Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 1934

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 1934

For the quarterly period ended September 30, 2021

☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
2022

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number:

001-40464

img139668345_0.jpg 

ZETA GLOBAL HOLDINGS CORP.

(Exact name of registrant as specified in its charter)

Delaware

80-0814458

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

3 Park Ave, 33

rd
Floor

New York, NY10016

(Address of principal executive offices) (Zip Code)

(212)

(212) 967-5055

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the act:

Title of each class

Trading

Symbol(s)

Trading
Symbol(s)

Name of each exchange

on which registered

Class A common stock, par value $0.001 per share

ZETA

ZETA

The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T
(§ (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated
filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule
12b-2
of the Exchange Act.

Large-accelerated filer

☐

☐

Accelerated filer

☐

Non-accelerated filer

☒

☒

Smaller reporting company

☐

Emerging growth company

☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act

.  
Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2
of the Exchange Act). Yes ☐ No ☒

As of October 29, 2021,

159,603,268
28, 2022, 174,157,067shares of the registrant’s Class A common stock and 37,856,09532,464,430 shares of registrant’s Class B common stock were outstanding.

Table of Contents

ZETA GLOBAL HOLDINGS CORP.

Quarterly Report on Form

10-Q

For the Quarterly Period Ended September 30, 2021

2022

TABLE OF CONTENTS

Page
PART I - FINANCIAL INFORMATION
Item 1.

Financial Statements (unaudited)
3

Page

PART I - FINANCIAL INFORMATION

Item 1.

Financial Statements

3

Condensed Unaudited Consolidated Balance Sheets as of September 30, 20212022 and December 31, 20202021

3

Condensed Unaudited Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 20212022 and 20202021

4

Condensed Unaudited Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity / (Deficit) for the Three and Nine Months Ended September 30, 20212022 and 2020202

1

5

Condensed Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 20212022 and 2020202

1

7

8

Notes to Condensed Unaudited Consolidated Financial Statements

8

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

24

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

36

37

Item 4.

Controls and Procedures

37

38

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings

39

Item 1A.

Risk Factors

39

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

39

Item 3.

Default Upon Senior Securities

39

40

Item 4.

Mine Safety Disclosures

39

40

Item 5.

Other Information

39

40

Item 6.

Exhibits

Exhibits
40

41

Signatures

Signatures
41

42

i

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form

10-Q
contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risks and uncertainties. All statements made in this Quarterly Report on Form
10-Q
that are not statements of historical fact, including statements about our beliefs and expectations and regarding future events or our future results of operations, financial condition, business, strategies, financial needs, and the plans and objectives of management, are forward-looking statements and should be evaluated as such. These statements often include words such as “anticipate,” “expect,” “suggests,” “plan,” “believe,” “intend,” “estimates,” “targets,” “projects,” “should,” “could,” “would,” “may,” “will,” “forecast” and other similar expressions or the negative of those terms. We base these forward-looking statements on our current expectations, plans and assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances at such time. As you read this Quarterly Report on Form
10-Q,
you should understand that these statements are not guarantees of future performance or results. The forward-looking statements are subject to and involve risks, uncertainties and assumptions, and you should not place undue reliance on these forward-looking statements. Although we believe that these forward-looking statements are based on reasonable assumptions at the time they are made, you should be aware that many factors could affect our business, results of operations and financial condition and could cause actual results to differ materially from those expressed in the forward-looking statements. The following important factors, along with the factors discussed in “Risk Factors” in this Quarterly Report on Form
10-Q
and in the Company’s final prospectus, dated June 9,Annual Report on Form 10-K for the year ended December 31, 2021, and filed with the SEC on June 14, 2021 (the “Prospectus”), may materially affect such forward-looking statements:

•
The continued impact of the
COVID-19
pandemic on our and our customers’, suppliers’ or other partners’ business could be detrimental to our business, results of operations, financial condition and the global economy,price of our customers, employees and business;
stock;
•
We may experience fluctuations in our operating results, which could make our future operating results difficult to predict;
•
If we fail to innovate and make the right investment decisions in our product offerings and platform, we may not attract and retain customers and our revenue and results of operations may decline;
•
Our success and revenue growth depends on our ability to add and retain scaled customers, which we define as customers from which the Company has generated
trailing-12-month
revenues of at least $100,000;
•
If we do not manage our growth effectively, the quality of our platform and solutions may suffer and our business, results of operations and financial condition may be adversely affected;
•
Our business and the effectiveness of our platform depends on our ability to collect and use data online. New consumer tools, regulatory restrictions and potential changes to web browsers and mobile operating systems all threaten our ability to collect such data, which could harm our operating results and financial condition and adversely affect the demand for our products and solutions;
•
The standards that private entities and inbox service providers adopt in the future to regulate the use and delivery of email may interfere with the effectiveness of our platform and our ability to conduct business;
•
A significant inadvertent disclosure or breach of confidential and/or personal information we process, or a security breach of our or our customers’, suppliers’ or other partners’ computer systems could be detrimental to our business, reputation, financial performance and results of operations;
•
Our infrastructure depends on third-party data centers, systems and technologies to operate our business, the disruption of which could adversely affect our business, results of operations and financial condition;
and
•
Inflation may impact us and our customers;
•
Our failure to remediate the material weaknessesborrowing costs may increase as a result of increases in our internal control over financial reporting could result in material misstatements in our financial statements or the inability to timely report our financial condition or results of operations; and
interest rates;
•
Other factors discussed in other sections of this Quarterly Report on Form
10-Q,
including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
1
Table of Contents

You should not place undue reliance on our forward-looking statements and you should not rely on forward-looking statements as predictions of future events. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements. The forward-looking statements made in this Quarterly Report on Form

10-Q
should not be construed by you to be exhaustive and speak only as of the date of this report. We undertake no obligation to update any forward-looking statements made in this report to reflect events or circumstances after the date of this report or to reflect new information or the occurrence of

1

unanticipated events, except as required by law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

Unless the context otherwise requires, references in this Form 10-Q to “Zeta,” “Zeta Global,” “we,” “us,” “our” or “the Company” refer to Zeta Global Holdings Corp.

WHERE YOU CAN FIND MORE INFORMATION

Our corporate

The Company maintains a website addressat the following address: https://zetaglobal.com. The information on the Company’s website is https://zetaglobal.com (“Corporate Website”). The contentsnot incorporated by reference in, or otherwise to be regarded as part of, this Quarterly Report on Form 10-Q.

We make available on or information accessible through our Corporate Website are not part of this

Form 10-Q.
The company maintains a dedicated investor website at https://investors.zetaglobal.com (“Investor Website”), which is similarly not part of this
Form 10-Q.
We make our filings with the SEC, including our Annual Report on
Form 10-K,
Quarterly Reports on
Form 10-Q,
Current Reports on
Form 8-K
certain reports and all amendments to those reports we file with or furnish to the Securities and Exchange Commission (“SEC”) pursuant to Section 13(a) or 15(d) of the Exchange Act. These include our annual reports on Form 10-K, our quarterly reports on Form 10-Q, and our current reports on Form 8-K. We make this information available on our website free of charge on our Investor Website as soon as reasonably practicable after we electronically file such reportsthe information with, or furnish such reportsit to, the SEC.
We may use our Investor Website as a distribution channel of

Investors and others should note that we routinely announce material information aboutto investors and the Company including throughmarketplace using SEC filings, press releases, investor presentations, sustainability reports,public conference calls, webcasts, and notices of upcoming events.the Zeta Global Investor Relations website at https://investors.zetaglobal.com. We intend to utilize our Investor Websiteuse these channels as a channel of distribution to reach public investorswell as social media channels (e.g., the Zeta Facebook account (facebook.com/ZetaGlobal); the Zeta Instagram account (instagram.com/zetaglobal); the Zeta Twitter account (twitter.com/zetaglobal); and the Zeta LinkedIn account (linkedin.com/company/zetaglobal)) as a means of disclosing material

non-public
information for complying with disclosure obligations under Regulation FD.
Any referenceabout our business to our Corporate Website or Investor Website addresses docustomers, colleagues, investors, and the public. While not constitute incorporation by referenceall of the information containedthat we post to the Zeta Global Investor Relations website or on or available through those websites, and you should not consider suchour social media channels is of a material nature, some information could be deemed to be amaterial. Accordingly, we encourage investors, the media, and others interested in Zeta to review the information that we share on the Zeta Global Investor Relations website and on our social media channels. The information on the Zeta Global Investor Relations website and the Company’s social media channels is not incorporated by reference in, or otherwise to be regarded as part of, this
Quarterly Report on Form 10-Q
or any other filings we make with the SEC.
10-Q.

2

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1.
Financial Statements

Item 1. Financial Statements

Condensed Unaudited Consolidated Balance Sheets

(In thousands, except shares, per share and par values)

  
As of September 30, 2021
  
As of December 31, 2020
 
ASSETS
  
Current assets:
 
Cash and cash equivalents
 
$
116,180
 
 $50,725 
Accounts
 
receivable,
 
net
 
of
 
allowance
 
of
 
$2,046
 
and
 
$2,207
 
as
 
of
 
September
 
30,
 
2021
 
and
December 31, 2020, respectively
 
 
72,785
 
  79,366 
Prepaid expenses
 
 
5,820
 
  3,903 
Other current assets
 
 
3,058
 
  7,374 
  
 
 
  
 
 
 
Total current assets
 
 
197,843
 
  141,368 
  
 
 
  
 
 
 
Property and equipment, net
 
 
5,869
 
  6,117 
Website and software development costs, net
 
 
38,477
 
  32,891 
Intangible assets, net
 
 
28,932
 
  28,591 
Goodwill
 
 
81,917
 
  76,432 
Deferred tax assets, net
 
 
195
 
  366 
Other
non-current
assets
 
 
1,063
 
  521 
  
 
 
  
 
 
 
Total
non-current
assets
 
 
156,453
 
  144,918 
  
 
 
  
 
 
 
Total assets
 
$
354,296
 
 $286,286 
  
 
 
  
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY / (DEFICIT)
        
Current liabilities:
        
Accounts payable
 
$
27,905
 
 $40,976 
Accrued expenses
 
 
50,619
 
  44,622 
Acquisition related liabilities
 
 
16,155
 
  6,018 
Deferred revenue
 
 
2,739
 
  4,053 
Other current liabilities
 
 
5,044
 
  8,310 
  
 
 
  
 
 
 
Total current liabilities
 
 
102,462
 
  103,979 
  
 
 
  
 
 
 
Non-current
liabilities:
        
Long-term borrowings
 
 
183,528
 
  189,693 
Acquisition related liabilities
 
 
8,731
 
  17,137 
Warrants and derivative liabilities
 
 
—  
 
  58,100 
Other
non-current
liabilities
 
 
3,790
 
  2,387 
  
 
 
  
 
 
 
Total
non-current
liabilities
 
 
196,049
 
  267,317 
  
 
 
  
 
 
 
Total liabilities
 
$
298,511
 
 $371,296 
  
 
 
  
 
 
 
Commitments and contingencies (Note 8)
  0    0  
Mezzanine equity:
        
Redeemable
 
convertible
 
preferred
 
stock
 
$0.001
 
per
 
share
 
par
 
value,
 
up
 
to
 
60,137,979
 
shares
authorized and 39,223,194 shares issued and outstanding as of December 31, 2020
 
 
—  
 
  154,210 
Stockholders’ equity / (deficit):
        
Series
 
A
 
common
 
stock
 
$0.001
 
per
 
share
 
value,
 
up
 
to
 
204,220,800
 
shares
 
authorized,
112,012,693 shares issued and outstanding as of December 31, 2020
 
 
—  
 
  112 
Treasury
 
common
 
stock,
 
8,195,464
 
s
hares
 
repurchased
 
at
 
a
 
weighted
 
average
 
price
 
of
 
$2.86
per share
 
 
(23,469)
 
  (23,469) 
Series
 
B
 
common
 
stock
 
$0.001
 
per
 
share
 
par
 
value,
 
up
 
to
 
3,400,000
 
shares
 
authorized,
3,054,318 shares issued and outstanding as of December 31, 2020
 
 
—  
 
  3 
Class
 
A
 
common
 
stock,
 
par
 
value
 
$0.001
 
per
 
share
 
par
 
value,
 
up
 
to
 
3,750,000,000
 
shares
authorized and 155,022,167 shares issued and outstanding as of September 30, 2021
 
 
155
 
  —   
Class
 
B
 
common
 
stock,
 
par
 
value
 
$0.001,
 
up
 
to
 
50,000,000
 
shares
 
authorized
 
and
37,856,095 shares issued and outstanding as of September 30, 2021
 
 
38
 
  —   
Additional
paid-in
capital
 
 
511,929
 
  28,425 
Accumulated deficit
 
 
(430,679)
 
  (242,254) 
Accumulated other comprehensive loss
 
 
(2,189)
 
  (2,037) 
  
 
 
  
 
 
 
Total stockholders’ equity / (deficit)
 
 
55,785
 
  (239,220) 
  
 
 
  
 
 
 
Total liabilities and stockholders’ equity / (deficit)
 
$
354,296
 
 $286,286 
  
 
 
  
 
 
 

 

 

As of

 

 

 

September 30, 2022

 

 

December 31, 2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

114,808

 

 

$

103,859

 

Accounts receivable, net of allowance of $1,746 and $1,295 as of September 30, 2022 and December 31, 2021, respectively

 

 

91,414

 

 

 

83,578

 

Prepaid expenses

 

 

7,600

 

 

 

6,970

 

Other current assets

 

 

1,893

 

 

 

1,649

 

Total current assets

 

 

215,715

 

 

 

196,056

 

Non-current assets:

 

 

 

 

 

 

Property and equipment, net

 

 

6,235

 

 

 

5,630

 

Website and software development costs, net

 

 

36,863

 

 

 

38,038

 

Intangible assets, net

 

 

45,601

 

 

 

40,963

 

Goodwill

 

 

133,009

 

 

 

114,509

 

Deferred tax assets, net

 

 

1,253

 

 

 

956

 

Other non-current assets

 

 

2,059

 

 

 

1,113

 

Total non-current assets

 

$

225,020

 

 

$

201,209

 

Total assets

 

$

440,735

 

 

$

397,265

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

28,400

 

 

$

21,711

 

Accrued expenses

 

 

63,516

 

 

 

63,979

 

Acquisition related liabilities (current)

 

 

17,220

 

 

 

8,042

 

Deferred revenue

 

 

6,104

 

 

 

6,866

 

Other current liabilities

 

 

8,258

 

 

 

5,159

 

Total current liabilities

 

 

123,498

 

 

 

105,757

 

Non-current liabilities:

 

 

 

 

 

 

Long term borrowings

 

 

183,868

 

 

 

183,613

 

Acquisition related liabilities (non-current)

 

 

22,032

 

 

 

14,915

 

Other non-current liabilities

 

 

2,225

 

 

 

2,492

 

Total non-current liabilities

 

 

208,125

 

 

 

201,020

 

Total liabilities

 

$

331,623

 

 

$

306,777

 

Commitments and contingencies (See Note 8)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Class A common stock $ 0.001 per share par value, up to 3,750,000,000 shares authorized, 173,957,931 and 159,974,847 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

 

 

174

 

 

 

160

 

Class B common stock $ 0.001 per share par value, up to 50,000,000 shares authorized, 32,464,430 and 37,856,095 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

 

 

32

 

 

 

38

 

Additional paid-in capital

 

 

831,731

 

 

 

584,208

 

Accumulated deficit

 

 

(719,303

)

 

 

(491,817

)

Accumulated other comprehensive loss

 

 

(3,522

)

 

 

(2,101

)

Total stockholders' equity

 

 

109,112

 

 

 

90,488

 

Total liabilities and stockholders' equity

 

$

440,735

 

 

$

397,265

 

See accompanying notes to condensed unaudited consolidated financial statements.

3

Table of Contents

Condensed Unaudited Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

   
Three months ended September 30,
   
Nine months ended September 30,
 
   
2021
   
2020
   
2021
   
2020
 
Revenues
  
$
115,133
 
  $95,284   
$
323,492
 
  $253,674 
   
 
 
   
 
 
   
 
 
   
 
 
 
Operating expenses:
                    
Cost of revenues (excluding depreciation and amortization)
(1)
  
 
44,525
 
   40,705   
 
125,709
 
   100,530 
General and administrative expenses
(1)
  
 
50,643
 
   17,150   
 
135,682
 
   53,270 
Selling and marketing expenses
(1)
  
 
60,537
 
   18,269   
 
163,952
 
   54,359 
Research and development expenses
(1)
  
 
13,998
 
   6,905   
 
50,285
 
   23,789 
Depreciation and amortization
  
 
11,783
 
   10,133   
 
33,135
 
   30,171 
Acquisition related expenses
  
 
480
 
   1,230   
 
1,516
 
   4,321 
Restructuring expenses
  
 
30
 
   259   
 
467
 
   1,950 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total operating expenses
  
 
181,996
 
  
 
94,651
 
  
 
510,746
 
  
 
268,390
 
   
 
 
   
 
 
   
 
 
   
 
 
 
(Loss) / income from operations
  
 
(66,863)
 
   633   
 
(187,254)
 
   (14,716) 
Interest expense
  
 
1,342
 
   3,823   
 
5,705
 
   12,548 
Other expenses / (income), net
  
 
496
 
   (188)   
 
1,031
 
   (546) 
Gain on extinguishment of debt
  
 
0  
 
   —     
 
(10,000)
 
   —   
Change in fair value of warrants and derivative liabilities
  
 
0  
 
   9,700   
 
5,000
 
   16,400 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total other expenses
  
 
1,838
 
   13,335   
 
1,736
 
   28,402 
   
 
 
   
 
 
   
 
 
   
 
 
 
Loss before income taxes
  
 
(68,701)
 
   (12,702)   
 
(188,990)
 
   (43,118) 
Income tax provision / (benefit)
  
 
428
 
   301   
 
(565)
 
   1,319 
   
 
 
   
 
 
   
 
 
   
 
 
 
Net loss
  
$
(69,129)
 
  
$
(13,003)
 
  
$
(188,425)
 
  
$
(44,437)
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Other comprehensive (loss) / income :                    
Foreign currency translation adjustment
  
 
(77)
 
   272   
 
(152)
 
   (516) 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total comprehensive loss
  
$
(69,206)
 
  
$
(12,731)
 
  
$
(188,577)
 
  
$
(44,953)
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Net loss per share
                    
Net loss
  
$
(69,129)
 
  $(13,003)   
$
(188,425)
 
  $(44,437) 
Cumulative redeemable convertible preferred stock dividends
  
 
0  
 
   3,774   
 
7,060
 
   11,150 
   
 
 
   
 
 
   
 
 
   
 
 
 
Net loss available to common stockholders
  
$
(69,129)
 
  $(16,777)   
$
(195,485)
 
  $(55,587)
   
 
 
   
 
 
   
 
 
   
 
 
 
Basic loss per share
  
$
(0.53)
 
  $(0.51)   
$
(2.60)
 
  $(1.70) 
Diluted loss per share
  
$
(0.53)
 
  $(0.51)   
$
(2.60)
 
  $(1.70) 
Weighted
 
average
 
number
 
of
 
shares
 
used
 
to
 
compute
 
net
 
loss
 
per
 
share
                    
Basic
  
 
129,731,980
 
   32,607,357   
 
75,313,520
 
   32,607,373 
Diluted
  
 
129,731,980
 
   32,607,357   
 
75,313,520
 
   32,607,373 
(1)   The Company recorded the total stock-based compensation expense as follows:
    
   
Three months ended September 30,
   
Nine months ended September 30,
 
   
2021
   
2020
   
2021
   
2020
 
Cost of revenues (excluding depreciation and amortization)
  $1,183   $—     $1,449   $—   
General and administrative expenses
   28,243    26    70,868    79 
Selling and marketing expenses
   35,114    —      94,626    —   
Research and development expenses
   4,803    —      21,670    —   
   
 
 
   
 
 
   
 
 
   
 
 
 
Total
  
$
      
69,343
 
  $        
26
   
$
188,613
 
  $
79
 
   
 
 
   
 
 
   
 
 
   
 
 
 

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenues

 

$

152,252

 

 

$

115,133

 

 

$

415,821

 

 

$

323,492

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues (excluding depreciation and amortization)

 

 

57,529

 

 

 

44,525

 

 

 

149,487

 

 

 

125,709

 

General and administrative expenses

 

 

53,584

 

 

 

50,643

 

 

 

162,598

 

 

 

135,682

 

Selling and marketing expenses

 

 

76,987

 

 

 

60,537

 

 

 

223,044

 

 

 

163,952

 

Research and development expenses

 

 

16,954

 

 

 

13,998

 

 

 

52,223

 

 

 

50,285

 

Depreciation and amortization

 

 

13,367

 

 

 

11,783

 

 

 

39,448

 

 

 

33,135

 

Acquisition related expenses

 

 

—

 

 

 

480

 

 

 

344

 

 

 

1,516

 

Restructuring expenses

 

 

—

 

 

 

30

 

 

 

-

 

 

 

467

 

Total operating expenses

 

$

218,421

 

 

$

181,996

 

 

$

627,144

 

 

$

510,746

 

Loss from operations

 

 

(66,169

)

 

 

(66,863

)

 

 

(211,323

)

 

 

(187,254

)

Interest expense

 

 

2,038

 

 

 

1,342

 

 

 

5,002

 

 

 

5,705

 

Other expenses

 

 

1,142

 

 

 

496

 

 

 

12,111

 

 

 

1,031

 

Gain on extinguishment of debt

 

 

—

 

 

 

—

 

 

 

-

 

 

 

(10,000

)

Change in fair value of warrants and derivative liabilities

 

 

(805

)

 

 

—

 

 

 

410

 

 

 

5,000

 

Total other expenses

 

$

2,375

 

 

$

1,838

 

 

$

17,523

 

 

$

1,736

 

Loss before income taxes

 

 

(68,544

)

 

 

(68,701

)

 

 

(228,846

)

 

 

(188,990

)

Income tax provision / (benefit)

 

 

896

 

 

$

428

 

 

$

(1,360

)

 

$

(565

)

Net loss

 

$

(69,440

)

 

$

(69,129

)

 

$

(227,486

)

 

$

(188,425

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

774

 

 

 

77

 

 

 

1,421

 

 

 

152

 

Total comprehensive loss

 

$

(70,214

)

 

$

(69,206

)

 

$

(228,907

)

 

$

(188,577

)

Net loss

 

$

(69,440

)

 

$

(69,129

)

 

$

(227,486

)

 

$

(188,425

)

Cumulative redeemable convertible preferred stock dividends

 

 

—

 

 

 

—

 

 

 

—

 

 

 

7,060

 

Net loss available to common stockholders

 

$

(69,440

)

 

$

(69,129

)

 

$

(227,486

)

 

$

(195,485

)

Basic loss per share

 

$

(0.49

)

 

$

(0.53

)

 

$

(1.66

)

 

$

(2.60

)

Diluted loss per share

 

$

(0.49

)

 

$

(0.53

)

 

$

(1.66

)

 

$

(2.60

)

Weighted average number of shares used to compute net loss per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

140,594,128

 

 

 

129,731,980

 

 

 

136,793,272

 

 

 

75,313,520

 

Diluted

 

 

140,594,128

 

 

 

129,731,980

 

 

 

136,793,272

 

 

 

75,313,520

 

The Company recorded following stock-based compensation under respective lines of the above unaudited consolidated statements of operations and comprehensive loss:

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Cost of revenues (excluding depreciation and amortization)

 

$

1,536

 

 

$

1,183

 

 

$

4,436

 

 

$

1,449

 

General and administrative expenses

 

 

28,193

 

 

 

28,243

 

 

 

88,873

 

 

 

70,868

 

Selling and marketing expenses

 

 

38,868

 

 

 

35,114

 

 

 

117,765

 

 

 

94,626

 

Research and development expenses

 

 

6,621

 

 

 

4,803

 

 

 

20,215

 

 

 

21,670

 

Total

 

$

75,218

 

 

$

69,343

 

 

$

231,289

 

 

$

188,613

 

See accompanying notes to condensed unaudited consolidated financial statements.

