Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Apr. 15, 2024 | Jun. 30, 2023 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity Registrant Name | Digital Media Solutions, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity File Number | 001-38393 | ||
Entity Tax Identification Number | 98-1399727 | ||
Entity Address, Address Line One | 4800 140th Avenue N. | ||
Entity Address, Address Line Two | Suite 101 | ||
Entity Address, City or Town | Clearwater | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 33762 | ||
City Area Code | 877 | ||
Local Phone Number | 236-8632 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3 | ||
Documents Incorporated by Reference | The information required by Part III, Items 10, 11, 12, 13, and 14 of this Annual Report on Form 10-K will be filed (and is hereby incorporated by reference) by an amendment hereto or pursuant to a definitive proxy statement that will contain such information. | ||
CIK | 0001725134 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Class A Common Stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 4,438,137 | ||
Redeemable warrants to acquire Class A common stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 1,896,235 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Auditor Information [Abstract] | |
Auditor Name | Grant Thornton LLP |
Auditor Location | Tampa, Florida |
Auditor Firm ID | 248 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 18,466 | $ 48,839 |
Restricted cash | 502 | 0 |
Accounts receivable, net of allowances of $4,172 and $4,656, respectively | 35,322 | 48,109 |
Contract assets - current, net | 6,467 | 0 |
Prepaid and other current assets | 2,908 | 3,296 |
Income tax receivable | 2,133 | 1,966 |
Total current assets | 65,798 | 102,210 |
Property and equipment, net | 15,390 | 17,702 |
Operating lease right-of-use assets, net | 862 | 2,187 |
Goodwill | 32,849 | 77,238 |
Intangible assets, net | 29,441 | 27,519 |
Contract assets - non-current, net | 1,632 | 0 |
Other assets | 1,315 | 765 |
Total assets | 147,287 | 227,621 |
Current liabilities: | ||
Accounts payable | 41,235 | 39,908 |
Accrued expenses and other current liabilities | 10,548 | 7,101 |
Current portion of long-term debt | 2,750 | 2,250 |
Tax Receivable Agreement liability | 164 | 164 |
Operating lease liabilities - current | 1,812 | 2,175 |
Contingent consideration payable - current | 1,000 | 1,453 |
Total current liabilities | 57,509 | 53,051 |
Long-term debt | 286,353 | 254,573 |
Deferred tax liabilities | 314 | 1,112 |
Operating lease liabilities - non-current | 532 | 2,232 |
Warrant liabilities | 82 | 600 |
Contingent consideration payable - non-current | 512 | 0 |
Total liabilities | 345,302 | 311,568 |
Preferred stock, $0.0001 par value, 100,000 shares authorized; 80 Series A and 60 Series B convertible redeemable issued and outstanding, respectively at December 31, 2023 | 16,646 | 0 |
Stockholders' deficit: | ||
Additional paid-in capital | (80,523) | (14,054) |
Treasury stock, at cost, 7 and 9 shares, respectively | (235) | (181) |
Cumulative deficit | (126,230) | (32,896) |
Total stockholders' deficit | (206,981) | (47,124) |
Non-controlling interest | (7,680) | (36,823) |
Total deficit | (214,661) | (83,947) |
Total liabilities, preferred stock and stockholders' deficit | 147,287 | 227,621 |
Class A Common Stock | ||
Stockholders' deficit: | ||
Common stock | 4 | 4 |
Class B Common Stock | ||
Stockholders' deficit: | ||
Common stock | 3 | 3 |
Class C common stock | ||
Stockholders' deficit: | ||
Common stock | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | |
Allowance for credit loss | $ 4,172 | $ 4,656 | |
Preferred stock par value (in usd per share) | $ 0.0001 | ||
Preferred stock, authorized (in shares) | 100,000,000 | ||
Common stock par value (in usd per share) | $ 0.0001 | ||
Common stock authorized (in shares) | 600,000,000 | ||
Common stock outstanding (in shares) | 1,672,000 | ||
Treasury stock (in shares) | 7,000 | 9,000 | |
Preferred Stock | |||
Preferred stock outstanding (in shares) | [1] | 0 | |
Series A Preferred Stock | Preferred Stock | |||
Preferred stock issued (in shares) | 80,000 | ||
Preferred stock outstanding (in shares) | 80,000 | ||
Series B Preferred Stock | Preferred Stock | |||
Preferred stock issued (in shares) | 60,000 | ||
Preferred stock outstanding (in shares) | 60,000 | ||
Class A Common Stock | |||
Common stock par value (in usd per share) | $ 0.0001 | ||
Common stock authorized (in shares) | 500,000,000 | ||
Common stock issued (in shares) | 2,766,000 | ||
Common stock outstanding (in shares) | 2,766,000 | ||
Class B Common Stock | |||
Common stock par value (in usd per share) | $ 0.0001 | ||
Common stock authorized (in shares) | 60,000,000 | ||
Common stock issued (in shares) | 1,672,000 | ||
Class C common stock | |||
Common stock par value (in usd per share) | $ 0.0001 | ||
Common stock authorized (in shares) | 40,000,000 | ||
Common stock issued (in shares) | 0 | ||
Common stock outstanding (in shares) | 0 | ||
[1] See Note 10. Fair Value Measurements and Note 11. Equity |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Income Statement [Abstract] | |||
Net revenue | $ 334,949 | $ 391,148 | |
Cost of revenue (exclusive of depreciation and amortization) | 252,050 | 287,820 | |
Salaries and related costs | 43,583 | 49,872 | |
General and administrative expenses | 46,578 | 41,878 | |
Depreciation and amortization | 19,460 | 28,242 | |
Impairment of goodwill | 49,390 | 0 | |
Impairment of intangible assets | 16,744 | 21,570 | |
Acquisition costs | 3,020 | 1,650 | |
Change in fair value of contingent consideration liabilities | (1,833) | 2,583 | |
Loss from operations | (94,043) | (42,467) | |
Interest expense, net | 38,634 | 17,366 | |
Change in fair value of warrant liabilities | (9,185) | (3,360) | |
Change in Tax Receivable Agreement liability | 0 | 125 | |
Other | [1] | (9) | 7 |
Net loss before income taxes | (123,483) | (56,605) | |
Income tax benefit | (790) | (4,105) | |
Net loss | (122,693) | (52,500) | |
Net loss attributable to non-controlling interest | (41,012) | (20,548) | |
Net loss attributable to Digital Media Solutions, Inc. | $ (81,681) | $ (31,952) | |
Weighted-average Class A common shares outstanding – basic (in shares) | 2,920 | 2,581 | |
Weighted-average Class A common shares outstanding – diluted (in shares) | 2,920 | 2,583 | |
Loss per share attributable to Digital Media Solutions, Inc.: | |||
Basic – per Class A common shares (in usd per share) | $ (31.96) | $ (12.38) | |
Diluted – per Class A common shares (in usd per share) | $ (31.96) | $ (12.37) | |
[1] Represents Foreign exchange gain and (Gain) loss on disposal of assets. |
Consolidated Statements of Chan
Consolidated Statements of Changes in Preferred Stock and Stockholders’ Deficit - USD ($) shares in Thousands, $ in Thousands | Total | Crisp Results | Series A Preferred Stock | Series B Preferred Stock | Class A Common Stock | Total Stockholders' Deficit | Total Stockholders' Deficit Crisp Results | Total Stockholders' Deficit Series A Preferred Stock | Total Stockholders' Deficit Series B Preferred Stock | Preferred Stock | Preferred Stock Series A Preferred Stock | Preferred Stock Series B Preferred Stock | Common Stock Class A Common Stock | Common Stock Class A Common Stock Smarter Chaos | Common Stock Class A Common Stock Crisp Results | Common Stock Class B Common Stock | Common Stock Class B Common Stock Smarter Chaos | Additional Paid-in Capital | Additional Paid-in Capital Crisp Results | Treasury Stock | Cumulative Deficit | Cumulative Deficit Series A Preferred Stock | Cumulative Deficit Series B Preferred Stock | Non- controlling Interest | ||||
Preferred stock, ending balance (in shares) at Dec. 31, 2022 | [1] | 0 | ||||||||||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2021 | 2,447 | 1,713 | ||||||||||||||||||||||||||
Beginning balance at Dec. 31, 2021 | $ (47,818) | $ (26,177) | $ 3 | $ 3 | $ (25,239) | $ (944) | $ (21,641) | |||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||||
Net loss | (52,500) | (31,952) | (31,952) | (20,548) | ||||||||||||||||||||||||
Shares redeemed and issued to Class A Common Stock (in shares) | [2] | 10 | ||||||||||||||||||||||||||
Stock-based compensation | 7,125 | 7,125 | 7,125 | |||||||||||||||||||||||||
Shares issued under the 2020 Omnibus Incentive Plan (in shares) | 48 | |||||||||||||||||||||||||||
Treasury shares purchased under the 2020 Omnibus Incentive Plan (in shares) | (9) | |||||||||||||||||||||||||||
Treasury stock purchased under the 2020 Omnibus Incentive Plan | (181) | (181) | $ (181) | |||||||||||||||||||||||||
Impact of transactions affecting non-controlling interest | [3] | 0 | (5,939) | (5,939) | 5,939 | |||||||||||||||||||||||
Shares issued in connection with the Crisp Earnout (in shares) | 199 | |||||||||||||||||||||||||||
Shares issued in connection with the Crisp Earnout | $ 10,000 | $ 10,000 | $ 1 | $ 9,999 | ||||||||||||||||||||||||
Distributions to non-controlling interest holders | [4] | (573) | (573) | |||||||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2022 | 2,695 | 1,713 | ||||||||||||||||||||||||||
Ending balance (in shares) (Change In Percent Calculation) at Dec. 31, 2022 | 2,695 | 1,713 | ||||||||||||||||||||||||||
Ending balance at Dec. 31, 2022 | (83,947) | (47,124) | $ 0 | [1] | $ 4 | $ 3 | (14,054) | (181) | (32,896) | (36,823) | ||||||||||||||||||
Ending balance (Change In Percent Calculation) at Dec. 31, 2022 | (83,947) | (47,124) | $ 4 | $ 3 | (14,054) | (181) | (32,896) | (36,823) | ||||||||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||||||||||||||||||||
Convertible redeemable preferred stock (in shares) | 140 | 80 | [1] | 60 | [1] | |||||||||||||||||||||||
Convertible redeemable preferred stock | [1] | $ 2,853 | $ 2,140 | |||||||||||||||||||||||||
Accretion convertible redeemable preferred stock | [1] | 6,391 | 4,794 | |||||||||||||||||||||||||
Preferred stock dividends | [1],[5] | $ 267 | $ 201 | |||||||||||||||||||||||||
Preferred stock, ending balance (in shares) at Dec. 31, 2023 | 80 | 60 | ||||||||||||||||||||||||||
Preferred stock, ending balance (in shares) (Change In Percent Calculation) at Dec. 31, 2023 | [1] | 140 | ||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||||
Net loss | (122,693) | (81,681) | (81,681) | (41,012) | ||||||||||||||||||||||||
Shares redeemed and issued to Class A Common Stock (in shares) | 1,562 | (1,562) | ||||||||||||||||||||||||||
Stock-based compensation | 3,686 | 3,686 | 3,686 | |||||||||||||||||||||||||
Accretion of convertible redeemable preferred stock | $ (6,391) | $ (4,794) | $ (6,391) | $ (4,794) | $ (6,391) | $ (4,794) | ||||||||||||||||||||||
Preferred stock dividends | [5] | $ (267) | $ (201) | $ (267) | $ (201) | $ (267) | $ (201) | |||||||||||||||||||||
Shares issued under the 2020 Omnibus Incentive Plan (in shares) | 38 | |||||||||||||||||||||||||||
Treasury shares purchased under the 2020 Omnibus Incentive Plan (in shares) | (8) | |||||||||||||||||||||||||||
Treasury stock purchased under the 2020 Omnibus Incentive Plan | (54) | (54) | (54) | |||||||||||||||||||||||||
Impact of transactions affecting non-controlling interest | [6] | $ 0 | (70,155) | (70,155) | 70,155 | |||||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2023 | 1,672 | 2,766 | ||||||||||||||||||||||||||
Ending balance (in shares) (Change In Percent Calculation) at Dec. 31, 2023 | 4,287 | 151 | ||||||||||||||||||||||||||
Ending balance at Dec. 31, 2023 | $ (214,661) | |||||||||||||||||||||||||||
Ending balance (Change In Percent Calculation) at Dec. 31, 2023 | $ (214,661) | $ (206,981) | $ 16,646 | [1] | $ 4 | $ 3 | $ (80,523) | $ (235) | $ (126,230) | $ (7,680) | ||||||||||||||||||
[1] See Note 10. Fair Value Measurements and Note 11. Equity On January 17, 2022, the Sellers of SmarterChaos redeemed their remaining non-controlling interest held through DMSH Units in exchange for 10 thousand shares of Class A Common Stock in DMS, Inc. The non-controlling interest held by the Sellers of SmarterChaos did not include related Class B Common Stock to be retired upon redemption. The carrying amount of non-controlling interest was adjusted primarily to reflect the change in ownership interest caused by additional DMSH units redeemed and issued to Class A Common Stock by the Sellers of SmarterChaos, shares issued in connection with the Crisp Earnout and shares issued under the 2020 Omnibus Incentive Plan. Represents tax distributions to shareholders Prism, Clairvest and the Sellers of SmarterChaos. As of September 30, 2022, $10 thousand of these distributions had not been paid. Represents Series A and Series B preferred stock dividends, which have not been paid. The carrying amount of non-controlling interest was adjusted primarily to reflect the change in ownership interest caused by additional controlling shares contributed as a result of the shares issued under the 2020 Omnibus Incentive Plan and the non-controlling redemptions by Prism. |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Preferred Stock and Stockholders’ Deficit (Parenthetical) shares in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Unpaid distributions | $ 10 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (122,693) | $ (52,500) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Allowance for credit losses - Accounts receivable, net | 1,756 | 1,761 |
Allowance for credit losses - Contract assets, net | 2,337 | 0 |
Depreciation and amortization | 19,460 | 28,242 |
Amortization of right-of-use assets | 648 | 937 |
(Gain) loss on disposal of assets | (3) | 7 |
Impairment of goodwill | 49,390 | 0 |
Impairment of intangible assets | 16,744 | 21,570 |
Lease restructuring charges | 0 | 438 |
Loss on termination of operations | 869 | 0 |
Stock-based compensation, net of amounts capitalized | 3,051 | 6,656 |
Interest expense paid-in-kind | 23,482 | 0 |
Amortization of debt issuance costs | 2,398 | 1,490 |
Deferred income tax benefit, net | (798) | (4,108) |
Change in fair value of contingent consideration | (1,905) | 2,583 |
Change in fair value of warrant liabilities | (9,185) | (3,360) |
Loss from preferred warrants issuance | 553 | 0 |
Change in Tax Receivable Agreement liability | 0 | (1,146) |
Change in income tax receivable and payable | (167) | 9 |
Change in accounts receivable | 17,942 | 1,984 |
Change in contract assets | (10,436) | 0 |
Change in prepaid expenses and other current assets | 798 | 416 |
Change in operating right-of-use assets | 757 | 0 |
Change in accounts payable and accrued expenses | (735) | (3,055) |
Change in operating lease liabilities | (2,143) | (2,102) |
Change in other liabilities | 0 | (137) |
Net cash used in operating activities | (7,880) | (315) |
Cash flows from investing activities | ||
Additions to property and equipment | (6,624) | (6,744) |
Acquisition of business, net of cash acquired | (33,564) | (2,502) |
Net cash used in investing activities | (40,188) | (9,246) |
Cash flows from financing activities | ||
Proceeds from borrowings on revolving credit facilities | 10,000 | 40,000 |
Payments of long-term debt and notes payable | (2,250) | (2,250) |
Payments of borrowings on revolving credit facilities | (250) | 0 |
Payment of debt issuance costs | (1,928) | 0 |
Proceeds from preferred shares and warrants issuance, net | 13,107 | 0 |
Purchase of treasury stock related to stock-based compensation | (54) | (181) |
Distributions to non-controlling interest holders | 0 | (563) |
Payment of deferred consideration and contingent consideration payable | (428) | (5,000) |
Net cash provided by financing activities | 18,197 | 32,006 |
Net change in cash and cash equivalents and restricted cash | (29,871) | 22,445 |
Cash and cash equivalents and restricted cash, beginning of period | 48,839 | 26,394 |
Cash and cash equivalents and restricted cash, end of period | 18,968 | 48,839 |
Supplemental Disclosure of Cash Flow Information | ||
Interest | 13,074 | 15,574 |
Income taxes | 170 | 1,214 |
Non-Cash Transactions: | ||
Contingent and deferred acquisition consideration | 2,392 | 3,014 |
Stock-based compensation capitalized in property and equipment | 635 | 469 |
Capital expenditures included in accounts payable | 155 | 151 |
Issuance of equity for Crisp Results | 0 | 10,000 |
Accretion and Dividends - Preferred Series A and B | 11,653 | 0 |
Debt amendment fees paid-in-kind | 5,410 | 0 |
Interest paid-in-kind | $ 23,482 | $ 0 |
Business, Basis of Presentation
Business, Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business, Basis of Presentation and Summary of Significant Accounting Policies | Business, Basis of Presentation and Summary of Significant Accounting Policies Business Digital Media Solutions, Inc. (“DMS Inc.”) is a digital performance marketing company offering a diversified lead and software delivery platform that drives high value and high intent leads to its customers. As used in this Annual Report, the “Company” refers to DMS Inc. and its consolidated subsidiaries, (including its wholly-owned subsidiary, CEP V DMS US Blocker Company, a Delaware corporation (“Blocker”)). The Company is headquartered in Clearwater, Florida. The Company primarily operates and derives most of its revenue in the United States. Leo, a special purpose acquisition company, was incorporated on November 29, 2017 as a Cayman Islands exempted company for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses. On July 15, 2020, Leo consummated the business combination with Digital Media Solutions LLC (the “Business Combination”) and domesticated as a corporation incorporated in the state of Delaware. At the closing of the Business Combination (the “Closing”), Leo acquired the equity in Blocker and a portion of the equity of Digital Media Solutions Holding, LLC (“DMSH”), Blocker became the sole managing member of DMSH, and Leo was renamed Digital Media Solutions, Inc. See Note 2. Business Combination for additional information. As the Business Combination was structured as a reverse recapitalization, the historical operations of DMSH are deemed to be those of the Company. Thus, the financial statements included in this Annual Report reflect (i) the historical operating results of DMSH prior to the Business Combination; (ii) the combined results of the Company following the Business Combination; (iii) the assets and liabilities of Leo at historical cost; and (iv) the Company’s equity and loss per share for all periods presented. Refer to Note 2. Business Combination for additional discussion related to the transaction. The Company operates as a performance marketing engine for companies across numerous industries, including consumer finance (mortgage), education (split between non-profit and for-profit), automotive (aftermarket auto warranty, auto insurance), insurance (health, homeowners), home services (home security), brand performance (consumer products), gig, health and wellness, and career (job pursuit). Through its agency business, DMS provides access and control over the advertising spend of clients, and also offers marketing automation software as a service (SaaS) to clients. The Company has organized its operations into three reportable segments. The Brand Direct reportable segment consists of services delivered against an advertiser’s brand, while the Marketplace reportable segment is made up of services delivered directly against the DMS brand. In the Technology Solutions reportable segment, services offered by DMS include SaaS and digital media services that are managed on behalf of the customer (i.e., managed services). Basis of presentation These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the SEC. Principles of consolidation The Company consists of DMS Inc. and its wholly-owned subsidiary, Blocker. Pursuant to the Business Combination, DMS Inc. acquired, directly and through its acquisition of the equity of Blocker, approximately 96.6% of the membership interest in DMSH, while the Sellers (as defined in Note 2. Business Combination ) retained approximately 3.4% of the membership interest in DMSH (“non-controlling interests”) as of December 31, 2023. The Company consolidates the assets, liabilities and operating results of DMSH and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The results of operations attributable to the non-controlling interests are included in the Company’s consolidated statements of operations, and the non-controlling interests are reported as a separate component of equity, refer to Note 11. Equity. Reverse Stock Split On August 28, 2023, the Company effected a reverse stock split (the “Reverse Stock Split”) of the Company’s Class A Common Stock and Class B Common Stock at a ratio of 1-for-15. All historical share amounts disclosed in this Annual Report on Form 10-K have been retroactively restated to reflect the Reverse Stock Split. No fractional shares were issued as a result of the Reverse Stock Split, as fractional shares of Common Stock were rounded up to the nearest whole share. See Note 11. Equity for additional information. Reclassification Certain prior period balances have been reclassified to conform to the current period presentation in the consolidated financial statements and the accompanying notes. Specifically, Income taxes payable has been netted with Income tax receivable. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported as separate financial statement line items in the consolidated financial statements. Actual results could differ from those estimates. Management regularly makes estimates and assumptions that are inherent in the preparation of the consolidated financial statements including, but not limited to, the fair value of warrants, the allowance for credit losses, stock-based compensation, fair value of intangibles acquired in business combinations, loss contingencies, contingent consideration liabilities, goodwill and intangible asset impairments, and deferred taxes and amounts associated with the Tax Receivable Agreement. Revenue recognition The Company derives revenue primarily from fees earned through the delivery of qualified clicks, leads, inquiries, calls, applications, customers and, to a lesser extent, display advertisements, or impressions. The Company recognizes revenue when the Company transfers promised goods or services to clients in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company recognizes revenue pursuant to the five-step framework contained in ASC 606, Revenue from Contracts with Customers : (i) identify the contract with a client; (ii) identify the performance obligations in the contract, including whether they are distinct in the context of the contract; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligations. As part of determining whether a contract exists, probability of collection is assessed on a client-by-client basis at the outset of the contract. If it is determined from the outset of an arrangement that the client does not have the ability or intention to pay, the Company will conclude that a contract does not exist and will continuously reassess its evaluation until the Company is able to conclude that a contract does exist. Generally, the Company’s contracts specify the period of time as one month, but in some instances the term may be longer. However, for most of the Company’s contracts with clients, either party can terminate the contract at any time without penalty. Consequently, enforceable rights and obligations only exist on a day-to-day basis, resulting in individual daily contracts during the specified term of the contract or until one party terminates the contract prior to the end of the specified term. The Company has assessed the services promised in its contracts with clients and has identified one performance obligation, which is a series of distinct services. Depending on the client’s needs, these services consist of a specified number or an unlimited number of clicks, leads, calls, applications, customers, etc. (hereafter collectively referred to as “marketing results”) to be delivered over a period of time. The Company satisfies these performance obligations over time as the services are provided. The Company does not promise to provide any other significant goods or services to its clients. Transaction price is measured based on the consideration that the Company expects to receive from a contract with a client. The Company’s contracts with clients contain variable consideration as the price for an individual marketing result varies on a day-to-day basis depending on the market-driven amount a client has committed to pay. However the Company ensures the stated period of its contracts does not generally span multiple reporting periods, and therefore the contractual amount within a period is based on the number of marketing results delivered within the period. In those cases, the transaction price for any given period is fixed and no estimation of variable consideration is required. In the case of commission revenue, revenue recorded represents estimated variable consideration for commissions to be received from insurance distributors for performance obligations that have been satisfied (additional information below). If a marketing result delivered to a client does not meet the contractual requirements associated with that marketing result, the Company’s contracts allow for clients to return a marketing result generally within 5-10 days of having received the marketing result. Such returns are factored into the amount billed to the client on a monthly basis and consequently result in a reduction to revenue in the same month the marketing result is delivered. No warranties are offered to the Company’s clients. The Company does not allocate transaction price as the Company has only one performance obligation and its contracts do not generally span multiple periods. Taxes collected from clients and remitted to governmental authorities are not included in revenue. The Company elected to use the practical expedient which allows the Company to record sales commissions as expense as incurred when the amortization period would have been one year or less. The Company bills clients monthly in arrears for the marketing results delivered during the preceding month. The Company’s standard payment terms are 30-60 days. Consequently, the Company does not have significant financing components in its arrangements. Separately from the agreements the Company has with clients, the Company has agreements with Internet search companies, third-party publishers and strategic partners that we engage with to generate targeted marketing results for its clients. The Company receives a fee from its clients and separately pays a fee to the Internet search companies, third-party publishers and strategic partners. Other than certain of its managed services arrangements, the Company is the principal in the transaction. For the transactions where the Company is the principal, the fees paid by its clients are recognized as revenue and the fees paid to its Internet search companies, third-party publishers and strategic partners are included in cost of revenue. Customer acquisition The Company’s performance obligation for Customer acquisition contracts is to deliver an unspecified number of potential customers or leads (i.e., number of clicks, emails, calls and applications) to the customer in real-time, on a daily basis as the leads are generated, based on predefined qualifying characteristics specified by our customer. The contracts generally have a one-month term and the Company has an enforceable right to payment for all leads delivered to the customer. The Company’s customers simultaneously receive and consume the benefits provided, as the Company satisfies its performance obligations. The Company recognizes revenue as the performance obligations are satisfied over time. Beginning in 2023, the Company earns commission revenue related to marketing of Affordable Care Act insurance policies. Compensation in the form of commissions is received from an insurance distributor for the multiple types of insurance products sold by the Company on behalf of the insurance distributors. Commission revenue generally represents a percentage of the premium amount expected to be collected by the insurance distributor while the policyholder is enrolled in the insurance product, including renewal periods. The Company’s performance obligation is complete when an insurance distributor has received and approved an insurance application. As such, the Company recognizes revenue at this point in time, which represents the total estimated lifetime commissions it expects to receive for selling the product after the health plan approves an application, net of an estimated constraint. Commissions payments are received monthly, over the life of the active policies. The Company’s consideration is variable based on the amount of time it estimates a policy will remain in force. The Company estimates the amount of variable consideration that it expects to receive based on historical experience or insurance distributor experience to the extent available, industry data and expectations as to future retention rates. Additionally, the Company considers application of the constraint and only recognizes the amount of variable consideration that it believes is probable that it will be entitled to receive and will not be subject to a significant revenue reversal in the future. The Company monitors and updates this estimate at each reporting date. The Company does not have any remaining performance obligations in its commission contracts with customers. When there is a delay between the period in which revenue is recognized and when a customer invoice is issued based on timing of reconciliation of amounts due, revenue is recognized and the corresponding amounts are recorded as unbilled revenue within accounts receivable, net on the consolidated balance sheets. In line with industry practice, the Company applies the constraint on variable consideration and records revenue based on internally tracked conversions (for example, leads delivered, applications submitted), net of the amount tracked and subsequently confirmed by customers. A significant portion of the unbilled estimated revenue balance is finalized and invoiced to customers within sixty days following the period of service. Any remaining estimates are finalized and invoiced as billing totals are reconciled with the customer. Historical estimates related to unbilled revenue have not been materially different from actual revenue billed. Related to commissions from health insurance distributors and other forms of revenue which may be billed on a schedule other than that of the revenue recognition, when there is a delay that is the result of timing differences between our recognition of revenue and our contractual right to invoice, the corresponding amounts are recorded as contract assets on the consolidated balance sheets. These cases primarily relate to commission-related revenue as described above. Consistent with industry practice related to commission revenue, constraints are applied to the expected lifetime value “LTV” for revenue recognition purposes to help ensure that the total estimated lifetime commissions expected to be collected for an approved member’s plan are recognized as revenue only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with future commissions receivable from the partner is subsequently resolved. Significant judgment can be involved in determining the constraint. To determine the constraints to be applied to LTV, we have initially utilized industry studies, peer information, and other expertise. Going forward, we will continually monitor prior calculations of LTV to current period calculations, taking into account terminations, cancellations, and actual cash received, and review the reasons for any variations, and will then apply judgment in assessing whether the difference between historical cancellations/terminations and cash collections and LTV is representative of differences that can be expected in future periods. We also analyze whether circumstances have changed and consider any known or potential modifications to the inputs into LTV in light of the factors that can impact the amount of cash expected to be collected in future periods, including but not limited to commission rates, carrier mix, plan duration, cancellations of insurance plans offered by health insurance carriers with which we have a relationship, changes in laws and regulations, and changes in the economic environment. We evaluate the appropriateness of our constraints on an ongoing basis, at least quarterly, and update our assumptions when we observe a sufficient amount of evidence that would suggest that the long-term expectation underlying the assumptions has changed. For additional information, see the Accounts receivable, net and Contract assets, net section below. Managed services The Company’s performance obligation for Managed service contracts is to provide continuous service of managing the customer’s media spend for the purpose of generating leads through a third-party supplier of leads, as requested by our customer. Each month of service is distinct, and any variable consideration is allocated to a distinct month. Therefore, revenue is recognized as the performance obligation is satisfied each month and there is no estimation of revenue required at each reporting period for managed services contracts. The Company enters into agreements with internet search companies, third-party publishers and/or strategic partners to generate customer acquisition services for their Managed service customers. The Company receives a fee from its customers and separately pays a fee to the internet search companies, third-party publishers and/or strategic partners. The third-party supplier is primarily responsible for the performance and deliverable to the customer, and the Company solely arranges for the third-party supplier to provide services to the customer. Therefore, in certain cases, the Company acts as the agent and the net fees earned by the Company are recorded as revenue, with no associated costs of revenue attributable to the Company. Software services The Company’s performance obligation for Software services contracts is to provide the customer with continuous, daily access to the Company’s proprietary software. Service provided each month is distinct, and any variable consideration is allocated to a distinct month. Therefore, revenue is recognized as the performance obligations are satisfied each month and there is no estimation of revenue required at each reporting period for Software services contracts. Cost of revenue Cost of revenue primarily includes media and related costs, which consist of the cost to acquire traffic through the purchase of impressions, clicks or actions from publishers or third-party intermediaries, such as advertising exchanges, and technology costs that enable media acquisition. These media costs are used primarily to drive user traffic to the Company’s and its clients’ media properties. Cost of revenue additionally consists of indirect costs such as data verification, hosting and fulfillment costs. Cost of revenue is presented exclusive of Depreciation and amortization expenses, as well as Salaries and related costs. