Comscore Inc (SCOR) 2015 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to first-quarter 2015 comScore earnings conference call. My name is Matthew and I will be your operator for today.

(Operator Instructions)

Now I would like to turn the call over to Mr. Mel Wesley, Chief Financial Officer. Please proceed.

Thank you. Good morning and welcome to comScore's earnings call for the first quarter of 2015. I am Mel Wesley, comScore's Chief Financial Officer, and with me today is Serge Matta, President and Chief Executive Officer. Before we begin, please allow me to read the following disclaimer regarding our use of forward-looking information and non-GAAP financial measures.

During the course of today's call, as well as during any question-and-answer period that may follow, representatives of the Company may make forward-looking statements within the meaning of Securities Act of 1933 and the Securities Exchange Act of 1934 regarding future events or performance of the Company that involve risks and uncertainties. Including, without limitation, expectations as to opportunities for comScore, including customers, markets, and partnerships; expectations as to the strength of comScore's business, including the growth and composition of comScore's customer base and renewal rates; expectations regarding comScore's products, including new releases and features, their quality relative to competitors and the potential benefits of particular products. Expectations regarding the strategic and economic benefits of certain strategic relationships, such as those with Google, WPP/Kantar, and strategic acquisitions; expectations as to the financial effects of comScore's expected divestiture of certain business lines and related impairment losses; assumptions regarding tax rates and net operating loss carry forwards; and forecasts of future financial performance for the second quarter and full-year 2015, including related growth rates, exchange rates, and assumptions.

Such statements are only predictions based on Management's current expectations. Actual events or results could differ materially from those predictions due to a number of risks and uncertainties, including those identified in the documents comScore files from time to time with the Securities and Exchange Commission.

Those documents specifically include but are not limited to comScore's Form 8-K filed earlier today relating to this call and comScore's Form 10-K for the period ending December 31, 2014. We caution you not to place undue reliance on any forward-looking statements included in these presentations, which speak only as of today. We do not undertake any obligation to publicly update any forward-looking statements to reflect new information after today's call or to reflect the occurrence of unanticipated events.

In addition, we may also reference certain non-GAAP financial measures in the course of our presentation. You will find in our press release and on our Investor Relations website a reconciliation of non-GAAP financial measures discussed during today's call to the most directly comparable GAAP financial measure.

The link to our Investor Relations website is ir.comScore.com, and our results are posted under Press Releases. We have a presentation posted on our IR website under Events and Presentations that corresponds to our comments today and will be helpful as you follow along. With that, I will now turn the call over to Serge.

Thank you, Mel, and good morning, everyone. We have a lot to cover. I will begin with a brief overview of the quarter and provide details on the April 1 closing of the transaction we announced on our last call with WPP/Kantar. I will then report on some key operational highlights from what has been a very quick start to the year. I will then turn it over to Mel to provide a detailed review of our financial performance before we take your questions.

So let's begin. On slide 4, comScore delivered another quarter of strong revenues and strong profitability. This reflects continued positive momentum across our business and the strength of our partnerships, which continue to grow in number and impact. On a pro-forma basis, first-quarter 2015 revenue was $87.1 million, up 15% over last year.

We had a strong revenue growth despite the negative effects of foreign currency. For example, on a constant currency basis, our pro-forma revenue would have grown 19% over last year, an additional $3.5 million. Adjusted EBITDA was $21.3 million, a 25% year-over-year increase, and a 24% adjusted EBITDA margin, reflecting the significant operating leverage we have in the business and our focus on managing expenses. Adjusted EBITDA margin for the same quarter last year was 22%.

During the first quarter, we added 40 net new customers for our overall business, for a total of 2,585 customers. We added 54 net new customers to our Media Metrix Multi-Platform service, also known as MMX MP, for a total of 560 customers. Approximately two-thirds of these Multi-Platform customers also bought Mobile Metrix and/or Video Metrix during the same quarter, continuing a trend that I've highlighted before.

We see this as validation that customers place significant value on our entire suite of service offerings and continue to embrace our market-leading products that measure the multi-platform world. In addition, we believe there's continued upside for MMX MP, as just under 50% of Media Metrix customers buy MMX MP in the markets where it's available today. We expect to see this penetration rise in existing Multi-Platform markets, even as we expand the markets we serve with this product suite. Our contract renewal rate for the entire business with existing customers again remained above 90% on a constant dollar basis.

Moving to slide 5, immediately following the end of the first quarter on April 1, we closed the WPP transaction that was announced on our last earnings call. In connection with that closing, we issued a total of 6.04 million shares of common stock. Here's how the share issuance calculations break out.

