers.The geographic segmentation of revenue from our customers includes 63.2%in the Americas,26.6%EMEA,and 10.2%in APAC for the year ended December 31,2021.15Our client base encompasses the largest digital ad spenders globally.In the yea
163、r ended December 31,2021,we had 183 large advertising customers,defined as those who spend at least$200,000 per year.Since 2012,our average customer tenure for our top 100 customers has been 6.9 years.We have also grown our customer relationships over time as they adopt additional products.From Dece
164、mber 31,2017 to December 31,2021,our average revenue per customer for our top 100 customers has grown at a CAGR of 25%.We have generated strong historical net revenue retention of advertising customers of 128%and 108%as of December 31,2021 and December 31,2020,respectively.No single customer account
165、ed for more than approximately 5%of our revenues for the year ended December 31,2021.No single customer represented more than 10%of our revenues for the years ended December 31,2021 and 2020.For a definition of net revenue retention,see Part II,Item 7 “Managements Discussion and Analysis of Financia
166、l Condition and Results of Operations.”Advertisers can access our solutions through a number of means,including directly through our platform or indirectly through DSPs,agencies,and social platforms.Based on recent trends,advertising customers are increasingly accessing our solutions directly,and we
167、 signed several of the largest deals in company history in the last two years.Our advertising customers are a reflection of our relevance and value across the digital advertising ecosystem.We serve some of the largest global brands in a variety of industries including Consumer Packaged Goods(“CPG”),
168、Finance,Technology/Telecommunications,Automotive,Retail/Quick Service Restaurants(“QSR”),and Travel&Entertainment(“T&E”).We also serve advertisers indirectly through demand side platforms including Amazon,AppNexus,Googles Display and Video 360,The Trade Desk,Xandr and Yahoo.Additionally,we serve adv
169、ertisers through global advertising agencies such as IPG,Omnicom,Publicis Groupe,WPP,Vivendis Havas Group,and Dentsu.Our customers also include some of the largest digital publishers.We work with 137 publishers,including Bloomberg,Hulu,Reuters,and Turner,who trust us to improve the quality of their
170、inventory and maximize their revenue.Our Go-To-Market StrategySales and MarketingWe employ a rigorous sales and marketing strategy,which we believe is a competitive differentiator to qualifying opportunities,forecasting pipeline,and achieving financial performance.We have an established global sales
171、 team segmented by geography and we focus our marketing strategy on key regions including the Americas,EMEA,and APAC.We currently address the digital media quality needs of many of the largest global brands such as Verizon,Disney,Nestl,and Coca-Cola.We have aligned sales and go-to-market strategies
172、to efficiently pursue growth opportunities.As a result,we have created a global accounts team to service large opportunities,a mid-market team to efficiently target this customer segment,and a programmatic channel sales team to scale these revenues.Our client services team is responsible for develop
173、ing customer relationships,promoting retention and loyalty,and improving overall customer satisfaction.Our marketing teams core objectives focus on building upon what we believe is leadership for IASs brand recognition and brand favorability within our category.These efforts include driving sales ef
174、fectiveness through field marketing collateral and a sophisticated demand generation engine with impressive top-of-funnel pipeline growth.We also leverage content marketing,which we believe has established IAS as a genuine thought leader by delivering high-value research,whitepapers,case studies,alo
175、ng with associated press coverage,social media content,and industry and proprietary events.Our marquee Media Quality Reports share insights extracted from the trillions of data events we capture globally,so that ad buyers and sellers can benchmark the quality of their campaigns and inventory.16Custo
176、mer Operations and SupportWe have developed an efficient,full-platform solutions model with a white-glove service to address the needs of large global clients and an end-to-end self-service solution for small-and-medium-sized businesses.Our customer operations and support organization continues to l
177、everage automation to better meet the needs of our customers and add scale.For example,in 2020,we were the first digital media quality company to release an automated tag with Google that reduced a multi-day,labor-intensive process to an activation that can be completed in seconds and we plan to fur
178、ther expand this coverage to other platforms in 2022.Intellectual PropertyThe protection of our intellectual property is important to our success and our internally developed technology provides the foundation of our proprietary solutions.We rely on intellectual property laws in the U.S.and abroad,a
179、s well as confidentiality procedures and contractual restrictions,to protect our intellectual property.We believe our products are difficult to replicate and we will continue to enhance our intellectual property portfolio as we develop new solutions and services for our customers.As of December 31,2
180、021,we had 35 issued U.S.patents,2 allowed patent applications,and 26 pending patent applications.The terms of individual s extend for varying periods of time,depending upon the date of filing of the patent application,the date of patent issuance,and the legal term of patents in the countries in whi
181、ch they are obtained.Generally,patents issued for applications filed in the U.S.are effective for 20 years from the earliest effective filing date of a non-provisional patent application.The duration of patents outside of the U.S.varies in accordance with provisions of applicable local law,but typic
182、ally is also 20 years from the earliest effective filing date.However,the actual protection afforded by a patent varies on a country-to-country basis and depends upon many factors,including the type of patent,the scope of its coverage,the availability of legal remedies in a particular country,and th
183、e validity and enforceability of the patent.We also hold or have applied for registration of various service marks,trademarks,and trade names,including“Integral Ad Science,”“IAS,”“Quality Impressions,”and“Total Visibility,”that we believe are important to our business.As of December 31,2021,we had 1
184、2 registered U.S.trademarks,5 pending U.S.trademark applications,and 11 registered international trademarks.CompetitionOur industry is highly competitive with a mix of large,established companies such as DoubleVerify,Inc.and Oracles MOAT,as well as various point solution providers such as Human,Inc.