4

Table of Contents

Condensed Unaudited Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity / (Deficit)

(In thousands, except shares)

  
Redeemable Convertible
Preferred Stock
  
Series A

Common Stock
  
Series B

Common Stock
  
Class A

Common Stock
  
Class B

Common Stock
  
Treasury Stock
  
Additional
Paid-in

Capital
  
Accumulated
Deficit
  
Accumulated
Other
Comprehensive
Loss
  
Total
 
  
Shares
  
Amount
  
Shares
  
Amount
  
Shares
  
Amount
  
Shares
  
Amount
  
Shares
  
Amount
  
Shares
  
Amount
 
Balance as of January 1, 2021
 
 
39,223,194
 
 
$
154,210
 
 
 
112,012,693
 
 
$
112
 
 
 
3,054,318
 
 
$
3
 
 
 
—  
 
 
$
—  
 
 
 
—  
 
 
$
—  
  
 
(8,195,464)
 
 
$
(23,469)
 
 
$
28,425
 
 
$
(242,254)
 
 
$
(2,037)
 
 
$
    (239,220)
 
Shares
 
issued
 
in
 
connection
 
with
 
an
acquisition
  —     —     613,497   1   —     —     —     —     —     —     —     —     5,453   —     —     5,454 
Restricted stock grants
  —     —     3,687,431   4   —     —     —     —     —     —     —     —     (4)   —     —     —   
Restricted stock forfeitures
  —     —     (1,629,369)   (2)   —     —     —     —     —     —     —     —     2   —     —     —   
Restricted stock cancelation
  —     —     (17,853,416)   (18)   —     —     —     —     —     —     —     —     18   —     —     —   
Foreign
 
currency
 
translation
 
adjustment
  —     —     —     —     —     —     —     —     —     —     —     —     —     —     54   54 
Net loss
  —     —     —     —     —     —     —     —     —     —     —     —     —     (24,374)   —     (24,374) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance as of March 31, 2021
 
 
39,223,194
 
 
$
154,210
 
 
 
96,830,836
 
 
$
97
 
 
 
3,054,318
 
 
$
3
 
 
 
—  
 
 
$
—  
 
 
 
—  
 
 
$
—  
  
 
(8,195,464)
 
 
$
(23,469)
 
 
$
33,894
 
 
$
(266,628)
 
 
$
(1,983)
 
 
$
(258,086)
 
Conversion
 
of
 
Series
 
A
 
and
 
Series
 
B
common shares
 
into Class A and Class
 
B
 
common
 
shares,
 
respectively
  —     —     (96,830,836)   (97)   (3,054,318)   (3)   60,421,367   60   39,463,787   39   —     —     1   —     —     —   
Conversion of redeemable
 
convertible
preferred
 
stock
 
to
 
Class
 
A
 
Common
Stock
  (39,223,194)   (154,210)   —     —     —     —     73,813,713   74   —     —     —     —     193,136   —     —     193,210 
Warrants and options exercised
  —     —     —     —     —     —     8,360,331   8   —     —     —     —     24,132   —     —     24,140 
Shares
 
issued
 
in
 
connection
 
with
 
the
 
Initial
Public
 
Offering
  —     —     —     —     —     —     14,773,939   15   —     —     —     —     147,724   —     —     147,739 
Equity issuance cost
  —     —     —     —     —     —     —     —     —     —     —     —     (21,201)   —     —     (21,201) 
Shares repurchased
  —     —     —     —     —     —     (4,138,866)   (4)   (2,307,692)   (2)   —     —     (64,462)   —     —     (64,468) 
Restricted stock grants
  —     —     —     —     —     —     1,155,598   1   700,000   1   —     —     (2)   —     —     —   
Restricted stock forfeitures
  —     —     —     —     —     —     (2,334,753)   (2)   —     —     —     —     2   —     —     —   
Restricted stock units
 
vesting
  —     —     —     —     —     —     219,072   —     —     —     —     —     —     —     —     —   
Stock-based compensation
  —     —     —     —     —     —     —     —     —     —     —     —     126,775   —     —     126,775 
Foreign currency translation adjustment
  —     —     —     —     —     —     —     —     —     —     —     —     —     —     (129)   (129) 
Net loss
  —     —     —     —     —     —     —     —     —     —     —     —     —     (94,922)   —     (94,922) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance as of June 30, 2021
 
 
—  
 
 
$
—  
 
 
 
—  
 
 
$
—  
 
 
 
—  
 
 
$
—  
  
 
152,270,401
 
 
$
152
 
 
 
37,856,095
 
 
$
38
 
 
 
(8,195,464)
 
 
$
(23,469)
 
 
$
439,999
 
 
$
(361,550)
 
 
$
(2,112)
 
 
$
53,058
 
Options exercised
  —     —     —     —     —     —     26,485   —     —     —     —     —     69   —     —     69 
Shares repurchased
  —     —     —     —     —     —     (37,679)   0     0     0     —     —     0     —     —     0   
Restricted stock grants
  —     —     —     —     —     —     3,281,016   3   0     0     —     —     (3)   —     —     —   
Restricted stock forfeitures
  —     —     —     —     —     —     (718,056)   0     —     —     —     —     0     —     —     —   
Stock-based compensation
  —     —     —     —     —     —     —     —     —     —     —     —     70,668   —     —     70,668 
Shares
 
issued
 
in
 
connection
 
with
settlement of a
 
dispute
  —     —     —     —     —     —     200,000   —     —     —     —     —     1,196   —     —     1,196 
Foreign currency translation adjustment
  —     —     —     —     —     —     —     —     —     —     —     —     —         (77)   
(77)
 
Net loss
  —     —     —     —     —     —     —         —     —     —     —     —     (69,129)   —     (69,129) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance as of September 30, 2021
  —    
$
—  
 
  —    
$
—  
 
  —    
$
—  
  
 
155,022,167
 
 
$
155
 
 
 
37,856,095
 
 
$
38
 
 
 
(8,195,464)
 
 
$
(23,469)
 
 
$
511,929
 
 
$
(430,679)
 
 
$
(2,189)
 
 
$
55,785
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 

 

 

Class A common stock

 

Class B common stock

 

 

 

 

 

 

 

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Additional Paid-in Capital

 

Accumulated Deficit

 

Accumulated Other Comprehensive Loss

 

Total

Balance as of January 1, 20221

 

159,974,847

 

$160

 

37,856,095

 

$38

 

$584,208

 

$(491,817)

 

$(2,101)

 

$90,488

Shares issued in connection with certain agreements

 

1,026,785

 

1

 

              —

 

     —

 

11,082

 

                       —

 

                        —

 

11,083

Restricted stock grants

 

4,162,159

 

4

 

              —

 

     —

 

                   (4)

 

                       —

 

                        —

 

              —

Restricted stock forfeitures

 

                (717,505)

 

       (1)

 

              —

 

     —

 

1

 

                       —

 

                        —

 

              —

Class B common stock transferred to Class A common stock

 

1,000,000

 

1

 

 (1,000,000)

 

     (1)

 

                   —

 

                       —

 

                        —

 

              —

Stock-based compensation

 

                           —

 

       —

 

              —

 

     —

 

74,990

 

                       —

 

                        —

 

74,990

Options exercised

 

15,500

 

       —

 

              —

 

     —

 

65

 

                       —

 

                        —

 

65

Foreign currency translation adjustment

 

                           —

 

       —

 

              —

 

     —

 

                   —

 

                       —

 

                    (244)

 

          (244)

Net loss

 

                           —

 

       —

 

              —

 

     —

 

                   —

 

              (72,037)

 

                        —

 

     (72,037)

Balance as of March 31, 20222

 

165,461,786

 

$165

 

36,856,095

 

$37

 

$670,342

 

$(563,854)

 

$(2,345)

 

$104,345

Shares issued in connection with certain agreements

 

434,237

 

       —

 

           ��  —

 

     —

 

3,853

 

                       —

 

                        —

 

3,853

Restricted stock grants

 

2,568,346

 

3

 

              —

 

     —

 

                   (3)

 

                       —

 

                        —

 

              —

Restricted stock forfeitures

 

                (184,342)

 

       —

 

              —

 

     —

 

                   —

 

                       —

 

                        —

 

              —

Class B common stock transferred to Class A common stock

 

1,787,043

 

2

 

 (1,787,043)

 

     (2)

 

                   —

 

                       —

 

                        —

 

              —

Stock-based compensation

 

                           —

 

       —

 

              —

 

     —

 

83,734

 

                       —

 

                        —

 

83,734

Options exercised

 

221,530

 

       —

 

              —

 

     —

 

65

 

                       —

 

                        —

 

65

Foreign currency translation adjustment

 

                           —

 

       —

 

              —

 

     —

 

                   —

 

                       —

 

                    (403)

 

          (403)

Restricted stock units vesting

 

26,932

 

       —

 

              —

 

     —

 

                   —

 

                       —

 

                        —

 

              —

Shares issued with connection with employee stock purchase plan

 

196,385

 

       —

 

              —

 

     —

 

1,320

 

                       —

 

                        —

 

1,320

Net loss

 

                           —

 

       —

 

              —

 

     —

 

                   —

 

              (86,009)

 

                        —

 

     (86,009)

Balance as of June 30, 20223

 

170,511,917

 

$170

 

35,069,052

 

$35

 

$759,311

 

$(649,863)

 

$(2,748)

 

$106,905

Restricted stock grants

 

1,481,585

 

2

 

              —

 

     —

 

                   (2)

 

                       —

 

                        —

 

              —

Restricted stock forfeitures

 

                (208,367)

 

       —

 

              —

 

     —

 

                   —

 

                       —

 

                        —

 

              —

Class B common stock transferred to Class A common stock

 

2,604,622

 

3

 

 (2,604,622)

 

     (3)

 

                   —

 

                       —

 

                        —

 

              —

Stock-based compensation

 

                           —

 

       —

 

              —

 

     —

 

76,696

 

                       —

 

                        —

 

76,696

Options exercised

 

41,500

 

       —

 

              —

 

     —

 

35

 

                       —

 

                        —

 

35

Foreign currency translation adjustment

 

                           —

 

       —

 

              —

 

     —

 

                   —

 

                       —

 

                    (774)

 

          (774)

Restricted stock units vesting

 

96,627

 

       —

 

              —

 

     —

 

                   —

 

                       —

 

                        —

 

            -

Shares repurchased

 

                (569,953)

 

       (1)

 

              —

 

     —

 

            (4,309)

 

                       —

 

                        —

 

       (4,310)

Net loss

 

                           —

 

       —

 

              —

 

     —

 

                   —

 

              (69,440)

 

                        —

 

     (69,440)

Balance as of September 30, 20224

 

173,957,931

 

$174

 

32,464,430

 

$32

 

$831,731

 

$(719,303)

 

$(3,522)

 

$109,112

1. Includes 115,456,543 outstanding Class A common stock, 18,419,260 outstanding Class B common stock, 44,518,304 unvested Class A restricted stock and 19,436,835 unvested Class B restricted stock.

2. Includes 117,498,828 outstanding Class A common stock, 17,419,260 outstanding Class B common stock, 47,962,958 unvested Class A restricted stock and 19,436,835 unvested Class B restricted stock.

3. Includes 122,895,336 outstanding Class A common stock, 15,807,217 outstanding Class B common stock, 47,616,581 unvested Class A restricted stock and 19,261,835 unvested Class B restricted stock.

4. Includes 127,679,117 outstanding Class A common stock, 15,632,217 outstanding Class B common stock, 46,278,814 unvested Class A restricted stock and 16,832,213 unvested Class B restricted stock.

5

Table of Contents
 
Redeemable Convertible
Preferred Stock
  
Series A

Common Stock
  
Series B

Common Stock
  
Class A

Common Stock
  
Class B

Common Stock
  
Treasury Stock
  
Additional
Paid-in

Capital
  
Accumulated
Deficit
  
Accumulated
Other
Comprehensive
Loss
  
Total
 
  
Shares
  
Amount
  
Shares
  
Amount
  
Shares
  
Amount
  
Shares
  
Amount
  
Shares
  
Amount
  
Shares
  
Amount
 
Balance
 
as
 
of
 
January
 
1,
 
2020
  39,223,194  $154,210   99,339,942  $99   3,054,318  $3   —    $—     —    $—     (8,195,464)  $(23,469)  $27,909  $(189,029)  $(1,847)  $    (186,334) 
Shares
 
issued
 
in
 
connection
 
with
 
an
agreement
  —     —     154,560   —     —     —     —     —     —     —     —     —     423   —     —     423 
Restricted stock grants
  —     —     3,975,634   4   —     —     —     —     —     —     —     —     (4)   —     —     —   
Restricted stock forfeitures
  —     —     (997,094)   (1)   —     —     —     —     —     —     —     —     1   —     —     —   
Stock-based compensation
  —     —     —     —     —     —     —     —     —     —     —     —     26   —     —     26 
Foreign
 
currency
 
translation
 
adjustment
  —     —     —     —     —     —     —     —     —     —     —     —     —     —     (741)   (741) 
Net loss
  —     —     —     —     —     —     —     —     —     —     —     —     —     (16,380)   —     (16,380) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance as of March 31, 2020
 
 
39,223,194
 
 
$
 154,210
 
 
 
102,473,042
 
 
$
102
 
 
 
3,054,318
 
 
$
3
 
 
 
—  
 
 
$
—  
 
 
 
—  
 
 
$
—  
  
 
(8,195,464)
 
 
$
(23,469)
 
 
$
28,355
 
 
$
(205,409)
 
 
$
(2,588)
 
 
$
(203,006)
 
Restricted stock grants
  —     —     1,148,962   1   —     —     —     —     —     —     —     —     (1)   —     —     —   
Restricted stock forfeitures
  —     —     (383,695)   —     —     —     —     —     —     —     —     —     —     —     —     —   
Stock-based compensation
  —     —     —     —     —     —     —     —     —     —     —     —     27   —     —     27 
Foreign
 
currency
 
translation
 
adjustment
  —     —     —     —     —     —     —     —     —     —     —     —     —     —     (47)   (47) 
Net loss
  —     —     —     —     —     —     —     —     —     —     —     —     —     (15,054)   —     (15,054) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance as of June 30, 2020
 
 
39,223,194
 
 
$
154,210
 
 
 
103,238,309
 
 
$
103
 
 
 
3,054,318
 
 
$
3
 
 
 
—  
 
 
$
—  
 
 
 
—  
 
 
$
—  
  
 
(8,195,464)
 
 
$
(23,469)
 
 
$
28,381
 
 
$
(220,463)
 
 
$
(2,635)
 
 
$
(218,080)
 
Restricted stock grants
  —     —     8,743,780   9   —     —     —     —     —     —     —     —     (9)   —     —     —   
Restricted stock forfeitures
  —     —     (481,656)   —     —     —     —     —     —     —     —     —     —     —     —     —   
Stock-based compensation
  —     —     —     —     —     —     —     —     —     —     —     —     26   —     —     26 
Foreign
 
currency
 
translation
 
adjustment
  —     —     —     —     —     —     —     —     —     —     —     —     —     —     272   272 
Net loss
  —     —     —     —     —     —     —     —     —     —     —     —     —     (13,003)   —     (13,003) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Balance as of September 30, 2020
 
 
39,223,194
 
 
$
154,210
 
 
 
111,500,433
 
 
$
 112
 
 
 
3,054,318
 
 
$
3
 
  
—  
 
 
$
—  
 
 
 
—  
 
 
$
—  
  
 
(8,195,464)
 
 
$
(23,469)
 
 
$
28,398
 
 
$
(233,466)
 
 
$
(2,363)
 
 
$
(230,785)
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 

 

 

Redeemable Convertible Preferred Stock

 

Series A common stock

 

Series B common stock

 

Class A common stock

 

Class B common stock

 

 

 

 

 

 

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

 

Shares

 

Amount

Additional Paid-in Capital

 

Accumulated Deficit

 

Accumulated Other Comprehensive Loss

 

Total

Balance as of January 1, 2021

 

39,223,194

 

$154,210

 

112,012,693

 

$112

 

3,054,318

 

$3

 

  —

 

  —

 

  —

 

  —

$4,956

 

$(242,254)

 

$(2,037)

 

$(239,220)

Restricted stock cancelation

 

  —

 

  —

 

  (17,853,416)

 

  (18)

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

18

 

  —

 

  —

 

  —

Shares issued in connection with certain agreements

 

  —

 

  —

 

613,497

 

1

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

5,453

 

  —

 

  —

 

5,454

Restricted stock grants

 

  —

 

  —

 

3,687,431

 

4

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

  (4)

 

  —

 

  —

 

  —

Restricted stock forfeitures

 

  —

 

  —

 

  (1,629,369)

 

  (2)

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

2

 

  —

 

  —

 

  —

Foreign currency translation adjustment

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

  —

 

  —

 

54

 

54

Net loss

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

  —

 

  (24,374)

 

  —

 

  (24,374)

Balance as of March 31, 2021

 

39,223,194

 

$154,210

 

96,830,836

 

$97

 

3,054,318

 

$3

 

  —

 

  —

 

  —

 

$—

$10,425

 

$(266,628)

 

$(1,983)

 

$(258,086)

Conversion of Series A and Series B common shares into Class A and Class B common shares, respectively

 

  —

 

  —

 

  (96,830,836)

 

  (97)

 

  (3,054,318)

 

  (3)

 

60,421,367

 

60

 

39,463,787

 

39

1

 

  —

 

  —

 

  —

Conversion of convertible preferred stock to Class A common stock

 

  (39,223,194)

 

  (154,210)

 

  —

 

  —

 

  —

 

  —

 

73,813,713

 

74

 

  —

 

  —

193,136

 

  —

 

  —

 

193,210

Warrant Exercise

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

8,360,331

 

8

 

  —

 

  —

24,132

 

  —

 

  —

 

24,140

Shares issued in connection with the Initial Public Offering

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

14,773,939

 

15

 

  —

 

  —

147,724

 

  —

 

  —

 

147,739

Equity issuance cost

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

  (21,201)

 

  —

 

  —

 

  (21,201)

Shares repurchased

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  (4,138,866)

 

  (4)

 

  (2,307,692)

 

  (2)

  (64,462)

 

  —

 

  —

 

  (64,468)

Restricted stock grants

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

1,155,598

 

1

 

700,000

 

1

  (2)

 

  —

 

  —

 

  —

Restricted stock forfeitures

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  (2,334,753)

 

  (2)

 

  —

 

  —

2

 

  —

 

  —

 

  —

Restricted stock units vesting

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

219,072

 

  —

 

  —

 

  —

  —

 

  —

 

  —

 

  —

Stock based compensation

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

126,775

 

  —

 

  —

 

126,775

Foreign currency translation adjustment

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

  —

 

  —

 

  (129)

 

  (129)

Net loss

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

  —

 

  (94,922)

 

  —

 

  (94,922)

Balance as of June 30, 2021

 

  —

 

$—

 

  —

 

$—

 

  —

 

$—

 

152,270,401

 

$152

 

37,856,095

 

$38

$416,530

 

$(361,550)

 

$(2,112)

 

$53,058

Shares issued in connection with settlement of a dispute

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

200,000

 

  —

 

  —

 

  —

1,196

 

  —

 

  —

 

1,196

Restricted stock grants

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

3,281,016

 

3

 

  —

 

  —

  (3)

 

  —

 

  —

 

  —

Restricted stock forfeitures

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  (718,056)

 

  —

 

  —

 

  —

  —

 

  —

 

  —

 

  —

Common Shares canceled

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  (37,679)

 

—

 

—

 

—

—

 

  —

 

  —

 

—

Options exercised

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

26,485

 

  —

 

  —

 

  —

69

 

  —

 

  —

 

69

Stock based compensation

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

70,668

 

  —

 

  —

 

70,668

Foreign currency translation adjustment

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

  —

 

  —

 

  (77)

 

  (77)

Net loss

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

 

  —

  —

 

  (69,129)

 

  —

 

  (69,129)

Balance as of September 30, 2021

 

  —

 

$—

 

  —

 

$—

 

  —

 

$—

 

155,022,167

 

$155

 

37,856,095

 

$38

$488,460

 

$(430,679)

 

$(2,189)

 

$55,785

6

See accompanying notes to condensed unaudited consolidated financial statements.

6

7

Table of Contents

Condensed Unaudited Consolidated Statements of Cash Flows

(In thousands)

   
Nine months ended September 30,
 
   
        2021        
   
        2020        
 
Cash flows from operating activities:
          
Net loss
  
$
(188,425)
 
  $(44,437) 
Adjustments to reconcile net loss to net cash provided by operating activities:
          
Depreciation and amortization
  
 
33,135
 
   30,171 
Stock-based compensation
  
 
188,613
 
   79 
Deferred income taxes
  
 
(1,635)
 
   (170) 
Change in fair value of warrant and derivative liabilities
  
 
5,000
 
   16,400 
Gain on extinguishment of debt
  
 
(10,000)
 
   —   
Other, net
  
 
2,509
 
   2,880 
Changes in
non-cash
working capital (net of acquisitions):
          
Accounts receivable
  
 
7,423
 
   28,967 
Prepaid expenses
  
 
(1,917)
 
   (450) 
Other current assets
  
 
4,316
 
   349 
Other
non-current
assets
  
 
(542)
 
   1,294 
Deferred revenue
  
 
(1,314)
 
   184 
Accounts payable
  
 
(17,961)
 
   (325) 
Accrued expenses and other current liabilities
  
 
2,762
 
   (19,405) 
Other
non-current
liabilities
  
 
1,402
 
   1,105 
   
 
 
   
 
 
 
Net cash provided by operating activities
  
 
23,366
 
   16,642 
   
 
 
   
 
 
 
Cash flows from investing activities:
          
Capital expenditures
  
 
(6,883)
 
   (1,903) 
Website and software development costs
  
 
(13,421)
 
   (17,505) 
Business and asset acquisitions, net of cash acquired
  
 
(2,159)
 
   —   
   
 
 
   
 
 
 
Net cash used for investing activities
  
 
(22,463)
 
  
 
(19,408)
 
   
 
 
   
 
 
 
Cash flows from financing activities:
          
Proceeds from initial public offering, net of issuance costs
  
 
126,538
 
   —   
Cash paid for acquisition related liabilities
  
 
(64)
 
   (496) 
Proceeds from term loan, net of issuance cost
  
 
183,311
 
   —   
Proceeds from paycheck protection program loan
   —      10,000 
Repurchase of restricted stock
  
 
(64,468)
 
   —   
Exercise of
warrants and 
options
  
 
110
 
   —   
Repayments against the credit facilities
  
 
(180,745)
 
   (3,500) 
   
 
 
   
 
 
 
Net cash provided by financing activities
  
 
64,682
 
   6,004 
   
 
 
   
 
 
 
Effect of exchange rate changes on cash and cash equivalents
  
 
(130)
 
   (102) 
   
 
 
   
 
 
 
Net increase in cash and cash equivalents
  
 
65,455
 
   3,136 
   
 
 
   
 
 
 
Cash and cash equivalents, beginning of period
  
 
50,725
 
   37,818 
   
 
 
   
 
 
 
Cash and cash equivalents, end of period
  
$
116,180
 
  
$
40,954
 
   
 
 
   
 
 
 
Supplemental cash flow disclosures including
non-cash
activities:
          
Cash paid for interest
  
$
5,673
 
  $10,330 
Cash paid for income taxes, net
  
$
1,294
 
  $1,224 
Liability established in connection with acquisitions
  
$
1,795
 
  $—   
Shares issued in connection with acquisitions and other agreements
  
$
6,650
 
  $423 
Dividends on redeemable convertible preferred stock settled in Company’s equity
  
$
60,082
 
  $—   
Non-cash
settlement of warrants and derivative liabilities
  
$
63,100
 
  $—   
Capitalized stock-based compensation as website and software development costs
  
$
8,830
 
  $—   
Non-cash
consideration for website and software development costs
  
$
45
   $770 

 

 

Nine months ended September 30,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(227,486

)

 

$

(188,425

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

39,448

 

 

 

33,135

 

Stock-based compensation

 

 

231,289

 

 

 

188,613

 

Gain on debt extinguishment

 

 

-

 

 

 

(10,000

)

Deferred income taxes

 

 

(3,114

)

 

 

(1,635

)

Change in fair value of warrants and derivative liabilities

 

 

410

 

 

 

5,000

 

Others, net

 

 

12,018

 

 

 

2,509

 

Change in non-cash working capital (net of acquisitions):

 

 

 

 

 

 

Accounts receivable

 

 

(4,595

)

 

 

7,423

 

Prepaid expenses

 

 

(489

)

 

 

(1,917

)

Other current assets

 

 

(241

)

 

 

4,316

 

Other non-current assets

 

 

150

 

 

 

(542

)

Deferred revenue

 

 

(765

)

 

 

(1,314

)

Accounts payable

 

 

7,253

 

 

 

(17,961

)

Accrued expenses and other current liabilities

 

 

1,778

 

 

 

2,762

 

Other non-current liabilities

 

 

(267

)

 

 

1,402

 

Net cash provided by operating activities

 

 

55,389

 

 

 

23,366

 

Cash flows from investing activities:

 

 

 

 

 

 

Capital expenditures

 

 

(17,165

)

 

 

(6,883

)

Website and software development costs

 

 

(12,820

)

 

 

(13,421

)

Business acquisitions, net of cash acquired

 

 

(9,209

)

 

 

(2,159

)

Net cash used for investing activities

 

 

(39,194

)

 

 

(22,463

)

Cash flows from financing activities:

 

 

 

 

 

 

Cash paid for acquisition-related liabilities

 

 

(2,292

)

 

 

(64

)

Proceeds from credit facilities, net of issuance costs

 

 

5,625

 

 

 

183,311

 

Proceeds from IPO, net of issuance cost

 

 

-

 

 

 

126,538

 

Repurchase of shares

 

 

(4,310

)

 

 

(64,468

)

Issuance under employee stock purchase plan

 

 

1,320

 

 

 

-

 

Exercise of options

 

 

165

 

 

 

110

 

Repayments against the credit facilities

 

 

(5,625

)

 

 

(180,745

)

Net cash (used for) / provided by financing activities

 

 

(5,117

)

 

 

64,682

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(129

)

 

 

(130

)

Net increase in cash and cash equivalents

 

 

10,949

 

 

 

65,455

 

Cash and cash equivalents, beginning of period

 

 

103,859

 

 

 

50,725

 

Cash and cash equivalents, end of period

 

$

114,808

 

 

$

116,180

 

Supplemental cash flow disclosures including non-cash activities:

 

 

 

 

 

 

Cash paid for interest, net

 

$

4,003

 

 

$

5,673

 

Cash paid for income taxes, net

 

$

1,114

 

 

$

1,294

 

Liability established in connection with acquisitions

 

$

19,773

 

 

$

1,795

 

Capitalized stock-based compensation as website and software development costs

 

$

4,131

 

 

$

8,830

 

Shares issued in connection with acquisitions and other agreements

 

$

14,936

 

 

$

6,650

 

Dividends on redeemable convertible preferred stock settled in Company’s equity

 

$

-

 

 

$

60,082

 

Non-cash settlement of warrants and derivative liabilities

 

$

-

 

 

$

63,100

 

Non-cash consideration for website and software development costs

 

$

981

 

 

$

45

 

See accompanying notes to condensed unaudited consolidated financial statements.