The tender offer launched by WPP around the time of our last earnings call ended on March 20, and resulted in a sale of only 33,000 shares. As such, per our agreement with WPP, we issued on April 1, 4.44 million shares of stock to them in exchange for $205 million. We also issued 1.6 million shares, again on April 1, of stock to them in exchange for an international cross-media strategic alliance with WPP's Kantar Group, and to acquire Kantar's Nordic-based Internet audience measurement businesses.

I'm also pleased to announce that our Board recently authorized a total share buyback program of $150 million, with the primary purpose of offsetting dilution from the WPP transaction. We expect this program to begin this month and to run for 12 months. Of course, we will closely monitor and evaluate the progress of the program in the coming quarters and take steps we believe are appropriate to reduce dilution. This clearly shows our strong commitment to continue to return capital to our investor base.

Moving to slide 6, I know everyone listening to this call is aware that we are seeing rapid changes in the digital media, television, and advertising ecosystems. The forces of this disruption include the rapid emergence of the multi-platform consumer who connects with media across multiple devices and platforms; the ubiquity of video and television that's reaching consumers through increasingly digital channels and challenging existing business models; and third, the rise of advertising automation, which is changing how advertising is bought and sold.

We built comScore to take advantage of these secular trends as we pursue our mission of making audiences and advertising more valuable. As we said before, we are focused on, one, expanding our cross-media offerings globally; two, extending vCE market leadership, including display, video, and mobile on a worldwide basis; three, integrating comScore data into the places clients use them and a focus on our data into programmatic platforms and client work flows; and four, focusing on execution and continue to return capital to our investor base.

Now I will share some updates on our efforts against these priorities. Let's start with vCE. We've been building great momentum this year with vCE in our relationships with advertisers and agencies. In Q1 2015, we saw a 44% year-over-year increase in the number of vCE campaigns run by clients and several of our top vCE advertisers have doubled the impressions they are running through vCE. We are fortunate enough to have all 25 of the top 25 global advertisers using vCE. Again, all 25 of the top 25 global advertisers use vCE. These include brands such as P&G, Unilever, and Nestle, among others.

We are making great progress innovating in vCE for video and for mobile and we will be announcing key product enhancements in the next few months. Mobile continues to accelerate, and we increased our vCE mobile client base by nearly 40% in Q1. As such, we are announcing today that mobile vCE in the US reported on a daily basis will be available in a syndicated manner starting June 1 of this year.

A key priority for us is expanding our vCE momentum globally, and by the end of this quarter, we will launch vCE 2.0 in nine additional international markets. vCE 2.0, which went live in the US, UK, Canada, and Spain in 2014, dramatically expands the demographic data available to use, allowing us to conduct more granular studies and measure smaller campaigns. It also brings improved in-flight optimization and details on ad placement, enhancements which allow vCE to fold into client work flows and be used as a basis for billing.

Also in Q2, because I know you're going to ask, vCE and DoubleClick is going well, and I will review some of the performance numbers with you in a minute. That said, while there's been a slight delay on launch date to early summer due to some interface issues, none of the economics related to the deal have been impacted. Let me be very clear, comScore will continue to get paid at the exact same rate during the beta period despite this minor delay.

The adoption metrics continue to surpass all of our internal expectations on Google. To date, we have seen well in excess of 100 billion impressions run through vCE and DoubleClick, from hundreds of advertisers running over more than 100 networks, evaluating thousands of ad campaigns.

What's also worth noting is that we're seeing campaigns come from across the major holding companies, including Publicis, Omnicom, IPG, WPP, and Aegis. And even more exciting, we're seeing vCE and DoubleClick introduce new brands to vCE. While still early, these data points illustrate the fact that Google vCE is not cannibalizing our existing vCE service.

Moving to slide 8, I will talk more about the progress with our Kantar relationship a bit later, but when we announced as a strategic partnership and the investment from WPP, I went to great lengths to stress our commitment to maintaining our independence and neutrality. Being trusted and independent is at the core of the value we bring to the market and it's critical to our success. We wanted to make sure the industry understood that and it's clear to us that the message has been received.

For example, last week we announced a new panel-informed attribution offering that allows brands and agencies to get a complete picture of users' online behavior over longer periods of time than are currently possible with cookie-based approaches. This builds on our unique technology and data assets in allowing brands and agencies to develop better marketing strategies with respect to targeting, timing, and tactics. Notably, we created this new capability in a pilot with Publicis Groupe's ZenithOptimedia, and I shared our findings last week in a joint presentation with Rob Jayson, Chief Data Officer at ZenithOptimedia.