185、We believe that we primarily compete on our comprehensive coverage across channels,devices,and platforms;trusted independent position;established client relationships with many of the leading global brands;global footprint;and breadth and performance of our solutions.In addition,we believe new marke
186、t competitors would find it difficult to effectively compete given our scale,coverage,breadth of solutions,and strong integration throughout the digital ad ecosystem.The principal competitive factors in our market include:channel coverage;verification scope and capabilities;breadth of solution featu
187、res;technological and data science capabilities;scaled data assets;trusted position in the marketplace;brand awareness and reputation;17integrations and partnerships;industry accreditations and certifications;global coverage;reliability,performance,and effectiveness;tenure of customer relationships;
188、focus on customer success;strength of sales and marketing efforts;andprice of our solutions.We believe we compete favorably on the basis of these factors.SeasonalityWe experience fluctuations in revenue that coincide with seasonal fluctuations in the digital ad spend of our customers.Most notably,ad
189、vertisers have historically spent relatively more in the fourth quarter of the calendar year to coincide with the holiday shopping season,and relatively less in the first quarter.We expect seasonality trends to continue,and our ability to manage our resources in anticipation of these trends will aff
190、ect our operating results.See“Risk FactorsCertain of our operating results and financial metrics may be difficult to predict as a result of seasonality”and“Managements Discussion and Analysis of Financial Condition and Results of OperationsKey Factors Affecting Our PerformanceSeasonality”included el
191、sewhere in this Annual Report.CultureIAS was founded in 2009,and since then we have grown to 760 employees with 15 offices in 11 countries.We recognize that attracting,motivating,and retaining passionate talent at all levels is vital to our continued success.By improving employee retention and engag
192、ement,we also improve our ability to support our customers and protect the long-term interests of our stakeholders and stockholders.We invest in our employees through high-quality benefits and various health and wellness initiatives,and offer competitive compensation packages,ensuring fairness in in
193、ternal compensation practices.We have transformed our business over the past three years by enhancing our talent.We hired leaders with deep expertise in advertising and building global businesses,adding 164 new employees between December 31,2020 and December 31,2021 overall.We have also grown our ta
194、lent internationally with 432 employees based in the U.S.and 328 based outside of the U.S.,as of December 31,2021.As of December 31,2021,approximately 38%of our employees operate within a research and development function.We employ a global data science team to improve our competitive strength.We al
195、so engage temporary employees and consultants,as needed.In certain countries in which we operate,not including the U.S.,we are subject to,and comply with,local labor law requirements,which automatically make our employees subject to industry-wide collective bargaining agreements.Approximately 9%of o
196、ur global employees were subject to collective bargaining agreements,all located outside of the U.S.as of December 31,2021.We have not experienced any work stoppages.We have a positive relationship with employees and high levels of engagement.Our culture is defined by a clear set of six values that
197、guide our business,product development,and brand,while delivering tangible financial and operational benefits for our customers,employees,and shareholders:1.We Innovate:We build cool stuff.Innovation is at the core of what we do.We build products,deliver solutions,and generate ideas that provide val
198、uable functions for our customers.182.We Do the Right Thing:Regardless of whether anyone is looking or not.We act with honesty,transparency,and integrity in working with each other and with our customers.3.We Are Accountable:We hold ourselves and each other accountable for our conduct with teammates
199、 and our customers.We take full ownership for our deliverables.4.We Are Customer Obsessed:We put the customer front and center of everything that we do.Our customers success is our success.5.We Are One Team:We value and rely on each other.We are inclusive.We show up for each other,and we act with em
200、pathy and consideration for the benefit of the team.None of us succeeds if our team doesnt succeed.So,we never say,“thats not my job.”6.We Have a Bias for Action:Speed matters in business.We move at high velocity and we privilege risk-taking.We believe these values serve as a foundation for our tale
201、nt efforts.We vigorously invest in recruitment and retention,especially as we continue to grow our engineering talent across global offices where we are rapidly expanding our research and development capacity.As a company born from digital,big data,and data science,it is in our DNA to innovate and c
202、ontinually enhance our technology and products.Our HistoryOur company was founded in 2009 and launched our first media quality benchmarks in 2010.With the continued growth of the digital advertising market,we have continued to innovate through new product developments and partnerships across emergin
203、g digital media channels and offerings,including CTV,contextual targeting,programmatic,and social.Key milestones since our companys founding include:2009:Founded as AdSafe Media and opened our headquarters in New York City2010:Introduced our first Media Quality benchmarks for brand safety and viewab
204、ility2012:Rebranded to Integral Ad Science(IAS)2013:Patented our ad blocking technology;expanded internationally with a new UK presence2014:Acquired Simplytics;continued international expansion with office openings in Germany and Singapore2015:Acquired Veenome;continued international expansion with
205、office openings in Australia,France,and Japan2016:Announced industry-first social platform partnerships with Facebook and YouTube;acquired Swarm2017:Launched new partnerships with Twitter and Snapchat;launched mobile in-app fraud and publisher optimization solutions2018:Acquired by Vista Equity Part