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, and accounts receivable. While the Company maintains its cash and cash equivalents and restricted cash with financial institutions with high credit ratings, it often maintains those deposits in federally insured financial institutions in excess of federally insured (FDIC) limits. Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. The Company performs credit evaluations of its customers’ financial condition and records reserves to provide for estimated credit losses. Accounts receivable and contract assets are due from both domestic and international customers. See Note 3. Revenue for additional information. Cash and cash equivalents The Company considers highly liquid securities and other investments purchased with an original or remaining maturity of three months or less at the date of the purchase to be cash equivalents. The Company’s cash is primarily held as cash deposits with no cash restrictions at retail and commercial banks. Restricted cash Restricted cash represents cash held in a bank account that is not available to the Company for immediate use. Interest earned on these deposits is immaterial, and is recorded as an offset of Interest expense, net in the consolidated statements of operations for the year ended December 31, 2023. Accounts receivable, net and Contract assets, net Accounts receivable and contract assets are recorded net of the Allowance for credit losses. Management determines the Allowance for credit losses based on factors including past write-offs, delinquency trends and current credit conditions. Accounts are written off when management determines that collection is unlikely. As of December 31, 2023 and 2022, the Allowance for credit losses was $4.2 million and $4.7 million, respectively, for accounts receivable, and $2.3 million and $0, respectively, related to contract assets. For the years ended December 31, 2023 and 2022 bad debt expense was $4.1 million and $1.8 million, respectively. See Note 3. Revenue for additional information. Property and equipment, net Property and equipment are recorded at cost, net of accumulated Depreciation and amortization. Property and equipment consist of computer and office equipment, furniture and fixtures and leasehold improvements, which are depreciated on a straight-line basis over the estimated useful lives of the assets. Costs for websites and internal-use software are capitalized as property and equipment, net on the consolidated balance sheets during the application stages. Any initial research and development costs incurred during the preliminary project stage or costs incurred for data conversion activities, training, maintenance, general and administrative or overhead costs are expensed as incurred. Qualified costs incurred during the operating stage of our websites and software applications relating to upgrades and enhancements are capitalized to the extent it is probable that they will result in added functionality, while costs that cannot be separated between maintenance of, and minor upgrades and enhancements to, websites and internal‑use software are expensed as incurred. Capitalized software development costs are amortized on a straight line basis over the estimated useful life or 3 years, whichever is shorter. Website and s oftware development costs that do not qualify for capitalization are expensed as incurred - through salaries and related costs for employees time or through cost of goods sold for third-party maintenance efforts, which are recorded in Salaries and related costs or in General and administrative expenses, respectively, within the consolidated statements of operations. The capitalization and ongoing assessment of recoverability of development costs require considerable judgment by management with respect to certain external factors, including estimated economic life. Management regularly assesses the carrying value of its long-lived assets to be held and used, including property and equipment and intangible assets, for impairment when events or changes in circumstances indicate that their carrying value may not be recoverable. If such events or circumstances are present, a loss is recognized to the extent the carrying value of the asset is in excess of estimated fair value. For more information, see Note 5. Property and Equipment. Lease accounting The Company classifies its lease arrangements at inception as either operating leases or finance leases. A lease is classified as a finance lease if at least one of the following criteria is met: (1) the lease transfers ownership of the underlying asset to the lessee, (2) the lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise, (3) the lease term is for a major part of the remaining economic life of the underlying asset, (4) the present value of the sum of the lease payments equals or exceeds substantially all of the fair value of the underlying asset, or (5) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. A lease is classified as an operating lease if none of the five criteria described above for finance lease classification is met. We determine if an arrangement is a lease at inception of the contract. Our right of use assets represents our right to use the underlying assets for the lease term and our lease liabilities represent our obligation to make lease payments arising from the leases. Right of use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company’s lease arrangements consist of real estate operating leases for office space which generally contain an initial term of five ASC 842, Lease Accounting . Our right-of-use assets associated with operating leases are included in Operating lease right-of-use assets, net on the Company’s consolidated balance sheets. Current and long-term portions of lease liabilities related to operating leases are included in Operating lease liabilities - current and Operating lease liabilities - non-current on the Company’s consolidated balance sheets. As of December 31, 2023, the Company has seven leased properties, representing 80,861 square feet of office space located in the United States, the Netherlands, and Poland. In assessing our real estate operating leases and determining the lease liability, we were not able to readily determine the discount rate implicit in the lease arrangements, and thus used the lease commencement date and determined the incremental borrowing rate range between 3.40% and 4.23% for the leases on a collateralized basis to calculate the present value of the lease payments. Our operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of the remaining lease payments at the discount rate. Certain adjustments to the right-of-use asset may be required for items such as incentives received, initial direct cost, and prepaid lease payments. The Company’s right-of-use assets are measured as the balance of the lease liability plus any prepaid or accrued lease payments and any unamortized initial direct costs less any lease incentives received. Additionally, certain amounts related to our lease arrangements that were previously reported as part of our lease abandonment reserve have been reflected as impairment reducing the Operating lease right-of-use assets, net on the Company’s consolidated balance sheets. The Company has no finance leases . Operating lease expenses are recognized on a ratable basis, regardless of whether the payment terms require the Company to make payments annually, quarterly, monthly, or for the entire term in advance. Certain of the Company’s lease agreements contain fixed escalation clauses (such as fixed dollar or fixed percentage increases) or inflation-based escalation clauses. If the payment terms include fixed escalator provisions, the effect of such increases is recognized on a straight-line basis. The Company calculates the straight-line expense over the contract’s estimated lease term, including any renewal option periods that the Company may deem reasonably certain to be exercised. The majority of the Company’s lease agreements have certain termination rights that provide for cancellation after a notice period and multiple renewal options at the Company’s option. The Company includes renewal option periods in its calculation of the estimated lease term when it determines that the options are reasonably certain to be exercised. When such renewal options are deemed to be reasonably certain, the estimated lease term determined under ASC 842, Lease Accounting will be greater than the non-cancelable term of the contractual arrangement. Although certain renewal periods are included in the estimated lease term, the Company would have the ability to terminate or elect to not renew a particular lease if business conditions warrant such a decision. For additional information, see Note 9. Leases . Goodwill and intangible assets We account for our business combinations using the acquisition accounting method, which requires us to determine the fair value of net assets acquired and the related goodwill and intangible assets. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and involves the use of significant estimates, including projections of future cash flows, discount rates, asset lives and market multiples. Interim Testing In 2023, the Company considered if an interim event occurred or circumstances changed that would more likely than not reduce the fair value of a reporting unit below its carrying amount. In the second quarter of 2023, the Company determined that the recent economic downturn and inflation, along with the Company’s revenue reduction and decreased stock market price were indicators of impairment for the Marketplace reporting unit under ASC 350-20, Goodwill , and ASC 360-10, Impairment and Disposal of Long-Lived Assets for certain asset groups during 2023. The Company determined the fair value of goodwill at the reporting unit level utilizing a combination of a discounted cash flow analysis incorporating variables such as revenue projections, projected operating cash flow margins, and discount rates, as well as a market-based approach employing comparable sales analysis. The valuation assumptions used in the discounted cash flow model reflect historical performance of the Company, the prevailing values in the Company’s industry, including the extent of the economic downturn related to the recent inflation and its economic contraction and its expected timing of recovery. The result of our analysis indicated that there was goodwill impairment of $33.8 million for the related to the Marketplace reporting unit, which was recorded as impairment of goodwill in the consolidated statements of operations for the quarter ended June 30, 2023. Further, the Company performed quarterly recoverability tests for certain asset groups to determine whether an impairment loss should be measured on intangible assets. The undiscounted cash flows in the recoverability tests were compared to each identified asset group’s carrying value. During the second quarter of 2023, the Company identified three asset groups with carrying value in excess of the current projected undiscounted cash flows for those asset groups, and therefore calculated the fair value of the finite-lived intangible assets. Intangible assets include technology, brand, and customer relationships. The fair value of technology was determined using the Relief from Royalty Approach; fair value of the customer relationships was determined using the Multi Period Excess Earnings Method; and fair value of the brand was determined using the Relief from Royalty Method. As a result of the fair value being lower than the carrying value for certain assets, the Company recorded impairment loss of $7.8 million in the second quarter of 2023, to intangible assets which were in asset groups included in the Marketplace reporting unit, which is included in the consolidated statements of operations as Impairment of intangible assets. Annual Testing Additionally, the Company reviews goodwill as of December 31 each year and whenever events or significant changes in circumstances indicate that the carrying value may not be recoverable. We evaluate the recoverability of goodwill at the reporting unit level. For the year ended December 31, 2023, the result of our annual impairment test indicated that there were goodwill impairment indicators for the Brand Direct segment, as the carrying value of that reporting unit exceeded the fair value. |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combination | Business Combination On July 15, 2020, DMSH consummated the business combination with Leo pursuant to the Business Combination Agreement (the “Business Combination Agreement”), by and among Leo, DMSH, Blocker, Prism Data, LLC, a Delaware limited liability company (“Prism”), CEP V-A DMS AIV Limited Partnership, a Delaware limited partnership (“Clairvest Direct Seller”) and related entities (the “Sellers”). In connection with the consummation of the Business Combination, the following occurred: • Leo was domesticated and continues as a Delaware corporation, changing its name to “Digital Media Solutions, Inc.” • The Company was organized into an umbrella partnership-C corporation (or “Up-C”) structure, in which substantially all of the assets and business of the Company are held by DMSH and continue to operate through the subsidiaries of DMSH, and the Company’s sole material assets are the equity interests of DMSH indirectly held by it. • DMS Inc. consummated the PIPE investment with certain qualified institutional buyers and accredited investors (the “PIPE Investors”), pursuant to which the PIPE Investors collectively subscribed for 10,424,282 shares of Class A Common Stock for an aggregate purchase price of $100.0 million. • DMS Inc. purchased all of the issued and outstanding common stock of Blocker and a portion of the units of DMSH held by Prism and Clairvest Direct Seller. Those DMSH membership interests were then immediately contributed to the capital of Blocker in exchange for aggregate consideration to the Sellers of $57.3 million in cash, 25,857,070 shares of Class B common stock, 2.0 million warrants to purchase Class A Common Stock, and 17,937,954 shares of Class C Common Stock. Refer to Note 11. Equity for a description of the Company’s Common Stock. • The Sellers amended and restated the limited liability company agreement of DMSH (the “Amended Partnership Agreement”), to, among other things: (i) recapitalize DMSH such that, as of immediately following the consummation of the Business Combination, Prism and Clairvest Direct Seller collectively own 25,857,070 of DMSH Units and Blocker owns 32,293,793 of DMSH Units; and (ii) provide Clairvest Direct Seller and Prism the right to redeem their DMSH Units for cash or, at the Company’s option, the Company may acquire the DMSH Units in exchange for cash or shares of Class A Common Stock, subject to certain restrictions set forth therein. • DMS Inc. issued 2.0 million Private Placement Warrants in exchange for previously held warrants in Leo, and an additional approximate 10.0 million Public Warrants were issued in exchange for the warrants offered and sold by Leo in its initial public offering. Refer to Note 10. Fair Value Measurements and Note 11. Equity for a description of the Company’s Private Placement and Public Warrants, respectively. • DMS Inc. obtained $30.0 million in cash for working capital needs and $10.0 million to pay down outstanding indebtedness under the Monroe Capital Management Advisors (as administrative agent and lender) (the “Monroe Facility”). • The Sellers exercised their right to convert the shares of Class C Common Stock into shares of Class A Common Stock, on a one-for-one basis, in accordance with the new Certificate of Incorporation (the “Conversion”). • Prism and Clairvest Direct Seller continue to retain a significant continuing equity interest in the Company, representing 44% of the economic interests in DMSH and 44% of the voting interest in DMS Inc. (“non-controlling interest”). • On October 22, 2020, as required by the post-closing working capital adjustment provisions of the Business Combination Agreement, (i) the Company issued (a) 98,783 total additional shares of Class A Common Stock to the Blocker Sellers and (b) 142,394 total additional shares of Class B Common Stock to Prism and Clairvest Direct Seller. • In conjunction with the Business Combination, DMS Inc. and Blocker also entered into the Tax Receivable Agreement with the Sellers. Pursuant to the Tax Receivable Agreement, DMS Inc. is required to pay the Sellers (i) 85% of the amount of savings, if any, in U.S. federal, state and local income tax that DMS Inc. and Blocker actually realize as a result of (A) certain existing tax attributes of Blocker acquired in the Business Combination, and (B) increases in Blocker’s allocable share of the tax basis of the assets of DMS and certain other tax benefits related to the payment of the cash consideration pursuant to the Business Combination Agreement and any redemptions or exchanges of DMS Units for cash or Class A Common Stock after the Business Combination and (ii) 100% of certain refunds of pre-Closing taxes of DMSH and Blocker received during a taxable year beginning within two Note 14. Income Taxes for further details. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The Company derives revenue primarily through the delivery of various types of services, including: customer acquisition, managed services and software as a service (“SaaS”). The Company recognizes revenue when the promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. The Company has elected the practical expedient to not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which revenue is recognized in the amount to which the Company has the right to invoice for services performed. The Company has organized its operations into three reportable segments: Brand Direct, Marketplace and Technology Solutions. The Brand Direct reportable segment consists of services delivered against our customer’s brand, while the Marketplace reportable segment includes services delivered directly against the DMS brand. In the Technology Solutions reportable segment, services offered by the Company include software services and digital media services that are managed on behalf of the customer. Corporate and other represents other business activities and includes eliminating entries. Management uses these segments to evaluate the performance of its businesses and to assess its financial results and forecasts. Disaggregation of Revenue The following tables presents the disaggregation of revenue by reportable segment and type of service (in thousands): Year Ended December 31, 2023 Brand Direct Marketplace Technology Solutions Intercompany Eliminations Total Net revenue: Customer acquisition $ 200,551 $ 149,782 $ — $ (27,632) $ 322,701 Managed services 3,905 — 2,294 — 6,199 Software services — — 6,049 — 6,049 Total Net revenue $ 204,456 $ 149,782 $ 8,343 $ (27,632) $ 334,949 Year Ended December 31, 2022 Brand Marketplace Technology Solutions Intercompany Eliminations Total Net revenue: Customer acquisition $ 198,873 $ 216,385 $ — $ (39,284) $ 375,974 Managed services 5,367 — 4,814 — 10,181 Software services — — 4,993 — 4,993 Total Net revenue $ 204,240 $ 216,385 $ 9,807 $ (39,284) $ 391,148 The Company generated revenue outside the United States through its 2023 ClickDealer acquisition. The following table represents these revenues by region (in thousands): Year Ended December 31, 2023 Europe $ 17,376 Other International 10,109 Accounts Receivable, net Accounts receivable are recorded at the invoiced amount and do not bear interest. The Allowance for credit losses is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience, delinquency trends and current credit conditions. The Company reviews its Allowance for credit losses monthly. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. All other balances are reviewed on a pooled basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers. The activity in the Allowance for credit losses related to accounts receivable is as follows (in thousands): Balance, January 1, 2022 $ 4,930 Additions charged to expense 1,761 Deductions/write-offs (2,035) Balance, December 31, 2022 4,656 Additions charged to expense 2,050 Deductions/write-offs (2,240) ASU 2016-13 (Topic 326) adjustment (294) Balance, December 31, 2023 $ 4,172 For the years ended December 31, 2023 and 2022, one advertising customer within the Marketplace segment accounted for approximately 14.1% and 23.2% of our total revenue, respectively. For the year ended December 31, 2023, bad debt expense was $4.1 million, including the establishment of allowance for credit losses related to contract assets as described below. For the year ended December 31, 2022, bad debt expense was $1.8 million. Contract balances Contract Assets The Company’s contract assets primarily result from the estimated variable consideration for commissions to be received from insurance distributors for performance obligations that have been satisfied. In addition, other contract assets with clients where the performance obligations have been satisfied in advance of the contractual terms with the customer are also recorded as contract assets. The Company recognizes revenue when the performance obligation is met and the contract asset is recorded within the consolidated balance sheets as current assets and long term assets, where applicable. Related to commission revenue, the Company collects the consideration payments in equal installments over the lifetime-value of the underlying insurance policy, beginning collections on or after 90 days after the policy becomes effective, which can be up to several months after the Company’s performance obligation is met. From time to time, the Company may also record bonuses based on certain criteria set forth by the insurance distributor. Contract assets as of December 31, 2023 are as follows (in thousands): Contract assets - current, net $ 6,467 Contract assets - non-current, net 1,632 Total Contract assets $ 8,099 There were no contract assets as of December 31, 2022. The activity in the contract assets is as follows (in thousands): Balance, January 1, 2023 $ — Additions recorded as revenue 10,622 Collections (186) Changes to Allowance for Credit Losses (2,337) Balance, December 31, 2023 $ 8,099 Contract Liabilities The Company’s contract liabilities result from payments received from clients in advance of revenue recognition as they precede the Company’s satisfaction of the associated performance obligation. If a customer pays consideration before the Company’s performance obligations are satisfied, such amounts are classified as deferred revenue and recorded within Accrued expenses and other current liabilities on the consolidated balance sheets. As of December 31, 2023 and 2022, the balance of deferred revenue was $1.0 million and $1.0 million, respectively. We expect the majority of the deferred revenue balance at December 31, 2023 to be recognized as revenue during the following quarter. |
Reportable Segments
Reportable Segments | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable Segments The Company’s operating segments are determined based on the financial information reviewed by its chief operating decision maker (“CODM”), and the basis upon which management makes resource allocation decisions and assesses the performance of the Company’s segments. The Company evaluates the operating performance of its segments based on financial measures such as Net revenue, cost of revenue, and Gross profit. Given the nature of the digital marketing solutions business, the amount of assets does not provide meaningful insight into the operating performance of the Company. As a result, the amount of the Company’s assets is not subject to segment allocation and total assets is not included within the disclosure of the Company’s segment financial information. The following tables are a reconciliation of the operations of our segments to loss from operations (in thousands): Years Ended December 31, 2023 2022 Net revenue $ 334,949 $ 391,148 Brand Direct 204,456 204,240 Marketplace 149,782 216,385 Technology Solutions 8,343 9,807 Intercompany eliminations (27,632) (39,284) Cost of revenue (exclusive of depreciation and amortization) 252,050 287,820 Brand Direct 164,577 161,445 Marketplace 113,240 164,226 Technology Solutions 1,865 1,433 Intercompany eliminations (27,632) (39,284) Gross profit (exclusive of depreciation and amortization) 82,899 103,328 Brand Direct 39,879 42,795 Marketplace 36,542 52,159 Technology Solutions 6,478 8,374 Salaries and related costs 43,583 49,872 General and administrative expenses 46,578 41,878 Depreciation and amortization 19,460 28,242 Impairment of goodwill 49,390 — Impairment of intangible assets 16,744 21,570 Acquisition costs 3,020 1,650 Change in fair value of contingent consideration liabilities (1,833) 2,583 Loss from operations $ (94,043) $ (42,467) |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment The following table presents major classifications of property and equipment and the related useful lives (in thousands, except useful lives): Years Ended December 31, Useful Lives 2023 2022 Computers and office equipment 3 years $ 2,443 $ 2,207 Furniture and fixtures 5 years 322 321 Leasehold improvements 7 years 337 337 Software development costs 3 years 41,074 34,971 Total 44,176 37,836 Less: Accumulated depreciation and amortization (28,786) (20,134) Property and equipment, net $ 15,390 $ 17,702 Depreciation and amortization expense for property and equipment for the years ended December 31, 2023 and 2022 was $8.7 million and $8.4 million, respectively, included in our consolidated statements of operations. As of December 31, 2023 and 2022, the unamortized balance of capitalized software development costs was $14.5 million and $16.0 million, respectively. Amortization of capitalized software development costs for the years ended December 31, 2023 and 2022 was $7.6 million and $7.4 million, respectively, included in Depreciation and amortization of our consolidated statements of operations. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill Changes in the carrying value of Goodwill, by reporting segment, were as follows (in thousands): Brand Direct Marketplace Technology Solutions Total Balance, January 1, 2022 $ 18,376 $ 54,554 $ 3,628 $ 76,558 Additions (Note 7) — — 735 735 Miscellaneous changes (55) — — (55) Balance, December 31, 2022 18,321 54,554 4,363 77,238 Additions (Note 7) 2,308 2,693 — 5,001 Impairment of goodwill (15,595) (33,795) — (49,390) Balance, December 31, 2023 $ 5,034 $ 23,452 $ 4,363 $ 32,849 The carrying amount of Goodwill for the Marketplace segment had accumulated impairment of $33.8 million as of December 31, 2023 and no impairment as of December 31, 2022. The carrying amount of Goodwill for the Brand Direct segment had accumulated impairment of $15.6 million and no impairment as of December 31, 2022. Intangible assets, net Finite-lived Intangible assets, net consisted of the following (in thousands, except amortization periods): December 31, 2023 Amortization Gross Impairment Accumulated Net Technology 4 to 7 $ 59,095 $ (7,210) $ (43,752) $ 8,133 Customer relationships 4 to 15 71,323 (27,125) (26,510) 17,688 Brand 1 to 7 14,880 (3,979) (7,283) 3,618 Non-competition agreements 1 to 3 1,898 — (1,896) 2 Total $ 147,196 $ (38,314) $ (79,441) $ 29,441 December 31, 2022 Amortization Gross Impairment Accumulated Net Technology 4 to 7 $ 54,316 $ (5,933) $ (39,411) $ 8,972 Customer relationships 4 to 15 49,423 (12,387) (21,205) 15,831 Brand 1 to 7 12,169 (3,250) (6,233) 2,686 Non-competition agreements 1 to 3 1,898 — (1,868) 30 Total $ 117,806 $ (21,570) $ (68,717) $ 27,519 Amortization expense relating to intangible assets subject to amortization for each of the next five years and thereafter is estimated to be as follows (in thousands): 2024 2025 2026 2027 2028 Thereafter Amortization expense $ 5,474 $ 4,040 $ 3,642 $ 3,027 $ 2,535 $ 10,723 Amortization expense for finite-lived intangible assets is recorded on an accelerated straight-line basis. Amortization expense related to finite-lived intangible assets was $10.7 million and $19.7 million for the years ended December 31, 2023 and 2022, respectively. Impairment analysis Interim Testing The Company considered if an event occurred or circumstances changed that would more likely than not reduce the fair value of a reporting unit below its carrying amount. In the second quarter of 2023, the Company determined that the recent economic downturn and inflation, along with the Company’s revenue reduction and decreased stock market price were indicators of impairment for the Marketplace reporting unit under ASC 350-20, Goodwill , and ASC 360-10, Impairment and Disposal of Long-Lived Assets for certain asset groups during 2023. The Company determined the fair value of goodwill at the reporting unit level utilizing a combination of a discounted cash flow analysis incorporating variables such as revenue projections, projected operating cash flow margins, and discount rates, as well as a market-based approach employing comparable sales analysis. The valuation assumptions used in the discounted cash flow model reflect historical performance of the Company, the prevailing values in the Company’s industry, including the extent of the economic downturn related to the recent inflation and its economic contraction and its expected timing of recovery. The result of our analysis indicated that there was goodwill impairment of $33.8 million for the related to the Marketplace reporting unit, which was recorded as Impairment of goodwill in the consolidated statements of operations for the quarter ended June 30, 2023. Further, the Company performed quarterly recoverability tests for certain asset groups to determine whether an impairment loss should be measured on intangible assets. The undiscounted cash flows in the recoverability tests were compared to each identified asset group’s carrying value. During the second quarter of 2023, the Company identified three asset groups with carrying value in excess of the current projected undiscounted cash flows for those asset groups, and therefore calculated the fair value of the finite-lived intangible assets. Intangible assets include technology, brand, and customer relationships. The fair value of technology was determined using the Relief from Royalty Approach; fair value of the customer relationships was determined using the Multi Period Excess Earnings Method; and fair value of the brand was determined using the Relief from Royalty Method. As a result of the fair value being lower than the carrying value for certain assets, the Company recorded impairment loss of $7.8 million in the second quarter of 2023, to intangible assets which were in asset groups included in the Marketplace reporting unit, which is included in the consolidated statements of operations as Impairment of intangible assets. Annual Testing Annual impairment testing for Goodwill involves determining the fair value, or recoverable amount, of the reporting units to which Goodwill is allocated and comparing this to the carrying value of the reporting units. As part of the Company’s annual goodwill impairment analysis, we determined the fair value of goodwill at the reporting unit level utilizing a combination of a discounted cash flow analysis incorporating variables such as revenue projections, projected operating cash flow margins, and discount rates, as well as a market-based approach employing comparable sales analysis. The valuation assumptions used in the discounted cash flow model reflect historical performance of the Company, the prevailing values in the Company’s industry, including the extent of the economic downturn related to the recent inflation and its economic contraction and its expected timing of recovery. For the year ended December 31, 2023, the result of our annual impairment test indicated that there were goodwill impairment indicators for the Brand Direct segment, as the carrying value of that reporting unit exceeded the fair value. The result of our analysis indicated that there was goodwill impairment of $15.6 million for the year ended December 31, 2023 related to the Brand Direct reporting unit. Combined with the Marketplace-related goodwill impairment booked during the second quarter of $33.8 million as described above, total Impairment of goodwill for the year ended December 31, 2023 was $49.4 million. The Company further determined that the recent economic downturn and inflation, along with the Company’s revenue reduction and decreased stock market price were indicators of impairment under ASC 360-10, Impairment and Disposal of Long-Lived Assets for certain asset groups during 2023 and 2022. The Company performed a recoverability test for the asset groups to determine whether an impairment loss should be measured. The undiscounted cash flows in the recoverability test compared to the asset group’s carrying value of invested capital was less than the carrying value indicating an impairment for certain asset groups within each reporting unit. As a result, the Company calculated the fair value of those finite-lived intangible assets. Intangible assets primarily include technology, brand, and customer relationships. The Company determined the fair value of each asset group utilizing a discounted cash flow analysis incorporating variables such as revenue projections, projected operating cash flow margins, and discount rates. The valuation assumptions used in the discounted cash flow model reflect historical performance of the Company, the prevailing values in the Company’s industry, including the extent of the economic downturn related to increased inflation, the economic contraction in our industry and its expected timing of recovery. As a result of the fair value being lower than the carrying value for these asset groups, the Company recorded additional impairment of intangible assets of $1.5 million, $6.9 million and $0.5 million to intangible assets which are in asset groups included in Brand Direct, Marketplace and Technology Solutions reporting units, respectively, for the year ended December 31, 2023. The total impairment loss related to intangible assets of $16.7 million, which includes the interim impairment of asset groups within the Marketplace reporting unit of $7.8 million as described above, is included in the consolidated statements of operations as Impairment of intangible assets for the year ended December 31, 2023. For the year ended December 31, 2022, the Company recorded impairment loss of $0.9 million and $20.7 million to intangible assets which are in asset groups included in Brand Direct and Marketplace reporting units, respectively. The total impairment loss of $21.6 million is included in the consolidated statements of operations as Impairment of intangible assets for the year ended December 31, 2022. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions ClickDealer On March 30, 2023, the Company completed a transaction to acquire the HomeQuote.io home services marketplace from Customer Direct Group, along with the supporting media and technology assets of the ClickDealer international ad network, (“ClickDealer”). ClickDealer’s international performance ad network and the HomeQuote.io marketplace connects consumers with brands within the home improvement and related home services sector. The Company paid cash consideration of $31.8 million, including $0.3 million estimated net working capital adjustment, upon closing of the transaction, with an additional $3.5 million in holdbacks, subject to certain criteria. Through August 22, 2023, after the successful completion of the first and second tranche in criteria were met, $1.5 million of the holdback was paid to the Sellers in cash, including the true-up to the net working capital adjustment. The final net working capital adjustment was $0.6 million. The remaining holdback of $2.0 million is expected to be released within 24 months of the closing date, subject to certain criteria. The acquisition transaction also included up to $10.0 million in contingent consideration, subject to the achievement of certain revenue and net margin based milestones in two subsequent one-year measurement periods, payable in cash or, if mutually agreed to by the Company and the Seller, in Class A Common Stock. During the measurement period (which is the period required to obtain all necessary information that existed at the acquisition date, or to conclude that such information is unavailable, not to exceed one year), additional assets or liabilities may be recognized, or there could be changes to the amounts of assets or liabilities previously recognized on a preliminary basis, if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of these assets or liabilities as of that date. The measurement period ended March 30, 2024. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and involves the use of significant estimates, including projections of future cash inflows and outflows, discount rates, asset lives and market multiples. As the result of the completed valuation of the assets acquired (including intangibles) and liabilities assumed, as well as the contingent consideration liabilities, as of the acquisition dates, the following adjustments were recorded related to further analysis of the forecast (for example, items that occurring in the pre-acquisition period that should have been factored into the forecast as of the acquisition date) and refinements to the significant assumptions in the valuation models used to value the intangibles and contingent consideration liabilities. As a result, as of December 31, 2023, we have made adjustments to the initial fair value of our intangible assets, goodwill, contingent consideration and working capital. The impact of these adjustments on the acquisition date fair values are as follows (in thousands): ClickDealer Acquisition Date Fair Value Fair Value Mark-to-Market Changes Revised Acquisition Date Fair Value Goodwill $ 6,207 $ (1,206) $ 5,001 Intangible Assets: Technology $ 5,010 $ (230) $ 4,780 Customer relationships $ 20,400 $ 1,500 $ 21,900 Brand $ 2,840 $ (130) $ 2,710 Contingent consideration liability (1) $ 2,457 $ (65) $ 2,392 Working capital accounts $ 3,320 $ 245 $ 3,565 ________________ (1) See Note 10. Fair Value Measurements for assumptions used in the valuation of Contingent consideration liability. The Company primarily used Income Approach methodologies, which represents Level 3 fair value measurements, to assess the components of its purchase price allocation. The acquisition was accounted for as a business combination, whereby the excess of the fair value of the business over the fair value of identifiable net assets was allocated to Goodwill. Under ASC 805, Business Combinations , an acquirer must recognize any assets acquired and liabilities assumed at the acquisition date, measured at fair value as of that date. Assets meeting the identification criteria included tangible assets, such as real and personal property, and intangible assets. Identified intangible assets included the brand and customer relationships of the acquired business. Fair value of the ClickDealer and HomeQuote.io brands was determined using the Income Approach and Relief from Royalty Method, fair value of the technology was determined using the Relief from Royalty Method, and fair value of customer relationships was determined using the Multi Period Excess Earnings Method. Goodwill related to this transaction reflects the workforce and synergies expected from combining the operations of ClickDealer and will be included in the Brand Direct reportable segment for ClickDealer and in the Marketplace reportable segment for HomeQuote.io. Goodwill is expected to be deductible for tax purposes. Intangible assets primarily consist of brand, technology and customer relationships with an estimated useful life of five years for brand, seven years for technology and twelve years for customer relationships. Traverse On May 10, 2022, the Company acquired Traverse Data, Inc. (“Traverse”). Traverse is a marketing and advertising technology company. The Company paid cash consideration of $2.5 million upon closing of the transaction. The transaction also includes up to $0.5 million in contingent consideration, subject to the achievement of certain milestones, to be paid in cash 15 months after the acquisition date. Accounting for the acquisition was completed on May 10, 2023. The contingent consideration for the Traverse acquisition was finalized on May 10, 2023, which the Company paid on July 10, 2023 in the form cash payment of $0.5 million. Crisp Results On April 1, 2021, the Company completed a transaction to purchase the assets of Crisp Marketing, LLC (“Crisp Results” or “Crisp”). Crisp Results is a digital performance advertising company that connects consumers with brands within the insurance sector, with primary focus on the Medicare insurance industry. Crisp Results is known for providing predictable, reliable, flexible and scalable customer acquisition solutions, supporting large brands with a process that combines data, design, technology and innovation. The Company paid consideration of $40.0 million upon closing of the transaction, consisting of $20.0 million cash and 106.7 thousand Class A Common Stock valued at $20.0 million. The transaction also included up to $10.0 million in contingent consideration, and a $5.0 million deferred payment, to be paid 18 months after the acquisition date. Accounting for the acquisition was completed on March 31, 2022. The Company paid the contingent consideration on July 1, 2022 in the form of 199.3 thousand unregistered shares of Class A Common Stock, priced at $50.18, the average closing price of the Class A common stock during the twenty Aimtell, Aramis and PushPros On February 1, 2021, the Company acquired Aimtell, Inc. (“Aimtell”), PushPros, Inc. (“PushPros”) and Aramis Interactive (“Aramis”, and together with Aimtell and PushPros, “AAP”). Aimtell and PushPros are leading providers of technology-enabled digital performance advertising solutions that connect consumers and advertisers within the home, auto, health and life insurance verticals. Aramis is a network of owned-and-operated websites that leverages the Aimtell and PushPros technologies and relationships. The Company paid consideration of $20.0 million upon closing of the transaction, consisting of $5.0 million in cash and approximately 86.0 thousand shares of Class A Common Stock valued at $15.0 million. The transaction also included up to $15.0 million in contingent consideration to be earned over the three years following the acquisition, subject to the achievement of certain milestones. The contingent consideration can be paid in cash or Class A Common Stock at the election of the Company. Accounting for the acquisition was completed on March 31, 2022. The contingent consideration for the Aramis acquisition was finalized on December 31, 2022, the end of the earnout period, and became payable during the fourth quarter of 2023, in the form of cash or Class A Common Stock, at the election of the Company. The timing of payment of the Aramis earnout remains subject to resolution of certain outstanding indemnity issues relating to the acquisition. The contingent consideration for the Aimtell and PushPros acquisition finalized on December 31, 2023, the end of the earnout period, resulting in none of the metrics being met, thus no contingent consideration is to be paid to the sellers. Acquisitions’ Fair Value Measurement and Pro Forma Information The acquisition date fair value of assets acquired and liabilities assumed from the Traverse and ClickDealer acquisitions consist of the following (in thousands , except expected useful lives ): Expected Useful Life (Years) Traverse ClickDealer 2022 2023 Cash $ 232 $ — Goodwill 735 5,001 Technology 4 to 7 2,470 4,780 Customer relationships 4 to 12 50 21,900 Accounts receivable 276 6,959 Brand 1 to 7 60 2,710 Accounts payable (232) (3,561) Other assets acquired and liabilities assumed, net (1) 7 167 Net assets and liabilities acquired $ 3,598 $ 37,956 ____________________ (1) Other assets acquired and liabilities assumed, net includes prepaid expenses and other current assets, partially offset by other current liabilities (e.g., Travel and expense payables, payroll liabilities, tax liabilities, and transition services payable). The weighted average amortization period for Traverse acquisition technology is 5 years, customer relationships is 5 years, brand is 3 years and non-compete agreements is 1 year. The weighted average amortization period for ClickDealer acquisition technology is 7 years, customer relationships is 12 years and brand is 5 years. In total, the weighted average amortization period for Traverse is 5 years and ClickDealer is 10 years. The following schedules represent the amount of net revenue and net loss from operations related to Traverse and ClickDealer acquisitions which have been included in the consolidated statements of operations for the periods indicated subsequent to the acquisition date in the period of acquisition (in thousands): Year Ended December 31, 2023 ClickDealer Net revenue $ 57,959 Net income from operations $ 733 Year Ended December 31, 2022 Traverse Net revenue $ 1,846 Net income from operations $ 489 Pro Forma Information The following unaudited pro forma financial information represents the consolidated financial information as if the acquisitions had been included in our consolidated results beginning on the first day of the fiscal year prior to their respective acquisition dates. There is no pro forma financial information for three months ended December 31, 2023 as the results remain consistent. Pro forma financial information is presented in the table below (in thousands): Year Ended December 31, 2023 (unaudited) DMS ClickDealer Pro Forma Net revenue $ 334,949 $ 19,865 $ 354,814 Net income (loss) from operations $ (94,043) $ 1,704 $ (92,339) Year Ended December 31, 2022 (unaudited) DMS Traverse ClickDealer Pro Forma Net revenue $ 391,148 $ 999 $ 79,702 $ 471,849 Net income (loss) from operations $ (42,467) $ (417) $ 8,339 $ (34,545) |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table presents the components of outstanding debt (in thousands): December 31, 2023 December 31, 2022 Term loan $ 242,927 $ 221,625 Revolving credit facility 55,091 40,000 Total debt 298,018 261,625 Less: Unamortized debt issuance costs (1) (8,915) (4,802) Debt, net 289,103 256,823 Less: Current portion of long-term debt (2,750) (2,250) Long-term debt $ 286,353 $ 254,573 ____________________ (1) Includes net debt issuance discount, amendment’s administrative fees and other costs. On May 25, 2021, Digital Media Solutions, LLC (“DMS LLC”), as borrower, and DMSH, each of which is a subsidiary of DMS, entered into a five-year $275 million senior secured credit facility (the “Credit Facility”), with a syndicate of lenders (“Lenders”), arranged by Truist Bank and Fifth Third Bank, as joint lead arrangers, and Truist Bank, as administrative agent. The Credit Facility is guaranteed by, and secured by substantially all of the assets of, DMS LLC, DMSH LLC and their material subsidiaries, subject to customary exceptions. Pursuant to the Credit Facility, the Lenders provided DMS LLC with senior secured term loans consisting of a senior secured term loan with an aggregate principal amount of $225 million (the “Term Loan”) and a $50 million senior secured revolving credit facility (the “Revolving Facility”). The Term Loan, which was issued at an original issue discount of 1.80% or $4.2 million, is subject to payment of 1.0% of the original aggregate principal amount per annum paid quarterly, with a bullet payment at maturity. The Term Loan will mature, and the revolving credit commitments under the Revolving Facility will terminate, on May 25, 2026, when any outstanding balances will become due. Under the original agreement, the Term Loan would bear interest at our option, at either (i) adjusted LIBOR plus 5.00% or (ii) the Base Rate plus 4.00%. From May 25, 2021 to July 3, 2023 our interest rate was based on LIBOR plus 5.00%. Under the original agreement, borrowings under the Revolving Facility would bear interest, at our option, at either (i) adjusted LIBOR plus 4.25% or (ii) a base rate which is equal to the highest of (a) the administrative agent’s prime rate, (b) the federal funds rate, as in effect from time to time, plus 0.50%, (c) one-month LIBOR plus 1.00%, and (d) 1.75% (the “Base Rate”), plus 3.25%. DMS LLC pays a 0.50% per annum commitment fee in arrears on the undrawn portion of the revolving commitments. From May 25, 2021 to July 3, 2023, our interest rate was based on LIBOR plus 5.00% . The Company drew $10.0 million on May 24, 2023. On July 3, 2023, the Term Loan and Revolving Facility were amended to transition LIBOR to the Term Secured Overnight Financing Rate (SOFR) as the basis for establishing the interest rate applicable to borrowings under the agreements. The interest rate is based on SOFR Benckmark Replacement plus 5.00% for the Term Loan and SOFR Benckmark Replacement plus 4.25% for Revolving Facility. On August 16, 2023, DMS LLC and DMSH LLC, along with certain subsidiaries of the Company, entered into a first amendment to the Credit Facility (the “First Amendment”) with Truist Bank and the other lenders party thereto (the “Lenders”), which, among other things, modified the Credit Facility as follows: a. allows for the payment-in-kind (“PIK”) of the quarterly interest payments due and payable on September 30, 2023 and each of the following three quarters, with all PIK interest required to be repaid no later than December 31, 2025; b. provides that (a) if the borrower exercises the PIK option, the interest rate will be equal to SOFR+11%; (b) if interest is paid in cash during the PIK period, the rate will be equal to SOFR+8%; and (c) following the PIK period, the interest rate will be equal to SOFR+8%; provided that if the Company (1) achieves the credit rating of B3 by Moody’s and B- by S&P, and (2) has repaid the aggregate capitalized PIK interest, the interest rate will be SOFR + 6.0%; c. if any loans under the Credit Facility remain outstanding on or after January 1, 2025, back-end PIK interest will accrue as follows: 5% for the period from January 1, 2025 through June 30, 2025; 7.5% for the period from July 1, 2025 through December 31, 2025; and 10% in calendar year 2026 until maturity; d. eliminates the total net leverage ratio covenant for the remainder of 2023, inclusive of the second quarter of 2023, and sets the total net leverage ratio of DMSH LLC and its restricted subsidiaries starting at 15.6x and 10.6x for the first and second quarters of 2024, respectively, and varying for every quarter thereafter, down to 6.9x for the fourth quarter of 2025 and until maturity; e. eliminates the right of the Borrower to undertake an equity cure to cure any breach of the total net leverage ratio covenant; f. establishes a minimum liquidity covenant of $9 million for the remainder of 2023 excluding December 31, 2023, and $10 million from December 31, 2023 and thereafter until maturity (subject to the Company’s ability to exercise an equity cure solely with respect to the liquidity covenant); g. modifies in certain respects the affirmative and negative covenants and the events of default in the Credit Facility, including subjecting non ordinary course investments and restricted distributions to consent of the requisite Lenders; and h. establishes a minimum payment for the revolver of 1.0% per annum of the original aggregate principal amount of the Revolving Facility outstanding as of the First Amendment’s effective date, paid quarterly. The First Amendment, as it relates to the Term Loan, was accounted for as a modification for accounting purposes. As such, $6.3 million in fees due to the Lenders was paid-in-kind and capitalized as additional debt issuance costs. These costs, plus the initial $4.2 million debt discount and $3.5 million debt issuance cost related to the Term Loan are being amortized over the term of the loan using the effective interest method. As of December 31, 2023, the Term Loan debt discount and debt issuance cost classified as debt had a remaining unamortized balance of $2.1 million and $6.8 million, respectively. As of December 31, 2022, the Term Loan debt discount and debt issuance cost classified as debt had a remaining unamortized balance of $3.0 million and $1.8 million, respectively. In addition, the First Amendment added $0.8 million in lender fees to the Revolving Facility’s debt issuance costs. At December 31, 2023 and December 31, 2022, unamortized debt issuance costs of $1.1 million and $0.6 million, respectively, from the Revolving Facility are classified as Other assets within the consolidated balance sheets. For the year ended December 31, 2023, the Company elected to exercise its available PIK elections. Accordingly, $19.1 million and $4.3 million of PIK interest expense were added to the outstanding principal balance of the Term Loan and the Revolving Facility, respectively. As of December 31, 2023, the total outstanding balance of the Term Loan and the Revolving Facility is $242.9 million and $55.1 million, respectively. For the year ended December 31, 2023, the effective interest rate was 13.4%, for the Term Loan. The effective interest rate related to the Revolving Facility was 13.1% for the year ended December 31, 2023. As of March 31, 2024, the Company was in breach of the net leverage ratio covenant under its Credit Facility, which it cured as of April 17, 2024, when DMS, LLC, DMSH LLC and certain of the Company’s subsidiaries entered into a second amendment and waiver (the “Second Amendment”) to its existing Credit Facility with a syndicate of lenders, arranged by Truist Bank and Fifth Third Bank, as joint lead arrangers, and Truist Bank, as administrative agent and collateral agent. The Second Amendment introduced new Tranche A term loan commitments in the amount of $22 million with a maturity date of February 25, 2026, increasing our total borrowing capacity under the Credit Facility from $275 million to $297 million. The Second Amendment allows the Company to PIK the quarterly interest payments due and payable for the quarter ended March 31, 2024 and each of the following quarters up to and including the quarter ending on March 31, 2025; and waives compliance with the net leverage ratio covenant through June 30, 2025. The Second Amendment also includes certain limited waivers related to prior defaults and events of default under the Credit Facility, amends certain negative and affirmative covenants applicable to us and adds certain additional covenants. In accordance with the Second Amendment, we are required to maintain a minimum aggregate amount of unrestricted and uncommitted cash and cash equivalents held in U.S. dollars during the period of time from and after the Second Amendment effective date of at least $5 million. Further, we have agreed to a variance test in which (i) the Company disbursements during a variance testing period shall not be more than 15% in excess of the amount reflected in the corresponding period in the Credit Facility’s loan parties’ projected cash flows prepared in consultation with a financial advisor (the “Cash Flow Forecast”) or (ii) the Company’s aggregate net cash receipts, (a) during the two week period after the Second Amendment effective date, will not be less than 80%, for the trailing two week period, of the aggregate cash receipts forecasted in the Cash Flow Forecast applicable during such testing period, (b) during the three week period after the Second Amendment effective date, will not be less than 82.5%, for the trailing three week period of the aggregate cash receipts forecasted in the Cash Flow Forecast applicable during such testing period and (c) during the four week period after the Second Amendment effective date and thereafter, will not be less than 85%for the trailing four week period of the aggregate cash receipts forecasted in the Cash Flow Forecast applicable during such testing period. In connection with the Second Amendment, we must pay a 8.0% commitment fee, which shall be fully earned on the initial funding disbursement date and payable as PIK interest on the Second Amendment effective date. Further, under the terms of the Second Amendment, we have agreed to promptly commence a strategic review and marketing process for a sale of all or substantially all of our assets, which is subject to certain milestones. As noted above, the Credit Facility is conditioned upon the Company’s compliance with specified covenants, including certain reporting covenants and financial covenants that, in addition to other items, require the Company to maintain a maximum net leverage ratio. As of December 31, 2023, compliance with the net leverage ratio covenant was waived in connection with entry into the First Amendment. As of December 31, 2022, the Company was in breach of the net leverage ratio, which it cured on March 30, 2023 through the funds received in connection with the issuance of Series A and Series B convertible Preferred stock and Warrants. As of December 31, 2023, the Company was in compliance with the Credit Facility’s minimum liquidity covenant. Debt Maturity Schedule The scheduled maturities of our total debt are estimated as follows at December 31, 2023 (in thousands): 2024 $ 2,750 2025 26,233 2026 269,035 Total debt $ 298,018 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases The following table summarizes the maturities of undiscounted cash flows of operating lease liabilities reconciled to total lease liability as of December 31, 2023 (in thousands): Lease Amounts 2024 1,926 2025 465 Total 2,391 Less: Imputed interest (47) Present value of operating lease liabilities $ 2,344 As of December 31, 2023, the operating lease weighted average remaining lease term is 1.3 years and the operating lease weighted average remaining discount rate is 3.35%. The discount rate for each lease represents the incremental borrowing rate that the Company would incur at commencement of the lease to borrow on a collateralized basis over a similar term and amount equal to lease payments in a similar economic environment. The following table represents the Company’s aggregate lease costs, by lease classification (in thousands): Years Ended December 31, Category Statement of Operations Location 2023 2022 Operating lease costs General and administrative expenses $ 1,047 $ 1,228 Short-term lease costs General and administrative expenses 350 263 Sub-lease income General and administrative expenses (458) (586) Total lease costs, net $ 939 $ 905 The cash paid for amounts included in the measurement of operating leases was $2.1 million for years ended December 31, 2023 and 2022, respectively. As of August 31, 2023, the Windstream lease was abandoned under favorable terms, and, as of June 30, 2023, the AAP Lease located at 1245 East Main Street, Annville, PA 17003, was terminated under favorable terms. The total lease termination costs for the years ended December 31, 2023 and 2022 were $0.5 million and $0.1 million, respectively, which are included within General and administrative expenses in the consolidated statements of operations. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 10. Fair Value Measurements The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The carrying amounts of our Cash and cash equivalents, Restricted cash, Accounts receivable, Income tax receivable, Accounts payable, Accrued expenses and Income taxes payable, approximate fair value because of the short-term maturity of those instruments. Preferred Warrants On March 29, 2023, the Company completed a securities purchase agreement (the “SPA”) with certain investors to purchase 80,000 shares of Series A convertible redeemable Preferred Stock (“Series A Preferred Stock”) and 60,000 shares of Series B convertible redeemable Preferred Stock (“Series B Preferred Stock”) for an aggregate purchase price of $14.0 million (the “Preferred Offering”), including $6.0 million of related party participation. The Company also issued to the purchasers in the Preferred Offering warrants to acquire 963 thousand shares of Class A Common Stock (“Preferred Warrants”). The Preferred Warrants are exercisable for shares of the Company’s Class A Common Stock at any time at the option of the holder and expire five years from the date of issuance. The Preferred Warrants are exercisable on a cashless basis or for cash at an exercise price of $9.6795 per share of Class A Common Stock. The exercise price of the Preferred Warrants is subject to appropriate adjustment in the event of stock dividends, stock splits, subdivisions, combinations, reclassifications, or similar events affecting the Company’s Common Stock. The Preferred Warrants contain a put feature providing the right to the holder for a net cash settlement in the event of a fundamental transaction, which is defined as instances where the Company (i) effects any merger or consolidation of the Company, (ii) effects any sale, lease, license, assignment, transfer, conveyance, or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) completes any purchase offer, tender offer, or exchange offer that has been accepted by the holders of at least 50% of the outstanding Class A Common Stock, (iv) effects any reclassification, reorganization, or recapitalization of the Class A Common Stock or any compulsory share exchange pursuant to which the Class A Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) consummates a stock or share purchase agreement or other business combination in which more than 50% of the outstanding shares of Class A Common Stock is acquired. Under such a fundamental transaction, the holder can require the Company to purchase any unexercised warrant shares at the pro-rata share of the sales price or calculated value less the exercise price of the Warrant share. Due to the tender offer provision, the Preferred Warrants are classified as a derivative liability measured at fair value, with changes in fair value reported each period in earnings. The fair value of the warrant is estimated using the Black-Scholes-Merton pricing model. The fair value of the Preferred Warrants of approximately $8.7 million was estimated at the date of issuance using the following weighted average assumptions. Transaction costs incurred attributable to the issuance of the Preferred Warrants were part of the preferred shares issuance costs that were $0.9 million. The fair value of the derivative Preferred Warrants is considered a Level 3 valuation, is determined using the Black-Scholes-Merton valuation model, and is valued on a quarterly basis. The change in the value of the derivative Preferred Warrants are included in the accompanying consolidated statements of operations as Change in fair value of warrant liabilities. The significant assumptions were as follows: December 31, 2023 Preferred Warrants Fair Value Per Share $ 0.06 Preferred Warrant valuation inputs: Stock price - DMS Inc. Class A Common Stock $ 0.13 Remaining contractual term in years 4.25 Estimated volatility 150.0 % Dividend yield 0.0 % Risk free interest rate 3.87 % Private Placement Warrants Each Company Private Placement Warrant entitles the registered holder to purchase one-fifteenth (1/15) share of Class A Common Stock at a price of $172.50 per share, subject to adjustment. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of Class A Common Stock. This means only a whole warrant may be exercised at a given time by a warrant holder. The warrants will expire five years after the Business Combination, or earlier upon redemption or liquidation. The Company may call the Company Private Placement Warrants for redemption as follows: (1) in whole and not in part; (2) at a price of $0.01 per warrant; (3) upon a minimum of 30 days’ prior written notice of redemption; and (4) only if the last reported closing price of the Class A Common Stock equals or exceeds $270.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. If the Company calls the Company Private Placement Warrants for redemption, management will have the option to require all holders that wish to exercise the Company Public Warrants to do so on a “cashless basis.” The exercise price and number of Class A Common Stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of Class A Common Stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrant shares. We record the fair value of the Private Placement Warrants as a liability in our consolidated balance sheets as of December 31, 2023 and 2022, respectively. The fair value of the Private Placement Warrants is considered a Level 3 valuation and is determined using the Black-Scholes-Merton valuation model. Changes in fair value of the Private Placement Warrants are presented under Change in fair value of warrant liabilities on the consolidated statements of operations. As of December 31, 2023, the Company has approximately 4 million Private Placement Warrants outstanding (convertible into 267 thousand Class A Common Stock), the total value of which is not material to the financial statements. Contingent consideration payable related to acquisitions The contingent consideration payable for the Crisp acquisition was finalized on April 1, 2022, the end of the earnout period. As the full target was met, the payment was made on July 1, 2022 in the form of Class A Common Stock (see Note 7. Acquisitions ). The contingent consideration for the Aramis acquisition was finalized on December 31, 2022, the end of the earnout period, and became payable during the fourth quarter of 2023, in the form of cash or Class A Common Stock, at the election of the Company. The timing of payment of the Aramis earnout remains subject to resolution of certain outstanding indemnity issues relating to the acquisition (see Note 7. Acquisitions ). The contingent consideration for the Aimtell and PushPros acquisition finalized on December 31, 2023, the end of the earnout period, resulting in none of the metrics being met, thus no contingent consideration is to be paid to the sellers (see Note 7. Acquisitions ). The contingent consideration for the Traverse acquisition was finalized on May 10, 2023, which the Company paid on July 10, 2023 in the form cash payment of $0.5 million. The fair value of the contingent consideration payable for the ClickDealer acquisition (described in Note 7. Acquisitions ) was determined using a Monte Carlo fair value analysis, based on estimated performance and the probability of achieving certain targets. As certain inputs are not observable in the market, the contingent consideration is classified as a Level 3 instrument. Changes in fair value of contingent consideration are presented under Change in fair value of contingent consideration liabilities on the consolidated statements of operations. The following table presents the contingent consideration assumptions as of December 31, 2023: ClickDealer Revenue Volatility 50 % Iteration (actual) 100,000 Risk Adjustment Discount Rate 23.75 % Risk free / Credit risk 12.50 % Days from period end to payment 90 The following table presents assets and liabilities measured at fair value on a recurrent basis (in thousands): December 31, 2023 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Liabilities: Private placement warrants - Class B common stock Warrant liabilities $ — $ — $ 24 $ 24 Preferred warrants - Series A & B preferred stock Warrant liabilities — — 58 58 Contingent consideration - Aramis Contingent consideration payable - current — — 1,000 1,000 Contingent consideration - ClickDealer Contingent consideration payable - non-current — — 512 512 Total $ — $ — $ 1,594 $ 1,594 December 31, 2022 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Liabilities: Private placement warrants - Class B common stock Warrant liabilities $ — $ — $ 600 $ 600 Contingent consideration - Aramis Contingent consideration payable - current — — 1,000 1,000 Contingent consideration - Traverse Contingent consideration payable - current — — 453 453 Total $ — $ — $ 2,053 $ 2,053 The following table represents the change in the warrant liability and contingent consideration (in thousands): Private Placement Warrants Preferred Warrants Contingent Consideration Balance, January 1, 2022 $ 3,960 $ — $ 8,439 Additions — — 431 Changes in fair value (3,360) — 2,583 Settlements — — (10,000) Balance, December 31, 2022 600 — 1,453 Additions — 8,667 2,457 Changes in fair value (576) (8,609) (1,833) Settlements — — (500) Other (1) — — (65) Balance, December 31, 2023 $ 24 $ 58 $ 1,512 ____________________ (1) Relates to the revision of the initial fair value of the ClickDealer contingent consideration. See Note 7. Acquisitions . |
Equity
Equity | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Equity | Equity Authorized Capitalization The total amount of the Company’s authorized capital stock consists of (a) 600,000,000 shares of common stock, par value $0.0001 per share, of the DMS Inc., consisting of (i) 500,000,000 shares of Class A Common Stock, (ii) 60,000,000 shares of Class B Common Stock, and (iii) 40,000,000 shares of Class C Common Stock, and (b) 100,000,000 shares of preferred stock, par value $0.0001 per share, of the DMS Inc. (“Company Preferred Stock”). At December 31, 2023, there were 4,286,712 shares of Class A Common Stock outstanding and 151,191 shares of Class B Stock outstanding. Common Stock Reverse Stock Split On August 28, 2023, Digital Media Solutions, Inc. filed an amendment to its certificate of incorporation in the State of Delaware (the “Amendment”), which provides that, after the market close on August 28, 2023 (the “Reverse Split Effective Time”), every fifteen shares of our issued and outstanding Class A Common Stock and Class B Common Stock will automatically be combined into one issued and outstanding share of Class A Common Stock and Class B Common Stock, respectively, without any change in the par value per share (the “Reverse Stock Split”). Earlier, on April 28, 2023, a majority of our shareholders approved a reverse stock split subject to the board of directors determining the final ratio. At the Reverse Stock Split Effective Time, every 15 issued and outstanding shares of the Company’s Class A Common Stock and Class B Common Stock were converted automatically into one share of the Company’s Class A Common Stock and Class B Common Stock, respectively, without any change in the par value per share. The Reverse Stock Split reduced the number of shares of Class A Common Stock issued and outstanding from approximately 41.0 million to approximately 2.7 million and Class B Common Stock issued and outstanding from approximately 25.1 million to approximately 1.7 million. No fractional shares were issued in connection with the Reverse Stock Split. Shareholders who otherwise would have been entitled to receive a fractional share instead became entitled to receive one whole share of common stock in lieu of such fractional share. Company Common Stock The following table sets forth the Company’s common stock by class at December 31, 2023: December 31, 2023 December 31, 2022 Class Total Shares Ownership % Total Shares Ownership % Class A Common Stock 4,286,712 96.6% 2,694,648 61.1% Class B Common Stock 151,191 3.4% 1,713,298 38.9% Total Common Stock 4,437,903 100% 4,407,946 100% Voting Rights Each holder of Company Common Stock is entitled to one (1) vote for each share of Company Common Stock held of record by such holder. The holders of shares of Company Common Stock do not have cumulative voting rights. Except as otherwise required in the Company Certificate of Incorporation or by applicable law, the holders of Class A Common Stock, Class B Common Stock and Class C Common Stock will vote together as a single class on all matters on which stockholders are generally entitled to vote (or, if any holders of Company Preferred Stock are entitled to vote together with the holders of Company Common Stock, as a single class with such holders of Company Preferred Stock). In addition to any other vote required in the Company Certificate of Incorporation or by applicable law, the holders of Class A Common Stock, Class B Common Stock and Class C Common Stock will each be entitled to vote separately as a class only with respect to amendments to the Company Certificate of Incorporation that increase or decrease the par value of the shares of such class or alter or change the powers, preferences or special rights of the shares of such class so as to affect them adversely. Notwithstanding the foregoing, except as otherwise required by law, holders of Company Common Stock, as such, will not be entitled to vote on any amendment to the Company Certificate of Incorporation (including any Preferred Stock Designation relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to the Company Certificate of Incorporation (including any Preferred Stock Designation relating to any series of Preferred Stock) or pursuant to the General Corporation Law of the State of Delaware (the “DGCL”). Dividend Rights Subject to any other provisions of the Company Certificate of Incorporation, as it may be amended from time to time, holders of shares of Class A Common Stock are entitled to receive ratably, in proportion to the number of shares of Class A Common Stock held by them, such dividends and other distributions in cash, stock or property of the Company when, as and if declared thereon by the Company’s board of directors (the “Board”) from time to time out of assets or funds of the Company legally available therefor. Except as provided in the Company Certificate of Incorporation, dividends and other distributions will not be declared or paid on the Class B Common Stock. Subject to any other provisions of the Company Certificate of Incorporation, as it may be amended from time to time, holders of shares of Class C Common Stock are entitled to receive ratably, in proportion to the number of shares held by them, the dividends and other distributions in cash, stock or property of the Company payable or to be made on outstanding shares of Class A Common Stock that would have been payable on the shares of Class C Common Stock if each such share of Class C Common Stock had been converted into a fraction of a share of Class A Common Stock equal to the Conversion Ratio (as defined in the Company Certificate of Incorporation) immediately prior to the record date for such dividend or distribution. The holders of shares of Class C Common Stock are entitled to receive, on a pari passu basis with the holders of the Class A Common Stock, such dividend or other distribution on the Class A Common Stock when, as and if declared by the Board from time to time out of assets or funds of the Company legally available therefor. At December 31, 2023, there were no shares of Class C Common Stock outstanding. Redemption Pursuant to the terms and subject to the conditions of the Amended Partnership Agreement, each holder (other than Blocker) of a DMSH Unit has the right (the “Redemption Right”) to redeem each such DMSH Unit for the applicable Cash Amount (as defined in the Amended Partnership Agreement), subject to the Company’s right, in the sole and absolute discretion of the non-interested members of the Board of Directors, to elect to acquire some or all of such DMSH Units that such holder has tendered for redemption for a number of shares of Class A Common Stock, an amount of cash or a combination of both (the “Exchange Option”), in the case of each of the Redemption Right and the Exchange Option, on and subject to the terms and conditions set forth in the Company Certificate of Incorporation and in the Amended Partnership Agreement. Retirement of Class B Common Stock In the event that (i) any DMSH Unit is consolidated or otherwise cancelled or retired or (ii) any outstanding share of Class B Common Stock held by a holder of a corresponding DMSH Unit otherwise ceases to be held by such holder, in each case, whether as a result of exchange, reclassification, redemption or otherwise (including in connection with the Redemption Right and the Exchange Option as described above), then the corresponding share(s) of Class B Common Stock, if any, or such share of Class B Common Stock (in the case of (ii)) will automatically and without further action on the part of the Company or any holder of Class B Common Stock be transferred to the Company for no consideration and thereupon will be retired and restored to the status of authorized but unissued shares of Class B Common Stock. Rights upon Liquidation In the event of any liquidation, dissolution or winding up (either voluntary or involuntary) of the Company after payments to creditors of the Company that may at the time be outstanding, and subject to the rights of any holders of Preferred Stock that may then be outstanding, holders of shares of Class A Common Stock and Company C Common Stock will be entitled to receive ratably, in proportion to the number of shares held by them, all remaining assets and funds of the Company available for distribution; provided, however, that, for purposes of any such distribution, each share of Class C Common Stock will be entitled to receive the same distribution as would have been payable if such share of Class C Common Stock had been converted into a fraction of a share of Company A Common Stock equal to the Conversion Ratio immediately prior to the record date for such distribution. The holders of shares of Class B Common Stock, as such, will not be entitled to receive any assets of the Company in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. Conversion of Class C Common Stock Each holder of Class C Common Stock has the right, at such holder’s option, at any time, to convert all or any portion of such holder’s shares of Class C Common Stock, and the Company has the right, at the Company’s option, to convert all or any portion of the issued and outstanding shares of Class C Common Stock, in each case into shares of fully paid and non-assessable Class A Common Stock at the ratio of one (1) share of Class A Common Stock for the number of shares of Class C Common Stock equal to the Issuance Multiple (as defined in the Business Combination Agreement) so converted. As of December 31, 2023, there were no Class C Common Stock issued and outstanding. Treasury Stock Treasury stock is reflected as a reduction of stockholders’ deficit at cost. We use the weighted-average purchase cost to determine the cost of treasury stock that is reissued, if any. (See Note 13. Employee and Director Incentive Plans ). Transfers The holders of shares of Class B Common Stock will not transfer such shares other than as part of a concurrent transfer of an equal number of DMSH Units, in each case made to the same transferee in accordance with the restrictions on transfer contained in the Amended Partnership Agreement. Other Rights No holder of shares of Company Common Stock are entitled to preemptive or subscription rights. There is no redemption or sinking fund provisions applicable to the Company Common Stock. The rights, preferences and privileges of holders of the Company Common Stock will be subject to those of the holders of any shares of the Preferred Stock the Company may issue in the future. Preferred Stock The Board has the authority to issue shares of preferred stock from time to time on terms it may determine, to divide shares of preferred stock into one or more series and to fix the designations, preferences, privileges, and restrictions of preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, sinking fund terms, and the number of shares constituting any series or the designation of any series to the fullest extent permitted by the DGCL. The issuance of Preferred Stock of the Company could have the effect of decreasing the trading price of Company Common Stock, restricting dividends on the capital stock of the Company, diluting the voting power of the Company Common Stock, impairing the liquidation rights of the capital stock of the Company, or delaying or preventing a change in control of the Company. The Company is authorized to issue 100,000,000 preferred shares with such designations, voting, and other rights and preferences as may be determined from time to time by the Board (of which 140,000 preferred shares have been issued). March 2023 Offering On March 29, 2023, the Company entered into the SPA with certain investors, pursuant to which the Company sold (i) 80,000 shares of Series A Preferred Stock accompanied with warrants to purchase 550,268 Class A Common Stock (“Series A Warrant”) and (ii) 60,000 shares of Series B Preferred Stock accompanied with warrants to purchase 412,701 shares of Class A Common Stock (“Series B Warrants”). One share of Series A Preferred Stock with the accompanying warrants (“Series A Unit”) and one share of Series B Preferred Stock with the accompanying warrants (“Series B Unit”) were sold at $100 per unit. Although the Preferred Stock are mandatorily redeemable, the Preferred Stock have a substantive conversion feature; and therefore, are not required to be classified as a liability under ASC 480, Distinguishing Liabilities from Equity . However, as the Preferred Stock are mandatorily redeemable, redeemable in certain circumstances at the option of the holder, and redeemable in certain circumstances upon the occurrence of an event that is not solely within the Company’s control, the Company has classified the Preferred Stock as mezzanine equity in the consolidated balance sheets. The Company measures the Preferred Stock at its maximum redemption value plus dividends not currently declared or paid but which will be payable upon redemption. On June 15, 2023 the Company remeasured the Preferred Stock following the accretion method, which resulted in the Preferred Stock being measured at its maximum redemption value of $16.3 million and accretion of $11.3 million, included in Cumulative Deficit on the consolidated balance sheets as of December 31, 2023. The fair value of the preferred stock at issuance was recognized using the discount method, which accounts for the 11% discount of the stated value and a pro-rata allocation of the proceeds between the preferred shares and the warrants, less a pro-rata amount of the transaction costs. Dividend Rights The holders of the Preferred Stock are entitled to cumulative dividends at a 4.0% rate, which is accrued and compounded annually whether or not declared. These dividends are payable in cash or Class A Common Stock upon conversion or redemption of the underlying preferred stock. Additionally, the holders are also entitled to participate in dividends declared or paid on Class A Common Stock on an as-converted basis. Conversion Rights Each holder has the right, at its option, to convert its Preferred Stock into Class A Common Stock at either, at the option of the holder, (1) the Conversion Price, which is equal to $8.40 per share or (2) the Alternate Conversion Price, which is equal to the lesser of (i) 90% of the arithmetic average of the three lowest daily VWAPs (as defined in the Securities Purchase Agreement) of the 20 trading days prior to the applicable conversion date or (ii) 90% of the VWAP of the trading day prior to the applicable conversion date. Both the Conversion Price and the Alternate Conversion Price are subject to a floor price of $7.26 (“Floor Price”). However, for the Series A Preferred Stock only, if redemption of the Series A Preferred Stock is accelerated by either the Company or the holder (see the Accelerated Redemption provisions defined below), (i) any cash payment required to be made is not made, and (ii) the existing investors have defaulted under their obligations to purchase the Series A pursuant to the terms of a side letter, then the Floor Price shall be $2.415. The Conversion Price is subject to customary anti-dilution adjustments, including in the event of any stock split, stock dividend, subdivisions, combinations, recapitalization, or similar events, and subject to price-based adjustment in the event of any issuances of Class A Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Conversion Price (subject to certain exceptions). Additionally, the Conversion Price is subject to adjustment for any increase or decrease to the exercise price or conversion price to any outstanding options or convertible securities the Company has issued. The Company determined that the nature of the Preferred Stock was more akin to an equity instrument than a debt instrument because the Preferred Stock are subject to a substantive Conversion Option that is in-the-money and the Company has the ultimate authority to settle redemption of the Preferred Warrants upon the Mandatory Redemption or Accelerated Redemption (all defined below) by issuing shares of Class A Common Stock rather than paying cash. Further, such potential share settlement will be at the lower of the Conversion Price or based on the Company’s VWAP allowing for the holder to be exposed to the risks and returns of the underlying Class A Common Stock. Accordingly, the economic characteristics and risks of the embedded option to convert the Preferred Stock at the Conversion Price (the “Conversion Option”) was clearly and closely related to the host contract. As such, the Conversion Option was not required to be bifurcated from the host under ASC 815, Derivatives and Hedging. Redemption Rights In addition to the share-settled redemption feature discussed above in the Conversion Rights section (e.g., conversion of the Preferred Stock at the Alternate Conversion Price), the Preferred Warrants are subject to several redemption features. Mandatory Redemption – On and after June 29, 2023, the Company is required to redeem 1/10th of the number of the issued shares of Preferred Stock on a monthly basis (“Installments”). The redemption price is paid, at the option of the Company: (i) in cash at an amount that is approximately 104% of the stated value of $111.11 per share plus all accrued and unpaid dividends and any other amounts due (the “Mandatory Redemption Price”), (ii) in a variable number shares of Class A Common Stock based on a share price equal to the lesser of (1) the prevailing Conversion Price, (2) 90% of the arithmetic average of the three lowest daily VWAPs of the 20 Trading Days prior to the applicable mandatory redemption date, or (3) 90% of the VWAP of the trading day prior to the applicable mandatory redemption date, provided that such share price used will not be below the Floor Price, or (iii) in a combination thereof. Installments may be deferred or reallocated to other dates at the Preferred Stockholders’ discretion. Accelerated Redemption – The holders of the Preferred Stock have the right to require redemption of all or any part of the Preferred Stock at any time on or after June 15, 2023. Additionally, the Company has the option to elect redemption of all Series A shares at any time on or after June 15, 2023. The redemption price, as elected by the holder, is paid in either (i) the Mandatory Redemption Price in cash, (ii) in a variable number of shares of Common Stock based on a share price equal to the lesser of (1) the prevailing Conversion Price, (2) 90% of the arithmetic average of the three lowest daily VWAPs of the 20 Trading Days prior to the applicable accelerated redemption date or (3) 90% of the VWAP of the trading day prior to the applicable accelerated redemption date, provided that such share price used will not be below the Floor Price, or (iii) a combination thereof. Triggered Optional Redemption – If the Company closes a debt or equity financing, then each holder has the right to require the Company to use 30% of the proceeds from the financing to repurchase a pro rata portion of that holder’s Preferred Stock in cash at the Mandatory Redemption Price. Default Redemption – Upon certain default events in which the Company defaults on its covenants, promises, or obligations under the Securities Purchase Agreement or defaults on any of its other obligations, the holder has the option to redeem the Preferred Stock for a cash amount equal to 115% of the Mandatory Redemption Price. Bankruptcy Redemption – If the Company is subject to a bankruptcy event, then the Company is required to immediately redeem the outstanding Preferred Stock for cash. The redemption price paid shall equal 115% of the Mandatory Redemption Price. Change of Control Redemption – Upon change of control events (as defined in the Securities Purchase Agreement), the holders have the option to require the Company to redeem the Preferred Stock for cash. The redemption price paid shall equal the greater of (i) the product of 115% multiplied by the Mandatory Redemption Price and (ii) the prevailing Conversion Price plus all accrued but unpaid dividends. If upon an Accelerated Redemption, Triggered Optional Redemption, or Default Redemption, any cash payment required to be made is not made, then the holder can elect to retain its shares of Preferred Warrants that have not been redeemed for cash and sell the shares of Preferred Stock to a third party. Additionally, if such an election is not made by the holder, the Company has the authority to pay to the holder the unpaid cash redemption payment in duly authorized, validly issued, fully paid and non-assessable shares of Class A Common Stock. As noted above, the Company determined that the nature of the Preferred Stock were more akin to an equity instrument than a debt instrument. The Company determined that the economic characteristics and risks of the embedded redemption features discussed above were not clearly and closely related to the host contract. However, the Company assessed these items further and determined they did not meet the definition of a derivative under ASC 815, Derivatives and Hedging . Liquidation Rights Upon any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), prior and in preference to the common stock and the Series B Preferred Stock, the holders of Series A Preferred Stock are entitled to receive out of the assets available for distribution to stockholders an amount equal in cash to 115% of the stated value of $111.11 per share plus all accrued and unpaid dividends and any other amounts due. After the payment of all preferential amounts required to be paid to the Series A holders, the Series B holders shall be entitled to receive out of the assets available for distribution to stockholders an amount equal in cash to 115% of the stated value of $111.11 per share purchase price plus all accrued and unpaid dividends and any other amounts due. Voting Rights Holders of the Preferred Stock are entitled to vote with the holders of the ordinary shareholders on an as-converted basis. Holders of the Preferred Stock are entitled to a separate class vote with respect to (i) altering or changing the powers, preferences, or rights of the Preferred Stock so as to affect them adversely, (ii) amending the Certificate of Incorporation or other charter documents in a manner adverse to the holders, (iii) increasing the number of authorized shares of Preferred Stock, or (iv) entering into any agreement with respect to any of the foregoing. Redemptions On June 15, 2023, the Company received notice from the holders of all of the Company’s outstanding Series A Preferred Stock that each holder has elected to have the Company redeem for cash the Series A Preferred Stock held by such holder pursuant to Section 9(b) of the Certificate of Designation of Preferences, Rights and Limitations of the Series A Preferred Stock of the Company (the “Series A Certificate of Designation”). Section 9(b) of the Series A Certificate of Designation gives holders of Series A Preferred Stock the right to require the Company to redeem for cash the Series A Preferred Stock for cash at any time on or after June 15, 2023 at the “Corporation’s Mandatory Redemption Price” (as such term is defined in the Series A Certificate of Designation). As of June 15, 2023, the aggregate Corporation’s Mandatory Redemption Price for all of the outstanding Series A Preferred Stock was approximately $9.3 million. On June 16, 2023, the Board determined that the Company was not legally permitted under applicable Delaware law to effect a redemption for cash of any Series A Preferred Stock. As a result and in accordance with the Securities Purchase Agreement, the Company accrued dividends payable of $89 thousand to the Series A Preferred Stockholders, for both the quarters ended June 30, 2023 and December 31, 2023, included in Cumulative Deficit on the consolidated balance sheets, as of December 31, 2023. Total accrued dividend to Series A and B Preferred Stockholders was $468.0 thousand, as of December 31, 2023. Relatedly, Section 9(a) of the Series A Certificate of Designation and the Certificate of Designation of Preferences, Rights and Limitations of the Series B Preferred Stock (the “Series B Certificate of Designation” and together with the Series A Certificate of Designation, the “Certificates of Designation”) provide for the Company to redeem 1/10th of the outstanding Series A Preferred Stock and Series B Preferred Stock, respectively, for cash or shares of the Company’s Class A common stock on a monthly basis beginning on June 30, 2023 at the “Corporation’s Mandatory Redemption Price.” Pursuant to the terms of the Certificates of Designation, the Company was not permitted to elect payment in common stock because the Company’s common stock has not traded above the “Floor Price” ($7.26) for 20 trading days prior to redemption, as required by the Certificates of Designation. With respect to each monthly redemption date, the Board determined that the redemption was not permitted under the Certificates of Designation or applicable Delaware law. As a result, the Company did not redeem any shares of Series A Preferred Stock during the year ended December 31, 2023. Warrants Public Warrants Each Company Public Warrant entitles the registered holder to purchase one-fifteenth share of Class A Common Stock at a price of $172.50 per share, subject to adjustment. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of Class A Common Stock. This means only a whole warrant may be exercised at a given time by a warrant holder. The warrants will expire five years after the Business Combination, or earlier upon redemption or liquidation. The Company may call the Company Public Warrants for redemption as follows: (1) in whole and not in part; (2) at a price of $0.01 per warrant; (3) upon a minimum of 30 days’ prior written notice of redemption; and (4) only if the last reported closing price of the Class A Common Stock equals or exceeds $270.