7

8

Table of Contents

Notes to Condensed Unaudited Consolidated Financial Statements

(In thousands, except share and per share amounts)

1.
Organization and Background
(a)
Nature of Business

1.Organization and Background

(a)Nature of Business

Zeta Global Holdings Corp., a Delaware Corporation (“Zeta("Zeta" or “Zeta Global Holdings”), and Zeta Global Corp., a Delaware Corporation and the operating company of (“Zeta Global Holdings and a Delaware Corporation (“Zeta”Global” individually, or collectively with Zeta Global Holdings Corp. and its consolidated entities, as context dictates, the “Company”), is a marketing technology company that combinesuses proprietary data, artificial intelligence and software to create a technology platform that enables marketers to acquire, retain and grow customer relationships. The Company’s technology platform powers data-driven marketing programs for enterprises across a wide range of industries and utilizes all digital distribution channels including email, search, social, mobile, display and connected TV (“CTV”).TV. Zeta Global was incorporated and began operations in October 2007.

(b)
Initial Public Offering (“IPO”)

(b)Initial Public Offering (“IPO”)

On June 9, 2021, the Company’s registration statement on Form

S-1
relating to the initial public offering (“IPO”) of its Class A common stock was declared effective by the Securities and Exchange Commission (“SEC”). In connection with the IPO, on June 14, 2021, the Company issued and sold 14,773,939 shares of Class A common stock at a public offering price of $10$10 per share for net proceeds of $132.7$132.7 million, after deducting underwriters’ discounts and commissions (but excluding other offering expenses and reimbursements of $6.2$6.2 million). The Company used alla portions of the proceeds from the IPO (i) to satisfy the tax withholding and remittance obligations of holders of its outstanding restricted stock and restricted stock units that vested in connection with the offering by repurchasing and cancelling 1,799,650 shares of Class A restricted stock, 197,490 shares of Class B restricted stock and 92,671 restricted stock units (the “Tax Withholding Repurchase”); (ii) to repurchase and cancel 2,158,027 shares of Class A restricted stock and 88,518 restricted units at the election of certain holders (the “Class A Stock Repurchase”); (iii) to repurchase and cancel 1,767,692 shares of Class B common stock and 342,510 shares of restricted Class B common stock from its Chief Executive Officer and
Co-Founder,
David Steinberg (the “Class B Stock Repurchase”); and (iv) for general corporate purposes, including working capital, operating expenses and capital expenditures, although the Company did not designate any specific uses. The Company has used and may also use a portion of the net proceeds to fund possible investments in, or acquisitions of, complementary businesses, services or technologies.
(c)
Reorganization Transactions

(c)Reorganization Transactions

In connection with the IPO, the Company completed the following transactions (“Reorganization Transactions”):

•
As per the amended and restated certificate of incorporation, the authorized capital stock consists of 3,750,000,000 shares of Class A common stock, par value $0.001$0.001 per share, 50,000,000 shares of Class B common stock, par value $0.001$0.001 per share, and 200,000,000 shares of preferred stock, par value $0.001$0.001 per share.

The number of shares outstanding as of June 14, 2021 was 152,270,401 shares of Class A common stock and 37,856,095 shares of Class B common stock based on stock outstanding as of March 31, 2021, after giving effect to:

to the following transactions upon the Company’s IPO:

•
the conversion of 39,223,194 outstanding shares, and unpaid dividends on such outstanding shares, of its Series A preferred stock, Series
B-1
preferred stock, Series
B-2
preferred stock, Series C preferred stock, Series E preferred stock, Series
E-1
preferred stock, Series F preferred stock, Series
F-1
preferred stock, Series
F-2
preferred stock, Series
F-3
preferred stock and Series
F-4
preferred stock into 73,813,713 shares of its Class A common stock immediately prior to the completion of the IPO (the “Preferred Conversion”);
•
8
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8,360,331 shares of its Class A common stock issued in connection with the exercise of outstanding warrants (the “Warrant Exercise”);
•
the reclassification of 3,054,318 shares of its existing Series B common stock and 26,722,208 shares of Series A common stock into shares of Class A common stock and the reclassification of 70,108,628 shares of restricted Series A common stock into shares of restricted Class A common stock (of which 8,734,893 have vested in connection with the IPO and 4,138,866 shares were repurchased by the Company);
•
the exchange of 39,463,787 shares of Class A common stock (after giving effect to the Preferred Conversion and the Reclassification) held by the
Co-Founder
and Chief Executive Officer and his affiliates for an equivalent number of shares of Class B common stock, which went into effect upon the filing and effectiveness of our amended and restated certificate of incorporation pursuant to the terms of the exchange agreement entered into between its
Co-Founder
and Chief Executive Officer and his affiliates and us (the “Class B Exchange”); and

9

•
the repurchase of an aggregate of 4,138,866 shares of restricted Class A common stock and 2,307,692 shares of Class B common stock (of which 540,000 shares are restricted Class B common stock) as a result of the Stock Repurchase and the Tax Withholding Repurchase.

2.Basis of Presentation and Summary of Significant Accounting Policies

2.
Basis of Presentation and Summary of Significant Accounting Policies
(a)
Principles of Consolidation

(a)Principles of Consolidation

The accompanying condensed unaudited consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and as required by

Rule 10-01
of
Regulation S-X.
Accordingly, the condensed unaudited consolidated financial statements may not include all of the information and notes required by GAAP for audited financial statements. The
year-end
December 31, 20202021 consolidated financial statements data included herein was derived from audited financial statements but does not include all disclosures required by GAAP for complete financial statements. In the opinion of the Company’s management, the accompanying condensed unaudited consolidated financial statements contain all adjustments, consisting of items of a normal and recurring nature, necessary to present fairly the Company’s financial position as of September 30, 2021,2022, the results of operations, comprehensive income/(loss),loss and stockholders’ equity and cash flows for the three-month and nine-month periods ended September 30, 2022 and 2021, respectively, and 2020.cash flows for the nine-month period ended September 30, 2022 and 2021, respectively. The results of operations for the three-month and nine-month periods ended September 30, 2022 and 2021, and 2020respectively are not necessarily indicative of the results to be expected for the full year. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities, and related disclosures, as of the date of the financial statements, and the amounts of revenues and expenses reported during the period. Actual results could differ from estimates. The accompanying condensed unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the accompanying notes for the year ended December 31, 2020,2021, which arewas included in Zeta Global Holdings’ final prospectus dated June 9, 2021 andForm 10-K filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act on June 14, 2021 (the “Prospectus”).
February 25, 2022.

The accompanying condensed unaudited consolidated financial statements include the accounts of Zeta and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

The Company’s management considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date of issuance of these financial statements (see Note 16 to the condensed unaudited consolidated financial statements below).

statements.

(b)
Revenue Recognition

(b)Revenue Recognition

Revenue arises primarily from the Company’s technology platform via subscription fees, volume-based utilization fees and fees for professional services designed to maximize the customer usage of technology.

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Revenues are recognized when control of these services is transferred to the customers, in an amount that reflects the consideration that is expected to be entitled to an exchange for the services. Sales and other taxes collected by the Company in concurrence with the revenue-producing activities are excluded from revenues.

The Company enters into certain contracts with its vendors that involve both the purchase and sale of services with a single counterparty. The Company assesses each contract to determine if the revenue and expense should be presented gross or net. The Company recognizes revenue for these contracts to the extent that a standalone selling price is established for distinct services provided.

Contract assets and liabilities

Contract assets represent revenue recognized for contracts that have not been invoiced to customers and also certain sales commissions that are deferred and to be recognized over the expected term of contracts for which such commissions are paid.customers. Total contract assets were $2,507$3,247 and $1,748$2,286 as of September 30, 20212022 and December 31, 2020,2021, respectively, and are included in the account receivables, net, in the condensed unaudited consolidated balance sheets.

Contract liabilities consists of deferred revenues that represent amounts billed to the customers in excess of the revenue recognized. Deferred revenues are subsequently recorded as revenues when earned in accordance with the Company’s revenue recognition policies. During the nine months ended September 30, 20212022 and 2020,2021, the Company billed and collected $34,175$13,926 and $20,760$34,175 in advance, respectively, and recognized $35,489$14,688 and $20,576,$35,489 respectively, as revenues. As of September 30, 20212022 and December 31, 2020,2021, the deferred revenues are $2,739$6,104 and $4,053,$6,866, respectively.

10

Remaining Performance Obligations

Transaction price allocated to the remaining performance obligations represents contracted revenues that have not yet been recognized, which includes unearned revenues and unbilled amounts that will be recognized as revenues in future periods. Transaction price allocated to the remaining performance obligations is influenced by several factors, including seasonality, the timing of renewals, average contract terms and foreign currency exchange rates. Unbilled portions of the remaining performance obligations are subject to future economic risks including bankruptcies, regulatory changes and other market factors.

The Company Remaining performance obligations excludes amounts related to performance obligationsprofessional services contracts that are billed and recognized as the services are provided. This primarily consistsprovided on a time-and-materials basis.

As of professional services contracts that are on a

time-and-materials
basis.
September 30, 2022, the Company's remaining performance obligations for the next twelve months and thereafter were approximately $45,000 and $70,000, respectively.

Disaggregation of revenues from contract with customers

The Company reports disaggregation of revenues based on primary geographical markets and delivery channels / platforms. Revenues by delivery channels / platforms are based on whether the customer requirements necessitate integration with platforms or delivery channels not owned by the Company. When the Company generates revenues entirely through the Company platform, the Company considers it to be direct platform revenues.Direct Platform Revenues. When the Company generates revenue by leveraging its platform’s integration with third parties, it is considered integrated platform revenues.

Integrated Platform Revenues.

The following table summarizes disaggregation for the three and nine months ended September 30, 2022 and 2021, and September 30, 2020.respectively.

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Direct platform revenues

 

 

74

%

 

 

74

%

 

 

78

%

 

 

75

%

Integrated platform revenues

 

 

26

%

 

 

26

%

 

 

22

%

 

 

25

%

   
Three
 
months
 
ended
 
September 30
   
Nine
 
months
 
ended
 
September 30
 
   
2021
   
2020
   
2021
   
2020
 
Direct platform revenues
  $84,663   $63,346   $242,219   $180,589 
Integrated platform revenues
   30,470    31,938    81,273    73,085 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total revenues
  
$
115,133
 
  
$
95,284
 
  
$
323,492
 
  
$
253,674
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Refer to the Company’s accounting policy on “Segments” below for more information about disaggregation based on primary geographical markets.

(c)
Stock-based compensation and other stock-based payments:

(c)Stock-based compensation and other stock-based payments:

The measurement of share-basedstock-based compensation expense for all stock-based payment awards, including restricted stock, performance stock units (“PSUs”), shares purchased under its employee stock purchase plan and stock options granted to the employee,employees, consultants or advisors and

non-employee
directors, is based on the estimated fair value of the awards on the date of grant or date of modification of such grants.
The Company accounts for the modification to already issued awards as per guidance in ASC 718-20-35-3 (Refer to "Note 9. Stock-Based Compensation").

The Company accounts for all stock options and restricted shares granted prior to the IPO using a fair value-based method. The fair value of each stock option granted to employees is estimated on the date of the grant using the Black-Scholes-Merton option pricing model, and the related stock-based compensation expense is recognized over the expected life of the option. The fair value of the restricted shares granted

post-IPO
is based on the Company’s closing stock price as of the day prior to the date of the grants. The Company accounts for the forfeitures, as they occur.
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Since the Company’s restricted stock and restricted stock units had both a performance condition (i.e. initial public offering) and a service condition, the The Company uses the graded vesting attribution method to amortizerecognize the stock-based compensation.

The Company has issued PSUs to certain employees during the nine months ended September 30, 2022 and during the year ended December 31, 2021. The Company also adopted an ESPP plan during the year ended December 31, 2021 (Refer to "Note 9. Stock-Based Compensation"). The fair value of PSU awards was determined using the Monte Carlo simulation method and for the ESPP plan using the Black-Scholes-Merton model, by a third-party valuation firm engaged by the Company. The Company recognizes the stock-based compensation related to these plans on a straight-line basis over the vesting terms associated with these plans.

11

(d)
Segments

(d)Segments

The Company operates as 1one operating segment. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company’s CODM is the Chief Executive Officer. Since it operates as one operating segment, all required financial segment information can be found in the condensed unaudited consolidated financial statements. Revenues and long-lived assets by geographic region are based on the physical location of the customers being served or the assets and are as follows:

Revenues by geographical region consisted of the following;

   
Three months ended September 30
   
Nine months ended September 30
 
   
    2021    
   
    2020    
   
    2021    
   
    2020    
 
US
  $108,034   $88,014   $301,548   $234,565 
International
   7,099    7,270    21,944    19,109 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total revenues
  
$
115,133
 
  
$
95,284
 
  
$
323,492
 
  
$
253,674
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

US

 

$

146,488

 

 

$

108,034

 

 

$

398,418

 

 

$

301,548

 

International

 

 

5,764

 

 

 

7,099

 

 

 

17,403

 

 

 

21,944

 

Total revenues

 

$

152,252

 

 

$

115,133

 

 

$

415,821

 

 

$

323,492

 

Total long-lived assets by geographical region consisted of the following;

 

 

As of

 

 

 

September 30, 2022

 

 

December 31, 2021

 

US

 

$

42,233

 

 

$

43,023

 

International

 

 

865

 

 

 

645

 

Total long-lived assets

 

$

43,098

 

 

$

43,668

 

   
As of
 
   
    September 30, 2021    
   
    December 31, 2020    
 
US
  $43,734   $38,413 
International
   612    595 
   
 
 
   
 
 
 
Total long-lived assets
  
$
44,346
 
  
$
39,008
 
   
 
 
   
 
 
 
(e)
Concentration of Credit Risk

(e)Concentration of Credit Risk

No customer accounted for more than 10%10% of the Company’s total revenues during the periodnine months ended September 30, 20212022 and year ended December 31, 2020.

2021.

Financial instruments that potentially subject the Company to concentration risk consist primarily of accounts receivable from customers. As of September 30, 2022 and December 31, 2021,

, respectively, there was 0no customer that represented more than 10%10% of accounts receivables balance as of that date. Aseach of
December 31, 2020, the Company had receivables from one of its customers
,
which
represented
14% of the total account receivables balance as of that date. those dates. The Company continuously monitors whether there is an expected credit loss arising from customers and accordingly make provisions as warranted.

New accounting pronouncements

Recently adopted:

In May 2021, the FASB issued ASU No. 2021-04 Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation- Stock Compensation (Topic 718), and Derivatives and Hedging- Contracts in Entity’s Own Equity (Subtopic 815-40)- Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”). This amendment provides that for an entity that presents earnings per share (EPS) in accordance with Topic 260, the effects of a modification or an exchange of a freestanding equity-classified written call option that is recognized as a dividend should be an adjustment to net income (or net loss) in the basic EPS calculation. These amendments also require that an entity apply the guidance in Subtopic 470-50 to a modification or an exchange of a freestanding equity-classified written call option that is a part of or directly related to a modification or an exchange of an existing debt. An entity should recognize the effect of a modification or an exchange of a freestanding equity-classified written call option to compensate for goods or services in accordance with the guidance in Topic 718, Compensation—Stock Compensation. This update was effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company adopted ASU 2021-04 on January 01, 2022. The adoption of this customer,standard did not have any material impact on the Company's condensed unaudited consolidated financial statements.

Not yet adopted:

InFebruary 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” (“ASU 2016-02”). The standard establishes a ROU model that requires a lessee to recognize a right of use (“ROU”) asset and a lease liability on the balance sheet for all leases with a term longer than 12 months (based on the practical expedient provided in the ASU that allows 12 months or less not to be presented on the balance sheet) and requires the disclosure of key information about leasing arrangements. Leases are classified

12

as finance or operating, with classification affecting the subsequent expense pattern and presentation of expense recognition in the income statement. Subsequently, the FASB issued the following standards related to ASU 2016-02: ASU 2018-01, “Land Easement Practical Expedient for Transition to Topic 842”, ASU 2018-10, “Codification Improvements to Topic 842, Leases”, ASU 2018-11, “Leases (Topic 842): Targeted Improvements” (“ASU 2018-11”), ASU 2018-20, “Narrow-Scope Improvements for Lessors” and ASU 2019-01, “Leases (Topic 842): Codification Improvements”, which provided additional guidance and clarity to ASU 2016-02 (collectively, the “Lease Standard”). In 2021, the FASB further released ASU No. 2021-05, Leases (Topic 842) – Lessors – Certain Leases with Variable Lease Payments (“ASU 2021-05”), ASU No. 2021-09, Leased (Topic 842)- Discount Rate for Lessees That Are Not Public Business Entities (“non-PBE”) (“ASU 2021-09”). As per ASU 2020-05, issued by FASB, the new guidance is applicable to a non-PBE from fiscal year beginning after December 15, 2021 and interim periods beginning after December 15, 2022. As of December 31, 2021, the Company holds emerging growth company status, as such it is permitted to use non-PBE adoption of ASC 842 and therefore will present the impact of the new guidance in its annual statement as of December 31, 2022 and interim statements thereafter. The adoption of new guidance is not expected to have a material impact on the Company’s condensed unaudited consolidated statements of operations. Based on its preliminary assessment the Company expects that most of its lease commitments will be recognized as operating leases with right-of-use assets and liabilities of approximately $12.0 million to $14.0 million as of the year endeddate of adoption.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which was subsequently amended in November 2018 through ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses.” ASU No. 2016-13 will require entities to estimate lifetime expected credit losses for trade and other receivables, net investments in leases, financing receivables, debt securities and other instruments, which will result in earlier recognition of credit losses. Further, the new credit loss model will affect how entities in all industries estimate their allowance for losses for receivables that are current with respect to their payment terms. ASU No. 2018-19 further clarifies that receivables arising from operating leases are not within the scope of Topic 326. Instead, impairment from receivables of operating leases should be accounted for in accordance with Topic 842, Leases. As per the latest ASU 2020-02, FASB deferred the timelines for certain small public and private entities, thus the new guidance will be adopted by the Company for the annual reporting period beginning January 1, 2023, including interim periods within that annual reporting period. The standard will apply as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company does not expect adoption of this new guidance to have a material impact on its results of operations, financial condition, and financial statement disclosures.

In March 2020, the FASB issued ASU No. 2020-04 Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01 Reference Rate Reform (Topic 848) (“ASU 2021-01)”. The amendments in this update clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The ASU may be applied through December 31, 2020, no provision was warranted or recorded.2022. The Company does not expect adoption of this new guidance to have a material impact on its results of operations, financial condition, and financial statement disclosures.

In October 2021, the FASB released ASU No.2021-08, Business Combinations (Topic 805)- Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments in this update require that an entity (acquirer) recognize, and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and require application of the new accounting guidance at the beginning of the earliest comparative period presented in the year of adoption, however early adoption is permitted. The Company does not expect adoption of this new guidance to have a material impact on its results of operations, financial condition, and financial statement disclosures.

13

3.Intangible Assets

3.
Intangible Assets

The details of intangible assets and related accumulated amortization are set forth below:

 

 

As of September 30, 2022

 

 

As of December 31, 2021

 

 

 

Gross
value

 

 

Accumulated
amortization

 

 

Net
value

 

 

Gross
value

 

 

Accumulated
amortization

 

 

Net
value

 

Data supply relationships

 

$

21,173

 

 

$

6,133

 

 

$

15,040

 

 

$

8,750

 

 

$

1,875

 

 

$

6,875

 

Tradenames

 

 

2,720

 

 

 

2,564

 

 

 

156

 

 

 

2,720

 

 

 

2,171

 

 

 

549

 

Completed technologies

 

 

28,792

 

 

 

21,304

 

 

 

7,488

 

 

 

23,092

 

 

 

17,568

 

 

 

5,524

 

Customer relationships

 

 

71,099

 

 

 

48,182

 

 

 

22,917

 

 

 

65,999

 

 

 

37,984

 

 

 

28,015

 

Total intangible assets

 

$

123,784

 

 

$

78,183

 

 

$

45,601

 

 

$

100,561

 

 

$

59,598

 

 

$

40,963

 

   
As of September 30, 2021
   
As of December 31, 2020
 
   
Gross
value
   
Accumulated
amortization
   
Net
value
   
Gross
value
   
Accumulated
amortization
   
Net
value
 
Publisher and data supply relationships
  $7,500   $1,146   $6,354   $—     $—     $—   
Tradenames
   2,720    2,040    680    2,720    1,634    1,086 
Completed technologies
   20,292    16,352    3,940    20,292    13,037    7,255 
Customer relationships
   52,159    34,201    17,958    45,239    24,989    20,250 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total intangible assets
  
$
  82,671
   
$
  53,739
   
$
  28,932
   
$
  68,251
 
  
$
  39,660
 
  
$
  28,591
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
 
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Amortization expense of intangibles for the three and nine months ended September 30, 2022 was $5,051$6,348 and $14,079$18,585, respectively, and for the three and nine months ended September 30, 2021 respectively,was $5,051 and $3,913 and $11,754 for the three and nine months ended September 30, 2020,$14,079, respectively.

Weighted average useful life of the unamortized intangibles as of September 30, 20212022 was 2.103.64 years. Based on the amount of intangible assets subject to amortization, as of September 30, 2021, the Company’s estimated future a

m
ortizationamortization expense over the next five years and beyond are as follows:

 

 

As of September 30, 2022

 

Year ended December 31,

 

 

 

Remaining three months of 2022

 

$

5,039

 

2023

 

 

15,727

 

2024

 

 

11,265

 

2025

 

 

5,610

 

2026

 

 

4,161

 

2027 and thereafter

 

 

3,799

 

Total

 

$

45,601

 

4.Goodwill

Total estimated future amortization expense is as follows:
     
   
As of September 30, 2021
 
Year ended December 31,
     
Remaining three months of 2021
  $4,952 
2022
   15,332 
2023
   6,040 
2024
   2,002 
2025
   482 
2026 and thereafter
   124 
   
 
 
 
Total
  
$
28,932
 
   
 
 
 
4.
Goodwill
The following

Following is a summary of the carrying value of goodwill:

Balance as of January 1, 2022

 

$

114,509

 

Acquisition of ArcaMax

 

 

18,548

 

Foreign currency translation

 

 

(48

)

Balance as of September 30, 2022

 

$

133,009

 

     
Balance as of January 1, 2021
  $76,432 
Acquisition of Vital
   3,910 
Acquisition of Kinetic
   1,578 
Foreign currency translation
   (3) 
   
 
 
 
Balance as of September 30, 2021
  $
              81,917
 
   
 
 
 

There were no events during the three months ended September 30, 20212022 to which an impairment analysis would be warranted.