206、ners2019:Pioneered the first CTV verification solution with Verizon and leading video publishers including Hulu,Roku,and FireTV;acquired ADmantX2020:Launched Context Control and Channel Science products;announced Automated Tag partnership with Google;first company approved for brand safety and brand
207、 suitability verification with YouTube192021:Acquired Amino Payments;acquired Publica;launched brand safety solution for in-feed video ads on TikTok;acquired ContextGovernment RegulationWe are subject to many U.S.federal and state and foreign laws and regulations that involve matters central to our
208、business,including laws and regulations that involve data privacy and data protection,intellectual property,advertising,marketing,health and safety,competition,consumer protection,taxation,anti-bribery,anti-money laundering and corruption,economic or other trade prohibitions or sanctions,and securit
209、ies law compliance.Our business may also be affected by the adoption of any new or existing laws or regulations or changes in laws or regulations that adversely affect our business.Many relevant laws and regulations are still evolving and may be interpreted,applied,created or amended in a manner tha
210、t could harm our business,and new laws and regulations may be enacted,including in connection with the restriction or prohibition of certain content or business activities.We receive,process,store,use and share data,some of which contains personal information.We are therefore subject to U.S.federal,
211、state,local and foreign laws and regulations regarding data privacy and the collection,storage,sharing,use,processing,disclosure and protection of personal information and other data from users,employees or business partners,including the GDPR and the CCPA and similar comprehensive privacy laws that
212、 have been enacted in the states of Virginia and Colorado,each of which will each become effective in 2023.These laws expand the rights of individuals to control how their personal data is processed,collected,used and,shared to create new regulatory and operational requirements for processing person
213、al data,increase requirements for security and confidentiality,and provide for significant penalties for non-compliance.There are also a number of legislative proposals recently enacted or pending before the U.S.Congress,various state legislatures and foreign governments concerning content regulatio
214、n and data protection that could affect us.These and other laws and regulations that may be enacted,or new interpretation of existing laws and regulations,may require us to modify our data processing practices and policies and to incur substantial costs in order to comply.The foregoing description d
215、oes not include an exhaustive list of the laws and regulations governing or impacting our business.See the discussion contained in the Item 1A.“Risk Factors”for information regarding how actions by regulatory authorities or changes in legislation and regulation in the jurisdictions in which we opera
216、te may have a material adverse effect on our business.Available InformationWe make available,free of charge through our website,our Annual Reports on Form 10-K,Quarterly Reports on Form 10-Q and Current Reports on Form 8-K,and amendments to those reports,filed or furnished pursuant to Sections 13(a)
217、or Section 15(d)of the Securities Exchange Act of 1934,as amended,as well as proxy statements,as soon as reasonably practicable after they have been electronically filed with,or furnished to,the SEC.The SEC also maintains a website(www.sec.gov)that contains reports,proxy and information statements,a
218、nd other information regarding issuers that file electronically with the SEC.This Annual Report on Form 10-K includes our trademarks and service marks such as“IAS,”“Integral Ad Science,”IAS Signal,“Quality Impressions,”and“Total Visibility,”which are protected under applicable intellectual property
219、laws and are the property of us or our subsidiaries.This Annual Report on Form 10-K also contains trademarks,service marks,trade names and copyrights of other companies,such as“AWS”and“Oracles MOAT,which are the property of their respective owners.Solely for convenience,trademarks and trade names re
220、ferred to in this Annual Report on Form 10-K may appear without the or symbols,but such references are not intended to indicate,in any way,that we will not assert,to the fullest extent under applicable law,our rights or the rights of the applicable licensor to these trademarks and trade names.20Impl
221、ications of Being an Emerging Growth CompanyWe qualify as an“emerging growth company”as defined in the Jumpstart Our Business Startups Act of 2012(the“JOBS Act”).We will remain an emerging growth company until the earliest of(1)December 31,2026,(2)the last day of the fiscal year in which we have tot
222、al annual gross revenue of at least$1.07 billion,(3)the last day of the fiscal year in which we become a large accelerated filer(this means the market value of common that is held by non-affiliates exceeds$700.0 million as of the end of the second quarter of that fiscal year),or(4)the date on which
223、we have issued more than$1.0 billion in non-convertible debt securities during the prior three-year period.An emerging growth company may take advantage of reduced reporting requirements that are otherwise applicable to public companies.These provisions include,but are not limited to:a.not being req
224、uired to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002,as amended,or the Sarbanes-Oxley Act;b.reduced disclosure obligations regarding executive compensation in periodic reports,proxy statements and registration statements;andc.exemptions from the
225、requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.We have elected to take advantage of certain of the reduced disclosure obligations regarding financial statements in this Annual Report on Fo
226、rm 10-K and expect to elect to take advantage of other reduced burdens in future filings.As a result,the information that we provide to our shareholders may be different than you might receive from other public reporting companies in which you hold equity interests.The JOBS Act also permits an emerg
227、ing growth company like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies.We have elected to opt-in to this extended transition period for complying with new or revised accounting standards and,therefore,we will no