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. If the Company calls the Company Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Company Public Warrants to do so on a “cashless basis.” The exercise price and number of Class A Common Stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of Class A Common Stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrant shares. At December 31, 2023 and 2022, approximately 10.0 million Public Warrants were outstanding, respectively. Non-controlling Interests The non-controlling interests represent the membership interests in DMSH held by holders other than the Company. Changes to ownership interests in DMSH while the controlling interests in DMSH is retained will be accounted for as equity transactions. As such, future redemptions or direct exchanges of the Company’s Interests in DMSH by the other members of the Company will result in a change in ownership and reduce the amount recorded as non-controlling interest and increase additional paid-in capital. The Company has consolidated the financial position and results of operations of DMSH and reflected the proportionate interests held by the holders of the non-controlling interests. The following table summarizes the ownership interest in DMSH as of December 31, 2023 and 2022: December 31, 2023 December 31, 2022 Interests Ownership % Interests Ownership % Number of Interests held by DMS, Inc. 4,286,712 96.6% 2,694,648 61.1% Number of Interests held by non-controlling interests holders 151,191 3.4% 1,713,298 38.9% Total Interests Outstanding 4,437,903 100.0% 4,407,946 100.0% The following table summarizes the effects of changes in ownership in DMS, Inc. on our equity during the years ended December 31, 2023 and 2022 (in thousands): Years Ended December 31, 2023 2022 Net loss attributable to Digital Media Solutions, Inc. $ (81,681) $ (31,952) Transfers to (from) non-controlling interests due to: Redemption - Prism (68,836) — Stock-based compensation - Vested & Exercised (1,645) (1,156) Shares issued in connection with the Crisp Earnout (Note 7) — (4,757) Redemption - SmarterChaos — (245) Treasury stock purchased under the 2020 Omnibus Incentive Plan 326 219 Net transfers from non-controlling interests (70,155) (5,939) Change from net income attributable to DMS Inc. shareholders and transfers from non-controlling interests $ (151,836) $ (37,891) On January 17, 2022, the sellers of SmarterChaos redeemed approximately 153.7 thousand units of their non-controlling interest held through DMSH Unit in exchange for Class A Common Stock in DMS Inc. The non-controlling interest held by the Sellers of SmarterChaos did not include related Class B Common Stock to be retired upon redemption. On July 3, 2023 and November 17, 2023, Prism redeemed approximately 41.2 thousand and 1,520.9 thousand Class B Common Stock, respectively, effectively converting all of its remaining non-controlling interest held in DMSH Units into Class A Common Stock in DMS Inc. See Note 2. Business Combination. On April 12, 2024, Clairvest redeemed approximately 151.2 thousand Class B Common Stock, effectively converting all of its remaining non-controlling interest held in DMSH Units into Class A Common Stock in DMS Inc. Consequently, there were no shares of the Company's Class B Common Stock outstanding after this redemption. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Registration Rights At the Closing, the Company entered into an amended and restated registration rights agreement with certain Sellers (the “Amended and Restated Registration Rights Agreement”), pursuant to which the Company registered for resale certain shares of Class A Common Stock and warrants to purchase Class A Common Stock that were held by the parties thereto. Additionally, the Sellers may request to sell all or any portion of their shares of Class A Common Stock in an underwritten offering that is registered pursuant to the shelf registration statement filed by the Company (each, an “Underwritten Shelf Takedown”); however, the Company will only be obligated to effect an Underwritten Shelf Takedown if such offering will include securities with a total offering price reasonably expected to exceed, in the aggregate, $20.0 million and will not be required to effect more than four Underwritten Shelf Takedowns in any six-month period. The Amended and Restated Registration Rights Agreement also includes customary piggy-back rights, subject to cooperation and cut-back provisions. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Amended Partnership Agreement Pursuant to the Amended Partnership Agreement, the non-controlling interests (as defined in the Amended Partnership Agreement) have the right to redeem their DMSH Units for cash (based on the market price of the shares of Class A Common Stock) or, at the Company’s option, the Company may acquire such DMSH Units (which DMSH Units are expected to be contributed to Blocker) in exchange for cash or Class A Common Stock (a “Redemption”) on a one-for-one basis (subject to customary conversion rate adjustments, including for stock splits, stock dividends and reclassifications), in each case subject to certain restrictions and conditions set forth therein. In the event of a change of control transaction with respect to a Non-Blocker Member, DMSH will have the right to require such Non-Blocker Member to effect a Redemption with respect to all or any portion of the DMSH Units transferred in such change of control transaction. In connection with any Redemption a number of shares of Class B Common Stock will automatically be surrendered and cancelled in accordance with the Company Certificate of Incorporation. On April 12, 2024, with the conversion of the last remaining DMSH Units into Class A Common Stock, the Amended Partnership Agreement ended (see Note 11. Equity). Tax Receivable Agreement Since the year ended December 31, 2021, the Company maintains a full valuation allowance on our DTA related to the Tax Receivable Agreement along with the entire DTA inventory at DMS, Inc. and Blocker, as these assets are not more likely than not to be realized based on the positive and negative evidence that we considered. The Tax Receivable Agreement liability that originated from the Business Combination is not probable under ASC 450, Contingencies since a valuation allowance has been recorded against the related DTA. The remaining short-term Tax Receivable Agreement liability of $0.2 million is attributable to carryback claims. We will continue to evaluate the positive and negative evidence in determining the realizability of the Company’s DTAs. For further details, see Note 14. Income Taxes . Prism Incentive Agreement On October 1, 2017, DMS, through a subsidiary, acquired the assets of Mocade Media LLC (“Mocade”). On that date, in connection with the acquisition, DMS also entered into a consulting agreement with Singularity Consulting LLC (“Singularity”), a Texas limited liability company owned by the former management of Mocade. On August 1, 2018, in order to further incentivize Singularity’s efforts with respect to the acquired Mocade assets, DMS entered into an amendment to the Singularity consulting agreement. On that date, Prism Data, the then majority equity holder of DMS, also entered into an incentive agreement with Singularity, to which DMS was not a party, providing for certain incentive payments to be accounted for in accordance with applicable accounting standards by Prism Data to Singularity in the event of certain specified change of control sale transactions involving DMS. Following the Business Combination, in November 2020, DMS and Singularity resolved all outstanding amounts due under the Singularity consulting agreement between DMS and Singularity with a payment of $850,000. In addition, Prism Data and Singularity agreed that Singularity would be entitled to a payment from Prism Data of $2,000,000 in the event of certain specified change of control sale transactions involving DMS . DMSH Member Tax Distributions For the years ended December 31, 2023 and December 31, 2022 there were no tax distributions to members of DMSH. Private Placement of Convertible Preferred Stock and Preferred Warrants On March 29, 2023, the Company entered into the SPA with certain investors in connection with the Preferred Offering, including $6.0 million of related party participation. The Preferred Stock was issued at a 10% Original Issue Discount (OID) to the aggregate stated value of $15.5 million. The Series B Preferred Stock and corresponding Preferred Warrants were issued to the following related parties: Series B Preferred Shares Series B Preferred Warrants Name Number of Shares % of Shares in Series Number of Warrants % of Warrants in Series Lion Capital (Guernsey) BridgeCo Limited 28,671 47.7% 2,958,098 47.7% Leo Investors Limited Partnership 11,329 18.9% 1,168,886 18.9% Fernando Borghese 10,000 16.7% 1,031,746 16.7% Joseph Marinucci 7,500 12.5% 773,809 12.5% Matthew Goodman 2,500 4.2% 257,937 4.2% Total outstanding shares as of April 26, 2023 60,000 100.0% 6,190,476 100.0% |
Employee and Director Incentive
Employee and Director Incentive Plans | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Employee and Director Incentive Plans | Employee and Director Incentive Plans 2020 Omnibus Incentive Plan On July 15, 2020, Leo’s shareholders approved the 2020 Omnibus Incentive Plan (the “2020 Plan”). The 2020 Plan allows for the issuance of stock options, stock appreciation rights, stock awards (including restricted stock awards (“RSAs”) and Restricted Stock Units (“RSUs”)) and other stock-based awards. Directors, officers and employees, as well as others performing independent consulting or advisory services for the Company or its affiliates, will be eligible for grants under the 2020 Plan. The aggregate number of shares reserved under the 2020 Plan is approximately 0.8 million. The 2020 Plan terminates on June 24, 2030. The participants have no rights of a stockholder with respect to the RSUs, including the right to vote and the right to receive distributions or dividends until the shares become vested and settled. The settlement occurs after the vesting date and shall represent the right to receive one Share of Class A of common stock. RSUs awards provide for accelerated vesting if there is a change in control. The Company’s common stock began trading on April 20, 2018; no cash dividends have been declared since that time, and we do not anticipate paying cash dividends in the foreseeable future. The risk-free rate within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. We recognize forfeitures and/or cancellations based on an actual occurrence. The fair value of non-vested stock is determined based on the closing trading price of the Company’s stock on the grant date and are amortized over the award’s service period. At December 31, 2023, total unamortized Stock-based compensation expense related to restricted stock and options was $3.1 million, which will be recognized over a weighted-average remaining period of 1.65 years. Restricted Stock Units Stock awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those stock awards vest on 3 to 4 years of continuous service, depending on when the award was granted, and have 10-year contractual terms. The 2020 Plan allows employees’ vesting rights after each year for completed service to the Company. On October 28, 2020, the Board of Directors of DMS Inc. approved the grant of approximately 80 thousand RSUs, including 4 thousand units granted for Directors under the 2020 Plan. The RSUs vest one-third each year based on three years of continuous service starting with July 16, 2021 through July 16, 2023. The related Stock-based compensation expense is recognized on a straight-line basis over the vesting period. The 2020 Plan provides Directors’ and employees’ vesting rights after each year for completed service to the Company. The related costs were approximately $3.1 million and $6.7 million for the year December 31, 2023 and 2022, respectively, and are included in Salaries and related costs within the consolidated statements of operations. On April 12, 2022, the Board approved the grant of 50.8 thousand RSUs consisting of 25 thousand performance-based vesting RSUs (“PRSUs”) and 25.4 thousand time-based vesting RSUs (“TRSUs”) to executive management and certain key employees under the 2020 Plan. On July 1, 2022, the Board voted to award 22.0 thousand RSUs consisting of 10.9 thousand PRSUs and 10.9 thousand TRSUs to executive management under the 2020 Plan. The TRSUs vest one-fourth each year based on four years of continuous service starting with April 12, 2022, through April 12, 2026. The PRSUs vest one-fourth each calendar year from 2022 through 2026 based continuous service and subject to certain performance metrics of the Company during 2022, which the Company re-evaluates the probability of achievement on a quarterly basis. The TRSU’s related stock-based compensation expense is recognized on a straight-line basis over the vesting period. The PRSU awards’ expense is recognized on an accelerated basis over the vesting period. On August 4, 2022, the Board approved the grant of an aggregate of 3.5 thousand RSUs to the Company’s non-employee directors under the 2020 Plan. The RSUs were to vest on the date of the annual shareholder’s meeting or on the anniversary of the award, whichever occurs first, and the related Stock-based compensation expense was recognized on a straight-line basis over the vesting period. There were no new RSU awards for the year ended December 31, 2023. The following table presents the restricted stock units activity for the year December 31, 2023 and 2022 (in thousands, except price per share): Number of Restricted Stock Weighted-Average Grant Date Fair Value Outstanding at January 1, 2022 96 $ 119.70 Granted 76 40.65 Vested 48 115.50 Forfeited/Canceled 24 81.75 Outstanding at December 31, 2022 100 $ 70.95 Granted — $ — Vested 31 94.31 Forfeited/Canceled 30 46.18 Outstanding at December 31, 2023 39 $ 79.05 Vested as of December 31, 2023 119 $ 107.86 For the year December 31, 2023 and 2022, the fair value of vested restricted stock units was $0.2 million and $1.4 million, respectively. As of December 31, 2023, the total number of awards issued to other nonemployee consultants for advisory and consulting services were 2,036 restricted stock units and 5,726 stock options that represent total Stock-based compensation grant date fair value of $1.8 million, for which $1.6 million has been recorded for services provided to date. Stock Options The participants have no rights of a stockholder with respect to the stock options, including the right to vote and the right to receive distributions or dividends until the shares become vested and exercised. The exercise occurs after the vesting date and the participant may exercise the option by giving written notice of exercise to the Company specifying the number of shares to be purchased, accompanied by full payment of the exercise price or by means of a broker-assisted cashless exercise. Stock option awards provide for accelerated vesting if there is a change in control. The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton valuation method, which uses the assumptions noted in the following table. Because Black-Scholes-Merton option valuation models incorporate ranges of assumption for inputs, the selected inputs are disclosed below. Expected volatilities are based on implied volatilities from traded options on the Company’s peer group. The expected term is calculated using the simplified method, due to insufficient exercise activity during recent years as a basis from which to estimate future exercise patterns. The following table presents the stock option activity for the year December 31, 2023 and 2022 (in thousands, except price per share): Number of Stock Options Weighted-Average Grant Date Fair Value Weighted-Average Remaining Contractual Term (in Years) Total Intrinsic Value of Restricted Stock Options Exercisable Outstanding at January 1, 2022 139 $ 58.80 6.1 years $ — Granted — — — — Exercised — — — — Forfeited/expired 16 58.20 — — Outstanding at December 31, 2022 123 $ 50.25 6.8 years $ — Granted — $ — — $ — Exercised — — — — Forfeited/expired 25 59.05 — — Outstanding at December 31, 2023 98 $ 59.10 7.0 years $ — Exercisable at December 31, 2023 53 $ 58.77 7.0 years $ — There were no stock options granted in 2023. Defined Contribution Plans |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The benefit for income taxes consists of the following (in thousands): Years Ended December 31, 2023 2022 Current: Federal $ 195 $ 73 State (187) (70) Total Current 8 3 Deferred: Federal (928) (3,466) State 130 (642) Total Deferred (798) (4,108) Income tax benefit $ (790) $ (4,105) The benefit for income taxes shown above varies from the statutory federal income tax rate for those periods as follows (in thousands): Years Ended December 31, 2023 2022 Tax benefit from federal statutory rate $ (25,931) $ (11,888) Tax on income not subject to entity level federal income tax 6,584 4,085 State income taxes, net of federal tax effect (4,304) (1,639) Change in fair value of warrant liabilities (1,929) (705) Other permanent adjustments 950 26 Permanent adjustments - goodwill impairment 4,087 — Permanent adjustments - Tax Receivable Agreement — (176) Equity Conversion (15,443) — True-ups and other (3,094) (2,343) Uncertain tax position reserve 8,304 — Research and development credit — (250) Undistributed earnings 749 171 Foreign rate differential (562) — Valuation allowance 30,113 8,857 Tax credits (314) (243) Tax benefit $ (790) $ (4,105) As of December 31, 2023, the Company consists of DMS Inc. and its wholly-owned subsidiary, Blocker, which owns 96.6% of equity interests in DMSH. DMSH is treated as a partnership for purposes of U.S. federal and certain state and local income tax. As a U.S. partnership, generally DMSH will not be subject to corporate income taxes (except with respect to UE and Traverse, as described below). Instead, each of the ultimate partners (including DMS Inc.) are taxed on their proportionate share of DMSH taxable income. While the Company consolidates DMSH for financial reporting purposes, the Company will only be taxed on its allocable share of future earnings (i.e. those earnings not attributed to the non-controlling interests, which continue to be taxed on their own allocable share of future earnings of DMSH). The Company’s Income tax benefit is attributable to the allocable share of earnings from DMSH, the activities of UE and Traverse, wholly-owned U.S. corporate subsidiaries of DMSH, which is subject to U.S. federal and state and local income taxes and the activities of ClickDealer, wholly-owned foreign corporate subsidiaries of DMSH, which is subject to Netherlands, Ukraine and United Kingdom income taxes. The income tax burden on the earnings allocated to the non-controlling interests is not reported by the Company in its consolidated financial statements under GAAP. As a result, the Company’s effective tax rate is expected to differ materially from the statutory rate. For years ended December 31, 2023 and 2022, the components of Net loss before income taxes are comprised of the following (in thousands): Years Ended December 31, 2023 2022 Domestic $ (111,785) $ (56,605) Foreign (11,698) — Total Net loss before taxes $ (123,483) $ (56,605) Any change in the fair value of the private placement and preferred warrants, which are classified as a liability on the Company’s consolidated balance sheets at December 31, 2023, is recognized as a gain or loss in the Company’s consolidated statements of operations. The warrants are deemed equity instruments for income tax purposes, and accordingly, there is no income tax expense or benefit relating to changes in the fair value of such warrants. Deferred tax assets and liabilities are composed of the following (in thousands): Years Ended December 31, 2023 2022 Deferred tax assets: Investment in DMS Holdings LLC $ 58,622 $ 34,137 Reserve accruals 65 156 Charitable contributions 23 18 Interest carryforward 10,681 5,131 Tax credit carryforwards 823 1,013 Property and equipment — (7) Intangibles 1,709 — Operating lease liabilities 190 343 Net operating loss 1,851 2,863 Total gross deferred tax assets 73,964 43,654 Less: Valuation allowance (71,942) (41,829) Total deferred tax assets, net 2,022 1,825 Deferred tax liabilities: Intangibles — (1,295) Property and equipment (1) — Operating lease right-of-use assets (62) (119) Undistributed earnings (2,273) (1,523) Total deferred tax liabilities (2,336) (2,937) Net deferred tax liabilities $ (314) $ (1,112) At December 31, 2023, the Company has federal, foreign and state net operating loss carryforwards attributable to DMS, Inc. in the amount of $25.2 million, $3.9 million and $10.5 million, respectively. The federal carryforwards are not subject to expiration, and the state carryforwards begin to expire in 2030, however certain state carryforwards are indefinite. At December 31, 2023, the Company has an expected federal and state income tax credit carryforward of $0.8 million which would expire at December 31, 2039, unless utilized. Utilization of some of the federal and state net operating loss and credit carryforwards are subject to annual limitations due to the “change in ownership” provisions of the Internal Revenue Code and similar state provisions. The annual limitations may result in the expiration of net operating losses and credits before utilization. We do not expect any annual limitation to materially impact the utilization of net operating losses and credits. The Company records Deferred tax assets if it is more likely than not that the Company will realize a future tax benefit. Ultimate realization of any Deferred tax assets is dependent on the Company’s ability to generate sufficient future taxable income in the appropriate tax jurisdiction before the expiration of carryforward periods, if any. Our assessment of Deferred tax assets realizability considers many different factors including historical and projected operating results, the reversal of existing Deferred tax liabilities that provide a source of future taxable income, the impact of current tax planning strategies and the availability of future tax planning strategies. The Company establishes a valuation allowance against any Deferred tax assets for which we are unable to conclude that realizability is more likely than not. We have determined the need for a valuation allowance of $71.9 million as of December 31, 2023. In doing so we assessed the available positive and negative evidence to estimate whether future taxable income would be generated to permit use of the existing Deferred tax assets (“DTAs”). A significant piece of objective negative evidence evaluated was the three-year cumulative loss before taxes. Such objective evidence limits the ability to consider other subjective evidence, such as projections for future growth. Therefore, a valuation allowance has been recorded against the DTAs at DMS, Inc., UE, and ClickDealer. At December 31, 2023 and December 31, 2022, the Company had a total of $8.3 million and $0.0 million in net unrecognized tax benefits, respectively, which reduced the Company’s deferred income tax assets and offsetting valuation allowance. These unrecognized tax benefits, if recognized, would not have an impact on the effective tax rate due to the offsetting valuation allowance. Unrecognized tax benefits were a net increase of $8.3 million and a net increase of $0.0 million during the years ended December 31, 2023 and 2022, respectively. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as part of the provision for income taxes. As of December 31, 2023 and December 31, 2022, the Company had zero accrued interest and penalties associated with unrecognized tax benefits. Based on information available as of December 31, 2023, it is reasonably possible that the total amount of unrecognized tax benefits will decrease by $0 over the next 12 months. The Company believes that its unrecognized tax benefits as of December 31, 2023 are appropriately recorded for all years subject to examination. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands): Years Ended December 31, 2023 2022 Balance, beginning of year $ — $ — Additions for tax positions of the current years 33,589 — Additions for tax positions of the prior years — — Reductions for tax positions of prior years — — Expiration of applicable statutes of limitations — — Balance, end of year $ 33,589 $ — The Company is subject to examination by the Internal Revenue Service and taxing authorities in various states. The Company’s U.S. federal income tax returns remain subject to examination by tax authorities for the years 2020 to 2023. The Company’s state income tax returns are no longer subject to income tax examination by tax authorities prior to 2020; however, our net operating loss carryforwards arising prior to that year are subject to adjustment. In Netherlands, Ukraine and United Kingdom, the Company’s tax returns remain subject to examination by tax authorities for the year 2023, from the time of filing for a period of three years for Netherlands and Ukraine and four years for United Kingdom. The Company regularly assesses the likelihood of tax deficiencies in each of the tax jurisdictions and, accordingly, makes appropriate adjustments to the tax provision as deemed necessary. The Company records interest and penalties, if any, as a component of its Income tax benefit in the consolidated statements of operations. No interest expense or penalties were recognized during the years ended December 31, 2023 and 2022, respectively. Tax Receivable Agreement Since the year ended December 31, 2021, the Company maintains a full valuation allowance on our DTA related to the Tax Receivable Agreement along with the entire DTA inventory at DMS, Inc. and Blocker, as these assets are not more likely than not to be realized based on the positive and negative evidence that we considered. The Tax Receivable Agreement liability that originated from the Business Combination is not probable under ASC 450, Contingencies since a valuation allowance has been recorded against the related DTA. The remaining short-term Tax Receivable Agreement liability of $0.2 million is attributable to carryback claims. We will continue to evaluate the positive and negative evidence in determining the realizability of the Company’s DTAs. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share of Class A common stock is computed by dividing net income attributable to DMS Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income attributable to DMS Inc. adjusted for the income effects of dilutive instruments by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive elements. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted loss per share of Class A common stock (in thousands, except share data): Years Ended December 31, 2023 2022 Numerator: Net loss $ (122,693) $ (52,500) Net loss attributable to non-controlling interest (41,012) (20,548) Accretion and dividend Series A and B convertible redeemable preferred stock (11,653) — Net loss attributable to Digital Media Solutions, Inc. - Class A common stock - basic $ (93,334) $ (31,952) Denominator: Weighted-average Class A common shares outstanding – basic 2,920 2,581 Add: dilutive effects of equity awards under the 2020 Omnibus Incentive Plan — 2 Weighted-average Class A common shares outstanding – diluted 2,920 2,583 Net loss per common share: Basic – per Class A common shares $ (31.96) $ (12.38) Diluted – per Class A common shares $ (31.96) $ (12.37) Shares of the Company’s Class B convertible common stock and Series A and B Preferred stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate basic and diluted earnings per share of Class B convertible common stock and Series A and B Preferred stock under the two-class method has not been presented. For the year ended December 31, 2023, the Company excluded 0.2 million shares of Class B convertible common stock, 80 thousand Series A Preferred stock, 60 thousand Series B Preferred stock, 4.0 million Private Placement Warrants, 10.0 million Public Warrants, 14.4 million Preferred Warrants, 0.1 million stock options, 27.4 thousand RSUs, 12.0 thousand PRSUs, and the contingent and deferred considerations issued in connection with the ClickDealer and Aramis acquisitions as their effect would have been anti-dilutive. For the year ended December 31, 2022, the Company excluded 4.0 million Private Placement Warrants, 10.0 million Public Warrants, 0.1 million stock options, 0.1 million RSUs and 20.0 thousand PRSUs, and the contingent and deferred considerations issued in connection with the AAP and Crisp Results acquisitions, as their effect would have been anti-dilutive. For the year ended December 31, 2022, the Company excluded the Class B convertible stock, as their effect would have been anti-dilutive. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal proceedings In the ordinary course of business, we are involved from time to time in various claims and legal actions incident to our operations, both as a plaintiff and defendant. In the opinion of management, after consulting with legal counsel, none of these other claims are currently expected to have a material adverse effect on the results of operations, financial position or cash flows. We intend to vigorously defend ourselves in these matters. On October 28, 2022, the Company received notice from the Office of the Ohio Attorney General (“OH OAG”) that it was reviewing certain of DMS’s business practices pursuant to its authority under the Consumer Sales Practices Act, Ohio Revised Code Section 1345.06, and the Telephone Solicitation Sales Act, Ohio Revised Code Sections 4719.11; 109.87(C). While the Company believes that its practices are in compliance with applicable law, the Company and the OH OAG have entered into discussions regarding the terms of a potential resolution to the OH AG’s review. It is uncertain whether a mutually acceptable resolution can be reached and the terms thereof, and, accordingly, the Company is unable to predict the impact of any such resolution to the Company’s business operations or financial results. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (81,681) | $ (31,952) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Business, Basis of Presentati_2
Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of presentation These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the SEC. |
Principles of Consolidation | Principles of consolidation The Company consists of DMS Inc. and its wholly-owned subsidiary, Blocker. Pursuant to the Business Combination, DMS Inc. acquired, directly and through its acquisition of the equity of Blocker, approximately 96.6% of the membership interest in DMSH, while the Sellers (as defined in Note 2. Business Combination ) retained approximately 3.4% of the membership interest in DMSH (“non-controlling interests”) as of December 31, 2023. The Company consolidates the assets, liabilities and operating results of DMSH and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The results of operations attributable to the non-controlling interests are included in the Company’s consolidated statements of operations, and the non-controlling interests are reported as a separate component of equity, refer to Note 11. Equity. |
Reverse Stock Split | Reverse Stock Split |
Reclassifications | Reclassification Certain prior period balances have been reclassified to conform to the current period presentation in the consolidated financial statements and the accompanying notes. Specifically, Income taxes payable has been netted with Income tax receivable. |
Use of Estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported as separate financial statement line items in the consolidated financial statements. Actual results could differ from those estimates. Management regularly makes estimates and assumptions that are inherent in the preparation of the consolidated financial statements including, but not limited to, the fair value of warrants, the allowance for credit losses, stock-based compensation, fair value of intangibles acquired in business combinations, loss contingencies, contingent consideration liabilities, goodwill and intangible asset impairments, and deferred taxes and amounts associated with the Tax Receivable Agreement. |