5.
Acquisitions

5.Acquisitions

The Company’s acquisitions have been accounted for underCompany uses the purchase method of accounting. Theaccounting in accordance with ASC 805, Business Combinations. This standard requires that the total purchase pricecost of eachan acquisition wasbe allocated to the fair value oftangible and intangible assets acquired and liabilities assumed based on theirthe fair valuesvalue of the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates and assumptions used in assessing fair value are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with any excessthe corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially recorded in connection with a business combination as goodwill. of the acquisition date. Acquisition-related expenses are expensed when incurred.

The Company agreedmay also agree to pay a portion of the purchase price for certain acquisitions in the form of contingent purchase price andconsideration, the unpaid amounts of these liabilities are included in the acquisition relatedacquisition-related liabilities on the condensed unaudited consolidated balance sheets as of September 30, 20212022 and December 31, 2020.

2021.

14

(a) ArcaMax Publishing, Inc. (ArcaMax)

On March 11, 2022, the Company entered into a stock purchase agreement with the seller of ArcaMax Publishing, Inc., (“ArcaMax”) to purchase all of its issued and outstanding shares of common stock. The stock purchase agreement was effective March 1, 2022. The fair value of the aggregate purchase consideration for the ArcaMax acquisition was $26,925. The Company paid cash consideration of $9,322, issued 926,785 shares of Class A common stock with a fair value of $10,000, and agreed to pay certain earn-outs valued at $6,577 based on the operating performance of the acquired business after the closing date in cash and in shares of the Company, $962 in cash holdback and working capital adjustment of $64, payable in cash. The Company has recorded this transaction based on the preliminary purchase price allocation. Accordingly, the Company has recognized $5,100 as customer relationships intangibles, $5,700 as completed technologies, $18,548 as goodwill, $2,810 as deferred tax liability and $387 as other net assets associated with this acquisition. The Company amortizes the intangible assets over the weighted average life of 5 years.

Prior to the acquisition, ArcaMax was a leader in the development and distribution of more than 400 interest-based newsletters to consumers in the United States, distributing news and syndicating features to a growing opted-in subscriber audience of four million readers. Therefore, the Company paid a premium to acquire ArcaMax assets, which is represented as Goodwill in the above purchase price allocation. The Company incurred $344 as acquisition-related expenses related to this acquisition.

Goodwill acquired by the Company in its ArcaMax acquisition is not deductible for tax purposes.

(b) Apptness Media Group, LLC (“Apptness”):

On September 30, 2021, the Company entered into an asset purchase agreement with the sellers of Apptness to acquire its data platform business and hiring certain employees of Apptness who are engaged in the data platform business. This agreement was effective October 1, 2021. Since the assets acquired under the agreement with Apptness meets the definition of a business under ASC 805, Business Combinations, the Company concluded that it represents an acquisition of a business. The Company paid cash consideration of $17,934, issued 3,924,914 Class A common stock with a fair value of $23,000 and agreed to pay certain earn-outs valued at $7,748 based on the operating performance of the acquired business after the closing date and the Company shall pay such earn-out for a period of three years from the acquisition date in cash and in shares of the Company, and $1,396 in cash holdback. During the year ended December 31, 2021, the Company finalized the purchase price allocation for its Apptness acquisition. Accordingly, the Company recognized $13,530 as customer relationships intangibles, $2,740 as developed technology, $60 as database, $31,765 as goodwill and $1,983 as other net tangible assets associated with this acquisition. The Company amortizes the intangible assets over the weighted average life of 6.31 years.

Prior to the acquisition, Apptness operated a digital survey platform that provides comprehensive capabilities to engage consumers on sites across the open web, deliver proprietary insights and audiences to marketers, and providing publishers with new monetization opportunities. Therefore, the Company paid a premium to acquire Apptness assets, which is represented as Goodwill in the above purchase price allocation. The Company incurred $153 as acquisition-related expenses related to this acquisition

Goodwill acquired by the Company in its Apptness acquisition is deductible for tax purposes.

(c) Vital Digital, Corp (“Vital”):

On March 3, 2021, the Company entered into a stock purchase agreement with the sellers of Vital Digital, Corp (“Vital”) to purchase all of the issued and outstanding shares of common stock of Vital. The fair value of the purchase consideration for this transaction is determined as $8,950, with $3,400 in cash, 306,748 shares of Series A common stock with a fair value of $2,710, $2,262 in earnouts based on the operating performance of the acquired business after the closing date, and $578 in cash holdback. During the year ended December 31, 2021, the Company finalized the purchase price allocation for its Vital acquisition. Accordingly, the Company has recognized $5,630 as customer relationship intangibles, $4,736 as goodwill, $1,465 as deferred tax liability and $49 as other net assets associated with this acquisition. The Company amortizes the customer relationship over 3 years.

Prior to the acquisition, Vital delivered data-driven marketing solutions that were complementary to the Company’s business, and therefore the Company paid a premium to acquire Vital assets, which is represented as Goodwill in the above purchase price allocation.

Goodwill acquired by the Company in its Vital acquisition is not deductible for tax purposes.

(d) Kinetic Data Solutions, LLC (“Kinetic”):

On March 1, 2021, the Company entered into a merger agreement with the sellers of Kinetic Data Solutions, LLC (“Kinetic”), an entity controlled by the Chief Executive Officer of the Company, to purchase all of the issued and outstanding stock of Kinetic. The fair value of the purchase consideration was estimated at $2,762.$2,762. The Company agreed to issue 306,749 shares of Series

15

A common stock with a fair value of $2,738$2,738 and certain earn-outs of $24 based on the operating performance of the acquired business after the closing date. The

earn-out
was calculated based on the operating performance of the acquired business and the Company shall pay such
earn-out
for a period of three years from the acquisition date in cash and in restricted shares of the Company. TheDuring the year ended December 31, 2021, the Company has recorded this transaction based onfinalized the preliminary purchase price allocation.allocation for its Kinetic acquisition. Accordingly, the Company recognized $1,600$1,600 as customer relationships intangibles, $1,578$1,579 as goodwill and $416$417 as deferred tax liabilities associated with this acquisition.
On March The Company amortizes the customer relationships over 3 2021, years.

Prior to the acquisition, Kinetic was engaged in the business of marketing solutions focused on homeowners. Kinetic had homeowner data that the Company entered intointegrated with its proprietary data to enhance its business and therefore paid a stock purchase agreement withpremium to acquire Kinetic assets, which is represented as Goodwill in the sellers of Vital Digital, Corp (“Vital”) to purchase all of the issued and outstanding shares of common stock of Vital. The fair value of the purchase consideration for this transaction is determined as $7,894, with $3,400 in cash, 306,748 shares of Series A common stock with a fair value of $2,710, $1,206 in earnouts based on the operating performance of the acquired business after the closing date, and $578 in cash holdback. The Company has recorded this transaction based on the preliminaryabove purchase price allocation. Accordingly, the Company has recognized $5,320 as customer relationship intangibles, $3,910 as goodwill, $1,385 as deferred tax liability and $49 as other net assets associated with this acquisition. Caivis, one of the Company’s related parties, owned 5% interest in Vital as of the effective date of this stock purchase agreement (refer to Note 13 for a description of relationship with Caivis).

12
Table of Contents
The revenues and earnings from these acquisitions are not significant to the Company’s condensed unaudited consolidated financial statements for the three months and nine months ending September 30, 2021.

Goodwill acquired by the Company in these acquisitionsits Kinetic acquisition is not deductible for tax purposes.

6.
Acquisition Related Liabilities
The pro forma results of the Company as if these acquisitions had taken place on the first day of 2020 were not materially different from the amounts reflected in the accompanying condensed unaudited consolidated financial statements. The Company has recorded the earn-outs related to these acquisitions based on the fair value determined on the date of the acquisition, however the Company believes that the actual payouts for these acquisitions could be different from such recorded fair values.
6.
Acquisition Related Liabilities

The following is a summary of acquisition related liabilities:

 

 

eBay CRM

 

 

Sizmek

 

 

IgnitionOne

 

 

Kinetic

 

 

Vital

 

 

Apptness

 

 

ArcaMax

 

 

Total

 

Balance as of January 1, 2022

 

$

8,000

 

 

$

1,927

 

 

$

1,360

 

 

$

24

 

 

$

2,840

 

 

$

8,806

 

 

$

-

 

 

$

22,957

 

Additions

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7,539

 

 

 

7,539

 

Payments made during the period

 

 

-

 

 

 

(2,168

)

 

 

-

 

 

 

(205

)

 

 

(1,105

)

 

 

-

 

 

 

-

 

 

 

(3,478

)

Change in fair value of earn-out

 

 

-

 

 

 

241

 

 

 

-

 

 

 

1,133

 

 

 

488

 

 

 

8,444

 

 

 

1,928

 

 

 

12,234

 

Balance as of September 30, 2022

 

$

8,000

 

 

$

-

 

 

$

1,360

 

 

$

952

 

 

$

2,223

 

 

$

17,250

 

 

$

9,467

 

 

$

39,252

 

                                                                                                                                                                                              
   
eBay CRM
   
Sizmek
   
PlaceIQ
   
Ignition One
   
Kinetic
   
Vital
   
Total
 
Balance as of January 1, 2021
  
$
17,137
 
  
$
4,402
 
 
$
256
 
 
$
1,360
 
  
$
—  
 
  
$
—  
   $23,155 
Additions
   —      —     —     —      24    1,784    1,808 
Payments made during the year
   —      —     (64)   —      —      —      (64)
Change in fair value of
earn-out
   649    (470)   (192)   —      —      —      (13)
   
 
 
   
 
 
  
 
 
  
 
 
   
 
 
   
 
 
   
 
 
 
Balance as of September 30, 2021
  
$
17,786
 
  
$
3,932
 
 
$
—  
  
$
1,360
 
  
$
24
 
  
$
1,784
 
  
$
24,886
 
   
 
 
   
 
 
  
 
 
  
 
 
   
 
 
   
 
 
   
 
 
 
The

During the three months and nine months ended September 30, 2022, the businesses acquired by the Company in its Kinetic, Apptness and ArcaMax acquisitions have performed better than the estimates used for the initial purchase price allocation, as such the Company recorded the changes in the fair value of the acquisition related liabilitiesearn-outs, which are included in other expenses / (income) on the condensed unaudited consolidated statements of operations and comprehensive loss.

loss and others on the condensed unaudited consolidated statements of cash flows.

The Company is a party to a litigation matter in relation to certain acquisition related liabilities for its eBay CRM acquisition dated November 2, 2015. The amounts payable for eBay CRM has been contested by the Company in the court of law.

On October 14, 2021, the Company paid a portion of the liability for $9,786 to the sellers of eBay CRM business in satisfaction of a judgment, which was being accrued at $9,137. As such, the Company accrued an additional amount of $649 during the three months ending on September 30, 2021 such that the Company has full accrual for the payment relating to thisrecorded a liability of $8,000 as of September 30, 2021. Further, the Company has provided a letter of credit amounting to $6,028, against these payable amounts,2022 which
is in the process of being
cancelled upon satisfaction of the judgment. Another portion of the liability, which stands at $8,000, is still being contested by the Company and in view of the numerous legal, technical and factual issues involved in these lawsuits, the Company may resolve the remaining liabilities in any amount higher or lower than the accruals asaccruals.

On March 10, 2022, the Company entered into a settlement agreement with the sellers of Sizmek to resolve the dispute related to the contingent purchase consideration payable in connection with the Sizmek acquisition made during the year ended December 31, 2019. As such, the Company paid $1,085 in cash and issued 100,000shares of Class A common stock valued at $1,083, during the nine months ended September 30, 2021.

2022. As a result of this settlement, the Company accrued an additional amount of $241 during the nine months ended September 30, 2022, which was recorded as a change in fair value of earn-out under other expenses on the condensed unaudited consolidated statements of operations and comprehensive loss.

7.Credit Facilities

7.
Credit Facilities

The Company’s long-term borrowings are as follows:

 

 

As of September 30, 2022

 

 

As of December 31, 2021

 

Credit facility

 

$

185,000

 

 

$

185,000

 

Less:

 

 

 

 

 

 

Unamortized deferred financing cost

 

 

(1,132

)

 

 

(1,387

)

Long-term borrowings

 

$

183,868

 

 

$

183,613

 

         
   
As of September 30, 2021
   
As of December 31, 2020
 
         
Credit facility
  $185,000   $137,950
 
Loan under paycheck protection program
   —      10,000
 
Revolving loan
   —      42,600
 
   
 
 
   
 
 
 
Total borrowings
  
 
185,000
 
  
 
190,550
 
Less:
         
 
Unamortized discount on debt
   —      (426
) 
Unamortized deferred financing cost
   (1,472)    (431
) 
   
 
 
   
 
 
 
Long-term borrowings
  
$
183,528
 
  
$
189,693
 
   
 
 
   
 
 
 
In July 2016, the Company entered into a revolving credit, guarantee and security agreement with a financial institution and subsequently amended the agreement in May 2017. The agreement provides for a maximum revolving advance amount of $50,000. Interest on the outstanding balance is charged at an annual rate of the financial institution’s Prime Lending Rate (“PLR”)+
1.25
% or London Interbank Offered Rate (“LIBOR”)+
2.25
%, as elected by the Company. As of December 31, 2020, the outstanding balance of the revolving loan was $42,600. In addition, the Company also had an outstanding letter of credit amounting to $7,272 against the available revolving credit facility as of December 31, 2020. The credit facility was fully secured by the financial institution with a first lien on the Company’s account receivables. The Senior Secured Credit Facility, availed by the Company on February 3, 2021, was used to fully repay and terminate this Credit Agreement with a total payoff amount of $42,792.
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Table of Contents
In July 2015, the Company entered into a term loan facility with a financial institution that was also invested in the Company’s Series
E-1
redeemable convertible preferred stock and subsequently invested in the Company’s Series F redeemable convertible preferred stock. The term loan facility, as amended, is for up to $142,950, which consists of a $70,000 initial term loan that was drawn at closing date, a $32,950 delay draw term loan and $40,000 in an incremental term loan commitment. As of December 31, 2020, the Company has an undrawn facility of $5,000, on the delay draw term loan. Interest on the outstanding balances is payable quarterly at an annual rate of
LIBOR+7.5
%. Interest expense for the term loan is calculated using a LIBOR rate of no lower than 1.0%. The extensions of credit may be used solely (a) to refinance indebtedness, (b) to pay any expenses associated with this line of credit agreement, (c) for working capital, capital expenditures, acquisitions and redemptions of equity interests and (d) for other general corporate purposes and shall not be used for purchases of margin stock. The Company will be required to repay the principal balance and any unpaid accrued interest on the loans at the maturity date of July 29, 2022. The financial institution had a second lien on the account receivables of the Company and first lien on all the other assets. The Senior Secured Credit Facility, availed by the Company on February 3, 2021, was used to fully repay and terminate this Credit Agreement with a total payoff amount of $137,953.

On February

3, 2021, the Company entered into a $
222,500
Senior Secured Credit Facility (“Senior Secured Credit Facility”) with a syndicate of financial institutions and institutional lenders, led by BofA Securities, Inc., as a lead arranger and sole bookrunner, and Bank of America, N.A., as sole administrative agent.
The Senior Secured
Credit Facility is for up to $222,500, which consists of (i) a $73,750$73,750 initial Revolving Facility that was drawn at closing date,revolving facility, (ii) a $111,250 Term Facility that was drawn at closing date,$111,250 term loan facility, and (iii) a $37,500$37,500 in incremental Revolving Facility commitment thatrevolving facility commitment. Out of the total available credit facility $31,875 remains undrawn.undrawn as of September 30, 2022. In addition, the Company has an outstanding letter of credit amounting to $7,272
$1,244against the available revolving credit facility, of which a letter of credit amounting to $6,028 against the amount payable to eBay
is in the process of being
cancelled (refer to Note 6).facility. The credit facility was fully secured by the financial institution with a first lien on the Company’s
assets.

16

Interest on the

current outstanding balances is payable quarterly and calculated using a LIBOR rate of no lower than LIBOR+2.125%2.125% and no higher than LIBOR+2.625%2.625% based on the Company’s consolidated net leverage ratio stated in the credit agr
e
ement.agreement. The effective interest rate on this debt for the nine months ended September 30, 2022 was 3.6%. The extensions of credit may be used solely (a) to refinance existing indebtedness, (b) to pay any expenses associated with this line of credit agreement, (c) for acquisitions, and (d) for other general corporate purposes. The Company is required to repay the principal balance and any unpaid accrued interest on the Senior Secured Credit Facility on February 3, 2026.2026. During the nine months ended September 30, 2022, the Company borrowed $5,625 against the revolver facility and repaid the same amount against the term loan under the credit facility. The Company incurred $1,699 asinitial debt issuance costs of $1,699 incurred in the form of the legal fee, underwriter’s fee, etc., and these costs are recognized as a reduction in the long-term borrowings in the condensed unaudited consolidated balance sheets, and are being amortized over the term of the contract on a straight-line basis.

The Senior

Secured Credit Facility contains certain financial maintenance covenants including consolidated net leverage ratio and consolidated fixed charge coverage ratio. In addition, this agreement contains restrictive covenants that may limit the Company’s ability to, among other things, acquire equity interestinterests of the Company from its shareholders,stockholders, repurchase / retire any of the Company’s securities, and pay dividends or distribute excess cash flow. Additionally, the Company is required to submit periodic financial covenant letters that would include current net leverage ratio and fixed charge coverage ratio, among others. As of September 30, 2021,2022, the applicable total leverage ratio and fixed charge coverage ratio was 4.0were 3.0 and 1.25, respectively, and the Company was in compliance with these covenants.

Since the time
lag between the effective date of the new credit facility and September 30, 2021 is minimal and the interest rates on the Company’s new credit facility approximates the current market rates, the fair value of the debt is approximately equal to the carrying amount as of September 30, 2021.
On April 23, 2020, the Company received proceeds from a
loan
in the amount of $10,000, bearing annual interest of 1% and was due on
April 24, 2022
(the “PPP Loan”) pursuant to the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The Company evaluated the applicable accounting guidance relative to the PPP Loan and accounted for the proceeds of the PPP Loan as debt under ASC 470. On June 10, 2021, the Small Business Administration (“SBA”) approved the forgiveness for the full amount of the PPP Loan which included principal of $10,000. The Company recognized the reversal of the debt liability upon forgiveness of the PPP Loan as “Gain on extinguishment of debt” in its condensed unaudited consolidated statements of operations and comprehensive loss during the nine months ended September 30, 2021.

As of September 30, 2021,2022, the repayment schedule for the long-term borrowings was as follows:

     
   
As of September 30, 2021
 
Year Ended December 31,
     
Remaining three months of 2021
  $0   
2022
   5,625 
2023
   11,250 
2024
   11,250 
2025
   16,875 
2026 and thereafter
   140,000 
   
 
 
 
Total*
  
$
185,000
 
   
 
 
 

 

 

As of September 30, 2022

 

Year ended December 31,

 

 

 

Remaining three months of 2022

 

$

—

 

2023

 

 

11,250

 

2024

 

 

11,250

 

2025

 

 

16,875

 

2026

 

 

145,625

 

Total*

 

$

185,000

 

*Includes $4,219$8,438 repayable against the term loan facility within

the
twelve month twelve-month period ending September 30, 2022.2023. The Company intends to draw against the available revolving facility to pay off term loan installments and therefore the total borrowings are included in “Long-term borrowings” on the condensed unaudited consolidated balance sheets as of September 30, 2021.
2022.

8.Commitments and Contingencies

(a)Purchase obligations

14
Table of Contents
8.
Commitments and Contingencies
(a)
Purchase obligations

The Company entered into

non-cancellable
vendor agreements to purchase services. As of September 30, 2021,2022, the Company was party to outstanding purchase contracts as follows:

 

 

As of September 30, 2022

 

Year Ended December 31,

 

 

 

Remaining three months of 2022

 

$

7,719

 

2023

 

 

35,776

 

2024

 

 

28,290

 

2025

 

 

5,867

 

2026

 

 

1,425

 

Total

 

$

79,077

 

     
   
As of September 30, 2021
 
Year Ended December 31,
     
Remaining three months of 2021
  $2,468 
2022
   9,785 
2023
   5,700 
2024
   5,700 
2025
   5,700 
2026 and thereafter
   1,425 
   
 
 
 
Total
  
$
30,778
 
   
 
 
 
(b)
Lease commitments

(b)Lease commitments

The Company maintains leased offices in the United States of America, United Kingdom, India, Belgium and France. Deferred rent as of September 30, 20212022 and December 31, 20202021 was $2,458$2,688 and $2,652,$2,508, respectively, for these leases and is included in other current liabilities and

non-current
liabilities on the condensed unaudited consolidated balance sheets. Commitments for the base rents as of September 30, 2021 are as follows:

17

 

 

As of September 30, 2022

 

Year Ended December 31,

 

 

 

Remaining three months of 2022

 

$

859

 

2023

 

 

2,608

 

2024

 

 

2,045

 

2025

 

 

1,846

 

2026

 

 

1,678

 

2027 and thereafter

 

 

3,483

 

Total

 

$

12,519

 

     
   
As of September 30, 2021
 
Year Ended December 31,
     
Remaining three months of 2021
  $778 
2022
   2,553 
2023
   2,133 
2024
   1,953 
2025
   1,788 
2026 and thereafter
   5,062 
   
 
 
 
Total
  
$
14,267
 
   
 
 
 

(c)Other contingencies

The Company is a party to various litigations and administrative proceedings related to claims arising from its operations in the ordinary course of business including in relation to certain contingent purchase price obligations noted above. The Company records provisions for losses when claims become probable, and the amounts are estimable. Although the outcome of these matters cannot be predicted with certainty, the Company’s management believes that the resolution of the matters will not have a material impacteffect on the Company’s business, results of operations, financial condition, or cash flows.

9.
Stock-Based Compensation

9.Stock-Based Compensation

Stock-based compensation plan

In 2008, the Company adopted its 2008 Stock Option/Stock Issuance Plan and, in 2017, the Company adopted the Zeta Global Holdings Corp. 2017 Incentive Plan (collectively, the “Plans”).

The Plans permitpermitted the issuance of stock options, restricted stock and restricted stock units to employees, directors and officers, consultants or advisors and

non-employee
directors of the Company. Options granted under the Plans expire no later than ten years from the grant date. ThePrior to the IPO, the restricted stock and restricted stock units granted under the Plans generally did not vest until a change in control, which generally does not include an initial public offering.control. Upon a change in control, restricted stock and restricted stock units vest as to 25%25% of the shares with the balance of the shares vesting in equal quarterly installments following the change in control over the remainder of a fivefive-year-year term from the original date of grant. The restricted stock and restricted stock units will fully vest upon a change in control to the extent five years has passed from the original date of grant of the restricted stock or restricted stock units. Since the vesting of these awards was contingent upon the change of control event, which was not considered probable until it occurs, the Company did not record any stock-based compensation expense for such awards.awards prior to the IPO, a change in control event. The stock-based compensation has been recognized following the vesting of restricted stock, restricted stock units and options as described below.
In connection with our IPO, the Company adopted the Zeta Global Holdings Corp. 2021 Incentive Award Plan (the “2021 Plan”), which was effective as of the day prior to the first public trading date of our Class A common stock. All restricted stock, restricted stock units and options granted since the IPO have been granted under the 2021 Plan.

In the past, the Company has cancelled certain restricted stock and in lieu ofconnection with such cancellation has issued restricted stock units to the holders of that restricted stock, with the same vesting conditions as the cancelled restricted stock.