Well after we announced our agreement with WPP, we signed a multi-million dollar deal, multi-year deal as well, with Annalect, part of the Omnicom Group. Since we closed our deal, we've only seen an acceleration in our business with companies who are not part of the WPP group. Over the past quarter, we saw the top three holding companies, WPP, Omnicom, and Publicis, each increase their year-over-year spending with us.

Moving on to slide 9, our goal of making advertising more valuable has driven us to focus on ways that comScore can enable trusted transactions between buyers and sellers. We know this is a big industry pain point, which is why last quarter we launched comScore Industry Trust. The reception we've received here has been overwhelmingly positive.

We rolled out Trust Profiles, a collection of key comScore advertising metrics, such as audience and category ranking data, viewability ratings and non-human traffic ratings, to publisher clients in the US on April 1. These profiles bring each client insight into how their inventory will soon be represented in programmatic training platforms. It's powerful data and we are seeing it being put to use.

For example, Pandora used their Trust Profile data at their recent analyst day to validate the high quality of their audience and demonstrate that they were in the top-tier of publishers with less than 5% non-human traffic. When included in programmatic platforms, these Trust Profiles will help media buyers make smart decisions.

Last week, we expanded the availability of these Trust Profiles to publishers in 44 markets across the globe. Additional in depth vCE metrics are available in Australia, Canada, France, Germany, Italy, Spain, the UK, and the United States. Last Friday, Industry Trust went live for the buy side, with our first platform integration partner, allowing media buyers to access and use Trust Profiles.

Over the next several months, we will see comScore Industry Trust turned on across demand-side platforms across the globe, including Adform, DataXu, EyeReturn, MediaMath, Turn, The Trade Desk, Rubicon Project, and others to be announced. With Industry Trust, we are activating key comScore metrics directly in programmatic trading platforms, giving media buyers the ability for the first time to conduct traditional and programmatic buys based on the same set of trusted metrics. We're doing this globally and we are moving quickly.

Moving to slide 10, when I introduced Industry Trust to you on our last call, I noted that it was based in part on technology and data we received in our acquisition of MdotLabs last fall. We know that our ability to solve industry problems and serve our clients requires our continued technology leadership, and it's in that spirit that we announced earlier today that we've acquired Proximic, a Menlo Park, California-based analytics company that offers solutions focused on bringing transparency to digital advertising for both buyers and sellers in programmatic environments.

Technology used in Proximic's pre-bid solutions will power enhancements to brand safety and deep content categorization capabilities across comScore's products including Industry's Trust, vCE, and Media Metrix Multi-Platform product suite. The Proximic team, primarily comprised of engineers and technologists, will be joining comScore as part of the acquisition. This technology tuck-in is a great fit for our focused strategy. Like Mdot, Proximic will enhance our technical capabilities across audience and advertising products, and will be following the same rapid integration playbook that has worked well for us in the past. Additionally, Proximic has live integrations with several DSPs, including AppNexus, so we believe this will accelerate our rollout of Industry Trust.

Similar to the Mdot acquisition, we are able to acquire Proximic while not expecting any material impact to our adjusted EBITDA guidance for 2015. As a matter of fact, as Mel will mention later, we feel very confident on our overall margins, and we will be increasing our annual guidance related to adjusted EBITDA.

Moving to slide 11, I've spent a lot of time this morning talking about our momentum across advertising solutions, and now I'd like to take a moment to talk about our progress in making audience more valuable, specifically our pioneering work bring cross media data to the industry. The digital video audience is large and it's growing rapidly. The increasing importance of the digital video audience to broadcasters, content creators, and advertisers is evidenced by the rise of the NewFronts, which are ongoing now, a digital version of the traditional television's UpFront.

As we've long known would be the case, the cyber views of the television and digital video audience do a disservice to television broadcasters, who know that TV-only ratings undercount their audience reach. As well, digital video and over-the-top providers aren't getting opportunities from advertisers for the new reach they deliver because they are not in TV-only ratings. We are solving this problem.

Earlier this month, we presented the first view of our syndicated cross media data, data that provides a combined and unduplicated view of the TV and digital video audience to members of CIMM, the Coalition for Innovation (sic) in Media Measurement. We've been working for years with CIMM, whose members include A&E Networks, CBS, Disney, ABC, ESPN, FOX, NBC, Scripps, Interactive, Univision, and Viacom. CIMM was instrumental in the formation of Project Blueprint, the five-screen measurement project we championed with ESPN.

The reception we got from some of the major players in this space was extremely positive, as is illustrated with some of the quotes we cite, but now we're moving from projects to product. I would like to take a moment and do something we don't often do on these calls, show you some data, because it clearly illustrates why members of CIMM have called this moment, quote, a major industry milestone and, quote, a major step forward for the entire industry.