Revenue recognition | Revenue recognition The Company derives revenue primarily from fees earned through the delivery of qualified clicks, leads, inquiries, calls, applications, customers and, to a lesser extent, display advertisements, or impressions. The Company recognizes revenue when the Company transfers promised goods or services to clients in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company recognizes revenue pursuant to the five-step framework contained in ASC 606, Revenue from Contracts with Customers : (i) identify the contract with a client; (ii) identify the performance obligations in the contract, including whether they are distinct in the context of the contract; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligations. As part of determining whether a contract exists, probability of collection is assessed on a client-by-client basis at the outset of the contract. If it is determined from the outset of an arrangement that the client does not have the ability or intention to pay, the Company will conclude that a contract does not exist and will continuously reassess its evaluation until the Company is able to conclude that a contract does exist. Generally, the Company’s contracts specify the period of time as one month, but in some instances the term may be longer. However, for most of the Company’s contracts with clients, either party can terminate the contract at any time without penalty. Consequently, enforceable rights and obligations only exist on a day-to-day basis, resulting in individual daily contracts during the specified term of the contract or until one party terminates the contract prior to the end of the specified term. The Company has assessed the services promised in its contracts with clients and has identified one performance obligation, which is a series of distinct services. Depending on the client’s needs, these services consist of a specified number or an unlimited number of clicks, leads, calls, applications, customers, etc. (hereafter collectively referred to as “marketing results”) to be delivered over a period of time. The Company satisfies these performance obligations over time as the services are provided. The Company does not promise to provide any other significant goods or services to its clients. Transaction price is measured based on the consideration that the Company expects to receive from a contract with a client. The Company’s contracts with clients contain variable consideration as the price for an individual marketing result varies on a day-to-day basis depending on the market-driven amount a client has committed to pay. However the Company ensures the stated period of its contracts does not generally span multiple reporting periods, and therefore the contractual amount within a period is based on the number of marketing results delivered within the period. In those cases, the transaction price for any given period is fixed and no estimation of variable consideration is required. In the case of commission revenue, revenue recorded represents estimated variable consideration for commissions to be received from insurance distributors for performance obligations that have been satisfied (additional information below). If a marketing result delivered to a client does not meet the contractual requirements associated with that marketing result, the Company’s contracts allow for clients to return a marketing result generally within 5-10 days of having received the marketing result. Such returns are factored into the amount billed to the client on a monthly basis and consequently result in a reduction to revenue in the same month the marketing result is delivered. No warranties are offered to the Company’s clients. The Company does not allocate transaction price as the Company has only one performance obligation and its contracts do not generally span multiple periods. Taxes collected from clients and remitted to governmental authorities are not included in revenue. The Company elected to use the practical expedient which allows the Company to record sales commissions as expense as incurred when the amortization period would have been one year or less. The Company bills clients monthly in arrears for the marketing results delivered during the preceding month. The Company’s standard payment terms are 30-60 days. Consequently, the Company does not have significant financing components in its arrangements. Separately from the agreements the Company has with clients, the Company has agreements with Internet search companies, third-party publishers and strategic partners that we engage with to generate targeted marketing results for its clients. The Company receives a fee from its clients and separately pays a fee to the Internet search companies, third-party publishers and strategic partners. Other than certain of its managed services arrangements, the Company is the principal in the transaction. For the transactions where the Company is the principal, the fees paid by its clients are recognized as revenue and the fees paid to its Internet search companies, third-party publishers and strategic partners are included in cost of revenue. Customer acquisition The Company’s performance obligation for Customer acquisition contracts is to deliver an unspecified number of potential customers or leads (i.e., number of clicks, emails, calls and applications) to the customer in real-time, on a daily basis as the leads are generated, based on predefined qualifying characteristics specified by our customer. The contracts generally have a one-month term and the Company has an enforceable right to payment for all leads delivered to the customer. The Company’s customers simultaneously receive and consume the benefits provided, as the Company satisfies its performance obligations. The Company recognizes revenue as the performance obligations are satisfied over time. Beginning in 2023, the Company earns commission revenue related to marketing of Affordable Care Act insurance policies. Compensation in the form of commissions is received from an insurance distributor for the multiple types of insurance products sold by the Company on behalf of the insurance distributors. Commission revenue generally represents a percentage of the premium amount expected to be collected by the insurance distributor while the policyholder is enrolled in the insurance product, including renewal periods. The Company’s performance obligation is complete when an insurance distributor has received and approved an insurance application. As such, the Company recognizes revenue at this point in time, which represents the total estimated lifetime commissions it expects to receive for selling the product after the health plan approves an application, net of an estimated constraint. Commissions payments are received monthly, over the life of the active policies. The Company’s consideration is variable based on the amount of time it estimates a policy will remain in force. The Company estimates the amount of variable consideration that it expects to receive based on historical experience or insurance distributor experience to the extent available, industry data and expectations as to future retention rates. Additionally, the Company considers application of the constraint and only recognizes the amount of variable consideration that it believes is probable that it will be entitled to receive and will not be subject to a significant revenue reversal in the future. The Company monitors and updates this estimate at each reporting date. The Company does not have any remaining performance obligations in its commission contracts with customers. When there is a delay between the period in which revenue is recognized and when a customer invoice is issued based on timing of reconciliation of amounts due, revenue is recognized and the corresponding amounts are recorded as unbilled revenue within accounts receivable, net on the consolidated balance sheets. In line with industry practice, the Company applies the constraint on variable consideration and records revenue based on internally tracked conversions (for example, leads delivered, applications submitted), net of the amount tracked and subsequently confirmed by customers. A significant portion of the unbilled estimated revenue balance is finalized and invoiced to customers within sixty days following the period of service. Any remaining estimates are finalized and invoiced as billing totals are reconciled with the customer. Historical estimates related to unbilled revenue have not been materially different from actual revenue billed. Related to commissions from health insurance distributors and other forms of revenue which may be billed on a schedule other than that of the revenue recognition, when there is a delay that is the result of timing differences between our recognition of revenue and our contractual right to invoice, the corresponding amounts are recorded as contract assets on the consolidated balance sheets. These cases primarily relate to commission-related revenue as described above. Consistent with industry practice related to commission revenue, constraints are applied to the expected lifetime value “LTV” for revenue recognition purposes to help ensure that the total estimated lifetime commissions expected to be collected for an approved member’s plan are recognized as revenue only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with future commissions receivable from the partner is subsequently resolved. Significant judgment can be involved in determining the constraint. To determine the constraints to be applied to LTV, we have initially utilized industry studies, peer information, and other expertise. Going forward, we will continually monitor prior calculations of LTV to current period calculations, taking into account terminations, cancellations, and actual cash received, and review the reasons for any variations, and will then apply judgment in assessing whether the difference between historical cancellations/terminations and cash collections and LTV is representative of differences that can be expected in future periods. We also analyze whether circumstances have changed and consider any known or potential modifications to the inputs into LTV in light of the factors that can impact the amount of cash expected to be collected in future periods, including but not limited to commission rates, carrier mix, plan duration, cancellations of insurance plans offered by health insurance carriers with which we have a relationship, changes in laws and regulations, and changes in the economic environment. We evaluate the appropriateness of our constraints on an ongoing basis, at least quarterly, and update our assumptions when we observe a sufficient amount of evidence that would suggest that the long-term expectation underlying the assumptions has changed. For additional information, see the Accounts receivable, net and Contract assets, net section below. Managed services The Company’s performance obligation for Managed service contracts is to provide continuous service of managing the customer’s media spend for the purpose of generating leads through a third-party supplier of leads, as requested by our customer. Each month of service is distinct, and any variable consideration is allocated to a distinct month. Therefore, revenue is recognized as the performance obligation is satisfied each month and there is no estimation of revenue required at each reporting period for managed services contracts. The Company enters into agreements with internet search companies, third-party publishers and/or strategic partners to generate customer acquisition services for their Managed service customers. The Company receives a fee from its customers and separately pays a fee to the internet search companies, third-party publishers and/or strategic partners. The third-party supplier is primarily responsible for the performance and deliverable to the customer, and the Company solely arranges for the third-party supplier to provide services to the customer. Therefore, in certain cases, the Company acts as the agent and the net fees earned by the Company are recorded as revenue, with no associated costs of revenue attributable to the Company. Software services The Company’s performance obligation for Software services contracts is to provide the customer with continuous, daily access to the Company’s proprietary software. Service provided each month is distinct, and any variable consideration is allocated to a distinct month. Therefore, revenue is recognized as the performance obligations are satisfied each month and there is no estimation of revenue required at each reporting period for Software services contracts. The Company derives revenue primarily through the delivery of various types of services, including: customer acquisition, managed services and software as a service (“SaaS”). The Company recognizes revenue when the promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. The Company has elected the practical expedient to not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which revenue is recognized in the amount to which the Company has the right to invoice for services performed. The Company has organized its operations into three reportable segments: Brand Direct, Marketplace and Technology Solutions. The Brand Direct reportable segment consists of services delivered against our customer’s brand, while the Marketplace reportable segment includes services delivered directly against the DMS brand. In the Technology Solutions reportable segment, services offered by the Company include software services and digital media services that are managed on behalf of the customer. Corporate and other represents other business activities and includes eliminating entries. Management uses these segments to evaluate the performance of its businesses and to assess its financial results and forecasts. |
Cost of revenue | Cost of revenue Cost of revenue primarily includes media and related costs, which consist of the cost to acquire traffic through the purchase of impressions, clicks or actions from publishers or third-party intermediaries, such as advertising exchanges, and technology costs that enable media acquisition. These media costs are used primarily to drive user traffic to the Company’s and its clients’ media properties. Cost of revenue additionally consists of indirect costs such as data verification, hosting and fulfillment costs. Cost of revenue is presented exclusive of Depreciation and amortization expenses, as well as Salaries and related costs. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, and accounts receivable. While the Company maintains its cash and cash equivalents and restricted cash with financial institutions with high credit ratings, it often maintains those deposits in federally insured financial institutions in excess of federally insured (FDIC) limits. Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. The Company performs credit evaluations of its customers’ financial condition and records reserves to provide for estimated credit losses. Accounts receivable and contract assets are due from both domestic and international customers. See Note 3. Revenue |
Cash and cash equivalents | Cash and cash equivalents |
Restricted cash | Restricted cash Restricted cash represents cash held in a bank account that is not available to the Company for immediate use. Interest earned on these deposits is immaterial, and is recorded as an offset of Interest expense, net in the consolidated statements of operations for the year ended December 31, 2023. |
Accounts receivable, net and Contract assets, net | Accounts receivable, net and Contract assets, net |
Property and equipment, net | Property and equipment, net Property and equipment are recorded at cost, net of accumulated Depreciation and amortization. Property and equipment consist of computer and office equipment, furniture and fixtures and leasehold improvements, which are depreciated on a straight-line basis over the estimated useful lives of the assets. Costs for websites and internal-use software are capitalized as property and equipment, net on the consolidated balance sheets during the application stages. Any initial research and development costs incurred during the preliminary project stage or costs incurred for data conversion activities, training, maintenance, general and administrative or overhead costs are expensed as incurred. Qualified costs incurred during the operating stage of our websites and software applications relating to upgrades and enhancements are capitalized to the extent it is probable that they will result in added functionality, while costs that cannot be separated between maintenance of, and minor upgrades and enhancements to, websites and internal‑use software are expensed as incurred. Capitalized software development costs are amortized on a straight line basis over the estimated useful life or 3 years, whichever is shorter. Website and s oftware development costs that do not qualify for capitalization are expensed as incurred - through salaries and related costs for employees time or through cost of goods sold for third-party maintenance efforts, which are recorded in Salaries and related costs or in General and administrative expenses, respectively, within the consolidated statements of operations. The capitalization and ongoing assessment of recoverability of development costs require considerable judgment by management with respect to certain external factors, including estimated economic life. Management regularly assesses the carrying value of its long-lived assets to be held and used, including property and equipment and intangible assets, for impairment when events or changes in circumstances indicate that their carrying value may not be recoverable. If such events or circumstances are present, a loss is recognized to the extent the carrying value of the asset is in excess of estimated fair value. |
Lease accounting | Lease accounting The Company classifies its lease arrangements at inception as either operating leases or finance leases. A lease is classified as a finance lease if at least one of the following criteria is met: (1) the lease transfers ownership of the underlying asset to the lessee, (2) the lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise, (3) the lease term is for a major part of the remaining economic life of the underlying asset, (4) the present value of the sum of the lease payments equals or exceeds substantially all of the fair value of the underlying asset, or (5) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. A lease is classified as an operating lease if none of the five criteria described above for finance lease classification is met. We determine if an arrangement is a lease at inception of the contract. Our right of use assets represents our right to use the underlying assets for the lease term and our lease liabilities represent our obligation to make lease payments arising from the leases. Right of use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company’s lease arrangements consist of real estate operating leases for office space which generally contain an initial term of five ASC 842, Lease Accounting . Our right-of-use assets associated with operating leases are included in Operating lease right-of-use assets, net on the Company’s consolidated balance sheets. Current and long-term portions of lease liabilities related to operating leases are included in Operating lease liabilities - current and Operating lease liabilities - non-current on the Company’s consolidated balance sheets. As of December 31, 2023, the Company has seven leased properties, representing 80,861 square feet of office space located in the United States, the Netherlands, and Poland. In assessing our real estate operating leases and determining the lease liability, we were not able to readily determine the discount rate implicit in the lease arrangements, and thus used the lease commencement date and determined the incremental borrowing rate range between 3.40% and 4.23% for the leases on a collateralized basis to calculate the present value of the lease payments. Our operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of the remaining lease payments at the discount rate. Certain adjustments to the right-of-use asset may be required for items such as incentives received, initial direct cost, and prepaid lease payments. The Company’s right-of-use assets are measured as the balance of the lease liability plus any prepaid or accrued lease payments and any unamortized initial direct costs less any lease incentives received. Additionally, certain amounts related to our lease arrangements that were previously reported as part of our lease abandonment reserve have been reflected as impairment reducing the Operating lease right-of-use assets, net on the Company’s consolidated balance sheets. The Company has no finance leases . Operating lease expenses are recognized on a ratable basis, regardless of whether the payment terms require the Company to make payments annually, quarterly, monthly, or for the entire term in advance. Certain of the Company’s lease agreements contain fixed escalation clauses (such as fixed dollar or fixed percentage increases) or inflation-based escalation clauses. If the payment terms include fixed escalator provisions, the effect of such increases is recognized on a straight-line basis. The Company calculates the straight-line expense over the contract’s estimated lease term, including any renewal option periods that the Company may deem reasonably certain to be exercised. The majority of the Company’s lease agreements have certain termination rights that provide for cancellation after a notice period and multiple renewal options at the Company’s option. The Company includes renewal option periods in its calculation of the estimated lease term when it determines that the options are reasonably certain to be exercised. When such renewal options are deemed to be reasonably certain, the estimated lease term determined under ASC 842, Lease Accounting will be greater than the non-cancelable term of the contractual arrangement. Although certain renewal periods are included in the estimated lease term, the Company would have the ability to terminate or elect to not renew a particular lease if business conditions warrant such a decision. For additional information, see Note 9. Leases . |
Goodwill and intangible assets | Goodwill and intangible assets We account for our business combinations using the acquisition accounting method, which requires us to determine the fair value of net assets acquired and the related goodwill and intangible assets. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and involves the use of significant estimates, including projections of future cash flows, discount rates, asset lives and market multiples. Interim Testing In 2023, the Company considered if an interim event occurred or circumstances changed that would more likely than not reduce the fair value of a reporting unit below its carrying amount. In the second quarter of 2023, the Company determined that the recent economic downturn and inflation, along with the Company’s revenue reduction and decreased stock market price were indicators of impairment for the Marketplace reporting unit under ASC 350-20, Goodwill , and ASC 360-10, Impairment and Disposal of Long-Lived Assets for certain asset groups during 2023. The Company determined the fair value of goodwill at the reporting unit level utilizing a combination of a discounted cash flow analysis incorporating variables such as revenue projections, projected operating cash flow margins, and discount rates, as well as a market-based approach employing comparable sales analysis. The valuation assumptions used in the discounted cash flow model reflect historical performance of the Company, the prevailing values in the Company’s industry, including the extent of the economic downturn related to the recent inflation and its economic contraction and its expected timing of recovery. The result of our analysis indicated that there was goodwill impairment of $33.8 million for the related to the Marketplace reporting unit, which was recorded as impairment of goodwill in the consolidated statements of operations for the quarter ended June 30, 2023. Further, the Company performed quarterly recoverability tests for certain asset groups to determine whether an impairment loss should be measured on intangible assets. The undiscounted cash flows in the recoverability tests were compared to each identified asset group’s carrying value. During the second quarter of 2023, the Company identified three asset groups with carrying value in excess of the current projected undiscounted cash flows for those asset groups, and therefore calculated the fair value of the finite-lived intangible assets. Intangible assets include technology, brand, and customer relationships. The fair value of technology was determined using the Relief from Royalty Approach; fair value of the customer relationships was determined using the Multi Period Excess Earnings Method; and fair value of the brand was determined using the Relief from Royalty Method. As a result of the fair value being lower than the carrying value for certain assets, the Company recorded impairment loss of $7.8 million in the second quarter of 2023, to intangible assets which were in asset groups included in the Marketplace reporting unit, which is included in the consolidated statements of operations as Impairment of intangible assets. Annual Testing Additionally, the Company reviews goodwill as of December 31 each year and whenever events or significant changes in circumstances indicate that the carrying value may not be recoverable. We evaluate the recoverability of goodwill at the reporting unit level. For the year ended December 31, 2023, the result of our annual impairment test indicated that there were goodwill impairment indicators for the Brand Direct segment, as the carrying value of that reporting unit exceeded the fair value. The fair value of each reporting unit for 2023 was estimated using a combination of the income approach, which incorporates the use of the discounted cash flow method, and the market approach, which incorporates the use of earnings and revenue multiples based on market data. The Company’s estimates of fair value are based upon projected cash flows, weighted average cost of capital and other inputs which are uncertain and involve significant judgments by management. The result of our analysis indicated that there was Goodwill impairment of $15.6 million for the year ended December 31, 2023 related to the Brand Direct reporting unit. Combined with the Marketplace related goodwill impairment booked during the second quarter of $33.8 million as described above, total goodwill impairment for the year ended December 31, 2023 was $49.4 million. We review intangible assets with finite lives subject to amortization whenever events or circumstances indicate that a carrying amount of an asset may not be recoverable. We evaluate the recoverability of intangible assets at the asset group level. Recoverability of these assets is determined by comparing the carrying value of these assets to the estimated undiscounted future cash flows expected to be generated by these asset groups. These asset groups are impaired when their carrying value exceeds their fair value. Impaired intangible assets with finite lives subject to amortization are written down to their fair value with a charge to expense in the period the impairment is identified. intangible assets with finite lives are amortized on a straight-line basis with estimated useful lives generally between three fifteen ASC 360-10, Impairment and Disposal of Long-Lived Assets for certain asset groups during 2023 and 2022. As a result, the Company calculated the fair value of those finite-lived intangible assets. Intangible assets primarily include technology, brand, and customer relationships. The Company determined the fair value of each asset group utilizing a discounted cash flow analysis incorporating variables such as revenue projections, projected operating cash flow margins, and discount rates. The valuation assumptions used in the discounted cash flow model reflect historical performance of the Company, the prevailing values in the Company’s industry, including the extent of the economic downturn related to increased inflation, the economic contraction in our industry and its expected timing of recovery. As a result of the fair value being lower than the carrying value for these asset groups, the Company recorded additional impairment of intangible assets of $1.5 million, $14.7 million, and $0.5 million to intangible assets which are in asset groups included in Brand Direct, Marketplace and Technology Solutions reporting units, respectively, for the year ended December 31, 2023. Determining fair value requires the use of estimates and assumptions. Such estimates and assumptions include revenue growth rates, operating profit margins, royalty rates, weighted average costs of capital, terminal growth rates, future market share, the impact of new product development, and future market conditions, among others. The Company recognizes a goodwill impairment charge for the amount by which the carrying value of goodwill exceeds the reporting unit’s fair value. |
Contingencies and Contingent consideration | Contingencies The Company is subject to legal, regulatory and other proceedings and claims that arise in the ordinary course of business. An estimated liability is recorded for those proceedings and claims when the loss from such proceedings and claims becomes probable and reasonably estimable. Outstanding claims are reviewed with internal and external counsel to assess the probability and the estimates of loss, including the possible range of an estimated loss. The risk of loss is reassessed each period and as new information becomes available, liabilities are adjusted as appropriate. The actual cost of resolving a claim may be substantially different from the amount of the liability recorded. Differences between the estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material adverse effect on the consolidated financial position but could possibly be material to the consolidated results of operations or cash flows for any one period. Contingent consideration The Company recognizes the fair value of any contingent consideration that is transferred to the seller in a business combination on the date at which control of the acquiree is obtained. Contingent consideration is classified as a liability or as equity on the basis of the definitions of an equity instrument and a financial liability. Since the Company’s contingent consideration can be paid in cash or DMS Class A Common Stock, at the election of the Company, the Company classifies its contingent consideration as a liability. Contingent consideration payments related to acquisitions are measured at fair value at each reporting period using Level 3 unobservable inputs. The Company’s estimates of fair value are based upon projected cash flows, estimated volatility and other inputs which are uncertain and involve significant judgments by management. Any changes in the fair value of these contingent consideration payments are included in income from operations in the consolidated statements of operations. |
Acquisitions | Acquisitions Under the acquisition method of accounting, the Company recognizes, separately from goodwill, the identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities are recorded as goodwill. The Company performs valuations of assets acquired and liabilities assumed and allocates the purchase price to its respective assets and liabilities. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates, and selection of comparable companies. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable. As a result, actual results may differ from these estimates. During the measurement period, the Company may record adjustments to acquired assets and assumed liabilities, with corresponding offsets to goodwill. Upon the conclusion of a measurement period, any subsequent adjustments are recorded to earnings. At the acquisition date, the Company measures the fair values of all assets acquired and liabilities assumed that arise from contractual contingencies. The Company also measures the fair values of all non-contractual contingencies if, as of the acquisitions date, it is more likely than not that the contingencies will give rise to assets or liabilities. Acquisition related costs not considered part of the considerations are expensed as incurred and recorded in Acquisition costs within the consolidated statements of operations. |
Fair value measurement | Fair value measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. In most cases, the exit price and transaction (or entry) price will be the same at initial recognition. In the Company’s case, the fair value of financial instruments approximates fair value. The fair value hierarchy uses a framework which requires categorizing assets and liabilities into one of three levels based on the inputs used in valuing the asset or liability. • Level 1 inputs are unadjusted, quoted market prices in active markets for identical assets or liabilities. • Level 2 inputs are observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. • Level 3 inputs include unobservable inputs that are supported by little, infrequent or no market activity and reflect management’s own assumptions about inputs used in pricing the asset or liability. |