15
Table of Contents

Restricted Stock and Restricted Stock Units

As noted above, the Company’s restricted stock and restricted stock units granted prior to the IPO did not vest until thea change of control. On March 24, 2021, the Company’s board of directors approved a modification in the vesting terms of its restricted stock and restricted stock unit awards. Pursuant to that approval, the existing restricted stock and restricted stock units were divided into three broad categories with different vesting conditions as follows:

a)
For the first category of holders, terms of the modification provide the holders an option to tender up to 20% of their outstanding awards to the Company in a
buy-back
program for a cash payout on the effective date of the IPO, with the remaining percentage of the awards subject to future vesting beginning at the end of the first quarter following the
one-year
anniversary of the IPO and extending for a period of four years thereafter.
b)
For the second category of holders, terms of the modification provide for vesting upon the effective date of the IPO as follows: (i) 25% of shares with an original grant date of less than five years prior to the IPO and (ii) 100% of shares with a grant date of five years or older. Post the IPO, additional vesting is deferred for one year. Thereafter the rema
i
ning shares shall vest in equal quarterly installments at the end of each quarter until the fifth anniversary of the date of the original grant.
c)
For the third category of holders, terms of the modification provide for vesting to begin at the end of the first quarter following the
one-year
anniversary of the IPO, with such shares vesting in equal quarterly installments at the end of each quarter until the fifth anniversary of the date of the IPO.
The revised terms were communicated to the restricted stock and restricted stock unit holders.
The aboveThis modification was accounted for under the guidance in ASC
718-20-35-3.
Given the vesting of the modified awards contained a performance condition associated with the IPO, the Company had determined that the modification was considered
improbable-to-improbable
under ASC
718-20-55-118
through 119.

The restricted stock or restricted stock units that arewere tendered by the holders in the

buy-back
program for the first category ofcertain restricted stock and restricted stock units were liability classified and as such the expense related to these grants has been recognized based on the settlement price as of the date of IPO. In connection with the other two categories of holders, the Company will recognize compensation expense over the modified vesting terms, based on the fair value as of the date of modification. The portion of the awards subject to future service would remain classified as equity awards and expense would be recognized over the remaining future service period.

During the nine months ended September 30, 2022, the Company's board of directors approved the modification of the vesting schedule of certain awards granted prior to the IPO. The modification accelerated the vesting of those grants such that certain

18

grants that were scheduled to cliff vest in September and December of 2022, will now vest from July to December of 2022 in equal monthly instalments. Further, there were other modifications which were approved by the Company's board of directors during the nine months ended September 30, 2022, which accelerated the vesting of certain other grants. These modifications were accounted for in accordance with ASC 718-20-35-3 and did not have any material impact on the stock-based compensation during the nine months ended September 30, 2022.

The following is the activity of restricted stock and restricted stock units granted by the Company:

 

 

Shares

 

 

Weighted Average
Grant Date Fair
Value

 

Non-vested as of January 1, 2022

 

 

65,208,870

 

 

$

10.86

 

Granted (1)

 

 

8,413,274

 

 

 

9.61

 

Vested

 

 

(8,069,547

)

 

 

10.64

 

Forfeited (2)

 

 

(1,174,168

)

 

 

10.72

 

Non-vested as of September 30, 2022 (3)

 

 

64,378,429

 

 

$

10.73

 

(1)
   
Shares
   
Weighted Average
Grant Date Fair
Value
 
Non-vested
as of January 1, 2021
   85,903,970   $2.80 
Granted
(1)
   9,112,569    8.62 
Vested
   (9,300,893)    11.04 
Forfeited
(2)
   (4,700,102)    9.46 
Cancelled
(3)
   (16,655,197)    3.60 
Modified
   (68,986,297)    2.78 
Modified and reissued
   68,986,297    11.36 
   
 
 
   
 
 
 
Non-vested
as of September 30
, 2021
   64,360,347   $10.94 
   
 
 
   
 
 
 
(1)
During the nine months ended September 30, 2022, the Company granted 8,212,090 restricted stock and 201,184 restricted stock units to its employees, advisors and non-employee directors.
(2)
During the nine months ended September 30, 2022, 1,110,214 restricted stock and 63,954 restricted stock units were forfeited.
(3)
Includes 46,278,814 unvested Class A restricted stock, 16,832,213 unvested Class B restricted stock and 1,267,402 unvested restricted stock units as of September 30, 2022.

Stock options

Following is the summary of transactions under the Company’s stock option plan:

 

 

Number of
options

 

 

Weighted
average
exercise
price

 

 

Weighted
average
remaining
contractual
life (years)

 

 

Aggregate
intrinsic
value

 

Outstanding options as of January 1, 2021

 

 

1,150,893

 

 

$

3.61

 

 

 

5.31

 

 

$

3.89

 

Exercised

 

 

(31,985

)

 

 

3.29

 

 

 

—

 

 

 

—

 

Forfeited

 

 

(231,246

)

 

 

3.96

 

 

 

—

 

 

 

—

 

Outstanding options as of December 31, 2021

 

 

887,662

 

 

$

3.53

 

 

 

4.19

 

 

$

5.28

 

Granted

 

 

575,250

 

 

 

10.82

 

 

 

 

 

 

 

Exercised

 

 

(278,530

)

 

 

0.59

 

 

 

 

 

 

 

Forfeited

 

 

(28,450

)

 

 

10.83

 

 

 

 

 

 

 

Outstanding options as of September 30, 2022

 

 

1,155,932

 

 

$

7.69

 

 

 

6.80

 

 

$

(0.76

)

The Company engaged a third-party valuation firm to determine the estimated fair value of the options using the Black-Scholes-Merton method, which was determined as $7.46 for the options issued during the nine months ended September 30, 2022 using the following assumptions:

As of

September 30, 2021, the Company granted 8,824,045 restricted stock and 288,724 restricted stock units to its employees and board members,2022

Dividend yield

0.0%

Volatility

77.0%

Risk-free rate of which 1,660,677 restricted stock and 98,993 restricted stock units were granted prior to March 12, 2021 and will be governed by the vesting rules described in a), b) and c) above. Remaining shares that were granted on or after March 12, 2021 shall vest over a period of four years, with 25% vesting on the

one-year
anniversary of the IPO and the remainder vesting in equal quarterly installments thereafter through the 4th anniversary of the grant date. The Company also converted 1,198,219 restricted stock into restricted stock units for certain employee related grants included in the cancelled grants in the statements of shareholders equity for the nine months ended September 30, 2021.interest

2.93%

(2)
During the nine months ended September 30, 2021, the 4,682,178 restricted stock and 17,924 restricted stock units were forfeited.
(3)
During the nine months ended September 30, 2021, the Company also cancelled 16,655,197 shares of restricted stock granted to holders of series A redeemable convertible preferred shares (see Note 10 to the condensed unaudited consolidated financial statements below).
16
Table

During the three and nine months ended September 30, 2022, the Company recognized stock-based compensation expense of Contents

$582 and $979, respectively.

Performance Stock Unit (“PSU”) Award

On August 18, 2021,February 23, 2022, the Compensation Committee of the Board of Directors approved 1,500,000 PSU awardsthe grant of 1,979,500 PSUs under the Company’s 2021 Incentive Award Plan. Upon achievement of the conditions described below, the PSUs could result in the issuance of up to 3,000,0007,438,500 shares of Class A common stock. Each PSU represents the right to receive shares of Class A common stock as set forth in the PSU grant agreement or, at the option of the Company, an equivalent amount of cash. Participants have no right to the distribution of any shares or payment of any cash until the time (if ever) the PSUs are earned and have vested. Each PSU

19

provides for the right to receive a dividend equivalent to the value of any ordinary cash dividends paid on substantially all the outstanding shares of Class A common stock if the PSUs are earned and vested.

The PSUs may be earned at the end of each fiscal quarter beginning with the three monththree-month period ending on June 30,December 31, 2022 and ending with, and including, the three month period ending on December 31, 2025.2026. Such number of shares of Class A common stock shall be earned as a percentage of the PSUs granted, as set forth in the table below, based on the 20 day20-day volume-weighted average closing price per share (“VWAP”) for such quarter. The number of PSUs earned for such quarter shall be reduced by the number of PSUs, if any, earned in any prior quarter.

20 Day VWAP of Class A common
   stock

 

Below $13.84

 

$

13.84

 

 

$

16.34

 

 

$

18.84

 

 

$

22.34

 

 

$

25.34

 

 

$

38.09

 

Percentage of target PSUs

 

0%

 

25%

 

 

50%

 

 

100%

 

 

150%

 

 

200%

 

 

*

 

                      
                      
                      
                      
                      
                      
20 Day VWAP of Class A common stock
  
Below $10
  
$10.00
  
$12.50
  
$15.00
  
$18.50
  
$22.00
Percentage of target PSUs
  
0%
  
25%
  
50%
  
100%
  
150%
  
200%
Upon being

* The percentage of target PSUs earned at $38.09 for each participant ranges between 300% and subject to the participant’s continued service,500%.

Earned PSUs will vest in three equal annual installments, with the first installment vesting on the date the Company determines the number of determinationPSUs that are eligible to vest for the applicablesuch quarter, for which such PSUs were earned, and the second and third installments vesting on the secondfirst and thirdsecond anniversaries of such quarterly determination date, subject to accelerated vesting in connection with certain qualifying terminations of employment or a change in control. In

Following is the eventsummary of Participant’s termination of service for any reason, all unvested PSUs will immediately and automatically be cancelled and forfeited, except, tounder the extent a Participant is terminated without cause or resigns for good reason, (i) any PSUs earned for any quarter prior to the date of termination will fully vest, and (ii) any PSUs earned in the quarter in which the termination date occurs will fully vest.Company’s 2021 Incentive Award Plan:

 

 

Number of
PSUs

 

 

Weighted Average
Grant Date Fair
Value

 

Outstanding as of January 1, 2022

 

 

1,500,000

 

 

$

1.95

 

Granted

 

 

1,979,500

 

 

 

9.10

 

Outstanding as of September 30, 2022

 

 

3,479,500

 

 

$

6.02

 

The Company engaged a third-party valuation firm to determine the estimated fair value of the PSUs using the Monte Carlo simulation method, which was determined as $1.95$9.10 per PSU. PSU issued during the nine months ended September 30, 2022 using the following assumptions:

As of

September 30, 2022

Dividend yield

0.0%

Volatility

78.0%

Risk-free rate of interest

*

* For each simulation trial, the risk-free rate of interest was estimated based on the treasury securities with a similar term.

During the three and nine months ended September 30, 2021,2022, the Company recognized an expense of $86$1,120 and $2,783, respectively, related to the target PSUs during such period.

PSUs.

2021 Employee Stock Purchase Plan (“ESPP”)

In connection with its IPO, the Company adopted the 2021 Employee Stock Purchase Plan, or the 2021 ESPP. The Company expects that all of its employees will be eligible to participate (the “participants”) in the 2021 ESPP. The 2021 ESPP permits participants to purchase the Company’s Class A common stock through contributions up to a specified percentage of their eligible compensation. The maximum number of shares that may be purchased by a participant during any offering period are capped at 10,000. In addition, no employee will be permitted to accrue the right to purchase shares under the Section 423 component at a rate in excess of $25,000 worth of shares during any calendar year during which such a purchase right is outstanding (based on the fair market value per share of our Class A common stock as of the first day of the offering period).

On July 28, 2021, the Compensation Committee of the Board of Directors approved the Company’s first offering period under the 2021 ESPP, which commenced on August 1, 2021 and will end onended November 30, 2021. Following the end of the first offering period, the 2021 ESPP shall have consecutive offering periods of approximately six months in length commencing each year on December 1 and June 1 and ending on each May 31 and November 30 occurring six months later, as applicable.

During the nine months ended September 30, 2022, the Company issued 196,385 shares of Class A common stock related to the ESPP offering that ended on May 31, 2022.

During the three months and nine months ended September 30, 2021,2022, the Company recognized an expense of $180 at fair value of $2.16 per 2021 ESPP share,$504 and $1,294, respectively, related to the enrollments underfive months of offering that ended on May 31, 2022 and four months of the first offering period that commenced on AugustJune 1, 2021.2022. The fair value of the 2021 ESPPoffering that commenced on June 1, 2022 was determined, basedestimated at $3.44 per share, and expected to result in an issuance of approximately 291,900 shares of Class A common stock under this offering that will end on the Monte Carlo simulation method, by a third party valuation firm engaged by the Company.

November 30, 2022.

20

Unrecognized compensation expense

The Company has $607,110$396,366 of unrecognized compensation expense related to its 64,360,34764,378,429 unvested restricted stock and restricted stock units, 1,500,0003,479,500 performance stock units, 546,800 unvested options and291,900 shares of Class A common stock to be issued under the ESPP. This unrecognized stock-based compensation will be recognized over a weighted average period of 1.371.11 years.

10.
Stockholders’ Equity / (Deficit)

10.Stockholders’ Equity

Share repurchase plan

On February 24, 2021,August 3, 2022, the Company’s Board of Directors approvedauthorized a stock repurchase and withholding program of up to $50,000 in the correctionaggregate for (i) repurchases of the conversion price of Series A redeemable convertible preferred shares held by certain shareholders and cancelation of 16,655,197 shares of restricted stock granted to these holders of Series A

17
Table of Contents
redeemable convertible preferred shares. The Board of Directors determined that the restricted shares were issued to those shareholders in order to avoid dilution of their ownership in the Company as a result of other grants of shares. It was further determined that the dilutive effect of those other restricted shares should have been addressed by an adjustment to the conversion price of the Series A redeemable convertible preferred shares. Therefore, the issuance of the restricted shares to these holders of the Series A redeemable convertible preferred shares was determined to be an error and were duplicative with the corrected calculation of the conversion price of Series A redeemable convertible preferred shares. The conversion price of these Series A redeemable convertible preferred stock was adjusted to $0.073587 from $0.59.
The number of sharesCompany’s outstanding as of June 14, 2021 was 152,270,401 shares of our Class A common stock through December 31, 2024 (the “2022 SRP”) and 37,856,095(ii) the withholding of shares as an alternative to market sales by certain executives to satisfy tax withholding requirements upon vesting of restricted stock awards (the “RSA Withholding Program").

During the three months ended September 30, 2022, the Company repurchased 569,953 shares for a value of $4,310, including shares repurchased in conjunction with tax withholdings for the executives. As of September 30, 2022, approximately $45,690 worth of shares remained available for purchase under this discretionary plan.

Conversion of Common Class B to Class A

During the three and nine months ended September 30, 2022, respectively, 2,604,622 and 5,391,665 shares of our Class B common stock based on stock outstanding as of March 31, 2021, after giving effect to each of the Reorganization Transactions described in Note 1, as a result of the Company’s IPO.

Rights of Class A and Class B common stockholders:
The Company’s amended and restated Certificate of Incorporation defines the rights of the different classes of common stock as under:
Equal Status- Except as otherwise provided in the Certificate of Incorporation or required by applicable l
a
w,were converted into shares of Class A common stock upon transfer pursuant to the terms of our amended and Class B common stock shall have the same rights, privileges and powers, rank equally (including as to dividends and distributions, and upon any liquidation, dissolution, distributionrestated certificate of assets or winding up of the Company), share ratably and be identical in all respects and as to all matters.
Voting- Except as otherwise required by applicable law, at all meetings of stockholders and on all matters submitted to a vote of stockholders of the Company generally, each holderincorporation.

Issuance of Class A common stock as such, shall have

During the right to one (1) vote per share of Class A common stock held of record by such holder and each holder of Class B common stock, as such, shall have the right to ten (10) votes per share of Class B common stock held of record by such holder.

Dividend Rights- Shares of Class A common stock and Class B common stock shall be treated equally, identically and ratably, on a per share basis, with respect to any dividends as may be declared and paid from time to time by the Board of Directors of the Company.
Liquidation, Dissolution or Winding
Up-
Subject to the preferential or other rights of any holders of Preferred Stock then outstanding, upon the dissolution, distribution of assets, liquidation or winding up ofnine months ended September 30, 2022, the Company whether voluntary or involuntary, holders of Class A common stock and Class B common stock will be entitled to receive ratably all assets of the Company available for distribution to its stockholders unless disparate or different treatment of the shares of each such class with respect to distributions upon any such liquidation, dissolution, distribution of assets or winding up is approved by the affirmative vote of the holders of a majority of the outstandingissued 926,785 shares of Class A common stock valued at $10,000 for the ArcaMax acquisition and Class B common stock, each voting separately as a class.
Shares issued for a settlement
In connection with a settlement12,931 shares of a dispute with a vendor, the Company issued 200,000 shares which it recorded as a General & Administrative expense in the condensed unaudited statements of operations and comprehensive loss.
18
Table of Contents
11.
Warrants and Derivative Liabilities
The following assumptions were used to determine the fair value of the warrants and derivative liabilities as of September 30, 2021 and December 31, 2020:
   
As of September 30, 2021
   
As of December 31, 2020
 
Stock price
  $—     $7.56 
Exercise price
  $—     $0.01 
Risk-free interest rate
   —      0.09% 
Expected volatility
   —      64.0% 
Time to maturity (in years)
   —      0.63 
As of December 31, 2020, the fair value of the warrants and derivative liabilities was $58,100. In connection with the Company’s IPO, all the outstanding warrants were exercised by holders of those warrants and redeemable convertible preferred stock were converted to Class A common stock ofvalued at $103 for the Company. The derivative liability, that represented the conversion feature of certain redeemable convertible preferred stock has been settled in the additional paid in capital.
For the three months ended September 30, 2020, the Company recognized an expense of $9,700,earnout payments related to the changes in the fair value of warrants and derivative liabilities. There was no such expense in the three months ended September 30, 2021 due to the extinguishment of the warrants and derivative liability in connection with the Company’s IPO during Q2 2021. Forits Kinetic acquisition.

During the nine months ended September 30, 2021 and 2020,2022, the Company recognized an expense relatedalso issued 521,306 shares of Class A common stock valued at $4,833 pursuant to changescertain agreements. Out of these, certain shares had a stock price downward protection right accordingly, this right was accounted as a derivative liability as of June 30, 2022 fair valued at $985. This derivative was settled during the three months ended on September 30, 2022 for $410, which is included in the fair valueother current liabilities on the unaudited condensed consolidated balance sheets as of such warrants and derivative liabilities of $5,000 and $16,400, respectively.

September 30, 2022.

12.
Fair Value Disclosures

11.Fair Value Disclosures

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. These tiers include:

include Level 1, Level 2 and Level 3.

Level 1 is defined as observable inputs such as quoted prices in active markets for identical assets;

Level 2 is defined as observable inputs other than Level 1 prices such as quoted prices for similar assets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3 is defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The following table represents the fair value of the financial instruments measured at fair value on a recurring basis:

   
As of September 30, 2021
 
   
Level 1
   
Level 2
   
Level 3
   
Total
 
   
            
   
            
   
            
   
            
 
Assets
                    
Cash and cash equivalents*
  $5,764   $—     $—     $5,764 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total assets measured at fair value
  
$
5,764
 
  
$
—  
   
$
—  
   
$
5,764
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Liabilities
                    
Derivative liability
  $—     $—     $—     $—   
Warrant liability
   —      —      —      —   
Acquisition related liabilities
   —      —      24,886    24,886 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total liabilities measured at fair value
  
$
—  
   
$
—  
   
$
24,886
 
  
$
24,886
 
   
 
 
   
 
 
   
 
 
   
 
 
 
19

 

 

As of September 30, 2022

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents*

 

$

91,034

 

 

$

—

 

 

$

—

 

 

$

91,034

 

Total assets measured at fair value

 

$

91,034

 

 

$

—

 

 

$

—

 

 

$

91,034

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related liabilities

 

$

—

 

 

$

—

 

 

$

39,252

 

 

$

39,252

 

Total liabilities measured at fair value

 

$

—

 

 

$

—

 

 

$

39,252

 

 

$

39,252

 

21

Table of Contents
   
As of December 31, 2020
 
Assets
  
Level 1
   
 Level 2 
   
Level 3
   
Total
 
Cash and cash equivalents*
  $  12,257   $      —     $—     $12,257 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total assets measured at fair value
  
$
12,257
 
  
$
—  
   
$
—  
   
$
12,257
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Liabilities
                    
Derivative liability
  $—     $—     $38,400   $38,400 
Warrant liability
   —      —      19,700    19,700 
Acquisition related liabilities
   —      —      23,155    23,155 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total liabilities measured at fair value
  
$
—  
   
$
—  
   
$
  81,255
 
  
$
 
 
81,255
 
   
 
 
   
 
 
   
 
 
   
 
 
 
*

 

 

As of December 31, 2021

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents*

 

$

8,564

 

 

$

—

 

 

$

—

 

 

$

8,564

 

Total assets measured at fair value

 

$

8,564

 

 

$

—

 

 

$

—

 

 

$

8,564

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition-related liabilities

 

$

—

 

 

$

—

 

 

$

22,957

 

 

$

22,957

 

Total liabilities measured at fair value

 

$

—

 

 

$

—

 

 

$

22,957

 

 

$

22,957

 

* Includes cash invested by the Company in certain money market accounts with a financial institution.

As noted above in Note 7, as of September 30, 2021 and December 31, 2020, the Company determined that the Term Loan is classified as Level 3 and the relevant fair values were approximately equal to the book value as of September 30, 2021 and $152,538 as of December 31, 2020.
in certain money market accounts with a financial institution.

The following table reconciles the changes in the fair value of the liabilities categorized within Level 3 of the fair value hierarchy for the nine months ended September 30, 2021 and year ended December 31, 2020:2022:

 

 

Acquisition
related liabilities

 

Balance as of January 1, 2022

 

$

22,957

 

Additions, net of payments

 

 

4,061

 

Change in fair value

 

 

12,234

 

Balance as of September 30, 2022

 

$

39,252

 

   
Warrant
liability
   
Acquisition
related liabilities
   
Derivative
liability
 
Balance as of January 1, 2021
  $19,700   $23,155   $38,400 
Additions, net of payments
   —      1,744    —   
Change in fair value
   4,400    (13)    600 
Extinguishment of the warrant and derivative liabilities
   (24,100)    —      (39,000) 
   
 
 
   
 
 
   
 
 
 
Balance as of September 30, 2021
  
$
0—  
   
$
24,886
 
  
$
0—  
 
   
 
 
   
 
 
   
 
 
 

In connection with certain business combinations, the Company may owe additional purchase consideration (contingent consideration included in the acquisition relatedacquisition-related liabilities) based on the financial performance of the acquired entities after their acquisition. The fair value of the contingent consideration was determined using an unobservable input such as projected revenues, or collections of accounts receivables.receivables, etc. Changes in any of the assumptions related to the unobservable inputs identified above may change the contingent consideration’s fair value.

13.
Related Party Transactions
Caivis Acquisition Corp. II, Caivis Acquisition Corp. IV, Caivis Investment Company V, LLC and Caivis Investment Company VI, LLC (collectively, the “Caivis Group”) are entities owned by manyvalue of the same stockholders of the Company. In addition, the Chief Executive Officer of the Company owns a controlling interest in the Caivis Group. On April 9, 2012, the Company amended its agreement with the Caivis Group, whereby the Caivis Group will provide support for general administrative and corporate development activities, including sourcing and evaluating potential partners and acquisition targets to the Company for $2,000 per year. This agreement with the Caivis Group was terminated on December 31, 2019 and therefore 0 such expenses are incurred during FY2020 and the nine months ended on September 30, 2021. As of December 31, 2020, the Company had outstanding payables of $533 to the Caivis Group included in the “accounts payable and accrued expenses” in the condensed unaudited consolidated balance sheets. During the nine months ended on September 30, 2021, the Company paid an amount of $533 and as such there is 0 outstanding payable to the Caivis Group as of September 30, 2021.
contingent consideration.

12.Related Party Transactions

Casting Made Simple Corp. (“CMS”) is an entity owned by the Caivis Group (the Company's Chief Executive Officer owns a controlling interest in the Caivis Group) and the Chief Executive Officer’s spouse. On December 28, 2018, the Company entered into an agreement with CMS to monetize traffic generated through websites owned by CMS and give a profit share to CMS. DuringThe profit shared by the Company with CMS, amounted to $55 and $166 for the three and nine months ended September 30, 2022, respectively, and $49 and $211 for the three and nine months ended September 30, 2021, the Companyrespectively, was recognized $49 and $211, respectively and during the three and nine months ended September 30, 2020, the Company recognized $92 and $277, respectively, as direct cost of revenues in the condensed unaudited consolidated statements of operations and comprehensive loss, representing the profit shared by the Company with CMS.loss. As of September 30, 20212022 and December 31, 2020,2021, the Company had outstanding payables of $48$38 and $70,$20, respectively, to CMS and included in the “accounts payable and accrued expenses” in the condensed unaudited consolidated balancesbalance sheets.

20
Table

Prior to the acquisition, Kinetic Data Solutions, LLC (“Kinetic”) was an entity in which Caivis Group was the majority shareholder. On September 9, 2020, the Company entered into an agreement with Kinetic, wherein the Company appointed Kinetic as a reseller of Contentsits email marketing services to Kinetic’s customers. The Company recognized revenues of $129 during the three months ended March 31, 2021. There were no outstanding amounts from Kinetic as of September 30, 2022 and December 31, 2021.