Moving to slide 12, this first slide gives you a simple view into the power of cross-media data. Here we're looking at the unduplicated audiences for five cable networks. Understanding the overlaps between TV and digital, as well as understanding the TV-only and digital-only audiences transforms the way that we can understand consumers' reach of media. For example, for cable network number four, one-half of their audiences engage on both TV and digital and one-third of their audience is digital only. Data like this has a profound impact on how a broadcaster can sell their audience reach to advertisers and how brands and advertisers should understand this broadcaster's audience.

Slide 13, content owners and advertisers care about more than just aggregate reach; they also need to understand consumer engagement and understand it in the context of differing demographic segments. In this chart, we are showing data on ESPN's unduplicated daily rage for men 18-plus. This is obviously an important demographic for advertisers and comScore data illustrates the digital platforms, including mobile, extend ESPN's reach in this demographic by 21%. If an advertiser wants to reach ESPN's total audience, they need to be spending across all platforms.

The data varies significantly across different media companies, which is the point. Broadcasters, content creators, publishers, brands, and agencies are all in pursuit of engaged audiences and our data helps find them. Cross-media data is no longer an aspiration; at comScore, we are making it a reality. We will be formally launching our first syndicated cross-media product later this quarter.

Next slide, our belief in the transformational impact of quality, independent cross-media audience, and campaign measurement was the thesis behind our long-term strategic partnership with Kantar. Since we announced the partnership, we have seen significant interest and enthusiasm for our partnership from clients and industry committees around the world. Though we only closed our deal only a month ago on April 1, both companies have been moving very quickly to deliver on this promise.

Last week, along with Andy Brown, President of Kantar Media, I delivered a briefing unveiling our a framework for integrated measurement, demonstrating our approach to bringing cross-media measurement to markets around the globe. We had a standing room-only audience from across the global advertising, measurement, and media industry that were eager to help us solve this problem. Again, we weren't simply presenting an aspirational vision of the future; we shared concrete steps we are taking to make this a reality, including announcing Spain as our pilot market. We expect to have data from the Spanish pilot, and will be announcing additional markets later this year.

We also announced that comScore and Kantar Media have developed an integrated tagging approach for web, video, and application measurement. While this may seem to get into the weeds of measurement, one of our goals is to make life easier for our clients. By integrating this data collection, we are aiming to significantly reduce the operational overhead of measurement for broadcasters, content owners, and publishers. With explicit client permission, we will be able to seamlessly share data without requiring duplicate implementation work.

Finally, we have started working with Kantar across their entire global organization to efficiently recruit TV, digital, and mobile panels. This is of strategic importance for both organizations and our combined assets will help accelerate this need for our clients. In less than two months, we have made strong, substantive progress on our collaboration, setting the pace for a strategic alliances that we believe is transformative to comScore's business and to the media measurement industry worldwide. I personally could not be happier with this partnership.

In summary, we're continuing to execute well against the focused set of priorities that put comScore at the center of key changes in the media and advertising ecosystem. We have lots of work ahead of us, but I am incredibly pleased with our progress and the momentum our team is building. Now I will turn it over to Mel for a review of our financial results.

Thank you, Serge. I will now provide more detail regarding our first-quarter results. Revenue in the quarter was $87.1 million on a pro-forma basis, up 15% versus the same quarter last year. We are pleased with our revenue growth despite foreign currency exchange rate headwind. If exchange rates against the US dollar remained constant from the same quarter last year, our Q1 pro-forma revenue would have been $3.5 million higher, generating a growth rate of 19%.

Subscription revenue in the quarter was $79.9 million on a pro-forma basis, up 17% versus the same quarter last year. Subscription and project revenue represented 92% and 8% of total revenue, respectively. Revenue from existing customers was $78.9 million on a pro-forma basis, up 15% year-over-year, and representing 91% of total revenue. During the quarter, we also added 40 net new customers, bring our total customer count to 2,585 on a pro-forma basis.

Our international revenue on a pro-forma basis also continued to grow despite foreign currency pressure, up 2% year-over-year, and representing 26% of total revenue. On a constant currency basis, international revenue was up year-over-year by approximately 17%.

Moving to margin and expenses on a GAAP basis, our gross margin was 71.5%, up from 69.5% for the same quarter last year. The higher gross margin is primarily attributable to operating model leverage from revenue growth. Selling and marketing expense increased to $27.3 million, up $1.3 million from the same quarter last year.

Selling and marketing expense for Q1 represented 31.3% of revenue, compared to 33.9% for the same quarter last year. The increase in expense was driven by $1.6 million of stock-based compensation from the November 2014 market-based grant. The decrease in selling and marketing expense as a percentage of revenue was primarily due to operating model leverage from revenue growth.