228、t be subject to the same new or revised accounting standards as other public companies that comply with such new or revised accounting standards on a non-delayed basis.Item 1A.Risk FactorsRisk Factors SummaryThere are a number of risks related to our business,our indebtedness,and our common stock.Yo
229、u should carefully consider all the information presented in this section entitled“Risk Factors”in this Annual Report on Form 10-K.Some of the principal risks include the following:factors that affect the amount of advertising spending,such as economic downturns and marketability,including as a resu
230、lt of COVID-19,instability in political or market conditions generally,and any changes in tax treatment of advertising expenses,can make it difficult to predict our revenue and could adversely affect our business,results of operations,and financial condition;if we fail to innovate,maintain or achiev
231、e industry accreditation standards,make the right investment decisions in our offerings and platform,including responding to technological changes or upgrading our technology systems,and expand into new channels,we may not attract new customers,retain customers,or achieve customer acceptance of our
232、products,and our business,revenue,and results of operations may decline;the market in which we participate is intensely competitive,both from established and new companies,and we may not be able to compete successfully with our current or future competitors;21we rely on integrations with advertising
233、 platforms,demand-side platforms(“DSPs”),proprietary platforms,and ad servers,over which we exercise little control and loss of integration,through technology issues,regulations affecting our partners or loss of partners would materially affect our business;our international expansion may expose us
234、to additional risks and requires increased expenditures,which imposes additional risks and compliance imperatives,and failure to successfully execute our international plans will adversely affect our growth and operating results;if we are not able to maintain and enhance our brand,our business,finan
235、cial condition,and operating results may be adversely affected;we are subject to payment-related risks and,if our customers do not pay or dispute their invoices,our business,financial condition,and operating results may be adversely affected;we have revenue share arrangements with certain DSPs and a
236、ny material changes to those sharing arrangements could affect our costs;if we are unable to remain competitive,retain key clients or lose large clients,our business could be adversely affected;our corporate culture has contributed to our success and,if we are unable to maintain it or manage our gro
237、wth effectively,our business,financial condition,and results of operations could be harmed and the quality of our platform and solutions may suffer;our business is subject to the risks of earthquakes,fires,floods,and other natural catastrophic events and to interruption by man-made problems such as
238、terrorism,computer viruses,or social disruption impacting advertising spending;certain operating results and financial metrics may be difficult to accurately predict due to seasonality;our revenue model depends on high impression volumes,the growth of which may not be sustained,and our short operati
239、ng history makes it difficult to evaluate our future prospects;the market for buying digital advertising verification solutions is relatively new and evolving.Our estimates of market opportunity and forecasts of market growth included in this Annual Report may prove to be inaccurate;if the non-propr
240、ietary technology,software,products and services that we use are unavailable,become subject to future license or other terms we cannot agree to,or do not perform as we expect,our business,financial condition,and results of operations could be harmed;we may be sued by third parties for alleged infrin
241、gement,misappropriation or other violation of their proprietary rights,which would result in additional expense and potential damages;we may be unable to obtain,maintain,protect,or enforce intellectual property and proprietary rights that are important to our business,which could enable others to co
242、py or use aspects of our technology without compensating us,thereby eroding our competitive advantages and harming our business;failures in the systems and infrastructure supporting our solutions and operations could significantly disrupt our operations,and operational,technical,and performance issu
243、es with our platform,whether real or perceived may adversely affect our business,reputation,financial condition,and operating results;if unauthorized access is obtained to user,customer or inventory,and third-party provider data,or our platform is compromised,our services may be disrupted or perceiv
244、ed as insecure,and as a result,we may lose existing customers or fail to attract new customers,and we may incur significant reputational harm and legal and financial liabilities;22concerns regarding data privacy and security relating to our industrys technology and practices,and perceived failure to
245、 comply with laws and industry self-regulation,could damage our reputation and deter current and potential customers from using our products and services;we are subject to taxation in multiple jurisdictions.Any adverse development in the tax laws of any of these jurisdictions,any disagreement with o
246、ur tax positions or change in our annual effective income tax rate could have a material and adverse effect on our business,financial condition or results of operations;andthe other factors below in this section“Risk Factors.”These and other risks are more fully described below.If any of these risks
247、 actually occurs,our business,financial condition,results of operations,cash flows,and prospects could be materially and adversely affected.As a result,you could lose all or part of your investment in our common stock.Risks Related to the COVID-19 PandemicEconomic downturns and market conditions bey
248、ond our control,including as a result of the COVID-19 pandemic,could materially adversely affect our business,operating results,financial condition and prospects.Our business depends on global economic conditions,the overall demand for global digital advertising spending and on the economic health o
