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Good afternoon, and thank you for joining comScore's earnings call for the second quarter of 2012. I'm Ken Tarpey, CFO at comScore. On the phone with me today are Dr. Magid Abraham, our President, CEO and Co-Founder; Cam Meierhoefer, our COO; and Serge Matta, our President of Commercial Solutions. We will all be available for the Q&A session. 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 periods 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, the strength of comScore's business; expectations as to comScore sales and bookings cycles, particularly with respect to new products; expectations as to opportunities, including new customers and markets for comScore; expectations as to the growth and composition of comScore's customer base, bookings and renewal rates; expectations regarding the impact and benefits of particular lines of business and products; expectations regarding the relative quality of comScore's products; expectations regarding the potential discontinuation or divestiture of certain product lines and associated impairment of intangible assets; assumptions regarding tax rates and net operating loss carryforwards; and forecasts of future financial performance for the third quarter and the full year 2012, including related growth rates, exchange rates and other 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; comScore's Form 10-K for the period ending December 31, 2011, and Form 10-Q for the period ending March 31, 2012. 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, which should reflect the occurrence of our anticipated events. During today's call, we also reference certain non-GAAP financial measures. You will find 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. In addition, we have posted a slide deck to supplement our prepared comments in the Investor Relations section of our website under the Events and Presentations section of the site. Both of these documents may be accessed at our Investor Relations website at ir.comscore.com. With that, I will now turn the call over to Magid.

Thank you, Ken, and thank you all for joining our earnings conference call for Q2 of 2012. We faced some challenges in the second quarter, with total revenue that was below our guidance range at $60.3 million, which resulted in adjusted EBITDA that was also below our guidance range at $9.6 million. The most significant factor contributing to lower-than-anticipated revenue was a sharp year-over-year decline in non-core traditional TV copying -- copy testing revenue. In addition, fluctuations in exchange rate adversely impacted revenue in the quarter. I would like to address these factors and then move to provide a more in-depth analysis of the business, which provides you with a very different color than the reported growth would imply. If we go to Slide 5, I would like to talk a little bit about the traditional TV copy testing business. We entered that business through an acquisition of ARSgroup in early 2010. Basically, TV copy testing services are survey-based studies that help advertisers optimize TV commercials by pre-screening them before putting them on the air. Our motivation for the acquisition was to extend copy testing to digital advertising. The legacy business has been popular with large consumer-oriented companies like Walmart and Procter & Gamble, who require minimum creative standards before they invest millions of dollars in TV media cost. However, our market experience in the online spaces demonstrated entrenched resistance to pre-testing digital creative and a clear preference towards in-flight creative optimization, which, by the way, we're very equipped to handle through our Campaign Essentials service. We've also gradually seen an increased requirement from global clients to conduct copy tests globally, including in low-Internet penetration markets where offline research fielding capabilities are required, something which we do not have and we have no plans for building. As a result, we…

Thank you, Magid. Revenue in the second quarter was $60.3 million, up 4% year-over-year. Excluding our copy testing business, revenue grew 9% on a non-GAAP pro forma basis. We also expect that foreign currency fluctuations negatively impacted growth by approximately 2 percentage points over that period as well. Subscription revenue in the second quarter was $51.8 million or up 5% year-over-year, representing 86% of total revenue, in line with recent trends. Subscription revenue was also impacted by decreasing minimum annual copy testing commitments and, to a smaller degree, by anticipated foreign currency fluctuations. Excluding copy testing, subscription revenue grew 11% from the prior year and 13% including the currency impact. Project revenue was $8.5 million, a decrease of 1% from the second quarter of 2011. Revenue from existing customers of $53.7 million was up 9% year-over-year in the second quarter and represented 89% of total revenues, while revenue from new customers of $6.6 million was consistent with the past several quarters. Revenue from new customers is a decrease from a year ago because of the impact of our past acquisitions. So the first year after acquisition, any new customer to comScore's revenue is considered a new revenue customer until the anniversary of the acquisition. During the quarter, we added 47 net new customers with a total gross customer count of 2,069 at the end of the second quarter or 54 net new customers, excluding the impact on the copy testing business. Growth in revenue from outside the U.S. continues to outpace our overall growth. International revenue in the second quarter was $17.8 million, up 21% from a year ago on a reported basis and 24% on a pro forma basis despite a weaker economic environment in Europe and greater than anticipated foreign exchange headwinds. Our top 10 customers represented 22%…

[Operator Instructions] And our first question comes from the line of Matt Chesler with Deutsche Bank.

