Good day, ladies and gentlemen, and welcome to Quarter Four 2013 comScore, Inc. Earnings Conference Call. My name is Cathy and I will be your operator for today. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. I'd now like to turn the call over to Mr. Ken Tarpey, Chief Financial Officer. Please proceed, sir.

Thank you. Good morning, and welcome to comScore's earnings call for the fourth quarter and full year of 2013. Again, I'm Ken Tarpey, CFO of comScore, with me today is, Dr. Magid Abraham, our CEO and Co-Founder; Serge Matta, our President; and Cameron Meierhoefer, our COO. 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 meanings of the 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 opportunities including new customers and markets for comScore; expectations as to the growth and composition of comScore's customer base 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 changes and responsibilities in roles of our executive officers; assumptions regarding tax rates and net operating loss carry-forwards; and forecasts of future financial performance for the first quarter and full year 2014, 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, 2012, and our quarterly reports on Form 10-Q. 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 with 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. Additionally, we have a presentation posted on our IR website under events and presentations that will accompany our comments today. It might be helpful to follow along with us. And with that, I will turn the call over to Magid.

Thank you, Ken, and thank you all for joining us today. I will start with a few comments on the announcement we today about the appointment of Serge Matta, as the CEO of comScore effective March 1. This well deserved promotion represents the combination of a thoughtful multiyear succession planning process, and the board and I are confident that this is the right time to elevate Serge to the CEO role. As you have seen in our earnings release and we will discuss in more detail on this call, comScore delivered strong results in 2013. We also continued to enter into powerful partnerships, like the Google partnership we just announced, which we expect to drive long-term growth and profitability. Several of these partnerships were conceived and driven by Serge. Many of you know him. For those who don’t, Serge has been with comScore almost since day 1. As a result, he has a deep understanding of comScore's product and technologies as well as the evolving industry landscape. He is a strong leader and someone who knows how to think strategically and execute well. So he has been close, very close to our clients and has strong relationships with them. He understands their needs and is effective at leading out team to develop solutions to best meet those needs. As far as my role as Executive Chairman after March 31 -- after March 1, sorry, I am excited to focus my energy and passion on driving innovation and product leadership and would continue to work closely with Serge and rest of the team. Beginning with Slide 5, let's review 2013. 2013 was a momentous year for comScore. We are thrilled about financial performance, our marketplace momentum, and the transformative industry partnerships we have established. But I am particularly excited about two…

Thank you, Magid and good morning everyone. Moving to Slide 12. We all share Magid's excitement and passion on our introduction of total video and its future impact on our business and the advertising industry. Clearly, the comScore brain trust has a big, exciting task in front of them. At the risk of sounding cliché, I will say the following, that wait, there is more. I spent the evening last night standing next to Neal Mohan, the VP of Display Advertising from Google, and partners at Starcom MediaVest, Kellogg’s and others at the IAB Leadership Summit, to announce a strategic partnership with Google which has the power to transform the entire media industry. Our goal is a simple one. To combine our company's respective strengths to help simplify and accelerate the growth of the digital advertising market. Online buyers and sellers of advertising have been asking for audience reach and frequency metrics for their online campaigns similar to TV. The want these metrics to be open, transparent, and actionable. Additionally, they need these metrics in minutes, not overnight, or net next week or next month, so that they can optimize their advertising spend across display, video and mobile platforms in close to real time. Our partnership does this and more. So turning to Slide 13. The first step of this collaboration will be the deep integration of comScore vCE into the DoubleClick ad management platform. This integration goes far beyond the placing of vCE tags on YouTube content, something comScore has already been doing with Google for the past year. This agreement makes vCE part of the daily workflow for display, mobile and video advertising in DoubleClick. So when someone is going to buy ads off of the DoubleClick platform, they will simply need a single click to chose to…

Thank you, Serge. Let's take a deeper look at our results for Q4 and for fiscal '13. Revenue in the fourth quarter was $76.5 million, up 15% versus pro forma results in the same quarter last year. Subscription revenue in the fourth quarter was $68.4 million, up 21% versus pro forma results in Q4 '12. Subscription revenue and project revenue represented 89% and 11% of total revenue respectively. As compared to prior quarter's more customers are contracting vCE on a subscription basis, driving the subscription revenue mix slightly higher. Revenue from existing customers was up 19% year-over-year in the fourth quarter to $69.5 million and represented 91% of total revenues. Our renewal rate with existing customers remained above 90% on a constant dollar basis, and we added a record 72 net new customers in the fourth quarter, bringing our total customer count to 2368, a 10% increase over the last year. Our international revenues remain strong as international revenue represents 29% of our total revenue and increased 12% over the same period in 2012 on a pro forma basis. But for the year of 2013, pro forma international revenues grew 21% over 2012. Turning to Slide 22. You can see in 2013 we closed the gap between bookings and revenue growth. We began disclosing bookings to contract value in 2012 as the number of new products were gaining traction and generating CV growth substantially greater than revenue growth. We expect these two metrics to ride similar growth rates going forward with some minor quarter-to-quarter fluctuation and, thus, expect bookings and revenue growth rates to align making it unnecessary to separately disclose CV. Slide 23. At the end of 2012, new products including vCE, DAx, and multi-platform audience solutions accounted for about 24% of our bookings. At the beginning of 2013,…

(Operator Instructions) Your first question comes from the line of Jason Helfstein of Oppenheimer. Please proceed, sir.