249、f customers that benefit from our platform.Unstable market conditions make it difficult for our customers and us to accurately forecast and plan future business activities,and could cause our customers to reduce or delay their spending with us.Economic downturns or unstable market conditions may cau
250、se customers to decrease their marketing and advertising budgets,which could reduce spending through our platform and adversely affect our business,financial condition,and results of operations.As we explore new countries to expand our business,economic downturns or unstable market conditions in any
251、 of those countries could result in our investments not yielding the returns we anticipate.Presently,the COVID-19 pandemic has resulted in severe market disruptions and a global economic slowdown for certain goods and services.The severity,magnitude and duration of the current COVID-19 pandemic cont
252、inues to be uncertain.The COVID-19 pandemic has resulted in governmental authorities around the globe implementing numerous measures to try to contain the virus,such as travel bans and restrictions,quarantines,shelter in place orders,and shutdowns.While we have not had a material increase in custome
253、rs cancellations,requests for more favorable contractual terms,or concessions,and we have not experienced a significant deterioration in the collectability of our receivables or a material negative impact from our vendors and third-party service providers to date,our results of operations could be m
254、aterially adversely affected in the future if measures to contain the virus were reinstated or expanded to mitigate the risks posed by the pandemic or to prevent a resurgence in infection rates,as a result of vaccine ineffectiveness against new strains or variants of COVID-19 and/or the general avai
255、lability of COVID-19 vaccines,or for other reasons.Concern over the impact of COVID-19 impacted the behavior of end consumers and the operations of our respective vendors and suppliers in 2020 and 2021,and resulted,and may continue to result in delays with respect to the purchasing decisions of cert
256、ain prospective customers and/or cause them to consider purchasing fewer solutions than originally anticipated.COVID-19 has and could continue to(i)cause advertisers to pause advertising spending due to market uncertainty,(ii)require advertisers to reposition messaging or(iii)cause reductions in ove
257、rall advertising spending budgets.Our sales,results of operations and cash flows depend on the overall demand for our platform.Some of our customers have experienced and may continue to experience financial hardships that,to date,have resulted in minimal instances of delayed or uncollectible payment
258、s,though this could increase in the future.Additionally,certain industry sectors that comprise part of our client base and spend heavily on advertising,such as travel and entertainment,may see prolonged financial difficulty that may result in further delays or reductions in advertising spending.23In
259、 response to disruptions caused by the COVID-19 pandemic,we have implemented a number of measures designed to protect the health and safety of our workforce and position us to maintain our healthy financial position.These measures include restrictions on business travel,the institution of work-from-
260、home policies currently operating with substantially all staff working remotely,and the implementation of strategies for workplace safety at our facilities to the extent our employees need to access them.We are following the guidance from local public health officials and government agencies with re
261、spect to such facilities,including implementation of enhanced cleaning measures,social distancing guidelines,and wearing of masks.We will continue to incur increased costs for our operations during this pandemic that are difficult to predict with certainty.In particular,our remote work arrangements
262、for employees,coupled with stay-at-home orders and quarantines,pose challenges for those employees and our IT systems,and extended periods of remote work arrangements could strain our business continuity plans,introduce operational risk,including cybersecurity and IT systems management risks.As a re
263、sult,our business,results of operations,cash flows,or financial condition have been affected by COVID-19 related disruptions and could continue to be adversely impacted in the future.There is no assurance the measures we have taken or may take in the future will be successful in managing the uncerta
264、inties caused by the COVID-19 pandemic.As a result of the COVID-19 pandemic,we may decide to postpone or cancel planned investments in our business in response to changes in our business.Additionally,there has been an overall labor shortage,lack of skilled labor,increase in turnover and labor inflat
265、ion caused by COVID-19 or due to general macroeconomic factors.As a result,we may experience difficulties in recruiting or retaining personnel,or increased turnover,any of which could impact our ability to respond to our customers needs and fulfill contractual obligations.In addition,we rely upon th
266、ird parties for certain critical inputs to our business and platform,such as data integrations with proprietary platforms,data centers,and technology infrastructure.Any labor shortages or disruptions to services provided to us by third parties that we rely upon to provide our platform,including as a
267、 result of COVID-19 or other actions outside of our control,could significantly impact the continued performance of our platform.The severity,magnitude,and duration of the current COVID-19 pandemic continues to be uncertain and hard to predict and depends on factors beyond our knowledge or control.T
268、hese and other impacts of the COVID-19 pandemic could have the effect of heightening many of the other risks described in this“Risk Factors”section,such as those relating to our reputation,product sales,results of operations,or financial condition.We might not be able to predict or respond effective
269、ly to all impacts on a timely basis,or at all,to prevent near-or long-term adverse impacts to our operating results.As a result,we cannot at this time predict the impact of the COVID-19 pandemic with certainty,but it could have a material adverse effect on our business,results of operations,financia
270、l condition,and cash flows.24Risks Relating to Our Business and StrategyOur revenue and results of operations are highly dependent on the overall demand for advertising.Factors that affect the amount of advertising spending,such as economic downturns,instability in political or market conditions gen