R&D expense increased to $18 million for the first quarter, up $5.5 million from the same quarter last year. R&D expense for Q1 represented 20.6% of revenue compared to 16.2% for the same quarter last year. The increase is largely the result of data acquisition cost, and to a lesser extent, stock-based compensation costs related to the November 2014 market-based grant. We expect R&D cost to decline in both absolute dollars and as a percentage of revenue during the remainder of 2015.

G&A expenses increased to $25 million for the first quarter, up $11.7 million from the same quarter last year. G&A expense for Q1 represented 28.6% of revenue compared to 17.4% for the same quarter last year. The increase in expense was driven by $10.1 million of stock-based compensation from the November 2014 market-based grant. We expect G&A cost to decline in both absolute dollars and as a percentage of revenue during the remainder of 2015.

GAAP pre-tax loss for the quarter was $9.7 million compared to GAAP pre-tax loss of $660,000 for the same quarter last year. The higher loss was primarily the result of $13.9 million of stock-based compensation expense related to the market-based stock grant issued in November of 2014, partially offset by revenue growth. During Q2, the stock expense related to the November grant will decline to approximately $2 million.

During the quarter, total stock-based compensation expense was $21.8 million, up $14.5 million from the same quarter last year. The increase was driven by the November 2014 grant. As of the end of Q1, over 80% of the grant value has been expensed. The remaining expense associated with this grant during 2015 is $4.3 million. Consequently, we expect our total stock-based compensation expense to be approximately $10 million for each of the remaining quarters of 2015.

We generated a tax benefit during the quarter of $2.3 million compared to a tax expense of $122,000 for the same quarter last year. We expect our cash taxes to remain low in the near-term, as we hold net operating loss carry forwards in the US and certain foreign jurisdictions.

During the quarter, GAAP net loss was $7.3 million, or $0.22 per basic and diluted share, based on a basic and diluted share count of 33.8 million shares. Non-GAAP net income for the quarter was $18.7 million, or $0.54 per diluted share, excluding stock-based compensation, amortization of intangibles, acquisition-related expenses, and other non-recurring items. Our non-GAAP EPS calculation is based on a fully diluted share count of 34.9 million shares.

First-quarter adjusted EBITDA was $21.3 million, a 25% increase over the prior year, representing an adjusted EBITDA margin of 24%. We are pleased by the continued margin expansion, and we expect these gains to provide us with incremental investment dollars to accelerate key projects we believe will contribute significant ROI.

Looking at our balance sheet, we ended the quarter with cash and cash equivalents of $40.9 million, a decrease of $2.2 million sequentially and a decrease of $10.9 million from the same quarter last year. The primary use of cash during these periods was stock repurchase activity.

Cash flow from operations for the first quarter was $27.9 million and capital expenditures for the quarter were $1.4 million, resulting in free cash flow of $26.5 million. Free cash flow for the same quarter last year was $17.5 million. The increase in free cash flow was primarily the result of strong accounts receivable collections activity.

Let's move to slide 16. It is important to note that the following guidance range excludes the financial impact of the Mobile Operator division as the division is currently classified as held for sale. For the second quarter of 2015, we anticipate revenue on a pro-forma basis in the range of $86.8 million to $92.2 million. We anticipate GAAP loss before income taxes on a pro-forma basis in the range of $5.6 million to $2.2 million.

We anticipate adjusted EBITDA to be in the range of $18.5 million to $21.5 million, which represents an adjusted EBITDA margin range of approximately 21% to 23%, or 22% at the midpoint of our revenue and adjusted EBITDA guidance ranges. Our estimated fully diluted share count for Q2 is 41 million and does not include any projected buyback activity.

We're raising our full-year revenue and profitability guidance. For the full year of 2015, we anticipate revenue on a pro-forma basis in the range of $368 million to $381 million. We anticipate GAAP income before income taxes on a pro-forma basis in the range of $9.2 million loss to income of $5.4 million. The guidance range is driven by $18.2 million of expense associated with the November market-based grant, which will be fully expensed by the end of 2015.

We anticipate adjusted EBITDA to be in the range of $85.5 million to $94.5 million, which represents an adjusted EBITDA margin range of approximately 23% to 25%, or 24% at the midpoint of our revenue and adjusted EBITDA guidance ranges. Our estimated fully diluted share count for the full year is 39.5 million, and does not include any projected buyback activity. We will now open the line for questions.

(Operator Instructions)

Youssef Squali, Cantor.