So first, Serge, I want to congratulate you on getting the CEO title. Two questions and then just one housekeeping. So the first question, obviously you are very excited about this cross-media, cross-device measurement. Just talk to us about, if this is in such high demand, is there anything that Nielson could ultimately do there that thwarts your effort? And I know that there is a lot of complicated rules around what they can and can't do but let's just say they underfund their own internal initiative, does that potentially ultimately drive up the cost to you overtime to make sure this is the quality product that comScore clients expect. So that’s one question and then I will hit the next one.

Sure. Let me answer that, Jason. The consent decree clearly prohibits that and in fact has appointed a mediator or a monitor to review the implementation of the deal. It's also important to realize that this infrastructure is really necessary to deliver the radio business, and clearly Nielson has a vested interest in making sure that their radio customers are well served.

Okay. And then second question....

The only other thing I would, Jason, thanks -- the only thing I would add is, everyone knows also where we stand in terms of digital and the ability, the data that we have in terms of all the census data that we have. So it would be -- it's just really hard to replicate the massive data that we have from all of the clients that we target.

And then onto the Google announcement. Can you help us understand how big this could be? So if you take the DoubleClick clients that you think would be technically eligible for this product, and let's ballpark, let's say half the clients adopted vCE with their version of DoubleClick, what type of revenue could that be to your guys? And then lastly, Ken, I don’t know, did you give us a 2014 CapEx forecast?

No, but I can give you that in a minute. What don’t we -- do you want to go to the first one, the Google?

Yes. Jason, in terms of the Google and revenue projections, clearly we are very very bullish about it. Having comScore vCE product integrated into DoubleClick will just make it so much easier for any advertiser to simply -- it's a click. It's a clickable and in real time or near-real time they will be able to get the campaign performance and they will be able to course correct. It is hard and somewhat premature to estimate any revenues at this point coming from this deal. It will be going live, like we said, in the second half of 2014, but it is premature at this point to speculate on the revenue associated with that deal. But you know as well as I do, how big Google DoubleClick's reach is in this ecosystem.

So basically what you are implying is that your guidance for the year does not assume any additional revenue from the Google deal?

No, our guidance includes some Google revenue coming from it but, again, we will be closing watching this. We have some three to six months of development that we need to get done. And then once we have a better read on it, we will obviously we talking.

And from a CapEx standpoint, Jason, I would say probably $8 million to $9 million.

Thank you for question. The next question comes from the line of Youssef Squali, Cantor Fitzgerald.

Hi, this is Kip Paulson for Youssef. So just a couple of quick ones on my end. First, did the fourth quarter results include as much investment in mobile data as you expected? Curious, if the EBITDA beat was due more to lower than expected mobile investment or if it was simply driven better than expected operating leverage?

Yes, hi, Kip, this is Ken. I will take that one. Yes, it was the operating leverage from that standpoint. As I mentioned in my comments, the team has started to keep expanding those investments and so Q4 was kind of in line with our expectation but it was really more about the operating leverage.

Okay. Great. And then second one. Pro forma subscription revenue growth continues to build nicely, 21% this quarter versus 19% to 20% in the last couple of quarters. Did any particular new product drive this more than the other components? And roughly how fast are Media Metrix, vCE and DAx growing? Thanks.

Sure. The other products are growing well but I think as Serge coined it, vCE is on fire and in terms of the fastest growth far and away was the vCE product.

Okay. Great. And then just one...

And then also Media Metrix MP, Media Metrix Mobile Platform, we continue to see a significant growth there. We have still significant upside in 2014 and beyond in the product not only in the U.S. but as we roll it out globally.

Great. And then just one more quick one if I could. How should we think about monetization for the just announced Google partnership? Is this going to have more of a cost per action transactional arrangement? And lastly, do you seen any potential cannibalization of the traditional vCE subscription plan?

It is definitely CPM based. So that is something that we have already stated in some of the press that we did yesterday. And just to be clear, Google pays us for this relationship. As far as the size and the financial implications, like I said earlier, again, a bit premature to state but we feel bullish about the deal.

Thank you for your question. The next question comes from Mark Zgutowicz of Northland Capital Markets.

Congrats on the Google announcement. Certainly impressive. And Serge, congrats as well. It's certainly not a bad time to be accepting the charge from Magid. Why don’t you just talk a little bit more about Google in terms of how that partnership works from an economic standpoint? And I understand, obviously, that economics are sensitive but maybe just, from a broader standpoint, for instance the things, Serge, you talked about, sort of just the single-click to get vCE. Would that require in itself a 12-month subscription to vCE or is this arrangement sort of an all transactional based, revenue share with Google.