271、erally,and any changes in tax treatment of advertising expenses,can make it difficult to predict our revenue and could adversely affect our business,results of operations,and financial condition.Our business depends on the overall demand for advertising and on the economic health of our current and
272、prospective advertiser and publisher customers.Various macroeconomic factors could cause advertisers to reduce,postpone or cancel their advertising budgets,including adverse economic conditions,supply chain issues affecting the distribution of our current and prospective advertisers products and gen
273、eral uncertainty about economic recovery or growth,particularly in North America,Europe,and Asia,where we do most of our business;instability in political or market conditions generally;and any changes in tax treatment of advertising expenses and the deductibility thereof.Generally,the U.S.and other
274、 key international economies have been affected from time to time by falling demand for a variety of goods and services,restricted credit,poor liquidity,reduced corporate profitability,volatility in credit,equity and foreign exchange markets,bankruptcies,and overall uncertainty with respect to the e
275、conomy,including with respect to tariff and trade issues.In particular,the economies of countries in Europe have been experiencing weakness associated with high sovereign debt levels,weakness in the banking sector,uncertainty over the future of the Eurozone and volatility in the value of the pound s
276、terling and the Euro.We have operations,as well as current and potential new customers,throughout most of Europe.If economic conditions in Europe and other key markets for our platform continue to remain uncertain or deteriorate further,it could adversely affect our customers ability or willingness
277、to utilize our platform,delay prospective customers purchasing decisions,and affect renewal rates,any of which could harm our operating results.Reductions in overall advertising spend as a result of these factors or the inability of advertisers to meet their commitments could make it difficult to pr
278、edict our revenue and could adversely affect our business,results of operations,and financial condition.If we fail to innovate and make the right investment decisions in our offerings and platform,including responding to technological changes or upgrading our technology systems,we may not attract ne
279、w customers and retain customers and our revenue and results of operations may decline.Our industry is subject to rapid and frequent changes in technology,evolving customer needs,and the frequent introduction by our competitors of new and enhanced offerings.We must constantly make investment decisio
280、ns regarding offerings and technology to meet customer demands and evolving industry standards and our success depends on our ability to adapt and innovate.Examples of innovation and technological changes that we have had to manage include,for example:(i)developing solutions for measuring in a mobil
281、e and in-app context as consumers and advertisers shifted to these environments,(ii)developing the necessary integrations and data ingestion methods to provide verification services for Walled Gardens as this channel became a greater portion of digital ad spend,and(iii)innovating and investing into
282、multimedia contextual capabilities to complement historical methods such as keyword based solutions.We may make wrong decisions regarding these investments.If new or existing competitors introduce new products and services using new technologies or if new industry standards and practices emerge,we m
283、ay lose customers or customers may decrease their use of our platform.New customer demands,superior competitive offerings,or new industry standards could require us to make unanticipated and costly changes to our platform or business model.If we do not have sufficient capital to make these costly ch
284、anges or to prioritize the research and development required to keep pace with the competition,our offerings may become obsolete and may cause a material adverse effect to our business,results of operations,and financial condition.Even if we are able to meet the demands for these unanticipated and c
285、ostly changes to our platform or business model,the impact of such rapid innovation could cause issues with integrating our new offerings and platform into our proprietary platforms solutions within a reasonable timeframe.We cannot assure you that our updated solutions will be compatible or accepted
286、 by our integration partners.Any delay or failure in integration may cause missing data or delays in data analysis,which could cause our customers to become dissatisfied with our services,cause a loss of customers and may adversely impact our business,results of operations,and financial condition.25
287、If we fail to adapt to our rapidly changing industry or to evolving customer needs as priorities shift or keep pace with rapid technological developments,the solutions we deliver may become less marketable and less competitive.If we are unable to properly identify and prioritize appropriate solution
288、 development projects or if we fail to develop and effectively market new solutions or enhance existing solutions to address the needs of existing and new customers,we may not be able to achieve or maintain adequate market acceptance and penetration of our solutions,and our solutions may become less
289、 competitive or obsolete,demand for our platform could decrease and our business,financial condition,and operating results may be adversely affected.If our existing and future product offerings fail to maintain or achieve industry accreditation standards,customer acceptance of our products may decre
290、ase which could have a material adverse effect on our business and results of operations.The market for our products is characterized by changes in protocols and evolving industry standards.Industry associations such as the Advertising Research Foundation,the Council of American Survey Research Orga
291、nizations,the IAB,the TAG,the GARM,which is comprised of advertisers,agencies,media companies,platforms and industry organizations,the MRC,a voluntary trade organization,and internationally-based industry associations have independently initiated efforts to either review market research and rating m