Warrant liabilities | Warrant liabilities Private Placement Warrants The warrants purchased privately by the Sponsor simultaneously with the consummation of the Company’s initial public offering and issued in exchange for previously held warrants in Leo ( “ Private Placement Warrants” ) are not redeemable by the Company so long as they are held by the warrant holder or its permitted transferees. Sponsor, or its permitted transferees, has the option to exercise the Company Private Placement Warrants on a cashless basis. Except for the forgoing, the Company Private Placement Warrants have terms and provisions that are identical to the terms and provisions of the Company’s public warrants included as part of the units, each whole warrant exercisable for one Class A ordinary share at an exercise price of $172.50 (“Public Warrants”). If the Company Private Placement Warrants are held by holders other than Sponsor or its permitted transferees, the Company Private Placement Warrants will be redeemable by Company and exercisable by the holders on the same basis as the Company Public Warrants. See Note 11. Equity for description of the Public Warrants’ terms. Preferred Warrants The Company Preferred Warrants are not redeemable by the Company so long as they are held by Investor or its permitted transferees. Investor, or its permitted transferees, has the option to exercise the Company Preferred Warrants on a cashless basis. Because the Company’s Private Placement and Preferred Warrants contain provisions whereby the settlement amount varies depending upon the characteristics of the warrant holder, they meet the definition of a derivative under ASC 815, Derivatives and Hedging . The Private Placement and Preferred Warrants are recorded as liabilities on the consolidated balance sheets at fair value, with subsequent changes in their respective fair values recognized in the consolidated statements of operations at each reporting date. The Company estimates the Private Placement and Preferred Warrants fair value using a Black-Scholes-Merton option pricing model using a combination of the historical share price volatility of the Company’s and other similar companies’ share prices and the implied volatility of the Public Warrants, market price and exercise price and the remaining life of the Private Placement and Preferred Warrants. |
Advertising costs | Advertising costs |
Stock-based compensation | Stock-based compensation is measured using the grant-date fair value of the award of equity instruments, including stock options and restricted stock units (“RSUs”). The expense is recognized over the requisite service period and forfeitures are recognized as incurred. The fair value of options granted to employees is estimated on the grant date using the Black-Scholes-Merton option valuation model. This valuation model for Stock-based compensation expense requires the Company to make assumptions and judgments about the variables used in the calculation, including the expected term (weighted-average period of time that the options granted are expected to be outstanding), the expected volatility in the fair market value of the Company’s common stock, a risk-free interest rate and expected dividends. The Company uses the simplified calculation of expected life as the contractual term for options of 10 years is longer than the Company has been publicly traded. The Company does not have enough historical perspective to estimate the volatility of its publicly traded shares in regards to the valuation of its stock options awarded to employees. The Company’s common stock began trading on April 20, 2018; no cash dividends have been declared since that time, and we do not anticipate paying cash dividends in the foreseeable future. Expected volatility is based on an average of the historical volatilities of the common stock of several entities with characteristics similar to those of the Company. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. The Company uses the straight-line method for expense attribution. The Company may also grant RSUs to its employees and directors. RSUs have a service-based vesting condition, which must be satisfied in order for RSUs to vest. The service-based vesting condition for these awards is typically satisfied over three |
Restructuring Costs | Restructuring Costs Restructuring costs include expenses associated with the Company’s effort to continually improve operational efficiency and reposition its assets to remain competitive. Restructuring costs include termination of fixed assets, employees severances, termination of facility costs of the Company’s Voice and Crisp call centers and other costs associated with these restructuring costs. For the years ended December 31, 2023 and 2022, these costs were $6.3 million $2.3 million, respectively, which are included in General and administrative expenses within the consolidated statements of operations. |
Income taxes | Income taxes The Company accounts for income taxes using the asset and liability method. Under this method, DTAs and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In assessing the realizability of DTAs, management considers whether it is more-likely-than-not that the DTAs will be realized. A valuation allowance will be recorded to reduce DTAs to an amount that is anticipated to be realized on a more likely than not basis. DTAs and liabilities are calculated by applying existing tax laws and the rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on DTAs and liabilities is recognized in the year of the enacted rate change. The Company accounts for uncertainty in income taxes using a recognition and measurement threshold for tax positions taken or expected to be taken in a tax return, which are subject to examination by federal and state taxing authorities. The tax benefit from an uncertain tax position is recognized when it is more likely than not that the position will be sustained upon examination by taxing authorities based on technical merits of the position. The amount of the tax benefit recognized is the largest amount of the benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The effective tax rate and the tax basis of assets and liabilities reflect management’s estimates of the ultimate outcome of various tax uncertainties. The Company recognizes penalties and interest related to uncertain tax positions within the provision (benefit) for income taxes line in the accompanying consolidated statements of operations. DMSH, the Company’s accounting predecessor, is a limited liability company treated as a partnership for U.S. federal income tax purposes and is not subject to entity-level U.S. federal income tax, except with respect to UE, which was acquired in November 2019 and Traverse, which was acquired in May 2022. Additionally, ClickDealer which was acquired in March 2023 is subject to entity level taxes in the United Kingdom, Ukraine and Netherlands. Because UE Authority, Co (“UE”) and Traverse Data Inc (“Traverse”) are treated as corporations for U.S. federal income tax purposes, they are subject to entity-level U.S. federal income tax. As a result of the Business Combination, Blocker’s allocable share of earnings from DMSH is also subject to U.S. federal and state and local income taxes in its consolidated return with DMS Inc.. See Note 14. Income Taxes for further details . Tax Receivable Agreement In conjunction with the Business Combination, DMS Inc. and Blocker also entered into the Tax Receivable Agreement with the Sellers. Pursuant to the Tax Receivable Agreement, DMS Inc. is required to pay the Sellers (i) 85% of the amount of savings, if any, in U.S. federal, state and local income tax that DMS Inc. and Blocker actually realize as a result of (A) certain existing tax attributes of Blocker acquired in the Business Combination, and (B) increases in Blocker’s allocable share of the tax basis of the assets of DMS and certain other tax benefits related to the payment of the cash consideration pursuant to the Business Combination Agreement and any redemptions or exchanges of DMS Units for cash or Class A Common Stock after the Business Combination and (ii) 100% of certain refunds of pre-Closing taxes of DMSH and Blocker received during a taxable year beginning within two (2) years after the Closing. All such payments to the Sellers are the obligation of DMS Inc., and not that of DMSH. As a result of the Business Combination, the Company recorded DTAs and Income tax receivable of $20.1 million and $0.2 million, respectively, with the offset as a long-term Tax Receivable Agreement liability of $16.3 million and Additional paid-in capital of $4.0 million in the consolidated balance sheets (see Note 12. Related Party Transactions and Note 14. Income Taxes ). Valuation allowances for Deferred tax assets We establish an income tax valuation allowance when available evidence indicates that it is more likely than not that all or a portion of a deferred tax asset (“DTA”) will not be realized. In assessing the need for a valuation allowance, we consider the amounts and timing of expected future deductions or carryforwards and sources of taxable income that may enable utilization. We maintain an existing valuation allowance until enough positive evidence exists to support its reversal. Changes in the amount or timing of expected future deductions or taxable income may have a material impact on the level of income tax valuation allowances. Our assessment of the realizability of the DTA requires judgment about its future results. Inherent in this estimation is the requirement for us to estimate future book and taxable income and possible tax planning strategies. These estimates require us to exercise judgment about our future results, the prudence and feasibility of possible tax planning strategies, and the economic environment in which the Company does business. It is possible that the actual results will differ from the assumptions and require adjustments to the allowance. Adjustments to the allowance would affect future net income (see Note 14. Income Taxes ). |
Earnings per share | Earnings per share Basic earnings per share of Class A Common Stock is computed by dividing net income attributable to DMS Inc. plus accretion and dividends on preferred stock by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted earnings per share of Class A Common Stock is computed by dividing net income attributable to DMS Inc., adjusted for the assumed exchange of all potentially dilutive securities, including the Private Placement Warrants’ fair value adjustments recognized in earnings, by the weighted-average number of shares of Class A Common Stock outstanding adjusted to give effect to potentially dilutive securities, to the extent their inclusion is dilutive to earnings per share. |
New Accounting Standards | New Accounting Standards Accounting Standards Recently Adopted In June 2016, the FASB issued authoritative guidance on accounting for credit losses on financial instruments in accordance with ASC 326, Financial Instruments - Credit Losses , including trade receivables, and has since issued subsequent updates to the initial guidance. The amended guidance requires the application of a Current Expected Credit Loss (“CECL”) model, which measures credit losses based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts. The Company adopted this guidance in first quarter of 2023, effective January 1, 2023. The adoption did not have a material impact on the Consolidated Financial Statements. Accounting Standards Not Yet Adopted In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280) Improvements To Reportable Segment Disclosures , which requires additional disclosures about a public entity’s reportable segments and addresses requests from investors and other allocators of capital for additional, more detailed information about a reportable segment’s expenses. The Company will adopt this ASU for the annual period beginning on January 1, 2024 and for interim periods beginning on January 1, 2025, and is still evaluating its impact on the Consolidated Financial Statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) Improvements To Income Tax Disclosures , which requires additional disclosures of income tax components that affect the rate reconciliation and income taxes paid, broken out by the applicable taxing jurisdictions. The Company expects to adopt this ASU for the annual period beginning on January 1, 2025, and does not expect a material impact on the Consolidated Financial Statements. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Disaggregation of Revenue The following tables presents the disaggregation of revenue by reportable segment and type of service (in thousands): Year Ended December 31, 2023 Brand Direct Marketplace Technology Solutions Intercompany Eliminations Total Net revenue: Customer acquisition $ 200,551 $ 149,782 $ — $ (27,632) $ 322,701 Managed services 3,905 — 2,294 — 6,199 Software services — — 6,049 — 6,049 Total Net revenue $ 204,456 $ 149,782 $ 8,343 $ (27,632) $ 334,949 Year Ended December 31, 2022 Brand Marketplace Technology Solutions Intercompany Eliminations Total Net revenue: Customer acquisition $ 198,873 $ 216,385 $ — $ (39,284) $ 375,974 Managed services 5,367 — 4,814 — 10,181 Software services — — 4,993 — 4,993 Total Net revenue $ 204,240 $ 216,385 $ 9,807 $ (39,284) $ 391,148 |
Revenue by Region | The Company generated revenue outside the United States through its 2023 ClickDealer acquisition. The following table represents these revenues by region (in thousands): Year Ended December 31, 2023 Europe $ 17,376 Other International 10,109 |
Schedule of Allowance for Credit Loss | The activity in the Allowance for credit losses related to accounts receivable is as follows (in thousands): Balance, January 1, 2022 $ 4,930 Additions charged to expense 1,761 Deductions/write-offs (2,035) Balance, December 31, 2022 4,656 Additions charged to expense 2,050 Deductions/write-offs (2,240) ASU 2016-13 (Topic 326) adjustment (294) Balance, December 31, 2023 $ 4,172 |
Schedule of Contract Asset | Contract assets as of December 31, 2023 are as follows (in thousands): Contract assets - current, net $ 6,467 Contract assets - non-current, net 1,632 Total Contract assets $ 8,099 |
Contract with Customer, Asset, Allowance for Credit Loss | The activity in the contract assets is as follows (in thousands): Balance, January 1, 2023 $ — Additions recorded as revenue 10,622 Collections (186) Changes to Allowance for Credit Losses (2,337) Balance, December 31, 2023 $ 8,099 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Reconciliation of Operations of Segments | The following tables are a reconciliation of the operations of our segments to loss from operations (in thousands): Years Ended December 31, 2023 2022 Net revenue $ 334,949 $ 391,148 Brand Direct 204,456 204,240 Marketplace 149,782 216,385 Technology Solutions 8,343 9,807 Intercompany eliminations (27,632) (39,284) Cost of revenue (exclusive of depreciation and amortization) 252,050 287,820 Brand Direct 164,577 161,445 Marketplace 113,240 164,226 Technology Solutions 1,865 1,433 Intercompany eliminations (27,632) (39,284) Gross profit (exclusive of depreciation and amortization) 82,899 103,328 Brand Direct 39,879 42,795 Marketplace 36,542 52,159 Technology Solutions 6,478 8,374 Salaries and related costs 43,583 49,872 General and administrative expenses 46,578 41,878 Depreciation and amortization 19,460 28,242 Impairment of goodwill 49,390 — Impairment of intangible assets 16,744 21,570 Acquisition costs 3,020 1,650 Change in fair value of contingent consideration liabilities (1,833) 2,583 Loss from operations $ (94,043) $ (42,467) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | The following table presents major classifications of property and equipment and the related useful lives (in thousands, except useful lives): Years Ended December 31, Useful Lives 2023 2022 Computers and office equipment 3 years $ 2,443 $ 2,207 Furniture and fixtures 5 years 322 321 Leasehold improvements 7 years 337 337 Software development costs 3 years 41,074 34,971 Total 44,176 37,836 Less: Accumulated depreciation and amortization (28,786) (20,134) Property and equipment, net $ 15,390 $ 17,702 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying value of Goodwill, by reporting segment, were as follows (in thousands): Brand Direct Marketplace Technology Solutions Total Balance, January 1, 2022 $ 18,376 $ 54,554 $ 3,628 $ 76,558 Additions (Note 7) — — 735 735 Miscellaneous changes (55) — — (55) Balance, December 31, 2022 18,321 54,554 4,363 77,238 Additions (Note 7) 2,308 2,693 — 5,001 Impairment of goodwill (15,595) (33,795) — (49,390) Balance, December 31, 2023 $ 5,034 $ 23,452 $ 4,363 $ 32,849 |
Schedule of Finite-Lived Intangible Assets | Finite-lived Intangible assets, net consisted of the following (in thousands, except amortization periods): December 31, 2023 Amortization Gross Impairment Accumulated Net Technology 4 to 7 $ 59,095 $ (7,210) $ (43,752) $ 8,133 Customer relationships 4 to 15 71,323 (27,125) (26,510) 17,688 Brand 1 to 7 14,880 (3,979) (7,283) 3,618 Non-competition agreements 1 to 3 1,898 — (1,896) 2 Total $ 147,196 $ (38,314) $ (79,441) $ 29,441 December 31, 2022 Amortization Gross Impairment Accumulated Net Technology 4 to 7 $ 54,316 $ (5,933) $ (39,411) $ 8,972 Customer relationships 4 to 15 49,423 (12,387) (21,205) 15,831 Brand 1 to 7 12,169 (3,250) (6,233) 2,686 Non-competition agreements 1 to 3 1,898 — (1,868) 30 Total $ 117,806 $ (21,570) $ (68,717) $ 27,519 |
Schedule of Finite-Lived Intangible Assets Amortization Expense | Amortization expense relating to intangible assets subject to amortization for each of the next five years and thereafter is estimated to be as follows (in thousands): 2024 2025 2026 2027 2028 Thereafter Amortization expense $ 5,474 $ 4,040 $ 3,642 $ 3,027 $ 2,535 $ 10,723 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Changes in Fair Value of Assets Acquired and Liabilities Assumed as Part of Business Combination | The impact of these adjustments on the acquisition date fair values are as follows (in thousands): ClickDealer Acquisition Date Fair Value Fair Value Mark-to-Market Changes Revised Acquisition Date Fair Value Goodwill $ 6,207 $ (1,206) $ 5,001 Intangible Assets: Technology $ 5,010 $ (230) $ 4,780 Customer relationships $ 20,400 $ 1,500 $ 21,900 Brand $ 2,840 $ (130) $ 2,710 Contingent consideration liability (1) $ 2,457 $ (65) $ 2,392 Working capital accounts $ 3,320 $ 245 $ 3,565 ________________ (1) See Note 10. Fair Value Measurements for assumptions used in the valuation of Contingent consideration liability. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The acquisition date fair value of assets acquired and liabilities assumed from the Traverse and ClickDealer acquisitions consist of the following (in thousands , except expected useful lives ): Expected Useful Life (Years) Traverse ClickDealer 2022 2023 Cash $ 232 $ — Goodwill 735 5,001 Technology 4 to 7 2,470 4,780 Customer relationships 4 to 12 50 21,900 Accounts receivable 276 6,959 Brand 1 to 7 60 2,710 Accounts payable (232) (3,561) Other assets acquired and liabilities assumed, net (1) 7 167 Net assets and liabilities acquired $ 3,598 $ 37,956 ____________________ (1) Other assets acquired and liabilities assumed, net includes prepaid expenses and other current assets, partially offset by other current liabilities (e.g., Travel and expense payables, payroll liabilities, tax liabilities, and transition services payable). |
Schedule of Business Acquisitions, by Acquisition | The following schedules represent the amount of net revenue and net loss from operations related to Traverse and ClickDealer acquisitions which have been included in the consolidated statements of operations for the periods indicated subsequent to the acquisition date in the period of acquisition (in thousands): Year Ended December 31, 2023 ClickDealer Net revenue $ 57,959 Net income from operations $ 733 Year Ended December 31, 2022 Traverse Net revenue $ 1,846 Net income from operations $ 489 |
Schedule of Pro Forma Information | The following unaudited pro forma financial information represents the consolidated financial information as if the acquisitions had been included in our consolidated results beginning on the first day of the fiscal year prior to their respective acquisition dates. There is no pro forma financial information for three months ended December 31, 2023 as the results remain consistent. Pro forma financial information is presented in the table below (in thousands): Year Ended December 31, 2023 (unaudited) DMS ClickDealer Pro Forma Net revenue $ 334,949 $ 19,865 $ 354,814 Net income (loss) from operations $ (94,043) $ 1,704 $ (92,339) Year Ended December 31, 2022 (unaudited) DMS Traverse ClickDealer Pro Forma Net revenue $ 391,148 $ 999 $ 79,702 $ 471,849 Net income (loss) from operations $ (42,467) $ (417) $ 8,339 $ (34,545) |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table presents the components of outstanding debt (in thousands): December 31, 2023 December 31, 2022 Term loan $ 242,927 $ 221,625 Revolving credit facility 55,091 40,000 Total debt 298,018 261,625 Less: Unamortized debt issuance costs (1) (8,915) (4,802) Debt, net 289,103 256,823 Less: Current portion of long-term debt (2,750) (2,250) Long-term debt $ 286,353 $ 254,573 ____________________ (1) Includes net debt issuance discount, amendment’s administrative fees and other costs. |
Schedule of Maturities of Long-term Debt | The scheduled maturities of our total debt are estimated as follows at December 31, 2023 (in thousands): 2024 $ 2,750 2025 26,233 2026 269,035 Total debt $ 298,018 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Operating Lease Maturity | The following table summarizes the maturities of undiscounted cash flows of operating lease liabilities reconciled to total lease liability as of December 31, 2023 (in thousands): Lease Amounts 2024 1,926 2025 465 Total 2,391 Less: Imputed interest (47) Present value of operating lease liabilities $ 2,344 |
Schedule of Operating Leases Cost | The following table represents the Company’s aggregate lease costs, by lease classification (in thousands): Years Ended December 31, Category Statement of Operations Location 2023 2022 Operating lease costs General and administrative expenses $ 1,047 $ 1,228 Short-term lease costs General and administrative expenses 350 263 Sub-lease income General and administrative expenses (458) (586) Total lease costs, net $ 939 $ 905 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Measurement Inputs and Valuation Techniques | The significant assumptions were as follows: December 31, 2023 Preferred Warrants Fair Value Per Share $ 0.06 Preferred Warrant valuation inputs: Stock price - DMS Inc. Class A Common Stock $ 0.13 Remaining contractual term in years 4.25 Estimated volatility 150.0 % Dividend yield 0.0 % Risk free interest rate 3.87 % The following table presents the contingent consideration assumptions as of December 31, 2023: ClickDealer Revenue Volatility 50 % Iteration (actual) 100,000 Risk Adjustment Discount Rate 23.75 % Risk free / Credit risk 12.50 % Days from period end to payment 90 |
Schedule of Fair Value Measurements, Recurring and Nonrecurring | The following table presents assets and liabilities measured at fair value on a recurrent basis (in thousands): December 31, 2023 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Liabilities: Private placement warrants - Class B common stock Warrant liabilities $ — $ — $ 24 $ 24 Preferred warrants - Series A & B preferred stock Warrant liabilities — — 58 58 Contingent consideration - Aramis Contingent consideration payable - current — — 1,000 1,000 Contingent consideration - ClickDealer Contingent consideration payable - non-current — — 512 512 Total $ — $ — $ 1,594 $ 1,594 December 31, 2022 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Liabilities: Private placement warrants - Class B common stock Warrant liabilities $ — $ — $ 600 $ 600 Contingent consideration - Aramis Contingent consideration payable - current — — 1,000 1,000 Contingent consideration - Traverse Contingent consideration payable - current — — 453 453 Total $ — $ — $ 2,053 $ 2,053 |
Schedule of Change in the Warrant Liability and Contingent Consideration | The following table represents the change in the warrant liability and contingent consideration (in thousands): Private Placement Warrants Preferred Warrants Contingent Consideration Balance, January 1, 2022 $ 3,960 $ — $ 8,439 Additions — — 431 Changes in fair value (3,360) — 2,583 Settlements — — (10,000) Balance, December 31, 2022 600 — 1,453 Additions — 8,667 2,457 Changes in fair value (576) (8,609) (1,833) Settlements — — (500) Other (1) — — (65) Balance, December 31, 2023 $ 24 $ 58 $ 1,512 ____________________ (1) Relates to the revision of the initial fair value of the ClickDealer contingent consideration. See Note 7. Acquisitions . |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of Stockholders Equity | The following table sets forth the Company’s common stock by class at December 31, 2023: December 31, 2023 December 31, 2022 Class Total Shares Ownership % Total Shares Ownership % Class A Common Stock 4,286,712 96.6% 2,694,648 61.1% Class B Common Stock 151,191 3.4% 1,713,298 38.9% Total Common Stock 4,437,903 100% 4,407,946 100% The following table summarizes the ownership interest in DMSH as of December 31, 2023 and 2022: December 31, 2023 December 31, 2022 Interests Ownership % Interests Ownership % Number of Interests held by DMS, Inc. 4,286,712 96.6% 2,694,648 61.1% Number of Interests held by non-controlling interests holders 151,191 3.4% 1,713,298 38.9% Total Interests Outstanding 4,437,903 100.0% 4,407,946 100.0% The following table summarizes the effects of changes in ownership in DMS, Inc. on our equity during the years ended December 31, 2023 and 2022 (in thousands): Years Ended December 31, 2023 2022 Net loss attributable to Digital Media Solutions, Inc. $ (81,681) $ (31,952) Transfers to (from) non-controlling interests due to: Redemption - Prism (68,836) — Stock-based compensation - Vested & Exercised (1,645) (1,156) Shares issued in connection with the Crisp Earnout (Note 7) — (4,757) Redemption - SmarterChaos — (245) Treasury stock purchased under the 2020 Omnibus Incentive Plan 326 219 Net transfers from non-controlling interests (70,155) (5,939) Change from net income attributable to DMS Inc. shareholders and transfers from non-controlling interests $ (151,836) $ (37,891) |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Schedule Of Shares Issued and Outstanding | The Series B Preferred Stock and corresponding Preferred Warrants were issued to the following related parties: Series B Preferred Shares Series B Preferred Warrants Name Number of Shares % of Shares in Series Number of Warrants % of Warrants in Series Lion Capital (Guernsey) BridgeCo Limited 28,671 47.7% 2,958,098 47.7% Leo Investors Limited Partnership 11,329 18.9% 1,168,886 18.9% Fernando Borghese 10,000 16.7% 1,031,746 16.7% Joseph Marinucci 7,500 12.5% 773,809 12.5% Matthew Goodman 2,500 4.2% 257,937 4.2% Total outstanding shares as of April 26, 2023 60,000 100.0% 6,190,476 100.0% |
Employee and Director Incenti_2
Employee and Director Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Nonvested Restricted Stock Shares Activity | The following table presents the restricted stock units activity for the year December 31, 2023 and 2022 (in thousands, except price per share): Number of Restricted Stock Weighted-Average Grant Date Fair Value Outstanding at January 1, 2022 96 $ 119.70 Granted 76 40.65 Vested 48 115.50 Forfeited/Canceled 24 81.75 Outstanding at December 31, 2022 100 $ 70.95 Granted — $ — Vested 31 94.31 Forfeited/Canceled 30 46.18 Outstanding at December 31, 2023 39 $ 79.05 Vested as of December 31, 2023 119 $ 107.86 |
Share-Based Payment Arrangement, Option, Activity | The following table presents the stock option activity for the year December 31, 2023 and 2022 (in thousands, except price per share): Number of Stock Options Weighted-Average Grant Date Fair Value Weighted-Average Remaining Contractual Term (in Years) Total Intrinsic Value of Restricted Stock Options Exercisable Outstanding at January 1, 2022 139 $ 58.80 6.1 years $ — Granted — — — — Exercised — — — — Forfeited/expired 16 58.20 — — Outstanding at December 31, 2022 123 $ 50.25 6.8 years $ — Granted — $ — — $ — Exercised — — — — Forfeited/expired 25 59.05 — — Outstanding at December 31, 2023 98 $ 59.10 7.0 years $ — Exercisable at December 31, 2023 53 $ 58.77 7.0 years $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The benefit for income taxes consists of the following (in thousands): Years Ended December 31, 2023 2022 Current: Federal $ 195 $ 73 State (187) (70) Total Current 8 3 Deferred: Federal (928) (3,466) State 130 (642) Total Deferred (798) (4,108) Income tax benefit $ (790) $ (4,105) |
Schedule of Effective Income Tax Rate Reconciliation | The benefit for income taxes shown above varies from the statutory federal income tax rate for those periods as follows (in thousands): Years Ended December 31, 2023 2022 Tax benefit from federal statutory rate $ (25,931) $ (11,888) Tax on income not subject to entity level federal income tax 6,584 4,085 State income taxes, net of federal tax effect (4,304) (1,639) Change in fair value of warrant liabilities (1,929) (705) Other permanent adjustments 950 26 Permanent adjustments - goodwill impairment 4,087 — Permanent adjustments - Tax Receivable Agreement — (176) Equity Conversion (15,443) — True-ups and other (3,094) (2,343) Uncertain tax position reserve 8,304 — Research and development credit — (250) Undistributed earnings 749 171 Foreign rate differential (562) — Valuation allowance 30,113 8,857 Tax credits (314) (243) Tax benefit $ (790) $ (4,105) |
Schedule of Income before Income Tax, Domestic and Foreign | For years ended December 31, 2023 and 2022, the components of Net loss before income taxes are comprised of the following (in thousands): Years Ended December 31, 2023 2022 Domestic $ (111,785) $ (56,605) Foreign (11,698) — Total Net loss before taxes $ (123,483) $ (56,605) |
Schedule of Deferred tax assets and Liabilities | Deferred tax assets and liabilities are composed of the following (in thousands): Years Ended December 31, 2023 2022 Deferred tax assets: Investment in DMS Holdings LLC $ 58,622 $ 34,137 Reserve accruals 65 156 Charitable contributions 23 18 Interest carryforward 10,681 5,131 Tax credit carryforwards 823 1,013 Property and equipment — (7) Intangibles 1,709 — Operating lease liabilities 190 343 Net operating loss 1,851 2,863 Total gross deferred tax assets 73,964 43,654 Less: Valuation allowance (71,942) (41,829) Total deferred tax assets, net 2,022 1,825 Deferred tax liabilities: Intangibles — (1,295) Property and equipment (1) — Operating lease right-of-use assets (62) (119) Undistributed earnings (2,273) (1,523) Total deferred tax liabilities (2,336) (2,937) Net deferred tax liabilities $ (314) $ (1,112) |
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands): Years Ended December 31, 2023 2022 Balance, beginning of year $ — $ — Additions for tax positions of the current years 33,589 — Additions for tax positions of the prior years — — Reductions for tax positions of prior years — — Expiration of applicable statutes of limitations — — Balance, end of year $ 33,589 $ — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted loss per share of Class A common stock (in thousands, except share data): Years Ended December 31, 2023 2022 Numerator: Net loss $ (122,693) $ (52,500) Net loss attributable to non-controlling interest (41,012) (20,548) Accretion and dividend Series A and B convertible redeemable preferred stock (11,653) — Net loss attributable to Digital Media Solutions, Inc. - Class A common stock - basic $ (93,334) $ (31,952) Denominator: Weighted-average Class A common shares outstanding – basic 2,920 2,581 Add: dilutive effects of equity awards under the 2020 Omnibus Incentive Plan — 2 Weighted-average Class A common shares outstanding – diluted 2,920 2,583 Net loss per common share: Basic – per Class A common shares $ (31.96) $ (12.38) Diluted – per Class A common shares $ (31.96) $ (12.37) |
Business, Basis of Presentati_3
Business, Basis of Presentation and Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 12 Months Ended | |||||||
Aug. 28, 2023 | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) ft² property | Dec. 31, 2023 USD ($) ft² property | Dec. 31, 2023 USD ($) ft² property | Dec. 31, 2023 USD ($) ft² property segment | Dec. 31, 2023 USD ($) ft² property segement | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||||
Number of reportable segments | 3 | 3 | |||||||