Hi, Mark. Thanks for the comments. You know it's -- we believe it's going to be a subscription based. I don’t see -- again, it's hard to tell at this point. We still have three to six months to work out all these details. But if I were to guess at this point, I would think it would end up being, a lot of the clients that we have, the big advertisers, the agencies, would end up doing subscription deals with Google whenever there is a campaign that goes through DoubleClick. Now clearly, anything that goes outside of DoubleClick, we will still have our regular vCE product and we will be marketing it as is. And we will be getting into deals with our clients on a subscription basis like we have been in 2013.

Okay. And then you talked about going live in the second half, obviously that's a pretty wide window. I'm just hoping to maybe tighten that a bit. So is there an equal probability of this going live in Q3 versus Q4 or is the expectation on your part that this would be live in Q3?

We have every expectation that this thing goes live in Q3. We are -- now, granted we are 50% of the puzzle, but integration, technical integration has already started with Google. It started just last week. So these things are, it's ongoing. There is quite a bit of effort that needs to be done. But we fully anticipate that it will get done in Q3.

Okay. And just following on an earlier question, in terms of your contemplation of your FY '14 guidance. Is that the assumption that it goes live in Q3 or is that....

It goes live in Q3...

Been contemplated in your guidance?

Absolutely. It goes live in Q3 and we will kind of see how it goes and we will obviously be updating you guys throughout the year.

Okay, great. And then just one last one on the Google. So you talked about on the press release the purpose or the MRC accreditation, I'm just curious what the purposes or the need to seek accreditation of this product with Google?

No, I think it's important, right. For advertisers, publishers, all of them want a separate accredited body to go in and say what we have done even though we go through our MRC accreditation for our own products. So as massive as this integration is going to be, it's really important to the industry. And it also says quite a bit about both of our intentions to remain open, clear methodologies, completely transparent. And for us to remain a neutral third party, we believe it's important that the MRC comes and accredits it. Now we all know that an MRC accreditation takes a few months but we will start the process as we quickly as we can once the product has been developed.

Okay. Are there certain clients that would require MRC accreditation, or is that start of the....?

No. It's really more of us bringing it up more than anything.

Right. Okay, that's what I assumed. And then just switching gears on the cross-media measurement opportunity. The $8 million to $10 million investment, I'm just curious if there's a pipeline that those investments are being directed to? And then, Ken, maybe if you can speak to the mix of R&D versus sales and marketing in the first half?

Sure. I think clearly in the first half -- first of all, is it directed to certain specific initiatives, absolutely, detailed plans behind it. The increase will be substantially seen in our R&D line in the first half of the year, to a lesser extent on the sales line. And then you are going to see a shifting or some additional cost into COGS during the second half as Serge just chatted about how some of these products will start to roll into the market and some of the cost will shift. So overall, that should give you some sense of how that rolls through and meanwhile the core business will continue to get some leverage on, so as I mentioned in my comments, it's only about 1% impact on margin from this past year.

Okay. And the fact that the majority is going into R&D, can I assume that you have more clients coming to you as opposed to you having to sell this product? I guess what I'm trying to get at is, is there a specific sales team that is being built to sell this product? Is it in place or not, this team?

We definitely have a sales team already but we will be expanding on that. We need additional sales people for the cross-media effort. And then on the Google thing, clearly both, like we said, both us and Google will be co-selling this and co-marketing it. So it helps to have them behind us as well but for the cross-media we definitely will be investing in additional sales people.

Thank you. (Operator Instructions) The next question comes from Ned Davis of William Smith

Thank you. The last guy did 12 questions, I will just ask you one. What is the target in terms of incremental customers that you might derive from this new relationship or expanded relationship with Google? You got about 2300 odd customers today, is it a big jump in customer potential?

Ned, good morning. It's hard to speculate at this point. Clearly we will see clients that have never done anything with us because they already have an integration going on with DoubleClick. The thing that I am also super excited about is, this deal will also help us up sell our existing ad effectiveness products once we bundle it with, and integrate it within DoubleClick. So that is something that, it's not only are we going to get absolutely, we will get new additional client, hard to tell at this point. But we will be, we are hoping that we can also integrate our existing ad effectiveness products.

Thank you for your question. I would now like to turn the call over to Dr. Abraham for closing remarks.

Thank you, very much, and thank you all for your participation today. As you see in our fourth quarter and full year 2013 results reflect continued strong execution and momentum across our business. 2014 is set to be another exciting year for comScore, one in which multiplatform, cross-media opportunities and the Google partnership are set to transform not only comScore but the industry as large. We have our key priorities identified and we remain focused on the sharp execution of our strategy and delivering value to shareholders. We look forward to speaking with you again on our next conference call. Thank you.

Thank you for your participation in today's conference. This concludes the presentation. You may disconnect. Good day.