Let's see. Where do I start? Can you just provide a little bit more clarification on -- within vCE, what you mean about the extended revenue recognition ramp? Is this simply because it's sold on a CPM basis and we should still see a significant ramp in revenue in the fourth quarter? Or is there another factor?

No, what happens with vCE is that by the time you get through the sales cycle and you get a customer to commit to a package of campaigns that they want to test, the billings, in a lot of cases, are related to impressions that are served. Now the campaigns do not start right away. The clients are not interested in evaluating campaigns that are currently running. They will wait for new campaigns to start. And that could take, on average, anywhere from 30 to 120 days. I will give you an example. We received a contract recently for a client to evaluate all their advertising next year. A significant billion [ph] -- number of billions [ph] of impressions. The contract was, I believe, $1.3 million, but we're only able to take $45,000 of it in the third quarter based on the media schedule and the timing of the impressions that they will run as related to their marketing activities [ph] . So in a situation like that, this is even less than the 20% that we talked about, that you can take for vCE. Now the flip side of that is that in the second half, we would expect higher than the pro rata share of the second half. So if we get 20% in the first half, we will get more in the second half if the client stays on their budget commitment. It is, at this point, very hard to gauge the balance between new project starts that -- or new contract starts, which have a significant lag and revenue accrual than the projects that have been there for a while, where the -- actually, the revenue accrual is higher than what it is prorated on a straight-line basis. We are trying to work with clients on figuring out ways to straighten out this thing and ideally would like to figure out a way to get these contracts accrued on a pro rata monthly basis. But it is something that we're still working on. So I hope we can accomplish it to simplify our lives and your lives.

Two quickie follow-ups. The accreditation by the MRC, can you just clarify whether you've received accreditation for the whole solution, including demographics and GRP? Or it's just the ability? And then I just want to get a sense -- I know earlier in the year you had some expectations on recognition of the telco contracts. I know that those are longer-cycle. Can you just comment on how your view on the likelihood of those hitting in the third or the fourth quarter affected your guidance revision today?

Okay. So on the MRC accreditation, we were explicitly focused on the new features that we have introduced, primarily around accrediting viewability and accrediting brand assurance, which allows us to block offensive advertising falling in inappropriate contacts in realtime. We are in the process of completing the other parts. I would say, as far as GRP accreditation is concerned, we will see -- and if you consider that our impression counts have been accredited, GRP is simply the number of impressions divided by 3 million. So the GRP's are really accredited. The question that we are working with is accrediting the demographic composition.

Then just a quick follow-up on the telco contracts, in terms of how it affected your outlook for the back half of the year.

Well, there is -- the telco contracts are lumpier than we would like. So if things break our way, we will get more than we expected. If things don't break our way, we will -- it will negatively affect us. We know we have a number of large contracts that we are working on, actually, we're working on delivering, but we also have a number of large contracts in the pipeline. And one of the frustrating things about this particular area and the revenue accrual rules is that the user acceptance testing is really beyond our control and has added an element of variability to our quarter-to-quarter revenue. And it is, again, something that we are working on to smooth it out, but -- by resorting to things like percent of complete accounting and things like that. Again, from my standpoint, the quicker we get to full straight line accrual that's very simple and easy-to-understand, the better off we will all be.

Our next question will come from the line of Shyam Patil with Raymond James.

Just high-level question in terms of the growth and margin profile for the company. Given the issues you talked about this year and the mismatch between the bookings growth, and it looks like low- to mid-teens kind of revenue growth on an adjusted basis, what's the right way to think about the intermediate term revenue growth profile on an organic basis, as well the margins?

Well, I mean, I think that -- as you know, bookings are a leading indicator of revenue growth. So at some point, we expect the gap to narrow. We have not studied very carefully how long it will take for that gap to narrow. So there is really nothing in our business that would cause us to believe that we have seen a new plateau of growth here, and I personally believe that the growth rate in the teens is an aberration that's a result of this transition period. This is, by the way, something that probably happens quite a bit for software companies that go from kind of a licensed model to a SaaS model, where the same sales results are -- end up delivering a different revenue profile over time. As far as margin is concerned, one of the things that I'm really pleased about is that we are able to deliver 16% EBITDA margin, even at 4% growth rate in the quarter. And so given the leverage in our business where you'd expect, on average, at least $0.50 of an incremental dollar to drop to the bottom line, if we are able to close an 8- to 10-point gap in revenue recognition, a lot of that will drop to the bottom line, we'll have the margins.

