Integral Ad Science (IAS -1.36%), a leader in digital ad verification and optimization, reported its Q2 2025 results on August 7, 2025. The company posted earnings per share of $0.10 (GAAP). EPS increased from $0.05 in Q2 2024 to $0.10 and exceeding the analyst consensus of $0.04 (GAAP). Revenue (GAAP) totaled $149.2 million, up 16.0% from a year ago, and was $5.55 million ahead of expectations (GAAP). The company raised its full-year 2025 revenue outlook following these results. IAS saw significant growth in its optimization and publisher segments. Margins held strong, and Net income (GAAP) grew substantially, but Measurement revenue (GAAP) showed slower expansion. Overall, the quarter was marked by strong execution, especially in adopting new products.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $0.10 | $0.04 | $0.05 | 100.0% |
| Revenue | $149.2 million | $143.65 million | $129.0 million | 16.0% |
| Gross Profit | $114.9 million | $101.9 million | 12.8% | |
| Adjusted EBITDA | $51.6 million | $46.2 million | N/A | |
| Net Income | $16.4 million | $7.7 million | 112.3% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Key Success Factors
Integral Ad Science is a technology company that helps digital advertisers and publishers ensure their ads are seen by real people, appear in safe environments, and drive better outcomes. Its core business is ad verification and optimization, using proprietary tools such as the Quality Impression metric and Context Control product to measure the effectiveness and safety of ads. The company processes an average of over 280 billion daily digital interactions as of December 31, 2024, using artificial intelligence and machine learning to extract measurement and optimization insights for clients.
Recent focus areas include ramping up its AI-powered optimization solutions and expanding partnerships with major platforms like Meta, Google, and Amazon. Success depends on innovation in ad measurement and optimization, maintaining integrations with large digital platforms, and adapting to new trends in digital media and privacy regulation. Growth in areas such as Connected TV (CTV), programmatic advertising, and mid-market advertisers has also been critical. Finally, managing relationships with top-tier advertisers and onboarding former Oracle clients have contributed to its market positioning and growth.
Quarterly Highlights and Segment Performance
Total revenue (GAAP) of $149.2 million represented a 16% increase from the prior year. Optimization products led performance, delivering $67.9 million in sales, up 16%. These tools use AI to help marketers maximize return on investment (ROI) and efficiency. Measurement product revenue (GAAP) was $57.0 million, up 8%. This growth was slower than in earlier years, reflecting broader industry trends such as weaker demand for open web display ads. Measurement revenue was $57.0 million, representing 38.2% of total revenue.
Publisher products, including CTV ad serving and advanced yield tools through Publica, saw strong traction, with revenue up 36% to $24.3 million. Growth in non-CTV publisher revenue was partly attributable to contributions from new Oracle customers. The publisher segment contributed 16% of total revenue in Q1 2025. Geographically, revenue outside the Americas reached $43.5 million, up 8%, though this represented a slowdown compared to Q1 2025's 17% GAAP revenue growth. Notably, international revenue was lifted by adoption of core measurement services in new markets.
Profitability also improved. Net income (GAAP) reached $16.4 million, more than doubling from a year earlier. Adjusted EBITDA rose to $51.6 million, up 12% year over year, with a margin of 35% (non-GAAP). Gross profit amounted to $114.9 million. Margins remained strong, with the gross margin (GAAP) was 77%. Stock-based compensation, a non-cash expense reflecting share grants to employees, grew to $18.8 million, up from $15.0 million in Q2 2024, and management raised full-year 2025 guidance for this cost. Operating cash flow (GAAP) for the first half of 2025 was $58.8 million, compared to $24.8 million in the first half of 2024.
Several operational achievements stood out. IAS earned the industry's first Ethical Artificial Intelligence Certification from the Alliance for Audited Media in July 2025. The company also expanded integrations with Meta, deepened partnerships with Lyft and Snap for new measurement and optimization capabilities, and maintained a high launch pace for new products like Dynamic Performance Profiles in optimization. Importantly, IAS onboarded over 75 former Oracle ad verification customers during the period, capturing both optimization and publisher revenue. IAS exited Q2 2025 with no long-term debt after repaying $35 million in obligations, ending the quarter with $90.7 million in cash and an expanded credit facility at better terms.
Not all trends were uniformly positive. Measurement revenue grew only at single digits, influenced by industry-wide downturns in open web display advertising and ongoing shifts in advertiser spending patterns. International revenue growth slowed to 8% year-over-year, compared to 18% in Q1 2025, partly due to tougher comparisons and currency impacts. The heavy reliance on partnerships with major digital platforms such as Meta and Amazon remains a strategic priority but also introduces risk if these platforms adjust their policies or relationships.
Outlook and Points to Monitor
IAS raised its outlook for FY2025, now forecasting revenue of $597–$605 million and adjusted EBITDA (non-GAAP) of $208–$214 million. For Q3 2025, management expects total revenue of $148–$150 million and adjusted EBITDA of $51–$53 million, which suggesting flat to modest sequential growth from Q2 2025. Management cited ongoing investment in new technology, mid-market client expansion, and broader international reach as drivers of future growth, while also pointing to demand from recent platform integrations.
Investors tracking IAS should note the pace of Oracle client onboarding, the adoption rate of new AI-powered optimization products, and international expansion trends as key in coming quarters. The company remains exposed to shifts in the digital ad industry and developments at its major partner platforms, which could impact both revenue streams and product integration efforts.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