Youssef Squali at Cantor. Two questions. The first question is around vCE. Serge, can you just provide us with a little more details about these minor delays that you mentioned with regards to the DoubleClick relationship? I know you won't quantify it, but maybe can you just directionally tell us what growth rate that line of business showed sequentially, since in Q4 of last year, you said it was in the low single million dollars? And any update on the opt-in/opt-out, or who is paying for it, Google or the client?

Sure. Why am I not surprised? On vCE DoubleClick, in terms of the minor delay, it really is just a delay related to the interface to ensure that the numbers between what we're presenting on vCE within comScore's system, or what I have traditionally called it, the [rest in service], exactly mirrors the numbers in the -- or close enough, to the numbers in the vCE DoubleClick. It's a technical interface issue; it's not something I am overly concerned about' and we are fully expecting it to be launched out of beta in the early summer.

What I did mention, which is really probably the more important piece of this puzzle is, even with this delay, none of the economics have changed. So we still get paid during the period during the beta period. During the beta period, similar to what you guys have heard from us and have found out from the clients, Google is not charging for during the beta period, and we fully -- and that will continue.

As far as opt-in/opt-out, honestly, none of that has yet been decided because we really need to get out of beta. Once we get out of beta and then post then, Google will probably test a couple of different options, and it's up to them to figure out what the best option.

Then, finally, in terms of momentum and how this business is doing, I have to tell you it is surpassing all of our internal expectations. vCE is on track to be to continue to grow in a high double-digits. It is something that we are extremely confident about, and we have not seen any slowdown at all. If anything, we continue to see more growth than we ever anticipated, and some of the analyst estimates out there on showing what the vCE growth rate is, are pretty dead on in terms of 2015.

Okay and on the WPP ownership, are they up to 20% or do you still have 15%? Do you guys have any insight into that?

As of April 1 or so -- we don't get updated numbers, as you know, but as of April 1 or so, they were at 15%. I don't think they have yet gone up to 20%, but we may be -- if they did, they may have gone in the past week and we wouldn't know about it.

Okay. Thanks a lot.

Sure.

Robert Peck, SunTrust.

Hey, Serge. Congratulations. I was wondering if you could provide a little more color around what you're seeing from OCR on the competitive side in the marketplace. Then I know, question number two, there had been some concern about the reaction of Publicis, maybe to the WPP investment, and it sounds like in your prepared remarks, that's not the case. Could you just give us a little more color around your relationship with Publicis and the Ad Age 100?

Sure. On Publicis, don't get me wrong, this was one -- a concern that we all had. We've had a very tight relationship with all of the agencies, not just Publicis, but this was one where I personally took it on a mission to make sure that they understood that our independence is intact, that WPP is an investment, they don't have a Board seat or a Board observer.

As a result, we have seen all three of them, as mentioned in the script, WPP, Publicis, and Omnicom, all increase their spend in Q1 over last year. So while we were a bit concerned, so far we are pleased with the results. At the end of the day, it all comes down to are they spending more or less? And as a whole, they are spending more post-announcement, which is something that we are very confident in.

As far as OCR is concerned, they branded a new name now. It's Digital Content Ratings. We obviously -- they are good competitor. We are seeing them in places as well, but -- with our clients, but we're fortunate enough, like I mentioned, to have all 25 of the top 25 global advertisers using us, and we feel good about our future. But we obviously, are not going to ignore the Nielsen's OCR/DCR service and we'll continue to monitor it very, very closely.

Thanks, Serge.

Sure. Thanks, Bob.

Jason Helfstein, Oppenheimer.

Thanks. Two questions. First housekeeping. Can you give us what the current cash balance is today or maybe what it was at the end of the quarter pro-forma for all announced transactions? Secondly, international organic growth looked like it slowed to 17% from 22% in Q4. Is there anything there or does it have to do with the way you book international clients? Just any detail around that? And then it looked like nice gross margin upside in the quarter. Was this primarily driven by vCE? Thanks.

I will handle the first question, based it on the cash. We did end with $40.9 million, which we reported, and then on April 1, we did get $205 million from the share issuance, and then beyond that, obviously we have transactions in process, so I can't comment on that, but hopefully that gives you a good data point. We did do some analysis in terms of looking at the buyback and we were very comfortable that even if we completed the buyback that we announced this year, which we anticipated will take 12 months, but let's say we completed it by the end of December, we'd still end the year with well over $100 million in cash.

Then on the gross margins, and then I will have Mel answer the international number, but on gross margins, absolutely, Jason, it was primarily attributed to vCE. And then also parts of our custom business, related to some times when our clients want access to our panel data assets, that also effected gross margin. So we saw an increase both as a result, both on that piece and on vCE.

And Jason, could you just give me a little bit more detail on your question on international revenues?