Great. That was helpful. And just a quick follow-up, what were the gross customer adds in...

177.

And our next question comes from the line of Mark Zgutowicz with Piper Jaffray.

Yes, you've got John Crowther on for Mark. Real quick question, first on the carrier side or the telcos. So obviously you've sort of laid out here that you don't expect any recorded revenue over the first 6 months. I'm just wondering if you could sort of give the profile of the contracts that you have one. Sort of what's the time length there and how it sort of flows on after that first 6 months? And then I'm assuming that given what you're saying, 6 months without any revenue, that you're expecting to see that ramp in Q1 of next year. Is that correct?

Most likely, but there is a possibility it will happen earlier. So here is the way your typical telco contract will go. You win the contract and then you have to go and work with the IT, the telco IT for essentially gathering requirements and agreeing on specs. And then we install the software, but the software is not considered complete until the data and any customization of the applications are delivered. And that's where we run into trouble, where access to the data can be delayed. I'm sure that's not a big surprise in telco. And where things move around a little bit, and given kind of the strict requirement that everything in the contract must be delivered, you're unable to really recognize revenue until that happens. And if you have a revenue -- if you have plan, they will say acceptance will happen within 7 months. You -- that's your best estimate at the beginning. But it could easily be 10 months or 12 months for things that are beyond our control. Probably the best example of that was some work we were doing in Egypt that, as you know, for understandable circumstances, the delivery cycle was -- ended up being a lot longer because the whole operation shut down.

Okay. And then just sort of following up on the revenue recognition here, just wondering if you could sort of highlight how the core Media Metrix product is growing here, what the impact of sort of the economy is there? We sort of start to back out some of the numbers here. It certainly looks like there's -- given some of the incremental on the mobile side, that there's been some slowing there. Just was wondering if you could comment about that?

No, I think the Media Metrix business is growing pretty robustly in the high teens in the U.S and stronger than that internationally, particularly on a constant-currency basis. The only thing I would have a caveat on is exactly what happened in Europe because of the decline in the euro on a constant currency basis. But our business continues to perform really well for us. On the mobile side, on one hand, we did have the positive impact of Mobile Metrix 2.0. On the other hand, we had a lower-than-expected quarter of revenue accrual on the carrier software side, just because of the these timing issues that we just discussed.

And just a real quick follow-up on Mobile, if you could give us an update on how sort of your cross panel initiatives with AT&T are going and sort of the outlook for that product here over the next 12 months or so?

Well, as I mentioned in the script, we have made a lot of progress. We've made a lot of progress in there. We have almost a dozen clients that are now working with us on 4-screen measurement, and we are delivering data, and it is actually just amazing data that is being delivered to the market for the first time. And we're not just focusing on web and TV. We are doing all 4 screens: web, TV, tablets, smartphones, et cetera, et cetera. We are also starting to take advantage of the millions of set-top boxes that we have, rather than working with the kind of the single-source panel that we initially developed with AT&T. We have gotten other TV providers to participate and share with us TV data. So we have a more representative national panel. The end result of which is that we fully expect that in the fourth quarter, we will have out in the market, a measurement of campaigns using all outlets, and we will have also just measurement of -- just general measurement of media and net incremental reach generated by digital on top of stand-alone TV. I also mentioned the TV Olympics project with NBC. We are working very hard on that, and that's going really well and we're getting a lot of positive feedback from the client on that. And then finally, I also mentioned-- and this is, I think, pretty significant, is that one of the major networks has signed a significant contract with us and Arbitron to develop what they believe is a unique capability for the most comprehensive cost media measurement system. So in a nutshell, it is going well, we're excited about it, and we think that we will be in a great position to meet client needs in this area.

Ladies and gentlemen, with no further questions, this concludes today's question-and-answer session. I would now like to turn the call back over to Dr. Abraham for closing remarks.

Well, thank you very much for your participation today. We look forward to speaking with you again in the future. Goodbye, and see you soon.

Ladies and gentlemen, this -- thank you for your participation in today's conference. This concludes the presentation and you may now disconnect. Have a good day.