292、ethodologies across the media that we measure or develop minimum standards for such research and rating.Accreditation is only granted on a per metric basis rather than on a product or solution.In order to attain accreditation for new metrics tied to new solutions,the processes supporting new solutio
293、ns must be reviewed to ensure that they are accurately processing data used to create the metrics.The process of obtaining such accreditations is costly,lengthy and there are often significant delays in achieving such accreditation.As a result,even if we are able to obtain such accreditations for ou
294、r product offerings,we typically incur significant costs in obtaining such accreditations and the process of obtaining such accreditations delays our ability to market such product offerings as accredited by one or more industry associations.Moreover,metrics must be accredited before they will achie
295、ve widespread acceptance by the industry and our customers.Additionally,these accreditation organizations could determine that there is a uniform standard that must be achieved by companies seeking accreditation,which could have the effect of limiting the methods of operations among competitors and
296、could lead to commoditization of our industry and harm our ability to effectively compete by inhibiting our ability to differentiate our services from those of our competitors.Failure to achieve accreditation for any of our product offerings,delays in obtaining such accreditations,or adverse audit f
297、indings may negatively impact the market acceptance of our products and could cause us to lose customers,and could delay acceptance of new product offerings by the industry and our customers.Meanwhile,successful accreditation or audits may lead to costly changes to our procedures and methodologies a
298、nd may have an adverse effect on our business and results of operations.If we are unable to provide digital or cross-platform analytics,or if our analytics are incomplete,our ability to maintain and grow our business may be harmed.Our business provides buy-side post-buy verification and programmatic
299、 pre-bid solutions;on the sell-side,we provide verification and optimization solutions for publisher and media companies that enable the measurement and targeting of inventory against ad viewability,ad fraud,invalid traffic,brand safety,and suitability metrics across platforms,such as display,video,
300、desktop,mobile,CTV,open web,browser,in-app,and more.If we are unable to gain or maintain access to information necessary to measure campaign performance,if we are unable to utilize such information in the development or enhancement of our programmatic pre-bid solutions or of our data sets and models
301、,or if we are unable to do any of the foregoing on commercially reasonable terms,our ability to meet our customers demands and our business and financial performance may be harmed.Furthermore,even if we do have access to complete data covering channels such as display,video,CTV,mobile and desktop,if
302、 we have insufficient technology,encounter challenges in our methodological approaches or have inadequate source materials to parse the information across such channels or to do so in a cost-effective manner,our products may be inferior to other offerings,and we may be unable to meet our customers d
303、emands.In such an event,our business and financial performance may be harmed.26In particular,rather than being able to collect data directly from our technology(e.g.,ad tags,pixels and SDKs)like we do on the open web,our ability to access data necessary for the measurement of campaigns with propriet
304、ary platforms,such as Facebook and YouTube among others,depends on our continued access to their proprietary platforms or certain segments of their proprietary platforms for research or measurement purposes.For example,we rely on Facebook and YouTube to provide us with access to mutually agreed upon
305、 data elements and signals for purposes of enabling the measurement and targeting of Facebook and YouTube inventory on behalf of advertisers.These proprietary platforms could limit our access to their data as a result of technologically changes or changes to their access terms.Moreover,while our con
306、tracts with these proprietary platforms generally renew automatically,many of our contracts with these proprietary platforms allow the platform to terminate their agreements with us without cause and subject to short notice periods.Such terminations would significantly limit our ability to access da
307、ta that is necessary for the measurement of our advertiser customers respective campaigns within the relevant proprietary platforms.There can be no assurance that such proprietary platforms will not limit or terminate our access to their data in the future,whether for competitive or other reasons.Mo
308、reover,as display,video,connected TV,mobile,and desktop viewing continue to proliferate,gaining and maintaining cost-effective access to display,video,connected TV,mobile and desktop data is already and will continue to become increasingly critical,and we could face difficulty in accessing data rela
309、ting to those platforms.If we are unable to maintain our access to these proprietary platforms,establish access with new platforms,or otherwise acquire or access data that we need for research or measurement purposes effectively and efficiently,or if the cost of data acquisition increases,our busine
310、ss,financial condition,we may be unable to provide certain digital or cross-platform analytic and our results of operations could be materially and adversely affected.We rely on integrations with advertising platforms,DSPs,proprietary platforms and ad servers,over which we exercise very little contr
311、ol.Our business depends on our ability to integrate our solutions with a variety of third-party advertising platforms,DSPs,proprietary platforms and ad services.We have formed partnerships with these platforms to integrate our technology with their software and product offerings,allowing our custome
312、rs to utilize our solutions wherever they purchase or place an ad.For example,we rely on integration with Google in order to provide automated tag wrapping functionalities.Google may deploy code or change operations that may impact joint solution and combined functionality,which would have a signifi