14.
Income Taxes

13.Income Taxes

The Company’s income tax provision consists of federal, foreign, and state taxes necessary to align the Company’s

year-to-date
tax provision with the annual effective rate that it expects to achieve for the full year. At each interim period, the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as necessary.

For the interim period ended September 30, 2020,2022, the Company utilized the annual effective tax rate methodology to determine its income tax provision. For the interim period ended September 30, 2021, the Company departed from the annual effective tax rate methodology and computed its income tax provision using a discrete method. The use of the discrete method was made in accordance with authoritative accounting guidance, which allows for the use of a discrete method when there are significant changes to the projected annual effective tax rate as a result of minor adjustments to projected

pre-tax
earnings.

For the three and nine months ended September 30, 2022, the Company recorded an income tax provision of $896 and income tax benefit of $1,360, respectively. The effective tax rate for the three months ended September 30, 2022 was negative 1.31% on a pre-tax loss of $68,544 and 0.59% on a pre-tax loss of $228,846, for the nine months ended September 30, 2022.

22

For the three and nine months ended September 30, 2021, the Company recorded an income tax provision of $428. The income tax provision

related
primarily to foreign taxes. For the three months ended September 30, 2020, the Company recorded$428 and an income tax provisionbenefit of $301 related primarily to foreign taxes.
$565, respectively. The effective tax rate for the three months ended September 30, 2021 was (0.62)negative 0.62% on a
pre-tax
loss of $68,701. $68,701 and 0.30% on a pre-tax loss of $188,990, for the nine months ended September 30, 2021.

The effective tax rate for the three months ended September 30, 2020 was (2.37)% on a

pre-tax
loss of $12,702. The effective tax rate for both interim periods was different thandiffers from the U.S. statutory rate primarily related to limited tax benefit being recordingrecorded for U.S. operating losses as the Company maintains a full valuation allowance against its U.S. deferred tax assets.

14.
Net Loss Per Share Attributable to Common Stockholders
15.
Net Loss Per Share Attributable to Common Stockholders

Basic net loss per share is computed using the

two-class
method, by dividing the net loss by the weighted-average number of shares of common stock of the Company outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock of the Company, including redeemable convertible preferred stock, outstanding stock options, warrants, to the extent dilutive, and reduced by the amount of cumulative dividends earned on the preferred shares. However, the unvested restricted stock, restricted stock units and performance stock units as of September 30, 2022 and 2021 of 67,857,929and 2020 of 65,860,347 and 84,486,332 respectively, are not considered as participating securities and are anti-dilutive and as such are excluded from the weighted average number of shares used for calculating basic and diluted net loss per share. Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential shares of common stock of the Company outstanding would have been anti-dilutive.

The following table sets forth the calculation of basic and diluted net loss per share attributable to common stockholders during the periods presented:

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

2022

 

2021

 

2022

 

2021

Numerator:

 

 

 

 

 

 

 

 

Net loss

 

$(69,440)

 

$(69,129)

 

$(227,486)

 

$(188,425)

Cumulative redeemable convertible preferred stock dividends

 

  —

 

  —

 

  —

 

7,060

Numerator for Basic and Dilutive loss per share - loss available to common stockholders

 

$(69,440)

 

$(69,129)

 

$(227,486)

 

$(195,485)

Denominator:

 

 

 

 

 

 

 

 

Class A common stock

 

124,920,063

 

111,312,720

 

119,953,034

 

50,027,683

Class B common stock

 

15,674,065

 

18,419,260

 

16,840,238

 

7,300,725

Series A common stock

 

  —

 

 

 

  —

 

14,420,964

Series B common stock

 

  —

 

 

 

  —

 

1,664,380

Warrants

 

  —

 

 

 

  —

 

1,899,768

Denominator for Basic and Dilutive loss per share-weighted-average common stock

 

140,594,128

 

129,731,980

 

136,793,272

 

75,313,520

Basic loss per share

 

$(0.49)

 

$(0.53)

 

$(1.66)

 

$(2.60)

Dilutive loss per share

 

$(0.49)

 

$(0.53)

 

$(1.66)

 

$(2.60)

   
Three months ended September 30,
   
Nine months ended September 30,
 
   
2021
   
2020
   
2021
   
2020
 
Net loss
  $(69,129)   $(13,003)   $(188,425)   $(44,437) 
Cumulative redeemable convertible preferred stock dividends
   —      3,774    7,060    11,150 
   
 
 
   
 
 
   
 
 
   
 
 
 
Numerator for Basic and Dilutive loss per share - loss available to common stockholders
  
$
(69,129)
 
  
$
(16,777)
 
  
$
(195,485)
 
  $(55,587)
   
 
 
   
 
 
   
 
 
   
 
 
 
Denominator:
                    
Class A common stock
   111,312,720    —      50,027,683    —   
Class B common stock
   18,419,260    —      7,300,725    —   
Series A common stock
   —      26,108,711    14,420,964    26,108,727 
Series B common stock
   —      3,054,318    1,664,380    3,054,318 
Warrants (convertible to Series A common stock)
   —      3,444,328    1,899,768    3,444,328 
   
 
 
   
 
 
   
 
 
   
 
 
 
Denominator for Basic and Dilutive loss per share-weighted-average common stock
  
 
129,731,980
 
  
 
32,607,357
 
  
 
75,313,520
 
  
 
32,607,373
 
   
 
 
   
 
 
   
 
 
   
 
 
 
Basic loss per share
  
$
(0.53)
 
  $(0.51)   
$
(2.60)
 
  $(1.70) 
Dilutive loss per share
  
$
(0.53)
 
  $(0.51)   
$
(2.60)
 
  $(1.70) 
21
Table of Contents

Since the Company was in a net loss position for all periods presented, basic loss per share calculation excludes redeemable convertible preferred stock as it does not participate in net losses of the Company. Additionally, net loss per share attributable to common shareholdersstockholders was the same on a basic and diluted basis, as the inclusion of all potential common equivalent shares outstanding would have been anti-dilutive.

Anti-dilutive weighted-average common equivalent shares were as follows:

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Options

 

 

1,201,964

 

 

 

923,750

 

 

 

1,081,654

 

 

 

923,750

 

Restricted stock and restricted stock units

 

 

67,303,354

 

 

 

64,360,347

 

 

 

67,329,282

 

 

 

64,360,347

 

Performance stock units

 

 

3,479,500

 

 

 

1,500,000

 

 

 

3,087,951

 

 

 

1,500,000

 

   
Three months ended September 30,
   
Nine months ended September 30,
 
   
2021
   
2020
   
2021
   
2020
 
Options (convertible to Series A common stock)
   923,750    1,137,026    923,750    1,137,026 
Warrants (convertible to Series A common stock)
   —      1,973,763    —      1,973,763 
Redeemable convertible preferred stock
   —      39,223,194    —      39,223,194 
Restricted stock and restricted stock units
   64,360,347    84,486,332    64,360,347    84,486,332 
Performance stock units
   1,500,000    —      1,500,000    —   
16.
Subsequent Event
On October 1, 2021, the Company acquired the digital survey platform business

23

Item 2.Management’s Discussion and Analysis of Apptness Media Group, LLC

(“Seller”)
 from Seller. As consideration for the acquisition, the Company (i) paid $17,934 in cash to Seller,Financial Condition and (ii) issued sharesResults of the Company’s Class A common stock, par value $0.001 per share (the “Shares”), to Seller with an aggregate value of $23,000 calculated based on the closing price of the Shares on the New York Stock Exchange on September 30, 2021. The Shares are subject to an eighteen month
lock-up
period with approximately equal release installments every six months.
Additionally, the Company may also (i) release to
Selle
r
 a $1,750 indemnity hold-back in eighteen months and (ii) pay up to $22,000 in
earn-out
consideration payable 50% in cash and 50% in shares, based on the performance of the acquired business over the next three years.
The Company has not completed the purchase price allocation of this acquisition prior to the issuance of these financial statements, and an estimate of the financial effect of the transaction cannot be made. All other business combination disclosures are not available due to the proximity of the acquisition to the issuance of these financial statements.
22
Table of Contents

Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form

10-Q.
In addition to historical financial information, the following discussion contains forward-looking statements that are based upon current plans, expectations and beliefs that involve risks and uncertainties. Our actual results and the timing of events may differ materially from those anticipated and discussed in the forward-looking statements as a result of various factors, including those set forth under the headingin Part 1, Item 1A “Risk Factors” in the Prospectus filed withCompany’s Annual Report on Form 10-K for the SECyear ended December 31, 2021, in Part II, Item IA “Risk Factors” included in the Company’s Quarterly Report on Form 10-Q for the three months ended June 14, 2021 pursuant to Rule 424(b)(4) under the Securities Act.
30, 2022 (the “Q2 2022 Form 10-Q”) and in this Quarterly Report on Form 10-Q.

Overview

Zeta develops and marketsis a leading omnichannel data-driven cloud platform that provides enterprises with consumer intelligence and marketing automation software. We empower our customers to target, connect and engage consumers through software that delivers personalized marketing across all addressable channels, including email, social media, web, chat, connected TV (“CTV”)CTV and video, among others. We believe our actionable insights derived from consumer intent enable our customers to acquire, grow and retain consumer relationships more efficiently and effectively than the alternative solutions available in the market.

Our

top-rated
Zeta Marketing Platform (the “ZMP”"ZMP") is the largest omnichannel marketing platform with identity data at its core. The ZMP analyzescan analyze billions of structured and unstructured data points to predict consumer intent by leveraging sophisticated machine learning algorithms and the industry’s largest
opted-in
data set for omnichannel marketing. The ZMP connectsacts on these insights by connecting with consumers through native integration of marketing channels and API integration with third parties. The ZMP’s data-driven algorithms and processes learn and optimize each customer’s marketing program in real time, producing a ‘flywheel effect’ that enables our customers to test, learn and improve their marketing programs in real time. Over time, thisThis continuous learning loop provides greater efficiency and effectiveness for our customers and creates a competitive advantage for Zeta.

The ZMP empowers our customers to personalize consumer experiences at scale across multiple touchpoints. Marketing programs are created and orchestrated by our customers through automated workflows and sophisticated dashboards. Our CDP+ ingests, analyzes and distills disparate data points to generate a single view of a consumer, encompassing identity, profile characteristics, behaviors and purchase intent, which is then made accessible through a single console. Our Opportunity Explorer synthesizes Zeta’s proprietary data and data generated by our customers to uncover consumer insights that are translated into marketing programs designed for highly targeted audiences across digital channels, including email, SMS, websites, applications, social media, CTV and chat.

Recent Developments
Initial Public Offering
On June 14, 2021, we completed our initial public offering (“IPO”) in which we sold 14,773,939 shares of our Class A common stock, and certain selling stockholders sold an additional 6,726,061 shares of Class A common stock, at a public offering price of $10.00 per share. We received net proceeds of approximately $132.7 million, after deducting underwriters’ discounts and commissions (but excluding other offering expenses and reimbursements of $6.2 million), from sales of our shares in the IPO. We did not receive any of the proceeds from any sale of shares by the selling stockholders.
COVID-19
Update
During the first half of 2021, some of our scaled customers in industries that experience negative effects from the
COVID-19
pandemic, such as travel and hospitality and financial services, reduced or paused their levels of business with us. This resulted in a reduction of total scaled customers that has continued through the three months ended September 30, 2021 relative to the prior-year period, as we saw a decrease in our total scaled customers, from 354 customers to 347 customers. However, during the three months ended September 30, 2021, we experienced an increase in scaled customer ARPU, which resulted in our revenue increasing for the three months ended September 30, 2021 compared to the prior-year period. Our scaled customer ARPU growth resulted primarily from the initial effects of transitioning our sales team model to focus a dedicated team on new business development and a separate team on training and educating new and existing users on our platform capabilities. Our transition to this hunter/farmer sales model has included focusing more of our sales team on growth of existing scaled customers and aligning scaled customers with sellers that have specific industry expertise. In addition, scaled customer ARPU also benefitted from increased levels of business from customers in industries that experienced positive effects from the
COVID-19
pandemic, such as insurance, automotive and telecom.
In future periods, as the post-pandemic recovery continues and pandemic-related restrictions subside, we expect that our customers in industries such as travel and hospitality and financial services will return to levels of spending comparable to or greater than their historical spending. Although the pandemic-related growth levels we have experienced may decrease in the future, we expect that the success of our new sales team model will continue to drive new business. As a result, we expect customer spending in industries where we saw strength during the
COVID-19
pandemic to continue to increase even as the growth effects of the
COVID-19
pandemic on some industries may tend to be moderate.
23
Table of Contents

Factors Affecting Results of Operations

For a discussion of the factors affecting our results of operations, please see “Factors Affecting Results of Operations” in the Management’sPart II, Item 7 "Management’s Discussion and Analysis sectionof Financial Condition and Results of Operations” and Part 1, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2021 as well as in Part II, Item 1A “Risk Factors” included in this Quarterly Report on Form 10-Q and the “Risk Factors” section of our Prospectus.

Q2 2022 Form 10-Q.

Key Business Metrics

For a list of the

We review several key performance metrics, we usediscussed below, to evaluate our business, track performance, identify trends, formulate plans and make strategic decisions, please see “Key Business Metrics” indecisions. We believe that the Management’s Discussionpresentation of such metrics provides investors with effective ways to measure and Analysis section andmodel the “Risk, Factors” sectionperformance companies such as ours, with recurring revenue streams.

24

Scaled customers increased 12%, from 347 as of September 30, 2021 to 389 as of September 30, 2022. Scaled customer ARPU increased 19%, from $319,945 for the three months ended September 30, 2021 to $381,734 for the three months ended September 30, 2022, primarily due to higher usage of our Prospectus.

platform among scaled customers.

Description of Certain Components of Financial Data

Revenues

Our revenue is primarily derivedarises from use of our technology platform via subscription fees, volume-based utilization fees and fees for professional services related to customers’ useservices. Our platform revenue comprises of our marketing platform. Our revenue is comprised from a mix of direct platform revenue and integrated platform revenue, which leverages application programming interface (“API”) integrations with third parties. For the nine months ended September 30, 20212022 and 2020,2021, we derived 75%78% and 71%75% of our revenues from direct platform revenue,platforms, respectively, and 25%22% and 29%25% of our revenues from integrated platform revenue,platforms, respectively. Revenues are recognized when control of these products or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those products and services. Sales and other taxes collected by us are excluded from revenue. Our revenue recognition policies are discussed in more detail below under “Critical Accounting Policies and Estimates.”

Cost of revenues (excluding depreciation and amortization)

Cost of revenue excludes depreciation and amortization and consists primarily of media and marketing costs and certain personnelemployee-related costs. Media and marketing costs consist primarily of fees paid to third-party publishers, media owners or managers, or toand strategic partners that are directly related to a revenue-generating event. We pay these third-party publishers, media owners or managers and strategic partners on a revenue-share, a

cost-per-lead,
cost-per-click,
or
cost-per-thousand-impressions
basis. PersonnelExpenses related to “internet traffic” associated with the viewing of available impressions or queries per second and costs of providing support to our customers are also included in the cost of revenues. Employee-related costs included in cost of revenues include salaries, bonuses, commissions, stock-based compensation and employee benefit costs primarily related to individuals directly associated with providing services to our customers. We expect costs of revenues will generally decrease in the future as a percentage of revenue will generally decrease from current levels over the long term.

General and administrative expenses

General and administrative expenses primarily consist of computer and telecom expenses, personnelemployee-related costs, including salaries, bonuses, stock-based compensation and employee benefits costs associated with our executive, finance, legal, human resources and other administrative personnel, as well as accounting and legal professional services fees.fees and platform and related infrastructure costs. We expect general and administrative expenses to increase in absolute dollars in future periods. We expect that general and administrative expenses, excluding the impact of stock-based compensation which is being recognized on an accelerated basis as discussed below, will stay consistent as a percentage of revenue over the long term.

24
Table of Contents

Selling and marketing expenses

Selling and marketing expenses primarily consist of personnelemployee-related costs, including salaries, bonuses, employee benefits costs, stock-based compensation and commission costs for our sales and marketing personnel. Selling and marketing expenses also include costs for market development programs, advertising, promotional and other marketing activities. We intend to continue to invest in marketing initiatives and as a result we expect selling and marketing expenses to increase in absolute dollars in future periods. Selling and marketing expense as a percentage of revenue may fluctuate from period to period based on revenue levels and the timing of our investments in these functions over the long term.

Research and development expenses

Research and development expenses primarily consist of personnelemployee-related costs, including salaries, bonuses and employee benefit costs, stock-based compensation associated with engineering and IT services associated with the ongoing research and maintenance of internal use software, including platform and related infrastructure.software. We expect to continue to invest in research and development in order to develop our technology platform to drive incremental value and growth and as a result we expect that research and development expenses will increase as a percentage of revenue in the long term.

25

Depreciation and amortization

Depreciation and amortization relate to property and equipment, website and software development costs as well as acquisition-related and other acquired intangible assets. We record depreciation and amortization when appropriate using straight-line method over the estimated useful life of the assets.

Acquisition related expenses

Acquisition related expenses primarily consist of legal fees associated with certain business combinations and addressing disputes related to those transactions. It also includes retention bonuses agreed to be paid to employees related to

one-time
events such as an acquisition or a significant transaction. We expect that acquisition related expenses will be correlated with future acquisitions (if any), which could be greater than or less than our historic levels.

Restructuring expenses

Restructuring expenses consists primarily consist of employee termination costs due to internal restructuring. We expect that restructuring expenses will be correlated with future restructuring activities (if any), which could be greater than or less than our historic levels.

Interest expense

Interest expense primarily consists of interest paidpayable on our long-term borrowings.

We anticipate that interest expense could be impacted by changes in variable interest rates.

Other (income) / expense

expenses

Other (income) / expense primarily consists of changes in fair value of acquisition related liabilities, gains and losses on sale of assets gains and losses on extinguishment of acquisition related liabilities and foreign exchange gains and losses. We expect that the magnitude of other income and expenses will depend on external factors such as foreign exchange rate and the remeasurement of acquisition related liabilities, which could be greater than or less than our historic levels.

Change in fair value of warrants and derivative liabilities

Change in fair value of warrants and derivative liabilities primarily relates to warrants to purchase shares of our common stock that we issued in connection with previous financing rounds. The change in fair value of warrants and derivative liabilities depends on external valuation-related factors. As of September 30, 2021,2022, the Company does not have any warrants and derivative liabilities on its condensed unaudited consolidated balance sheets.

25
Table of Contents

Income tax provision

The Company’s income tax provision consists of federal, foreign, and state taxes necessary to align the Company’s

year-to-date
tax provision with the annual effective rate that it expects to achieve for the full year. At each interim period, the Company updates its estimate of the annual effective tax rate and records cumulative adjustments as necessary. For the interim period ended September 30, 2020,2022, the Company utilized the annual effective tax rate methodology to determine its income tax provision. For the interim period ended September 30, 2021, the Company departed from the annual effective tax rate methodology and computed its income tax provision using a discrete method. The use of the discrete method was made in accordance with authoritative accounting guidance, which allows for the use of a discrete method when there are significant changes to the projected annual effective tax rate as a result of minor adjustments to projected
pre-tax
earnings.

Stock-based compensation

The measurement of stock-based compensation for all stock-based payment awards, including restricted stock and restricted stock units, employee stock purchase plan (“ESPP”), performance stock units (“PSUs”) and stock options granted to employees, consultants or advisors and non-employee directors, is based on the estimated fair value of the awards on the date of grant or date of modification of such grants.

26

We will expense the unrecognized stock-based compensation as follows, subject to future forfeitures:

 

 

 

 

 

Year ended December 31,

 

 

 

 

 

 

 

Remaining period of 2022

 

 

2023

 

 

2024

 

 

2025

 

 

2026

 

 

Total

 

$

68,443

 

 

$

182,610

 

 

$

95,260

 

 

$

41,255

 

 

$

8,798

 

 

$

396,366

 

See "Note 9. Stock-Based Compensation" to our condensed unaudited consolidated financial statements for further details.

Results of Operations

We operate as a single reportable segment to reflect the way our Chief Operating Decision Officer (“CODM”) reviews and assesses the performance of the business. The Company’s CODM is the Chief Executive Officer.

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenues

 

$

152,252

 

 

$

115,133

 

 

$

415,821

 

 

$

323,492

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues (excluding depreciation and amortization)

 

 

57,529

 

 

 

44,525

 

 

 

149,487

 

 

 

125,709

 

General and administrative expenses

 

 

53,584

 

 

 

50,643

 

 

 

162,598

 

 

 

135,682

 

Selling and marketing expenses

 

 

76,987

 

 

 

60,537

 

 

 

223,044

 

 

 

163,952

 

Research and development expenses

 

 

16,954

 

 

 

13,998

 

 

 

52,223

 

 

 

50,285

 

Depreciation and amortization

 

 

13,367

 

 

 

11,783

 

 

 

39,448

 

 

 

33,135

 

Acquisition - related expenses

 

 

—

 

 

 

480

 

 

 

344

 

 

 

1,516

 

Restructuring expenses

 

 

—

 

 

 

30

 

 

 

—

 

 

 

467

 

Total operating expenses

 

$

218,421

 

 

$

181,996

 

 

$

627,144

 

 

$

510,746

 

Loss from operations

 

 

(66,169

)

 

 

(66,863

)

 

 

(211,323

)

 

 

(187,254

)

Interest expense

 

 

2,038

 

 

 

1,342

 

 

 

5,002

 

 

 

5,705

 

Other expenses

 

 

1,142

 

 

 

496

 

 

 

12,111

 

 

 

1,031

 

Gain on extinguishment of debt

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(10,000

)

Change in fair value of warrants and derivative liabilities

 

 

(805

)

 

 

—

 

 

 

410

 

 

 

5,000

 

Total other expenses

 

$

2,375

 

 

$

1,838

 

 

$

17,523

 

 

$

1,736

 

Loss before income taxes

 

 

(68,544

)

 

 

(68,701

)

 

 

(228,846

)

 

 

(188,990

)

Income tax provision / (benefit)

 

 

896

 

 

 

428

 

 

 

(1,360

)

 

 

(565

)

Net loss

 

$

(69,440

)

 

$

(69,129

)

 

$

(227,486

)

 

$

(188,425

)

Comparison of the Three Months Ended September 30, 2022 and 2021

Revenues

 

 

Three months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Revenues

 

$

152,252

 

 

$

115,133

 

 

$

37,119

 

 

 

32.2

%

Revenues increased by $37.1 million, or 32.2%, for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021. This increase in revenues is attributable to incremental revenues of $17.9 million from existing customers and $19.4 million from new customers.

Cost of revenues (excluding depreciation and amortization)

 

 

Three months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Cost of revenues (excluding depreciation and amortization)

 

$

57,529

 

 

$

44,525

 

 

$

13,004

 

 

 

29.2

%

27

Cost of revenues (excluding depreciation and amortization) increased by $13.0 million, or 29.2%, for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021. This increase was primarily driven by $12.8 million in incremental media costs and higher stock-based compensation of $0.4 million.

General and administrative expenses

 

 

Three months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

General and administrative expenses

 

$

53,584

 

 

$

50,643

 

 

$

2,941

 

 

 

5.8

%

General and administrative expenses increased by $2.9 million, or 5.8%, for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021. This increase was primarily driven by higher computer and telecom related expenses of $2.7 million and professional services fees of $0.1 million.

Selling and marketing expenses

 

 

Three months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Selling and marketing expenses

 

$

76,987

 

 

$

60,537

 

 

$

16,450

 

 

 

27.2

%

Selling and marketing expenses increased by $16.5 million, or 27.2%, for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021. This increase was primarily driven by higher employee related costs of $9.2 million, stock based compensation of $3.8 million, and other marketing-related expenses of $3.5 million

Research and development expenses

 

 

Three months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Research and development expenses

 

$

16,954

 

 

$

13,998

 

 

$

2,956

 

 

 

21.1

%

Research and development expenses increased by $3.0 million, or 21.1%, for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021. This increase was primarily driven by higher stock-based compensation of $1.8 million, an increase in consulting expenses of $0.8 million and employee related costs of $0.2 million.

Depreciation and amortization

 

 

Three months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Depreciation and amortization

 

$

13,367

 

 

$

11,783

 

 

$

1,584

 

 

 

13.4

%

Depreciation and amortization increased by $1.6 million, or 13.4%, for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021. This increase was driven by an increase in amortization of intangible assets of $1.3 million. Further, there was an increase in depreciation expense of $0.3 million primarily due to incremental website and software development-related capitalization over the recent periods.

Acquisition related expenses

 

 

Three months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Acquisition related expenses

 

$

—

 

 

$

480

 

 

$

(480

)

 

 

(100.0

)%

28

Acquisition related expenses decreased by $0.5 million, or 100%, for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021, primarily driven by lower professional fees.

