Good day, ladies and gentlemen, and welcome to comScore First Quarter 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the call over to Mr. Steve Calk. Sir, you may begin.

Thank you, operator. Before we begin our prepared remarks, I would like to remind all of you that the following discussion contains forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include comments about our plans, expectations, and prospects and are based on our view as of today, May 8th, 2019. We disclaim any duty or obligation to update our forward-looking statements to reflect new information after today's call. We will be discussing non-GAAP measures during this call for which we have provided reconciliations in today's press release and on our website. Our actual results in future periods may differ materially from those expected because of a number of risks and uncertainties. These risks and uncertainties including those outlined in our 10-K, 10-Q, and other filings with the SEC, all of which you can find on our website or at www.sec.gov. Now, I'll turn the call over to our Director and Interim Chief Executive Officer, Dale Fuller. Dale?

Thank you, Steve and now that we're safely in the harbor, hello everyone. Thank you for joining our first quarter financial results call. I'm also joined by Greg Fink, our Chief Financial Officer. But before I begin my remarks, I want to acknowledge that the company has undergone some significant changes in the past five weeks. I want to extend my utmost gratitude and appreciation to our employees around the world for their hard work and dedication through this period of transition. They are at the core of our success and I want them to know that their contributions are critical and valued. Over the last 15 months, we have strengthened our customer engagement and increased our understanding of customer needs. In my initial weeks as CEO, we have accelerated the core value process. Today, we want to reaffirm our strategy of being the cross-platform leader in measurement because that is what our clients want and they want it immediately. Both locally and nationally, comScore delivers cross-platform audiences that improve media effectiveness with the ability to measure them. Our mission is clear; we must operate with integrity, strive for excellence, and we have to put our customers first. With this in mind, just as I've done previously in my career, we have put in place a plan to refocus our efforts on the products that our customers want. I believe this focus will help our team prioritize, strengthen our customer relationships, increase our success in the marketplace, and accelerate our path to profitable growth. One of my first action items was to reevaluate how our technology is transforming the media landscape and how advertisers can fully engage with our data. My primary objective is to streamline our product portfolio and devote the appropriate resources to emerging areas of cross-platform extended…

Thanks, Dale. Today, we reported Q1 revenue of $102.3 million, which compares to revenue of $105.9 million reported in the first quarter last year and $109.3 million in the fourth quarter of 2018. Revenue from Ratings and Planning in the first quarter was $70.6 million, an increase of $1 million from the prior year quarter. The increase was the result of continued growth in our TV products offset by a decline in our syndicated digital products. Increases in TV and cross-platform products were driven by improving existing customer contract values in the period as well as the establishment of stand-alone selling pricing over certain performance obligations and arrangements that include the purchase and sale services. Our syndicated digital revenue represented 51% of Ratings and Planning for the first quarter as compared to 61% in the same period a year ago and 50% in the fourth quarter of 2018. With the vast majority of these syndicated contracts now sign for 2019, we expect a sequential decline to slow in the coming quarters. Revenue from analytics and optimization in the first quarter was $21.5 million, down 17% from the first quarter of last year and down 10% sequentially. The decrease was related to lower digital custom marketing solutions delivery in the first quarter of 2019 as compared to the prior year quarter. This was primarily the result of delivery timing of certain custom projects, which we expect to deliver in future periods, as well as the first quarter of 2018 having higher deliveries. The decrease was offset by increased activation revenue, which continues to experienced year-over-year growth. Moving to movies reporting and analytics. Revenue decreased 3% in the first quarter relative to the same period a year ago as a result of lower project based revenue. I'll now turn to operating cost,…

Thanks, Greg. Before we take your questions, let me just sum up what we're working towards in 2019. First, we're driving comScore towards operational excellence with accountability across all lines of the business. We believe that streamlining our operations will provide us with the capital to redeploy in attractive high-growth products. Second, we are increasing product clarity. This means bigger bets in areas where our data sets allow us to capitalize on demand for our syndicated recurring products. Our customers are eager for us to deliver cross-platform extended TV, video and movies on-demand, addressable advertising and campaign ratings. Where we need to augment our existing platforms, we will consider the strategic, small, but accretive tuck-in acquisitions. Third, we're executing on a tactical plan to win. This comes from the cross-functional alignment and coordination amongst sales, product and technology teams. We believe these steps will allow comScore to leverage our unique market position and truly capitalize on this unprecedented fragmentation that we are seeing across the media landscape. With that, we'll open up the call for questions. Operator?

Thank you. [Operator Instructions] And our first question comes from the line of Matt Thorton from SunTrust. You may begin.

Hey, it's Anthony Duplisea on for Matt. Just a couple of questions for you guys. First off, do you guys have any progress on a permanent CEO search? And then secondly, is there any update on the three-year guidance framework?

Yes. So this is Dale speaking, we have -- the Board has retained an outside search forum, and we are in that process. It's again, six weeks into the process, and we're looking for great qualified candidates that can come in and run this company. My job right now is not being part of that process. But, I mean, I'm not on the cycle of intervening those guys. My job is to get this company fixed and getting it running operationally well for whoever takes over.

On the guidance question, as I mentioned in my remarks, we continue to look at revenue from the perspective of the things that Dale outlined and the timing of those products. And so, as I shared, we will update where we stand as we move forward. So at this point, we're only focused on the items that Dale talked about, delivering those products and we'll provide a more fulsome update at a future point.

Understood. Thanks guys.

Thank you. And our next question comes from the line of Tim McHugh from William Blair. You may begin.