313、cant effect on our ability to offer our products.Some of these integration partners have significant market share in the segment in which they operate.To date,we have relied on written contracts to govern our relationships with these partners.However,these are subject to change by such providers fro
314、m time to time and in many instances the provider may choose to terminate these contracts without cause and with short notice periods.Many of these agreements are short term with automatic renewal provisions,and there can be no assurances that such providers will agree to renew their agreements with
315、 us.Moreover,such providers may choose to stop integrating with our solutions and may unilaterally stop providing us with data necessary to our business if they acquire a competitor which provides services similar to ours or if they begin to deliver services similar to ours on their own.For example,
316、regarding our data measurements services,a provider such as YouTube has established a formal measurement program through which participants need to be approved by Google in order to participate.YouTube could adversely impact our operations in the future by limiting our data access from their platfor
317、m altogether,restricting access to data to only a select few vendors or taking away our certification within its measurement program.We cannot assure you that our existing integration partners will continue to,or that potential new integration partners will agree to,integrate our solutions.We also c
318、annot assure you that our customers will continue to use our solutions available on these digital media platforms or that our integration partners will not develop and market products that compete with us in the future.Such integrations may not be replaceable,and so loss of any such integrations cou
319、ld materially impact our business and our results of operations and we may lose customers.For the years ended December 31,2021,2020 and 2019,42%,36%and 32%respectively,of our total revenue from customers was facilitated by our partnerships with DSPs,of which two DSP partnerships facilitated 18%and 1
320、1%of our total revenue from customers for the year ended December 31,2021,17%and 8.5%,of our total revenue from customers for the year ended December 31,2020,and 15.5%and 6%of our total revenue from customers for the year ended December 31,2019.27Even if our partners continue their agreements and pa
321、rtnerships with us,we continuously are required to update and enhance our solutions to adapt to changes in software,networking,browser,and database technologies.For example,we may be forced to make changes based on a unilateral change that an integration partner makes to its platform in order to int
322、egrate our products or to have the integration operate in the same manner that it did prior to the integration partners change.The integration partners change may cause a malfunction in the integration and cause a break in services.We cannot assure you that our updated solutions will be compatible o
323、r accepted by our integration partners.Additionally,some of our partners are subject to regulatory actions,which,if successful,could cause our partners to be broken into separate companies.The U.S.federal and state and foreign governments and regulatory agencies have initiated lawsuits and investiga
324、tions against Google and Facebook related to certain alleged anticompetitive business practices and conduct in the digital advertising and social media industries and we cannot be certain as to how such lawsuits and investigations might affect Google or Facebook or otherwise affect the digital adver
325、tising industry.If our partners change their business as a result of these lawsuits or investigations,or are separated into separate companies,it could have a material effect on our ability to gather data and there can be no assurance that all of the separated companies will continue to be our partn
326、er,each of which could materially affect our business,results of operations,and revenues.Our business and revenues could also be affected by social issues or disruptions.For example,if there is public disapproval or boycotting of a specific platform,such as Facebook or other proprietary platforms,ou
327、r ability to optimize ad placement or to forecast usage may be impacted based on unforeseen trends or events.Additionally,how we categorize specific sites in the course of our normal business operations could expose us to risks from publishers or advertisers who could disagree with our categorizatio
328、ns and incur negative ramifications if they believe their ads were monetarily contributing to websites that contribute to the spread of hate speech,disinformation,white supremacist activity,or voter suppression efforts,among other things.If publishers or advertisers believe our categorizations are f
329、aulty or unreliable,they may pull back on advertising,which could affect our business,revenues,and results of operations.In addition,we rely on our DSP partners to report to us on the usage of our pre-bid and contextual targeting solutions on their platforms,as well as revenue generated on their pla
330、tforms.The timing of these reports is fixed per DSP,and variations impact our ability to derive insights,particularly granular insights into usage,and potentially impacts our ability to accurately forecast.Any financial or other difficulties our integration partners face may negatively impact our bu
331、siness,as a significant portion of our revenue depends on customers using our solutions on these digital media platforms,and we are unable to predict the nature and extent of any such impact.We exercise very little control over our integration partners,which increases our vulnerability to problems w
332、ith the services they provide and our reliance upon them for accurate data and revenue reporting.If our proprietary platform partners intentionally or unintentionally cause data delays or if data is missing,our reporting and ability to deliver our products and services would be adversely impacted an
333、d we would be unable to accurately forecast our revenue due to our inability to see the volume of impressions.Any errors,failures,interruptions,or delays experienced in connection with our integration partners could adversely affect our business,reputation,forecasts,and financial condition.The market in which we participate is intensely competitive,both from established and new companies,and we m
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