Interest expense

 

 

Three months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Interest expense

 

$

2,038

 

 

$

1,342

 

 

$

696

 

 

 

51.9

%

Interest expense increased by $0.7 million, or 51.9%, for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021, due to increases in interest rates.

Other expenses

 

 

Three months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Other expenses

 

$

1,142

 

 

$

496

 

 

$

646

 

 

 

130.2

%

Other expenses increased by $0.6 million, 130.2%, for the three months ended September 30, 2022 as compared to the three months ended September 30, 2021, primarily driven by an incremental change of $1.3 million in the fair value of acquisition related liabilities, related to the Company's prior acquisitions, partially offset by foreign exchange gain of $0.6 million due to appreciation of USD against other currencies.

Change in fair value of warrants and derivative liabilities

 

 

Three months ended September 30,

 

 

Change

 

 

2022

 

 

2021

 

 

Amount

 

 

%

Change in fair value of warrants and derivative liabilities

 

$

(805

)

 

$

—

 

 

$

(805

)

 

NA

We recorded a change in fair value of warrants and derivative liabilities of $0.8 million during the three months ended September 30, 2022 primarily due to a decrease in fair value of derivative liability as of September 30, 2022 as compared to the fair value of the derivative liability as of June 30, 2022. We settled our derivative liability as of September 30, 2022.

Income tax provision

 

 

Three months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Income tax provision

 

$

896

 

 

$

428

 

 

$

468

 

 

 

109.3

%

For the three months ended September 30, 2022 and 2021, the Company recorded an income tax provision of $0.9 million and $0.4 million, respectively, yielding an effective tax rate of negative 1.31% and 0.62%, respectively. The effective tax rate for both interim periods was different than the U.S. statutory rate primarily related to limited tax benefit being recorded for U.S. operating losses as the Company maintains a full valuation allowance against its U.S. deferred tax assets.

Comparison of the Nine Months Ended September 30, 2022 and 2021

Revenues

 

 

Nine months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Revenues

 

$

415,821

 

 

$

323,492

 

 

$

92,329

 

 

 

28.5

%

29

Revenues increased by $92.3 million, or 28.5%, for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021. This increase in revenues is attributable to incremental revenues of $48.2 million from existing customers and $45.9 million from new customers.

Cost of revenues (excluding depreciation and amortization)

 

 

Nine months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Cost of revenues (excluding depreciation and amortization)

 

$

149,487

 

 

$

125,709

 

 

$

23,778

 

 

 

18.9

%

Cost of revenues (excluding depreciation and amortization) increased by $23.8 million, or 18.9%, for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021. This increase was primarily driven by $20.8 million in incremental media costs and higher stock-based compensation of $3.0 million.

General and administrative expenses

 

 

Nine months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

General and administrative expenses

 

$

162,598

 

 

$

135,682

 

 

$

26,916

 

 

 

19.8

%

General and administrative expenses increased by $26.9 million, or 19.8%, for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021. This increase was primarily driven by higher stock-based compensation of $18.0 million, computer and telecom-related expenses of $4.6 million and professional services fees of $4.1 million.

Selling and marketing expenses

 

 

Nine months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Selling and marketing expenses

 

$

223,044

 

 

$

163,952

 

 

$

59,092

 

 

 

36.0

%

Selling and marketing expenses increased by $59.1 million, or 36.0%, for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021. This increase was primarily driven by higher stock-based compensation of $23.1 million, employee-related costs of $28.6 million and other marketing-related expenses of $7.5 million.

Research and development expenses

 

 

Nine months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Research and development expenses

 

$

52,223

 

 

$

50,285

 

 

$

1,938

 

 

 

3.9

%

Research and development expenses increased by $1.9 million, or 3.9%, for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021, primarily driven by higher consulting expenses of $2.3 million and employee related costs of $1.0 million. This increase was partially offset by lower stock-based compensation of $1.5 million.

Depreciation and amortization

 

 

Nine months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Depreciation and amortization

 

$

39,448

 

 

$

33,135

 

 

$

6,313

 

 

 

19.1

%

Depreciation and amortization increased by $6.3 million, or 19.1%, for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021. This increase was driven by an increase in amortization of intangible assets of $4.5 million and an increase in depreciation expense of $1.8 million primarily due to incremental website and software development-related capitalization over the recent periods.

30

Acquisition related expenses

 

 

Nine months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Acquisition related expenses

 

$

344

 

 

$

1,516

 

 

$

(1,172

)

 

 

(77.3

)%

Acquisition related expenses decreased by $1.2 million, or 77.3%, for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021. This decrease was primarily driven by lower professional fees incurred during the nine months ended September 30, 2022.

Restructuring expenses

 

 

Nine months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Restructuring expenses

 

$

—

 

 

$

467

 

 

$

(467

)

 

 

(100.0

)%

Restructuring expenses decreased by $0.5 million, or 100%, for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021, due to the reorganization expenses incurred by the Company during the nine months ended September 30, 2021.

Interest expense

 

 

Nine months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Interest expense

 

$

5,002

 

 

$

5,705

 

 

$

(703

)

 

 

(12.3

)%

Interest expense decreased by $0.7 million, or 12.3%, for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021. This decrease was primarily driven by a lower interest rate on the new debt facility entered into during February 2021, partially offset by higher interest rates in 2022.

Other expenses

 

 

Nine months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Other expenses

 

$

12,111

 

 

$

1,031

 

 

$

11,080

 

 

 

1,074.7

%

Other expenses increased by $11.1 million, or 1074.7%, for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021, primarily driven by an incremental change of $12.3 million in the fair value of acquisition related liabilities, related to the Company's prior acquisitions, partially offset by foreign exchange gain of $0.9 million due to appreciation of USD against other currencies.

Change in fair value of warrants and derivative liabilities

 

 

Nine months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Change in fair value of warrants and derivative liabilities

 

$

410

 

 

$

5,000

 

 

$

(4,590

)

 

 

(91.8

)%

Change in fair value of warrants and derivative liabilities expense decreased by $4.6 million, or 91.8%, for the nine months ended September 30, 2022 as compared to the nine months ended September 30, 2021, this is primarily due to the extinguishment of warrants and derivative liabilities upon our initial public offering ("IPO") on June 14, 2021. We did not have any derivative liability as of September 30, 2022 and December 31, 2021.

Income tax benefit

 

 

Nine months ended September 30,

 

 

Change

 

 

 

2022

 

 

2021

 

 

Amount

 

 

%

 

Income tax benefit

 

$

(1,360

)

 

$

(565

)

 

$

(795

)

 

 

140.7

%

31

For the nine months ended September 30, 2022 and 2021, the Company recorded an income tax benefit of $1.4 million and $0.6 million, respectively, yielding an effective tax rate of 0.59% and 0.30%, respectively. The effective tax rate for both interim periods was different than the U.S. statutory rate primarily related to limited tax benefit being recorded for U.S. operating losses as the Company maintains a full valuation allowance against its U.S. deferred tax assets.

32

Non-GAAP

Financial Measures

We use the following

non-GAAP
financial information, collectively, to evaluate our ongoing operations and for internal planning and forecasting purposes.
Non-GAAP
financial information is presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from similarly titled
non-GAAP
measures used by other companies. Whenever we use a
non-GAAP
financial measure, a reconciliation is provided to the most closely applicable financial measure stated in accordance with generally accepted accounting principles.

Adjusted EBITDA and adjusted EBITDA margin

Adjusted EBITDA is

a non-GAAP financial
measure defined as net loss adjusted for interest expense, depreciation and amortization, stock-based compensation, income tax (benefit) / provision, / (benefit), acquisition relatedacquisition-related expenses, restructuring expenses, change in fair value of warrants and derivative liabilities, certain dispute settlement expense,expenses, gain on extinguishment of debt, certain
non-recurring
IPO related expenses, including the payroll taxes related to vesting of restricted stock and restricted stock units upon the completion of our IPO, and other expenses / (income). Acquisition relatedexpenses. Acquisition-related expenses and restructuring expenses primarily consist of severance and other personnel-relatedemployee-related costs which we do not expect to incur in the future as acquisitions of businesses may distort the comparability of the results of operations. Change in fair value of warrants and derivative liabilities is
a non-cash expense
related to periodically
recording “mark-to-market” changes
in the valuation of derivatives and warrants. Other (income) / expenses / (income) consists
of non-cash expenses
such as changes in fair value of acquisition related liabilities, gains and losses on extinguishment of acquisition-related liabilities, gains and losses on sales of assets and foreign exchange gains and losses. In particular, we believe that the exclusion of stock-based compensation, certain dispute settlement expenses and
non-recurring
IPO related expenses that are not related to our core operations provides measures for
period-to-period
comparisons of our business and provides additional insight into our core controllable costs. Adjusted EBITDA margin is a
non-GAAP
metric defined as adjusted EBITDA divided by the total revenues for the same period. Adjusted EBITDA and adjusted EBITDA margin provide us with a useful measure
for period-to-period comparisons
of our business as well as comparison to our peers. We believe that
these non-GAAP financial
measures aremay be useful to investors in analyzing our financial and operational performance. Our use of adjusted EBITDA and adjusted EBITDA margin has limitations as an analytical tool, and you should not consider these measures in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Because of these and other limitations, you should consider
our non-GAAP measures
only as supplemental to other GAAP-based financial performance measures, including revenues and net loss.
26
Table of Contents

The following table reconciles adjusted EBITDA and adjusted EBITDA margin to net loss and net loss margin, the most directly comparable financial measure calculated and presented in accordance with GAAP.

   
Three months ended September 30,
   
Nine months ended September 30,
 
   
2021
   
2020
   
2021
   
2020
 
Net loss
  
$
(69,129)
 
  
$
(13,003)
 
  
$
(188,425)
 
  
$
(44,437)
 
Net loss margin
  
 
(60.0)%
 
  
 
(13.6)%
 
  
 
(58.2)%
 
  
 
(17.5)%
 
Add back:
        
Interest expense
  
 
1,342
 
   3,823   
 
5,705
 
   12,548 
Income tax provision / (benefit)
  
 
428
 
   301   
 
(565
) 
   1,319 
Depreciation and amortization
  
 
11,783
 
   10,133   
 
33,135
 
   30,171 
Stock-based compensation
  
 
69,343
 
   26   
 
188,613
 
   79 
IPO related expenses
  
 
—  
 
   —     
 
2,705
 
   —   
Gain on extinguishment of debt
  
 
—  
 
   —     
 
(10,000)
 
   —   
Acquisition related expenses
  
 
480
 
   1,230   
 
1,516
 
   4,321 
Restructuring expenses
  
 
30
 
   259   
 
467
 
   1,950 
Change in fair value of warrants and derivative liabilities
  
 
—  
 
   9,700   
 
5,000
 
   16,400 
Dispute settlement expense
  
 
1,196
 
   —     
 
1,196
 
   —   
Other expenses / (income)
  
 
496
 
   (188)   
 
1,031
 
   (546) 
  
 
 
   
 
 
   
 
 
   
 
 
 
Adjusted EBITDA
  
$
15,969
 
  
$
12,281
 
  
$
40,378
 
  
$
21,805
 
  
 
 
   
 
 
   
 
 
   
 
 
 
Adjusted EBITDA margin
  
 
13.9%
 
  
 
12.9%
 
  
 
12.5%
 
  
 
8.6%
 
27

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net loss

 

$

(69,440

)

 

$

(69,129

)

 

$

(227,486

)

 

$

(188,425

)

Net loss margin

 

 

45.6

%

 

 

60.0

%

 

 

54.7

%

 

 

58.2

%

Add back:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

13,367

 

 

 

11,783

 

 

 

39,448

 

 

 

33,135

 

Restructuring expenses

 

 

-

 

 

 

30

 

 

 

-

 

 

 

467

 

Acquisition related expenses

 

 

-

 

 

 

480

 

 

 

344

 

 

 

1,516

 

Stock-based compensation

 

 

75,218

 

 

 

69,343

 

 

 

231,289

 

 

 

188,613

 

Other expenses

 

 

1,142

 

 

 

496

 

 

 

12,111

 

 

 

1,031

 

Gain on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(10,000

)

IPO related expenses

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,705

 

Change in fair value of warrants and derivative liabilities

 

 

(805

)

 

 

-

 

 

 

410

 

 

 

5,000

 

Dispute settlement expense

 

 

-

 

 

 

1,196

 

 

 

-

 

 

 

1,196

 

Interest expense

 

 

2,038

 

 

 

1,342

 

 

 

5,002

 

 

 

5,705

 

Income tax provision / (benefit)

 

 

896

 

 

 

428

 

 

 

(1,360

)

 

 

(565

)

Adjusted EBITDA

 

$

22,416

 

 

$

15,969

 

 

$

59,758

 

 

$

40,378

 

Adjusted EBITDA margin

 

 

14.7

%

 

 

13.9

%

 

 

14.4

%

 

 

12.5

%

33

Table of Contents
Results of Operations
We operate as a single reportable segment to reflect the way our Chief Operating Decision Officer (“CODM”) reviews and assesses the performance of the business. The Company’s CODM is the Chief Executive Officer.
   
Three months ended September 30,
   
Nine months ended September 30,
 
   
2021
   
2020
   
2021
   
2020
 
                 
Condensed Consolidated Statements of Operations Data:
  
Revenues
  
$
 115,133
 
  $95,284   
$
323,492
 
  $ 253,674 
  
 
 
   
 
 
   
 
 
   
 
 
 
Operating expenses:
        
Cost of revenues (excluding depreciation and amortization)
  
 
44,525
 
   40,705   
 
125,709
 
   100,530 
General and administrative expenses
  
 
50,643
 
   17,150   
 
135,682
 
   53,270 
Selling and marketing expenses
  
 
60,537
 
   18,269   
 
163,952
 
   54,359 
Research and development expenses
  
 
13,998
 
   6,905   
 
50,285
 
   23,789 
Depreciation and amortization
  
 
11,783
 
   10,133   
 
33,135
 
   30,171 
Acquisition related expenses
  
 
480
 
   1,230   
 
1,516
 
   4,321 
Restructuring expenses
  
 
30
 
   259   
 
467
 
   1,950 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total operating expenses
  
$
181,996
 
  $94,651   
$
510,746
 
  $268,390 
  
 
 
   
 
 
   
 
 
   
 
 
 
(Loss) / income from operations
  
 
(66,863)
 
   633   
 
(187,254)
 
   (14,716) 
Interest expense
  
 
1,342
 
   3,823   
 
5,705
 
   12,548 
Other expenses / (income), net
  
 
496
 
   (188)   
 
1,031
 
   (546) 
Gain on extinguishment of debt
  
 
—  
 
   —     
 
(10,000)
 
   —   
Change in fair value of warrants and derivative liabilities
  
 
—  
 
   9,700   
 
5,000
 
   16,400 
  
 
 
   
 
 
   
 
 
   
 
 
 
Total other expenses
  
$
1,838
 
  $13,335   
$
1,736
 
  $28,402 
  
 
 
   
 
 
   
 
 
   
 
 
 
Loss before income taxes
  
 
(68,701)
 
   (12,702)   
 
(188,990)
 
   (43,118) 
Income tax provision / (benefit)
  
 
428
 
   301   
 
(565)
 
   1,319 
  
 
 
   
 
 
   
 
 
   
 
 
 
Net loss available to common stockholders
  
$
 (69,129)
 
  $ (13,003)   
$
 (188,425)
 
  $ 
(44,437)
 
  
 
 
   
 
 
   
 
 
   
 
 
 
Comparison of the Three Months Ended September 30, 2021 and 2020
Revenues
                                                                                
   
Three months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
Revenues
  $115,133   $95,284   $19,849        20.8% 
Revenues increased by $19.8 million, or 20.8%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This increase in revenues is attributable to incremental revenues of $6.2 million from existing customers and $13.6 million from new customers.
Cost of revenues (excluding depreciation and amortization)
                                                                                
   
Three months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
Cost of revenues (excluding depreciation and amortization)
  $  44,525   $40,705   $3,820        9.4% 
28
Table of Contents
Cost of revenues (excluding depreciation and amortization) increased by $3.8 million, or 9.4%, for the three months ended September 30, 2021, compared to the three months ended September 30, 2020. This increase was primarily driven by $1.9 million in incremental media costs and other direct fulfillment costs of $1.6 million.
General and administrative expenses
                                                                                
   
Three months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
General and administrative expenses
  $  50,643   $17,150   $33,493      195.3% 
General and administrative expenses increased by $33.5 million, or 195.3%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This increase was primarily driven by stock-based compensation of $28.2 million, higher employee related costs of $3.1 million, higher legal and professional fees of $1.7 million and shares issued in the settlement of a dispute of $1.2 million, this increase was partially offset by reduction in the rent and facility expenses of $0.4 million and computer and telecom expenses of $0.4 million.
Selling and marketing expenses
                                                                                
   
Three months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
Selling and marketing expenses
  $  60,537   $18,269   $42,268      231.4% 
Selling and marketing expenses increased by $42.3 million, or 231.4%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This increase was primarily driven by stock-based compensation of $35.1 million, higher employee related costs of $6.5 million and other marketing related expenses of $0.8 million.
Research and development expenses
                                                                                
   
Three months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
Research and development expenses
  $  13,998   $  6,905   $  7,093      102.7% 
Research and development expenses increased by $7.1 million, or 102.7%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This increase was primarily driven by stock-based compensation of $4.8 million and higher employee related costs of $2.1 million.
Depreciation and amortization
                                                                                
   
Three months ended September 30,
   
Change
 
   
      2021      
   
        2020        
   
    Amount    
   
        %        
 
Depreciation and amortization
  $  11,783   $10,133   $  1,650        16.3% 
Depreciation and amortization increased by $1.7 million, or 16.3%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This increase was primarily driven by amortization of intangibles of $1.1 million and depreciation expense of $0.5 million.
29
Table of Contents
Acquisition related expenses
                                                                                
   
Three months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
Acquisition related expenses
  $      480   $  1,230   $    (750)      (61.0)% 
Acquisition related expenses decreased by $0.8 million, or 61.0%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This decrease was primarily driven by lower retention bonuses and professional fees compared with those incurred during the three months ended September 30, 2020, in conjunction with acquisitions completed in 2019.
Restructuring expenses
                                                                                
   
Three months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
Restructuring expenses
  $        30   $     259   $    (229)      (88.4)% 
Restructuring expenses decreased by $0.2 million, or 88.4%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This decrease was primarily driven by lower employee severance cost.
Interest expense
                                                                                
   
Three months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %    
 
Interest expense
  $  1,342   $  3,823   $  (2,481)      (64.9)% 
Interest expense decreased by $2.5 million, or 64.9%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This decrease was primarily driven by a lower interest rate on the new debt facility entered into during 2021.
Other expenses / (income)
                                                                                
   
Three months ended September 30,
   
Change
 
   
        2021        
   
        2020    
   
    Amount    
   
        %        
 
Other expenses / (income)
  $      496   $    (188)   $     684      (363.8)% 
Other expenses increased by $0.7 million or 363.8% for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This increase was primarily driven by a foreign currency loss of $0.4 million and change in the fair value of acquisition related liabilities of $0.2 million.
Change in fair value of warrants and derivative liabilities
                                                                                
   
Three months ended September 30,
   
Change
 
   
        2021          
   
        2020        
   
    Amount    
   
        %    
 
Change in fair value of warrants and derivative liabilities
  $      —    $  9,700   $  (9,700)      (100)% 
Change in fair value of warrants and derivative liabilities expense decreased by $9.7 million for the three months ended September 30, 2021 compared to the three months ended September 30, 2020. This loss during the three months September 30, 2020 was primarily driven by a change in our estimates and assumptions specifically as it relates to the price of our underlying stock used to calculate the fair value of our warrants and derivatives. The warrants and derivative liabilities were extinguished upon the Company’s IPO on June 14, 2021 and as such there are no such changes in the liabilities recorded during the three months ended September 30, 2021.
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Income tax provision
   
  Three months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
     Amount     
   
        %        
 
Income tax provision
  $        428   $      301   $     127��       42.2% 
For the three months ended September 30, 2021, the Company recorded an income tax provision of $0.4 million yielding an effective tax rate of (0.62)%. For the three months ended September 30, 2020, the Company recorded an income tax provision of $0.3 million yielding an effective tax rate of (2.37)%. The effective tax rate for both interim periods was different than the U.S. statutory rate primarily related to limited tax benefit being recording for U.S. operating losses as the Company maintains a full valuation allowance against its U.S. deferred tax assets.
Comparison of the Nine Months Ended September 30, 2021 and 2020
Revenues
   
  Nine months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
Revenues
  $323,492   $253,674   $69,818        27.5% 
Revenues increased by $69.8 million, or 27.5%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This increase in revenues is attributable to incremental revenues of $30.8 million from existing customers and $38.9 million from new customers.
Cost of revenues (excluding depreciation and amortization)
   
  Nine months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
Cost of revenues (excluding depreciation and amortization)
  $125,709   $100,530   $25,179        25.0% 
Cost of revenues (excluding depreciation and amortization) increased by $25.2 million, or 25.0%, for the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020. This increase was primarily driven by $20.0 million in incremental media costs, other direct fulfillment costs of $3.5 million and stock-based compensation of $1.5 million.
General and administrative expenses
   
  Nine months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
General and administrative expenses
  $135,682   $53,270   $82,412      154.7% 
General and administrative expenses increased by $82.4 million, or 154.7%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This increase was driven by stock-based compensation of $70.9 million, employee related costs of $9.3 million,
non-recurring
IPO related expenses of $1.5 million, legal and professional fees of $2.0 million and shares issued in the settlement of a dispute of $1.2 million, this increase was partially offset by reduction in the rent and facility expenses of $1.4 million and computer and telecom expenses of $1.0 million.
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Selling and marketing expenses
                                                                                
   
Nine months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
Selling and marketing expenses
  $163,952   $54,359   $109,593    201.6% 
Selling and marketing expenses increased by $109.6 million, or 201.6%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This increase was primarily driven by stock-based compensation of $94.6 million, higher employee related costs of $14.2 million and
non-recurring
IPO related expense of $0.8 million.
Research and development expenses
                                                                                
   
Nine months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
Research and development expenses
  $  50,285   $23,789   $26,496    111.4% 
Research and development expenses increased by $26.5 million, or 111.4%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This increase was primarily driven by stock-based compensation of $21.7 million, higher employee related costs and professional and consulting fees of $4.5 million and
non-recurring
IPO related expenses of $0.4 million.
Depreciation and amortization
                                                                                
   
Nine months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
Depreciation and amortization
  $  33,135   $30,171   $  2,964       9.8% 
Depreciation and amortization increased by $3.0 million, or 9.8%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This increase was primarily driven by an increase in amortization of intangibles of $2.3 million and depreciation expense of $0.6 million.
Acquisition related expenses
                                                                                
   
Nine months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
Acquisition related expenses
  $  1,516   $  4,321   $  (2,805)    (64.9)% 
Acquisition related expenses decreased by $2.8 million, or 64.9%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This decrease was primarily driven by lower retention bonuses and professional fees compared to those incurred during the nine months ended on September 30, 2020 in conjunction with acquisitions completed in 2019.
Restructuring expenses
                                                                                
   
Nine months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
Restructuring expenses
  $      467   $  1,950   $  (1,483)      (76.1)% 
Restructuring expenses decreased by $1.5 million, or 76.1%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This decrease was primarily driven by lower employee severance cost during the nine months ending September 30, 2021 compared with September 30, 2020.
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Interest expense
                                                                                
   
Nine months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
Interest expense
  $  5,705   $12,548   $  (6,843)      (54.5)% 
Interest expense decreased by $6.8 million, or 54.5%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This decrease was primarily driven by a lower interest rate on the new debt facility entered into during 2021.
Other expenses / (income)
                                                                                
   
Nine months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
Other expenses / (income)
  $  1,031   $    (546)   $  1,577    (288.8)% 
Other expense increased by $1.6 million, or 288.8% for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. This increase was primarily driven by an increase in loss on sale of assets of $0.7 million, and an increase in foreign currency loss of $0.8 million.
Change in fair value of warrants and derivative liabilities
                                                                                
   
Nine months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
Change in fair value of warrants and derivative liabilities
  $  5,000   $16,400   $(11,400)    (69.5)% 
Change in fair value of warrants and derivative liabilities expense decreased by $11.4 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. These losses during the nine months ended September 30, 2021 and 2020 were primarily driven by a change in our estimates and assumptions specifically as it relates to the price of our underlying stock used to calculate the fair value of our warrants and derivatives. The warrants and derivative liabilities were extinguished upon the Company’s IPO on June 14, 2021 and as such there are no such changes in the liabilities recorded during the three months ended September 30, 2021, and the losses in the nine months ended September 30, 2021 are much smaller compared to the nine months ended September 30, 2020,
Income tax (benefit) / provision
                                                                                
   
Nine months ended September 30,
   
Change
 
   
        2021        
   
        2020        
   
    Amount    
   
        %        
 
Income tax (benefit) / provision
  $    (565)   $  1,319   $  (1,884)    (142.8)% 
For the nine months ended September 30, 2021, the Company recorded an income tax benefit of $0.6 million yielding an effective tax rate of 0.3%. For the nine months ended September 30, 2020, the Company recorded an income tax provision of $1.3 million yielding an effective tax rate of (3.06)%. The effective tax rate for both interim periods was different than the U.S. statutory rate primarily related to limited tax benefit being recording for U.S. operating losses as the Company maintains a full valuation allowance against its U.S. deferred tax assets.