Hi. Good afternoon. It's actually Trevor Romeo in for Tim. Thanks for taking the call. Just wondering, if you could give us your latest, kind of, broad view on the cross-platform opportunity and comScore Campaign Ratings in particular? What was the uptake from media networks like? What was the pipeline look like? I mean, are you still kind of thinking 2020 is the time frame for starting to see meaningful revenue from Campaign Ratings?

Well, I think, as we mentioned, we're not specifically talking about long-term revenue at this point. We want to work through the operating plan that we've talked about. We do believe -- Dale outlined four areas that we're going to be focused on, CCR is one of those. I think that as we build out this plan over the coming quarter, as Dale mentioned, he's been in the seat for five weeks, right? He has put together, as he talked about, four key areas. CCR being one of them and we would expect to be able to provide a broader update as we move forward. I think that those will refine themselves out, as we get very much in the detail of all four of those categories and where we want to employ our resources. It's one of -- part of the strategic review that we've highlighted. And as we go through that process, those areas will become clear, as to where the largest revenue opportunities are for us, and where we want to focus, and we'll bring that back once that's done.

Okay, fair enough. Thank you .And then, on the cost of revenue line item. I know you mentioned higher data costs and employee cost. But I think that line was up something like 700 basis points year-over-year as a percentage of revenue. So was there anything kind of unusual on that line that drove it up so much? Or maybe any other details you can give about the increase there.

Yeah, if you recall, in the second quarter of last year, we changed how we accounted for certain contracts, specifically on the network operators, and they went to a gross presentation of revenue and a cost. So that happened in the second quarter of last year. Therefore, first quarter didn't have that accounting. This will be the last quarter where you don't have a fair year-over-year compare. So that's -- the bulk of that increased year-over-year.

Got it, thank you and then maybe just one more quick one if I could. Could you just clarify strategic review? I guess does that -- is that more of an internal review? Or does that possibly include external options like divesting certain parts of the business or the sale of the whole company? Thank you.

I think all things are on the table. But I would tell you my comment was primarily about us internally reviewing things and going through that. So being a public company, you're always for sale no matter what people can buy our stock at any time across counter, over the market.

Okay, make sense. Thank you very much.

Thank you. And our next question comes from the line of Victor Anthony from Aegis Capital. You may begin.

Hi guys thanks. Two questions, one on the restructuring that happened yesterday. Could you just tell us, how big of a headcount reduction occurred yesterday? And as you go out throughout the year, are there more opportunities for you to reduce headcount and cut more cost? And second, last quarter, you announced CNN as a win, one of the partners that converted out of beta. Could you just talk to about all of the other beta testers? Are there any ones that's coming close? Or do you think that could ultimately come out of beta anytime soon? Thanks.

So, on the cost aspect of it I think that -- I don't foresee us doing any more headcount or a need for any more headcount reductions. I think that, with the reorganization of our sales -- sorry, our sales organizations being optimized, and setting the incentive structure such that helps us capitalize on our best opportunities, you look at formalizing just our most of our major purchases, through with RFPs. That's going to help drive some costs out. We're looking at other locations, facilities that will drive some cost out. We've mentioned the data costs that we have right now, renegotiating some of those, looking at some of those where our partners can help us. That will drive more cost out. And again, accelerating even in our integration or our technology will drive cost out, too. So, I think, that you'll see more costs coming out for the year but primarily through those areas, not any others. And the second part of the question was?

Victor, can you repeat it? How to deal with the beta test, right, of CCR?

Correct.

Yeah. So we continue to make significant progress in that area. We didn't highlight any here today, but I think you can expect -- as I said, I think it was the last call or, right, and as Dale mentioned, it is one of our key four areas that we're focused on, and I think that we continue to make excellent progress in that area and look forward to announcing more wins as we move forward.

But just to be cautionary, I mean there is -- CCR is one piece of a multi-tier strategy for a customer. What I've heard from customers is they want the other pieces as well. So we have to get our cross-platform extended TV out there. We need our video-on-demand pieces that integrate into that. Otherwise, it's not a complete tool set for them. So it's the first phase, we have multiple phases we have to do with that product to actually make it really useful. And so that's why we're really betting on these technologies and addressing them and really focusing everyone because that's what we hear from customers across the board.

So, just a follow-up on that. You guys gave time frames for product launches. Have those been changed, altered, given the series of events over the past month or two?

I can't address that right now. I'm six weeks in, so I will tell you that next week is my product road map, get into the time frames, making sure we have the appropriate carrot sticks and sugar cubes ready for everyone, so we can actually deliver on time. Also, on top of that, talking to customers to understand better their needs and what are the feature sets they have to have, must have. It will be great to come out with the product and call it something and not fit into what they need. So we have to -- we still have a lot of work to do there. And so we're aligning our product group with our technologies -- technology group, with our sales organizations and we make sure we're listening to customers really well. And we're transferring that knowledge all the way into actionable plans. So I'll know more and better to give you a better picture of it at our next earnings call.

Okay. Thank you.

Thank you. And I now like to turn the call back to Mr. Dale Fuller for closing remarks.

And thank you, everyone for joining us, and especially thank you to all the employees, the hundreds and hundreds of employees that are listening in today. Thank you for everything you've been doing over the last five or six weeks, and I'll even go back and say thank you for everything you've been doing for last five or six years that you've been here, and maybe even longer, 10 or 20 years. So, thank you, everyone, and we look forward to reporting progress at our next quarter.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a great day.