If I'm doing the math right, if you take the international and you adjust for currency, it looked like the organic growth -- in other words, the higher number, giving you back the currency drag, was about 17% growth year over year, so basically taking the 23%, adding back 3.5% the currency drag, was about 17% year over year. In the fourth quarter, if I take the 25.5% plus 1.5% for currency, it's 22%, so it did look like it slowed from a year-over-year basis; I'm just curious if there's anything there, just noise in the numbers, or just the way you --?

It's noise. It's small base. It's also, as you said, there is growth year-over-year, so I don't think there's anything there. Obviously, foreign currency has impacted that business, but other than that, there's really nothing else to talk about.

The small base, Jason, is really the answer. Obviously, one or two deals can swing that on a quarterly basis just because it is a small base as compared to the US business.

Okay, so basically not seeing really any -- there's no macro concern or anything?

No, no, not at all.

Okay thank you.

Sure.

Todd Mitchell, Brean Capital.

Thank you. Two questions, bigger picture here. You're putting forth a multi-platform measurement for the bigger programmers right now. Both of your competitors -- or other competitors are doing the same. Everybody's showing data. We can all make assumptions on who has got the best methodology, but what I'd like to hear from you is how do you think implementation is going to happen? Right now, a lot of these guys are using it in-house with their research, trying to pitch it to their own advertisers. When does this become standardized across the industry and how does that happen?

You said you had two questions. Was that the only one or is there another one?

Then the other question is, I was going to ask you about this Proximic acquisition. You said it adds context and brings transparency to the programmatic buys. Could you flesh that out for some of us, what that actually means?

On cross media, obviously, we're very excited about formally launching our cross media syndicated service later this quarter. We've been working extremely hard on it, with the help of ESPN and the members of CIMM. That's something that -- it's taken us a while, don't get me wrong -- because it is definitely complicated to integrate all the different data assets that we have.

While it is -- obviously we've integrated the Nielsen audio data, we've integrated the set-top box data that we have, we've integrated the panel data, our mobile, desktop, our census data; so putting all that together is no easy task for any company to do. So obviously, we will be measuring not only reach and frequency, but also measuring the performance of ad campaigns across platforms.

In terms of implementation, yes right now the main buyers are within the research departments within the broadcasters, but for this to become a currency, we all know that we have to go to the agencies and the agencies need to adopt it on day one, for this to go anywhere. Fortunately, we have very extensive and great relationships with all of the agencies, as we've mentioned earlier on this call, so we feel very good on where we are.

But at the end of the day, the proof is in the pudding, in the sense that we have to launch the service and then we have to go make sure that the agencies are starting to use it as their currency for trading, or else it's just a research tool that the research folks within each of the broadcasters just end up using it. So we are very well focused on the agency strategy.

As far as Proximic, this was one of a very important transaction for us. We needed an ability -- when we built comScore 14, 15 years ago, we had something called a client-focused dictionary. It basically is a taxonomy on how we classify all the different sites on the Internet. For example, if you are on ESPN, you go to an NFL, you go to sports, we go ahead and classify it as a sports site. Yahoo, Google, you name it. And that's a dictionary that we built over the years.

What we've realized over the past few years is that dictionary was perfect for audience measurement purposes, but it really wasn't granular enough for programmatic platforms. When you want to be trading, you don't want to just be trading on buyers of -- or interest of sports folks. You want to be able to go and say, these are folks that are interested in the NFL, in the draft, to a specific player, down to that level is what this acquisition provides us.

So we're able to then apply that deep content categorization across all of our data assets, across Media Metrix, vCE, Industry Trust, and then surface the data out there. So it becomes a lot more powerful than the categorization that we had with through the audience measurement tools.

Okay, thank you.

Sure.

Shyam Patil, Wedbush Securities.

This is Andy Cheng in for Shyam. Thanks for taking my question. I have two quick ones. First, can you just talk about how you are thinking about expanding your offering within DoubleClick? Right now, you're providing the demo piece of vCE, so what's the opportunity to provide the viewability component and others, as well? Also, second, how should we think about the ramp of Xmedia and cross media offerings over the next two, three years? And how do you think about Xmedia as differentiated from the competition?

Sure. On DoubleClick, right now we're focused on obviously measuring the demographics within the DoubleClick service on desktop. We announced last quarter that we're rolling out mobile and some international markets with Google. We've a very close partnership with them and things are going well.

While viewability, we understand they have viewability product, we have our own viewability product as well, and our non-human traffic product, as well. That, to date, is not part of the overall deal that we have with Google. It doesn't mean that it couldn't be down the road, but to date it is not part of the deal that we have with Google, but suffice to say, we have a very close partnership with them.