Liquidity and Capital Resources

We have financed our operations and capital expenditures primarily through utilization of cash generated from operations, as well as borrowings under our credit facilities. As of September 30, 2021,2022, we had cash and cash equivalents of $116.2 million. The$114.8 million and net working capital, consisting of current assets less current liabilities, as of September 30, 2021 was $95.4$92.2 million. As of September 30, 2021,2022, we had an accumulated deficit of $430.7$719.3 million.

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We believe our existing cash and anticipated net cash provided by operating activities, together with available borrowings under our credit facility, will be sufficient to meet our working capital requirements for at least the next 12 months.months and for the foreseeable future. However, if our operating performance during the next 12 months is below our expectations, our liquidity and ability to operate our business could be adversely affected.

Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth under "Risk Factors" in our Annual Report on Form 10 K for the year ended December 31, 2021. In the future, we may attempt to raise additional capital through sales of equity securities or through equity-linked or debt financing arrangements. Any future indebtedness we incur may result in terms that could be unfavorable to our equity investors. We cannot guarantee that we will be able to raise additional capital in the future on favorable terms, or at all. Any inability to raise capital could adversely affect our ability to achieve our business objectives.

Cash flows

The following table summarizes our cash flows:

   
Nine months ended September 30,
 
   
2021
   
2020
 
Net cash provided by / (used for):
    
Cash provided by operating activities
  
$
23,366
 
  
$
16,642
 
Cash used in investing activities
   (22,463)    (19,408) 
Cash provided by financing activities
   64,682    6,004 
Effect of exchange rate changes on cash and cash equivalents
   (130)    (102) 
  
 
 
   
 
 
 
Net increase in cash and cash equivalents
  
$
65,455
 
  
$
3,136
 
  
 
 
   
 
 
 
flows for the periods presented:

 

 

Nine months ended September 30,

 

 

 

2022

 

 

2021

 

Net cash provided by / (used for):

 

 

 

 

 

 

Cash provided by operating activities

 

$

55,389

 

 

$

23,366

 

Cash used for investing activities

 

 

(39,194

)

 

 

(22,463

)

Cash (used for) / provided by financing activities

 

 

(5,117

)

 

 

64,682

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(129

)

 

 

(130

)

Net increase in cash and cash equivalents

 

$

10,949

 

 

$

65,455

 

Cash Flows from Operating Activities

For the nine months ended September 30, 2022, net cash provided by operating activities of $55.4 million resulted primarily from adjusted non-cash items of $280.1 million, more than offsetting our net loss of $227.5 million. Changes in working capital were primarily driven by an increase in accounts payable of $7.3 million and increase in accrued expenses and other current liabilities of $1.8 million, partially offset by an increase in accounts receivable of $4.6 million, prepaid and other current assets of $0.7 million and a decrease in deferred revenues of $0.8 million.

For the nine months ended September 30, 2021, net cash provided by operating activities of $23.4 million resulted primarily from adjusted

non-cash
items of $217.6 million, more than offsetting our net loss of $188.4 million and resulting in a net cash income of $29.2 million. Changes in working capital were primarily driven by a decrease in accounts receivable of $7.4 million, decrease in prepaid and other current assets of $2.4 million and increase in accrued expenses and other current liabilities of $2.8 million, partially offset by a decrease in accounts payable of $18.0 million and deferred revenues of $1.3 million, for net decrease in working capital of $5.8 million.

Cash Flows from Investing Activities

For the nine months ended September, 30, 2020, net2022, we used $39.2 million of cash provided by operatingin investing activities, primarily consisting of $16.6capital expenditures of $17.2 million resulted primarily from changes(including a $14.4 million investment in working capital driven by a decrease in accounts receivabledata and partnership agreements), business and asset acquisitions of $29.0$9.2 million partially offset by a decrease in accounts payable, accrued expenses and other current liabilitieswebsite and software development costs of $19.7 million, for net increase in working capital of $11.7$12.8 million. This increase was partially offset by net loss of $44.4 million adjusted for

non-cash
items of $49.4 million, resulting in a net cash loss of $5.0 million.
Cash Flows from Investing Activities

For the nine months ended September 30, 2021, we used $22.5 million of cash in investing activities, primarily consisting of website and software development costs of $13.4 million, capital expenditure of $6.9 million and business and asset acquisitions, net of cash acquired, of $2.2 million.

Cash Flows used for / provided by Financing Activities

For the nine months ended September 30, 2020,2022, we used $19.4$5.1 million of cash in investingfinancing activities, primarily consistingdue to the repurchase of website$4.3 million of common stock under our repurchase and software development costsRSA withholdings program and payment of $17.5acquisition related

34

liabilities of $2.3 million, and capital expenditure of $1.9 million.

Cash Flows from Financing Activities
partially offset by $1.3 million paid by certain employees under the Company's employee stock purchase plan.

For the nine months ended September 30, 2021, net cash provided by financing activities of $64.7 million was primarily due to IPO proceeds (net of issuance cost) of $126.5 million, new credit facility of $183.3 million (net of financing cost), partially offset by repayments against credit facilitieslines of $180.7 million. Further, in connection with our IPO, we repurchased and cancelledcanceled certain stock from our employees, including restricted stock and restricted stock units with a total repurchase amount of $64.5 million.

For the nine months ended September 30, 2020, net cash provided by financing activities of $6.0 million was primarily due to $10.0 million in proceeds from the PPP loan, partially offset by repayments of $3.5 million under our credit facilities and cash paid for acquisition related liabilities amounting to $0.5 million.
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Debt

As of September 30, 2021,2022, we have $183.5$183.9 million (net of $1.5$1.1 million of unamortized debt acquisition costs) of outstanding long-term borrowings.

On February 3, 2021, we completed our debt refinancing and as a result of such debt refinancing, we entered into a $222.5 million Senior Secured Credit Facility. The Senior Secured Credit Facility which was used to fully repay and terminate our existingprevious credit agreement. Borrowings under the debt are expected to be in an amount of $185.0$185 million and bear interest payable quarterly ranging from LIBOR plus 2.125% to LIBOR plus 2.625% based on our consolidated net leverage ratio stated in the credit agreement. We are required to repay the principal balance and any unpaid accrued interest on the Senior Secured Credit Facility on February 3, 2026. We do not expect any other significant changes in liquidity as a result of this refinancing.

We are currently in compliance with our financial maintenance covenants under the Senior Secured Credit Facility and, based upon our current expectations, believe that we will continue to comply with our financial maintenance covenants for the next 12 months. The Senior Secured Credit Facility contains restrictive covenants that place restrictions on us and may limit our ability to, among other things, incur additional debt and liens, purchase our securities, undertake transactions with affiliates, make other investments, pay dividends or distribute excess cash flow.

On April 23, 2020,

During the nine months ended September 30, 2022, we entered into a promissory note evidencing an unsecured $10,000borrowed $5.6 million against the revolver facility and repaid the same amount against the term loan under the Paycheck Protection Program (“PPP Loan”) of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) administered by the U.S. Small Business Administration (“SBA”). The loan was made through Radius Bank. We accounted for the loan as a financial liability in accordance with ASC Topic 470, Debt. Accordingly, the loan was recognized within long-term debt. We used the proceeds from the loan for payroll, rent and utilities and certain other approved expenses during the eight-week period commencing on the loan effective date. On June 10, 2021, the Company received a notice from SBA stating full forgiveness of the principal amount of $10 million and the related interest therein.

credit facility.

Contractual obligations

There have been no material changes to our contractual obligations as compared to the contractual obligations described in our Management’s"Management’s Discussion and Analysis of Financial Condition and Results of OperationsOperations" set forth in our Annual Report on Form 10-K for the Prospectus related to our recent IPO.

year ended December 31, 2021.

Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance with U.S. GAAP. The preparation of our financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Estimates are based on management’s judgment and the best available information, and as such actual results could differ from those estimates.

There have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in our Management’s"Management’s Discussion and Analysis of Financial Condition and Results of OperationsOperations" set forth in our Annual Report on Form 10-K for the Prospectus related to our recent IPO.

year ended December 31, 2021.

JOBS Act Accounting Election

We are an emerging growth company, as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

35

Off-Balance

Sheet Arrangements

We have not entered into any

off-balance
sheet arrangements and do not have any holdings in variable interest entities.
35

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Item 3.
Quantitative and Qualitative Disclosures about Market Risk

Item 3.Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risk in the ordinary course of business. Market risk represents the risk of loss that may impact our financial condition due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in interest rates and foreign currency exchange risks. We do not hold or issue financial instruments for speculative or trading purposes.

Interest Rate Risk

We are exposed to market risk from changes in interest rates on our loan term borrowings, which accrue interest at a variable rate. As of September 30, 2022, we had not fixed the interest rate on $185 million of our debt through derivative financial instruments, and as a result, we are subject to the potential impact of rising interest rates, which could negatively impact our profitability and cash flows. Based upon the principal balance owed on our long-term borrowings as of September 30, 2021,2022, a hypothetical one percentage point increase or decrease in the interest would increase or decrease our annual interest expenses by $1.9 million. There were no other material changes in market risk exposures as of September 30, 2021.

2022.

Foreign Currency Risk

We have foreign currency risks related to a certain number of our foreign subsidiaries in the UK, France, Belgium and India. We do not believe that a 10% change in the relative value of the U.S. dollar to other foreign currencies would have a material effect on our cash flows and operating results in currencies other than the U.S. dollar.

Inflation Risk

In recent months, inflation has continued to increase significantly in the United States and overseas resulting in rising wages and other costs. We do not believe that inflation had a material effect on our business, financial condition or results of operations.

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Item 4.
Controls and Procedures
Internal Control Over Financial Reporting
Previously Identified Material Weaknesses
As previously identified, during the audits of However, if our financial statements for the years ended December 31, 2020 and 2019, three material weaknessescosts were identified in our internal control over financial reporting. Under standards established by the PCAOB, a “material weakness” is a deficiency, or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected on a timely basis. The material weaknesses that have been identified relate to lack of segregation of duties, lack of a risk assessment process and lack of contemporaneous documentation and accounting analysis.
As an emerging growth company, we have experienced growth such that our existing accounting and finance staff was not adequatebecome subject to contemplate all the financial transactions facing the company on a contemporaneous basis. This led to positions being taken without appropriate independent reviews by personnel adequately knowledgeable of the technical requirements under U.S. GAAP. Additionally, the Company had not historically completed a formalized risk assessment process on an annual basis, including an assessment of the risks related to fraud. Finally, the Company had taken historical accounting positions, specifically related to stock-based compensation awards, redeemable convertible preferred stock and warrants, which led to restatements of prior financial statements and material adjustments to current financial statements, to correct accounting errors associated with these positions. These positions were taken without complete documentation and full understanding of the technical requirements of the accounting literature as it related to our specific arrangements.
We are in the process of implementing a number of measures to address the material weaknesses and deficiencies that have been identified including: (i) hiring additional accounting and financial reporting personnel with generally accepted accounting principles in the U.S. GAAP and SEC reporting experience, (ii) developing, communicating and implementing an accounting policy manual for our accounting and financial reporting personnel for recurring transactions and
period-end
closing processes and (iii) establishing effective monitoring and oversight controls for
non-recurring
and complex transactions to ensure the accuracy and completeness of our consolidated financial statements and related disclosures.
These additional resources and procedures are designed to enable us to broaden the scope and quality of our internal review of underlying information related to financial reporting and to formalize and enhance our internal control procedures. With the oversight of senior management and our audit committee, we have begun taking steps and plan to take additional measures to remediate the underlying causes of the material weaknesses.
We intend to complete the implementation of our remediation plan during fiscal year 2021. Although we believe that our remediation plan will improve our internal control over financial reporting, additional time may be required to fully implement it and to make conclusions regarding the effectiveness of our internal controls over financial reporting. Our management will closely monitor and modify, as appropriate, the remediation plan to eliminate the identified material weaknesses.
If our remediation of the material weaknesses is not effective, or if we experience additional material weaknesses or otherwise fail to maintain an effective system of internal controls in the future,significant inflationary pressures, we may not be able to accuratelyfully offset higher costs through price increases and our inability or timely reportfailure to do so could potentially harm our business, financial condition, orand results of operations. Accordingly, there could continue to be a reasonable possibility that a material misstatement of our financial statements would not be prevented or detected on a timely basis. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to remediate the material weaknesses we have identified or avoid potential future material weaknesses.

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Item 4.Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer has(“CFO”), evaluated the effectiveness of our disclosure controls and procedures (asas defined in Rules

13a-15(e)
and
15d-15(e)
under the Exchange Act),Act as of the end of the period covered by this Quarterly Report on Form
10-Q.
Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2021, our

Our disclosure controls and procedures were effectiveare designed to provide reasonable assurance that information we are required to disclose in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosures, and is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms,forms. Based on this evaluation, our CEO and CFO have concluded that such information is accumulatedour disclosure controls and communicated to our management, including our Chief Executive Officer and Chief Financial Officer,procedures were effective at the reasonable assurance level as appropriate, to allow timely decisions regarding required disclosures.

of September 30, 2022.

Changes in Internal Control

Other than the changes described above regarding enhancements associated with ongoing remediation efforts, there over Financial Reporting

There were no changes in our internal control over financial reporting in connection with the evaluation required by Rule

Rules 13a-15(d)
and
15d-15(d)
of the Exchange Act that occurred during the period covered by this Quarterly Report on Form
10-Q
that materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

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Table of Contents

PART II - OTHER INFORMATION

Item 1.
Legal Proceedings

Item 1.Legal Proceedings

From time to time, we are involved in various legal proceedings arising from the normal course of business activities. We are not currently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows, or financial condition. Defending any such proceedings is costly and can impose a significant burden on management and employees. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

Item 1A
.
Risk Factors
There are

Item 1A.Risk Factors

Except to the extent updated below or previously updated or to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q related to such risk factors (including, without limitation, the matters discussed in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operation”), there have been no material changes to the risk factors previously disclosed under the headingin Part 1, Item 1A “Risk Factors” in the ProspectusForm 10-K for the year ended December 31, 2021 filed with the SEC on June 14,February 25, 2022 and in Part II, Item IA “Risk Factors” in the Q2 2022 Form 10-Q filed with the SEC on August 4, 2022.

We may be adversely affected by the effects of inflation.

Inflation has the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge our customers. The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, increased costs of labor, weakening exchange rates and other similar effects. As a result of inflation, we have experienced and may continue to experience, cost increases. Although we may take measures to mitigate the impact of this inflation, if these measures are not effective, our business, financial condition, results of operations and liquidity could be materially adversely affected. Even if such measures are effective, there could be a difference between the timing of when these beneficial actions impact our results of operations and when the cost of inflation is incurred.

Interest rate fluctuations may affect our results of operations and financial condition.

Because a substantial portion of our debt is variable-rate debt, fluctuations in interest rates could have a material effect on our business. We incur higher interest costs if interest rates increase. Interest rates were at historic lows during 2020 and 2021, pursuantwhen the United States Federal Reserve took several steps to Rule 424(b)(4) underprotect the economy from the impact of the COVID-19 pandemic, including reducing interest rates to new historic lows. Thus far in 2022, the United States Federal Reserve has raised interest rates by more than 100 basis points and has signaled that further increases are expected in the near future. Any such increase in interest costs could have a material adverse impact on our financial condition and the levels of cash we maintain for working capital.

Item 2.Unregistered Sales of Equity Securities Act.

Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
On July 28, 2021,and Use of Proceeds

Purchases of Equity Securities by the Company issued 200,000 sharesand Affiliated Purchasers

Common stock repurchases during the quarter ended September 30, 2022 were as follows.:

Period

 

(a)
Total Number of Shares (or Units) Purchased

 

(b)
Average Price Paid per Share (or Unit)

 

 

(c)
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs(1)

 

 

(d)
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (in millions) (1)

 

July 1, 2022 – July 31, 2022

 

 

—

 

 

—

 

 

 

—

 

 

 

—

 

August 1, 2022 – August 31, 2022

 

 

214,897

 

$

7.52

 

 

 

214,897

 

 

$

48.4

 

September 1, 2022 – September 30, 2022

 

 

355,056

 

$

7.59

 

 

 

355,056

 

 

$

45.7

 

Total

 

 

569,953

 

 

 

 

 

569,953

 

 

 

 

(1) On August 3, 2022, the Company’s Board of itsDirectors authorized a stock repurchase and withholding program of up to $50 million in the aggregate for (i) repurchases of the Company’s outstanding Class A common stock through December 31, 2024 and (ii) the withholding of shares as an alternative to a vendor in connectionmarket sales by certain executives to satisfy tax withholding requirements upon vesting of restricted stock awards.

39

Item 3.Defaults Upon Senior Securities

None.

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.Other Information

None.

40

Item 6.Exhibits

 

 

Incorporated by Reference

 

 

 

Exhibit

Number

 

Exhibit Description

 

Form

 

File No.

 

Exhibit

 

Filing Date

 

Filed

Herewith

 

Furnished

Herewith

 

 

 

 

 

 

 

 

 

 3.1

Amended and Restated Certificate of Incorporation of Zeta Global Holdings Corp.

8-K

001-40464

3.1

6/15/2021

 

 

 

 

 

 

 

 

 

 

    3.2

Amended and Restated Bylaws of Zeta Global Holdings Corp.

8-K

001-40464

3.2

6/15/2021

 

 

 

 

 

 

 

 

 

 

31.1

Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

 

 

 

X

 

 

 

 

 

 

 

 

 

  31.2

Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

X

  32.1*

Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

X

  32.2*

Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

X

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

X

101.SCH

Inline XBRL Taxonomy Extension Schema Document

X

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

X

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

X

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

X

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

X

104

Cover Page Interactive Data File (formatted as Inline XBRL

And contained in Exhibit 101)

* The certifications attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the settlementSEC and are not to be incorporated by reference into any filing of a dispute alleging

non-compensation
under a past services contract. We did not receive any proceeds from such issuance.
The securities described above were issued in reliance on the exemption from registration provided in Section 4(a)(2) ofCompany under the Securities Act of 1933, as amended, for transactions by an issuer not involving a public offering. The vendor confirmed that it was an accredited investor and acknowledged thator the securities must be acquired and held for investment.
Item 3.
Defaults Upon Senior Securities
None.
Item 4.
Mine Safety Disclosures
Not applicable.
Item 5.
Other Information
None.
39
Table of Contents
Item 6.
Exhibits
The documents listed inExchange Act whether made before or after the Exhibit Indexdate of this Quarterly Report on Form
10-Q,
are incorporated by reference or are filed with this Quarterly Report on Form
10-Q,
irrespective of any general incorporation language contained in each case as indicated therein.
     
Incorporated by Reference
       
Exhibit
Number
  
Exhibit Description
 
Form
  
File No.
  
Exhibit
  
Filing Date
  
Filed
Herewith
  
Furnished
Herewith
 
    3.1  Amended and Restated Certificate of Incorporation of Zeta Global Holdings Corp.  8-K   001-40464   3.1   6/15/2021   
    3.2  Amended and Restated Bylaws of Zeta Global Holdings Corp.  8-K   001-40464   3.2   6/15/2021   
    4.1  Specimen Stock Certificate evidencing the shares of Class A common stock.  S-1/A   333-255499   4.1   5/7/2021   
  10.1  Letter Agreement, dated June 29, 2021, by and between Zeta Global Holdings Corp. and Jené Elzie  8-K   001-40464   10.1   6/29/2021   
  10.2  Form of Indemnification Agreement by and between the Registrant and Each of its Directors and Executive Officers.  S-1/A   333-255499   10.2   5/7/2021   
  10.3#  Zeta Global Holdings Corp. 2008 Stock Option/Stock Issuance Plan  S-1/A   333-255499   10.3   5/7/2021   
  10.4#  Form of restricted stock agreement under 2008 Stock Option/Stock Issuance Plan  S-1/A   333-255499   10.4   5/7/2021   
  10.5#  Form of option agreement under 2008 Stock Option/Stock Issuance Plan  S-1/A   333-255499   10.5   5/7/2021   
  10.6#  Zeta Global Holdings Corp. 2017 Equity Incentive Plan  S-1/A   333-255499   10.6   5/7/2021   
  10.7#  Form of restricted stock agreement under 2017 Equity Incentive Plan  S-1/A   333-255499   10.7   5/7/2021   
  10.8#  Form of restricted stock unit agreement under 2017 Equity Incentive Plan  S-1/A   333-255499   10.8   5/7/2021   
  10.9#  Form of stock option agreement under 2017 Equity Incentive Plan  S-1/A   333-255499   10.9   5/7/2021   
  10.10#  Zeta Global Holdings Corp. 2021 Incentive Award Plan  S-1/A   333-255499   10.10   5/7/2021   
  10.11#  Form of restricted stock agreement under 2021 Incentive Award Plan.  S-1/A   333-255499   10.11   5/7/2021   
  10.12#  Form of restricted stock unit agreement under 2021 Incentive Award Plan  S-1/A   333-255499   10.12   5/7/2021   
  10.13#  Form of stock option agreement under 2021 Incentive Award Plan  S-1/A   333-255499   10.13   5/7/2021   
  10.14#  Zeta Global Holdings Corp. 2021 Employee Stock Purchase Plan  S-1/A   333-255499   10.14   5/7/2021   
  10.15#  Form of amendment to restricted stock agreement under 2008 Stock Option/Stock Issuance Plan and 2017 Equity Incentive Plan for participants eligible to participate in Buy-Back Program  S-1/A   333-255499   10.15   5/7/2021   
  10.16#  Form of amendment to restricted stock unit agreement under 2017 Equity Incentive Plan for participants eligible to participate in Buy-Back Program  S-1/A   333-255499   10.16   5/7/2021   
  10.17#  Form of Employment Agreement by and between Zeta Global Holdings Corp. and David A. Steinberg  S-1/A   333-255499   10.17   5/7/2021   
  10.18  Form of Exchange Agreement  S-1/A   333-255499   10.18   5/7/2021   
  10.19#  Form of Employment Agreement by and between Zeta Global Corp. and Steven Gerber  S-1/A   333-255499   10.19   5/7/2021   
  10.20#  Form of Employment Agreement by and between Zeta Global Corp. and Chris Greiner  S-1/A   333-255499   10.20   5/7/2021   
  10.21#  Form of performance stock unit agreement under 2021 Incentive Award Plan      X  
  31.1  Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002      X  
  31.2  Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002      X  
  32.1*  Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002       X 
  32.2*  Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002       X 
101.INS  XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.      X  
101.SCH  Inline XBRL Taxonomy Extension Schema Document      X  
101.CAL  Inline XBRL Taxonomy Extension Calculation Linkbase Document      X  
101.DEF  Inline XBRL Taxonomy Extension Definition Linkbase Document      X  
101.LAB  Inline XBRL Taxonomy Extension Label Linkbase Document      X  
101.PRE  Inline XBRL Taxonomy Extension Presentation Linkbase Document      X  
104  
Cover Page Interactive Data File (formatted as Inline XBRL
And contained in Exhibit 101)
      
#
Indicates a management contract or compensatory plan.
*
The certifications attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Quarterly Report on Form
10-Q
are deemed furnished and not filed with the SEC and are not to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act whether made before or after the date of this Quarterly Report on Form
10-Q,
irrespective of any general incorporation language contained in such filing.
40
such filing.

41

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Zeta Global Holdings Corp.

Zeta Global Holdings Corp.

Date: November 10, 20212, 2022

By:

By:

/s/ David A. Steinberg

David A. Steinberg

President, Chief Executive Officer and Chairperson

(Principal Executive Officer)

Date: November 10, 20212, 2022

By:

By:

/s/ Christopher Greiner

Christopher Greiner

Chief Financial Officer

(Principal Financial Officer)

41

42