On cross media and the ramp-up, we're obviously -- we're taking it out of syndicated on a syndicated basis later this quarter. We'll start talking to a lot of the broadcasters. We obviously have shared a lot of the pre-data with them. We are getting a lot of feedback.

This is going to ramp up, in terms of revenue, not a significant or material impact in 2015, but really starting to see an impact of it in 2016 and beyond. It's going to take time. We have no doubt that these are long sales cycles. There are seven-figure deals, and we know that we have our work cut out for us in terms of going after the broadcasters and the agencies.

In terms of differences, in terms of methodology, we feel very confident we're coming at it from a census-based approach. We're not looking at it based on a panel-based approach; we're looking at a combination of a census-based approach from both digital and set-top box data and then applying a person-level sample, which is what we were able to get through the consent decree that the SEC gave us.

So it's a different approach. It's a different methodology, but it's a methodology that we've heard from our clients that is being -- is extremely well-received. Again, is still early days. The proof is in the pudding, but we feel very, very good about where we are.

Thank you.

Sure.

Andre Benjamin, Goldman Sachs.

Thanks. Good morning. First question, I know you only have guidance for 2015, but as we think about rolling our models forward, could you maybe give us some color on how we should take about margin progression, given your scaling these platforms, but you're also investing pretty heavily in development of additional products?

Yes, sure, Andre. We've been consistently saying that we're going to be expanding adjusted EBITDA margin by at least 100 basis points a year. That's still our goal, and obviously that's contemplated in our 2015 guidance, but is also a goal for 2016, even though we didn't specifically guide for that. So no change in that whatsoever. We believe we can do that, and we can continue investing in the things that support the long-term thesis.

Okay. Then updated thoughts on -- I know cross media covers, just make sure I got -- you've got desktop, tablet, smartphone, you're also doing some OTT with the Video Metrix platform. Just any updated thoughts on how you're looking to progress your product offering in the subscription video-on-demand side? How it's being received versus some of Nielsen's new offerings? And how you think about just evolving that product?

Again, we're -- Andre, again, we're going to be looking at it from a census-based measurement, not through panel-based. And the way we will be doing it -- and by the way, we've been -- for example, Roku, we've been measuring VEVO, for example, on Roku for the -- since 2013 through a tagging-based approach. This is something that we've been doing now for, like I said, 1.5 years and to 2 years.

So it's not new to us. We've been measuring it. We are going to be including into the measurement. It will be tag-based. We also have a different approach that we are exploring. Not yet going to talk about it at this stage, but suffice to say, we feel very comfortable in measuring all of OTT.

Thank you.

Sure.

Allen Klee, Sidoti & Company.

I was interested in hearing your thoughts on how you think about the market size or opportunity for [where] you're going after with the Kantar partnership?

Sure. In terms of the Kantar relationship, they have -- their TV service is in over 40-plus countries and we will be going -- and they are the dominant force in all of those countries in terms of measurement. That said, they are, like I said, they are the joint industry committee a lot of these countries. We are going to go in and add our service, the cross media service, with them.

So it's going to be a service that sits on top of their existing revenue that they're generating, which is always the easy way to generate revenue. It's an existing client and an existing joint industry committee; but suffice to say, these things don't happen overnight. You have to get everybody comfortable with the methodology. You have to prove that the data is showing.

So that's why were focused on a pilot in Spain, and then what our plans are, is once we have the data from the pilot, we will roll it out and we'll show to each of the [JICs] and to our clients across in every single country, the power of the data if we were to do it in those individual countries. So I'm not going to go ahead size -- I'm sizing the opportunity for you, but in terms of revenue sizing, it's still way, way too early to determine that because these things take time. And that was the reason why, when we signed with Kantar, it was a 10-year exclusive relationship with them. So we know these things take time, but at least now, we have a platform to get there, while before we did not.

Thank you.

Sure.

Thank you very much indeed for your questions. I would now like to turn the call over to Mr. Mel Wesley for the closing remarks.

This is Serge. Thank you for your participation today. Our first-quarter 2015 results reflect the momentum we've been building across our business. We continued to enhance the value proposition of our offerings and enter into strategic partnerships with leaders in digital media. We are extremely excited for the WPP/Kantar relationship that closed on April 1 and we will update you in the coming quarters on our progress.

We remain focused on our key priorities, on the sharp execution of our strategy, and on delivering value to our shareholders. There's never been a more exciting time at comScore. We look forward to speaking with you again on the next conference call. Thank you and have a good day.

Thank you for joining in today's conference. Ladies and gentlemen, this concludes the presentation. You may now disconnect. Good day.