Equity conversion ratio | 0.0667 | ||||||||
Allowance for credit loss | $ 4,172,000 | $ 4,172,000 | $ 4,172,000 | $ 4,172,000 | $ 4,172,000 | $ 4,656,000 | $ 4,930,000 | ||
Accounts receivable | $ 2,300,000 | $ 2,300,000 | 2,300,000 | $ 2,300,000 | $ 2,300,000 | 0 | |||
Bad debt expense | $ 4,100,000 | 1,800,000 | |||||||
Number of properties under lease properties agreement | property | 7 | 7 | 7 | 7 | 7 | ||||
Properties under lease properties agreement, rental area | ft² | 80,861,000 | 80,861,000 | 80,861,000 | 80,861,000 | 80,861,000 | ||||
Impairment of goodwill | $ 49,390,000 | 0 | |||||||
Impairment of intangible assets | $ 7,800,000 | 16,700,000 | |||||||
Accumulated impairments | $ 33,800,000 | $ 33,800,000 | 33,800,000 | $ 33,800,000 | $ 33,800,000 | 0 | |||
Impairment of intangible assets | 16,744,000 | 21,570,000 | |||||||
Advertising expense | 9,200,000 | 10,600,000 | |||||||
Contract period | 10 years | ||||||||
Restructuring costs | $ 6,300,000 | 2,300,000 | |||||||
Refund of preclosing taxes to be paid to Sellers | 100% | 100% | 100% | 100% | 100% | ||||
Refund of preclosing taxes to be paid to Sellers, period after closing | 2 years | ||||||||
Current tax receivable agreement | $ 164,000 | $ 164,000 | $ 164,000 | $ 164,000 | $ 164,000 | 164,000 | |||
Additional paid-in capital | (80,523,000) | (80,523,000) | (80,523,000) | (80,523,000) | (80,523,000) | (14,054,000) | |||
Blocker Corp | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||||
Deferred tax asset | 20,100,000 | 20,100,000 | 20,100,000 | 20,100,000 | 20,100,000 | ||||
Income taxes receivable | 200,000 | 200,000 | 200,000 | 200,000 | 200,000 | ||||
Current tax receivable agreement | 16,300,000 | 16,300,000 | 16,300,000 | 16,300,000 | 16,300,000 | ||||
Additional paid-in capital | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | ||||
Brand Direct | Operating Segments | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||||
Impairment of goodwill | 15,595,000 | ||||||||
Accumulated impairments | $ 15,600,000 | $ 15,600,000 | 15,600,000 | $ 15,600,000 | $ 15,600,000 | 0 | |||
Impairment of intangible assets | 1,500,000 | 900,000 | |||||||
Marketplace | Operating Segments | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||||
Impairment of goodwill | $ 33,800,000 | 33,795,000 | |||||||
Impairment of intangible assets | 6,900,000 | ||||||||
Impairment of intangible assets | $ 14,700,000 | $ 20,700,000 | |||||||
Minimum | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||||
Term of lease | 5 years | 5 years | 5 years | 5 years | 5 years | ||||
Borrowing interest rate | 3.40% | ||||||||
Amortization period | 3 years | 3 years | 3 years | 3 years | 3 years | ||||
Minimum | Restricted Stock Units (RSUs) | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||||
Continuous service period | 3 years | ||||||||
Maximum | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||||
Term of lease | 7 years | 7 years | 7 years | 7 years | 7 years | ||||
Borrowing interest rate | 4.23% | ||||||||
Amortization period | 15 years | 15 years | 15 years | 15 years | 15 years | ||||
Maximum | Restricted Stock Units (RSUs) | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||||
Continuous service period | 4 years | ||||||||
DMSH | Sellers | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 3.40% | 3.40% | 3.40% | 3.40% | 3.40% | ||||
DMSH | DMSH | |||||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||||
Equity method investment, ownership percentage | 96.60% | 96.60% | 96.60% | 96.60% | 96.60% | 61.10% |
Business Combination (Details)
Business Combination (Details) $ in Thousands | 12 Months Ended | ||||
Mar. 29, 2023 shares | Oct. 22, 2020 shares | Jul. 15, 2020 USD ($) shares | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Business Acquisition [Line Items] | |||||
Payments to acquire business | $ | $ 33,564 | $ 2,502 | |||
Repayments of debt | $ | $ 2,250 | $ 2,250 | |||
Refund of preclosing taxes to be paid to Sellers | 100% | ||||
Refund of preclosing taxes to be paid to Sellers, period after closing | 2 years | ||||
Blocker Corp | |||||
Business Acquisition [Line Items] | |||||
Cash acquired from acquisition | $ | $ 30,000 | ||||
Unit redemption rights ratio | 1 | ||||
Leo | |||||
Business Acquisition [Line Items] | |||||
Warrants issued (in shares) | 2,000,000 | ||||
DMSH | Line of Credit | |||||
Business Acquisition [Line Items] | |||||
Repayments of debt | $ | $ 10,000 | ||||
Class A Common Stock | |||||
Business Acquisition [Line Items] | |||||
Shares issued (in shares) | 963,000 | ||||
Class A Common Stock | Leo | IPO | |||||
Business Acquisition [Line Items] | |||||
Warrants issued (in shares) | 10,000,000 | ||||
PIPE Investors | Class A Common Stock | |||||
Business Acquisition [Line Items] | |||||
Common stock, subscribed (in shares) | 10,424,282 | ||||
Sale of stock consideration received | $ | $ 100,000 | ||||
Blocker Corp | |||||
Business Acquisition [Line Items] | |||||
Payments to acquire business | $ | $ 57,300 | ||||
Other ownership interests, units outstanding (in shares) | 32,293,793 | ||||
Blocker Corp | Class A Common Stock | |||||
Business Acquisition [Line Items] | |||||
Shares issued (in shares) | 98,783 | ||||
Warrants issued (in shares) | 2,000,000 | ||||
Blocker Corp | Class B Common Stock | |||||
Business Acquisition [Line Items] | |||||
Shares issued (in shares) | 25,857,070 | ||||
Blocker Corp | Class C common stock | |||||
Business Acquisition [Line Items] | |||||
Shares issued (in shares) | 17,937,954 | ||||
Prism and Clairvest Direct Seller | DMSH | |||||
Business Acquisition [Line Items] | |||||
Economic ownership in company | 44% | ||||
Prism and Clairvest Direct Seller | DMS | |||||
Business Acquisition [Line Items] | |||||
Voting ownership in the company | 44% | ||||
Prism and Clairvest Direct Seller | Class B Common Stock | |||||
Business Acquisition [Line Items] | |||||
Other ownership interests, units outstanding (in shares) | 25,857,070 | ||||
Prism and Clairvest Direct Seller | Class B Common Stock | DMSH | |||||
Business Acquisition [Line Items] | |||||
Shares issued (in shares) | 142,394 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2023 USD ($) segment | Dec. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) segement | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Disaggregation of Revenue [Line Items] | |||||
Number of reportable segments | 3 | 3 | |||
Bad debt expense | $ 4.1 | $ 1.8 | |||
Contract with customer, liability | $ 1 | $ 1 | $ 1 | $ 1 | $ 1 |
Customer1 | Revenue from Contract with Customer, Product and Service Benchmark | Customer Concentration Risk | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk (as percent) | 14.10% | 23.20% |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 334,949 | $ 391,148 |
Intercompany Eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | (27,632) | (39,284) |
Brand Direct | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 204,456 | 204,240 |
Marketplace | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 149,782 | 216,385 |
Technology Solutions | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 8,343 | 9,807 |
Customer acquisition | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 322,701 | 375,974 |
Customer acquisition | Intercompany Eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | (27,632) | (39,284) |
Customer acquisition | Brand Direct | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 200,551 | 198,873 |
Customer acquisition | Marketplace | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 149,782 | 216,385 |
Customer acquisition | Technology Solutions | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 0 | 0 |
Managed services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 6,199 | 10,181 |
Managed services | Intercompany Eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 0 | 0 |
Managed services | Brand Direct | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 3,905 | 5,367 |
Managed services | Marketplace | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 0 | 0 |
Managed services | Technology Solutions | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 2,294 | 4,814 |
Software services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 6,049 | 4,993 |
Software services | Intercompany Eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 0 | 0 |
Software services | Brand Direct | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 0 | 0 |
Software services | Marketplace | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 0 | 0 |
Software services | Technology Solutions | Operating Segments | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 6,049 | $ 4,993 |
Revenue - Revenues by Region (D
Revenue - Revenues by Region (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 334,949 | $ 391,148 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 17,376 | |
Other International | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 10,109 |
Revenue - Allowance for Credit
Revenue - Allowance for Credit Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for credit loss, beginning balance | $ 4,656 | $ 4,930 |
Additions charged to expense | 2,050 | 1,761 |
Deductions/write-offs | (2,240) | (2,035) |
ASU 2016-13 (Topic 326) adjustment | (294) | |
Allowance for credit loss, ending balance | $ 4,172 | $ 4,656 |
Revenue - Contract Assets (Deta
Revenue - Contract Assets (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets - current, net | $ 6,467,000 | $ 0 |
Contract assets - non-current, net | 1,632,000 | 0 |
Total Contract assets | $ 8,099,000 | $ 0 |
Revenue - Rollforward of the Co
Revenue - Rollforward of the Contract Assets (Details) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Contract Asset Balance [Roll Forward] | |
Beginning balance | $ 0 |
Additions recorded as revenue | 10,622,000 |
Collections | (186,000) |
Changes to Allowance for Credit Losses | (2,337,000) |
Ending balance | $ 8,099,000 |
Reportable Segments (Details)
Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | |||
Net revenue | $ 334,949 | $ 391,148 | |
Cost of revenue (exclusive of depreciation and amortization) | 252,050 | 287,820 | |
Gross profit (exclusive of depreciation and amortization) | 82,899 | 103,328 | |
Salaries and related costs | 43,583 | 49,872 | |
General and administrative expenses | 46,578 | 41,878 | |
Depreciation and amortization | 19,460 | 28,242 | |
Impairment of goodwill | 49,390 | 0 | |
Impairment of intangible assets | 16,744 | 21,570 | |
Acquisition costs | 3,020 | 1,650 | |
Change in fair value of contingent consideration liabilities | (1,833) | 2,583 | |
Loss from operations | (94,043) | (42,467) | |
Intercompany eliminations | |||
Segment Reporting Information [Line Items] | |||
Net revenue | (27,632) | (39,284) | |
Cost of revenue (exclusive of depreciation and amortization) | (27,632) | (39,284) | |
Brand Direct | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 204,456 | 204,240 | |
Cost of revenue (exclusive of depreciation and amortization) | 164,577 | 161,445 | |
Gross profit (exclusive of depreciation and amortization) | 39,879 | 42,795 | |
Impairment of goodwill | 15,595 | ||
Impairment of intangible assets | 1,500 | 900 | |
Marketplace | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 149,782 | 216,385 | |
Cost of revenue (exclusive of depreciation and amortization) | 113,240 | 164,226 | |
Gross profit (exclusive of depreciation and amortization) | 36,542 | 52,159 | |
Impairment of goodwill | $ 33,800 | 33,795 | |
Impairment of intangible assets | 14,700 | 20,700 | |
Technology Solutions | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 8,343 | 9,807 | |
Cost of revenue (exclusive of depreciation and amortization) | 1,865 | 1,433 | |
Gross profit (exclusive of depreciation and amortization) | 6,478 | $ 8,374 | |
Impairment of goodwill | $ 0 |
Property and Equipment - Classi
Property and Equipment - Classifications of Property and Equipment and the Related Useful Lives (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 44,176 | $ 37,836 |
Less: Accumulated depreciation and amortization | (28,786) | (20,134) |
Property and equipment, net | $ 15,390 | 17,702 |
Computers and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 3 years | |
Total | $ 2,443 | 2,207 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 5 years | |
Total | $ 322 | 321 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 7 years | |
Total | $ 337 | 337 |
Software development costs | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 3 years | |
Total | $ 41,074 | $ 34,971 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 8.7 | $ 8.4 |
Unamortized balance of capitalized software development costs | 14.5 | 16 |
Capitalized computer software, amortization | $ 7.6 | $ 7.4 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | $ 77,238 | $ 76,558 | |
Additions | 5,001 | 735 | |
Impairment of goodwill | (49,390) | 0 | |
Miscellaneous changes | (55) | ||
Goodwill, ending balance | 32,849 | 77,238 | |
Brand Direct | Operating Segments | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 18,321 | 18,376 | |
Additions | 2,308 | 0 | |
Impairment of goodwill | (15,595) | ||
Miscellaneous changes | (55) | ||
Goodwill, ending balance | 5,034 | 18,321 | |
Marketplace | Operating Segments | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 54,554 | 54,554 | |
Additions | 2,693 | 0 | |
Impairment of goodwill | $ (33,800) | (33,795) | |
Miscellaneous changes | 0 | ||
Goodwill, ending balance | 23,452 | 54,554 | |
Technology Solutions | Operating Segments | |||
Goodwill [Roll Forward] | |||
Goodwill, beginning balance | 4,363 | 3,628 | |
Additions | 0 | 735 | |
Impairment of goodwill | 0 | ||
Miscellaneous changes | 0 | ||
Goodwill, ending balance | $ 4,363 | $ 4,363 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||
Accumulated impairments | $ 33,800,000 | $ 0 | |
Impairment of goodwill | 49,390,000 | 0 | |
Amortization of intangible assets | 10,700,000 | 19,700,000 | |
Impairment of intangible assets | $ 7,800,000 | 16,700,000 | |
Impairment loss | 16,744,000 | 21,570,000 | |
Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment loss | 500,000 | ||
Brand Direct | Operating Segments | |||
Finite-Lived Intangible Assets [Line Items] | |||
Accumulated impairments | 15,600,000 | 0 | |
Impairment of goodwill | 15,595,000 | ||
Impairment loss | 1,500,000 | 900,000 | |
Marketplace | Operating Segments | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of goodwill | $ 33,800,000 | 33,795,000 | |
Impairment of intangible assets | 6,900,000 | ||
Impairment loss | 14,700,000 | $ 20,700,000 | |
Asset impairment charges | $ 7,800,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 147,196 | $ 117,806 |
Impairment | (38,314) | (21,570) |
Accumulated Amortization | (79,441) | (68,717) |
Net | $ 29,441 | 27,519 |
Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 3 years | |
Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 15 years | |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 59,095 | 54,316 |
Impairment | (7,210) | (5,933) |
Accumulated Amortization | (43,752) | (39,411) |
Net | $ 8,133 | $ 8,972 |
Technology | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 4 years | 4 years |
Technology | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 7 years | 7 years |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 71,323 | $ 49,423 |
Impairment | (27,125) | (12,387) |
Accumulated Amortization | (26,510) | (21,205) |
Net | $ 17,688 | $ 15,831 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 4 years | 4 years |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 15 years | 15 years |
Brand | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 14,880 | $ 12,169 |
Impairment | (3,979) | (3,250) |
Accumulated Amortization | (7,283) | (6,233) |
Net | $ 3,618 | $ 2,686 |
Brand | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 1 year | 1 year |
Brand | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 7 years | 7 years |
Non-competition agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 1,898 | $ 1,898 |
Impairment | 0 | 0 |
Accumulated Amortization | (1,896) | (1,868) |
Net | $ 2 | $ 30 |
Non-competition agreements | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 1 year | 1 year |
Non-competition agreements | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 3 years | 3 years |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Amortization Expense (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 5,474 |
2025 | 4,040 |
2026 | 3,642 |
2027 | 3,027 |
2028 | 2,535 |
Thereafter | $ 10,723 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||||||
Jul. 10, 2023 USD ($) | Jul. 03, 2023 USD ($) | Mar. 30, 2023 USD ($) period | Jul. 01, 2022 $ / shares shares | May 10, 2022 USD ($) | Apr. 01, 2021 USD ($) shares | Feb. 01, 2021 USD ($) shares | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Oct. 04, 2022 USD ($) | |
Business Acquisition [Line Items] | ||||||||||
Net working capital adjustment amount | $ 600 | |||||||||
Payments to acquire business | $ 33,564 | $ 2,502 | ||||||||
Issuance of equity for Crisp Results | 0 | 10,000 | ||||||||
Contingent consideration payable - non-current | $ 512 | $ 0 | ||||||||
Maximum | Technology | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Estimated useful life (in years) | 7 years | |||||||||
Maximum | Brand | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Estimated useful life (in years) | 7 years | |||||||||
Maximum | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Estimated useful life (in years) | 12 years | |||||||||
ClickDealer | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration transferred | 31,800 | |||||||||
Holdbacks transactions | 3,500 | |||||||||
Holdbacks payables transactions | $ 1,500 | $ 2,000 | ||||||||
Holdbacks payment period (in months) | 24 months | |||||||||
Contingent consideration liability | $ 2,392 | |||||||||
Number of periods | period | 2 | |||||||||
Milestone period (in years) | 1 year | |||||||||
Estimated net working capital adjustment amount | $ 300 | |||||||||
Estimated useful life (in years) | 10 years | |||||||||
ClickDealer | Class A Common Stock | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Contingent consideration liability | $ 10,000 | |||||||||
ClickDealer | Technology | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Estimated useful life (in years) | 5 years | 7 years | ||||||||
ClickDealer | Brand | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Estimated useful life (in years) | 7 years | 5 years | ||||||||
ClickDealer | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Estimated useful life (in years) | 12 years | 12 years | ||||||||
Traverse | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration transferred | $ 2,500 | |||||||||
Estimated useful life (in years) | 5 years | |||||||||
Milestone period for contingent consideration | 15 months | |||||||||
Traverse | Technology | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Estimated useful life (in years) | 5 years | |||||||||
Traverse | Brand | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Estimated useful life (in years) | 3 years | |||||||||
Traverse | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Estimated useful life (in years) | 5 years | |||||||||
Traverse | Non-competition agreements | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Estimated useful life (in years) | 1 year | |||||||||
Traverse | Maximum | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Contingent consideration liability | $ 500 | |||||||||
Payment for contingent consideration | $ 500 | |||||||||
Crisp Results | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration transferred | $ 40,000 | |||||||||
Payments to acquire business | $ 20,000 | |||||||||
Equity issued to acquiree (in shares) | shares | 106,700 | |||||||||
Issuance of equity for Crisp Results | $ 20,000 | |||||||||
Contingent consideration | 10,000 | |||||||||
Deferred payment | $ 5,000 | |||||||||
Deferred payment period (in months) | 18 months | |||||||||
Deferred payment period (in days) | 20 days | |||||||||
Deferred acquisition consideration payable | $ 5,000 | |||||||||
Crisp Results | Class A Common Stock | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Shares issued in connection with the Crisp Earnout (in shares) | shares | 199,300 | |||||||||
Sale of stock price per unit (in usd per share) | $ / shares | $ 50.18 | |||||||||
AAP | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration transferred | $ 20,000 | |||||||||
Payments to acquire business | $ 5,000 | |||||||||
Equity issued to acquiree (in shares) | shares | 86,000 | |||||||||
Issuance of equity for Crisp Results | $ 15,000 | |||||||||
Contingent consideration payable - non-current | $ 15,000 | |||||||||
Earnout period (in years) | 3 years |
Acquisitions - Changes in Fair
Acquisitions - Changes in Fair Value (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Mar. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 32,849 | $ 77,238 | $ 76,558 | |
Change in fair value of contingent consideration liabilities | (1,833) | $ 2,583 | ||
ClickDealer | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 5,001 | 5,001 | ||
Contingent consideration liability | 2,392 | |||
Working capital accounts | 3,565 | |||
Goodwill, measurement period adjustment | (1,206) | |||
Change in fair value of contingent consideration liabilities | (65) | |||
Fair value, Working capital accounts | 245 | |||
ClickDealer | Previously Reported | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 6,207 | |||
Contingent consideration liability | 2,457 | |||
Working capital accounts | 3,320 | |||
ClickDealer | Technology | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | 4,780 | 4,780 | ||
Fair value, Finite-lived intangible assets acquired | (230) | |||
ClickDealer | Technology | Previously Reported | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | 5,010 | |||
ClickDealer | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | 21,900 | 21,900 | ||
Fair value, Finite-lived intangible assets acquired | 1,500 | |||
ClickDealer | Customer relationships | Previously Reported | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | 20,400 | |||
ClickDealer | Brand | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | 2,710 | $ 2,710 | ||
Fair value, Finite-lived intangible assets acquired | (130) | |||
ClickDealer | Brand | Previously Reported | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | $ 2,840 |
Acquisitions - Net Assets And L
Acquisitions - Net Assets And Liabilities Acquired (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Mar. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | May 10, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||||
Goodwill | $ 32,849 | $ 77,238 | $ 76,558 | ||
Technology | Minimum | |||||
Business Acquisition [Line Items] | |||||
Expected Useful Life (Years) | 4 years | ||||
Technology | Maximum | |||||
Business Acquisition [Line Items] | |||||
Expected Useful Life (Years) | 7 years | ||||
Customer relationships | Minimum | |||||
Business Acquisition [Line Items] | |||||
Expected Useful Life (Years) | 4 years | ||||
Customer relationships | Maximum | |||||
Business Acquisition [Line Items] | |||||
Expected Useful Life (Years) | 12 years | ||||
Brand | Minimum | |||||
Business Acquisition [Line Items] | |||||
Expected Useful Life (Years) | 1 year | ||||
Brand | Maximum | |||||
Business Acquisition [Line Items] | |||||
Expected Useful Life (Years) | 7 years | ||||
Traverse | |||||
Business Acquisition [Line Items] | |||||
Expected Useful Life (Years) | 5 years | ||||
Cash | $ 232 | ||||
Goodwill | 735 | ||||
Accounts receivable | 276 | ||||
Accounts payable | (232) | ||||
Other assets acquired and liabilities assumed, net | 7 | ||||
Net assets and liabilities acquired | 3,598 | ||||
Traverse | Technology | |||||
Business Acquisition [Line Items] | |||||
Expected Useful Life (Years) | 5 years | ||||
Finite-lived intangible assets acquired | 2,470 | ||||
Traverse | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Expected Useful Life (Years) | 5 years | ||||
Finite-lived intangible assets acquired | 50 | ||||
Traverse | Brand | |||||
Business Acquisition [Line Items] | |||||
Expected Useful Life (Years) | 3 years | ||||
Finite-lived intangible assets acquired | $ 60 | ||||
ClickDealer | |||||
Business Acquisition [Line Items] | |||||
Expected Useful Life (Years) | 10 years | ||||
Cash | $ 0 | ||||
Goodwill | $ 5,001 | 5,001 | |||
Accounts receivable | 6,959 | ||||
Accounts payable | (3,561) | ||||
Other assets acquired and liabilities assumed, net | 167 | ||||
Net assets and liabilities acquired | $ 37,956 | ||||
ClickDealer | Technology | |||||
Business Acquisition [Line Items] | |||||
Expected Useful Life (Years) | 5 years | 7 years | |||
Finite-lived intangible assets acquired | $ 4,780 | $ 4,780 | |||
ClickDealer | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Expected Useful Life (Years) | 12 years | 12 years | |||
Finite-lived intangible assets acquired | $ 21,900 | $ 21,900 | |||
ClickDealer | Brand | |||||
Business Acquisition [Line Items] | |||||
Expected Useful Life (Years) | 7 years | 5 years | |||
Finite-lived intangible assets acquired | $ 2,710 | $ 2,710 |
Acquisitions - Net Revenue and
Acquisitions - Net Revenue and Net Income (Loss) Attributable to DMS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Traverse | ||
Business Acquisition [Line Items] | ||
Net revenue | $ 1,846 | |
Net income from operations | $ 489 | |
ClickDealer | ||
Business Acquisition [Line Items] | ||
Net revenue | $ 57,959 | |
Net income from operations | $ 733 |
Acquisitions - Pro Forma Inform
Acquisitions - Pro Forma Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||
Net revenue | $ 354,814 | $ 471,849 |
Net income (loss) from operations | (92,339) | (34,545) |
DMS | ||
Business Acquisition [Line Items] | ||
Net revenue | 334,949 | 391,148 |
Net income (loss) from operations | (94,043) | (42,467) |
Traverse | ||
Business Acquisition [Line Items] | ||
Net revenue | 999 | |
Net income (loss) from operations | (417) | |
ClickDealer | ||
Business Acquisition [Line Items] | ||
Net revenue | 19,865 | 79,702 |
Net income (loss) from operations | $ 1,704 | $ 8,339 |
Debt - Long-term Debt Instrumen
Debt - Long-term Debt Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total debt | $ 298,018 | $ 261,625 |
Less: Unamortized debt issuance costs | (8,915) | (4,802) |
Debt, net | 289,103 | 256,823 |
Less: Current portion of long-term debt | (2,750) | (2,250) |
Long-term debt | 286,353 | 254,573 |
Term loan | ||
Debt Instrument [Line Items] | ||
Total debt | 242,927 | 221,625 |
Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Total debt | $ 55,091 | $ 40,000 |
Debt - Additional Information (
Debt - Additional Information (Details) | 12 Months Ended | 25 Months Ended | |||||||||
Apr. 15, 2024 USD ($) | Aug. 16, 2023 USD ($) | Jul. 03, 2023 | May 24, 2023 USD ($) | May 25, 2021 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jul. 03, 2023 | Apr. 17, 2024 USD ($) | Apr. 16, 2024 USD ($) | Mar. 29, 2023 USD ($) | |
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | $ 14,000,000 | ||||||||||
Unamortized debt issuance costs | $ 8,915,000 | $ 4,802,000 | |||||||||
Interest expense paid-in-kind | 23,482,000 | 0 | |||||||||
Total debt | 298,018,000 | 261,625,000 | |||||||||
Restricted cash | 502,000 | 0 | |||||||||
Line of Credit | Subsequent Event | During the Two Week Period After the Second Amendment Effective Date | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Redemption price, percentage | 80% | ||||||||||
Line of Credit | Subsequent Event | During the Three Week Period After the Second Amendment Effective Date | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Redemption price, percentage | 82.50% | ||||||||||
Line of Credit | Subsequent Event | During the Four Week Period After the Second Amendment Effective Date and Thereafter | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Redemption price, percentage | 85% | ||||||||||
Line of Credit | Revolving credit facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Amount withdrawn | $ 10,000,000 | ||||||||||
Senior Secured Credit Facility | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt term (in years) | 5 years | ||||||||||
Senior secured revolving credit facility | $ 275,000,000 | ||||||||||
Senior Secured Credit Facility | Line of Credit | January 1, 2025 Through June 30, 2025 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate paid in kind | 5% | ||||||||||
Senior Secured Credit Facility | Line of Credit | July 1, 2025 Through December 31, 2025 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate paid in kind | 7.50% | ||||||||||
Senior Secured Credit Facility | Line of Credit | Calendar Year 2026 Until Maturity | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate paid in kind | 10% | ||||||||||
Senior Secured Credit Facility | Line of Credit | First Quarter 2024 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Total net leverage ratio | 15.6 | ||||||||||
Senior Secured Credit Facility | Line of Credit | Second Quarter 2024 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Total net leverage ratio | 10.6 | ||||||||||
Senior Secured Credit Facility | Line of Credit | Fourth Quarter Of 2025 And Until Maturity | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Total net leverage ratio | 6.9 | ||||||||||
Senior Secured Credit Facility | Line of Credit | Remainder Of 2023 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Minimum liquidity covenant | $ 9,000,000 | ||||||||||
Senior Secured Credit Facility | Line of Credit | After 2023 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Minimum liquidity covenant | $ 10,000,000 | ||||||||||
Senior Secured Credit Facility | Line of Credit | Secured Overnight Financing Rate | PIK Option Exercised | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Variable rate (as percent) | 11% | ||||||||||
Senior Secured Credit Facility | Line of Credit | Secured Overnight Financing Rate | Interest Is Paid In Cash During PIK Period | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Variable rate (as percent) | 8% | ||||||||||
Senior Secured Credit Facility | Line of Credit | Secured Overnight Financing Rate | After PIK Period | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Variable rate (as percent) | 8% | ||||||||||
Senior Secured Credit Facility | Line of Credit | Secured Overnight Financing Rate | Credit Rating Of B3 And B- | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Variable rate (as percent) | 6% | ||||||||||
Senior Secured Credit Facility | Line of Credit | Secured Debt | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | $ 225,000,000 | ||||||||||
Discount as a percentage | 1.80% | ||||||||||
Discount amount | $ 4,200,000 | 2,100,000 | 3,000,000 | ||||||||
Payment of original principal amount paid quarterly (as percent) | 1% | ||||||||||
Debt issuance costs, before amortization | $ 6,300,000 | $ 3,500,000 | |||||||||
Unamortized debt issuance costs | 6,800,000 | 1,800,000 | |||||||||
Interest expense paid-in-kind | 19,100,000 | ||||||||||
Total debt | $ 242,900,000 | ||||||||||
Effective interest rate (as percent) | 13.40% | ||||||||||
Senior Secured Credit Facility | Line of Credit | Secured Debt | London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Variable rate (as percent) | 5% | 5% | |||||||||
Senior Secured Credit Facility | Line of Credit | Secured Debt | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Variable rate (as percent) | 4% | ||||||||||
Senior Secured Credit Facility | Line of Credit | Secured Debt | Secured Overnight Financing Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Variable rate (as percent) | 5% | ||||||||||
Senior Secured Credit Facility | Line of Credit | Revolving credit facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Senior secured revolving credit facility | $ 50,000,000 | ||||||||||
Per annum commitment fee (as percent) | 0.50% | ||||||||||
Minimum payment (as a percentage) | 1% | ||||||||||
Debt issuance costs, before amortization | $ 800,000 | ||||||||||
Unamortized debt issuance costs | $ 1,100,000 | $ 600,000 | |||||||||
Interest expense paid-in-kind | 4,300,000 | ||||||||||
Total debt | $ 55,100,000 | ||||||||||
Effective interest rate (as percent) | 13.10% | ||||||||||
Senior Secured Credit Facility | Line of Credit | Revolving credit facility | Subsequent Event | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Senior secured revolving credit facility | $ 297,000,000 | $ 275,000,000 | |||||||||
Senior Secured Credit Facility | Line of Credit | Revolving credit facility | Subsequent Event | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Restricted cash | $ 5,000,000 | ||||||||||
Variance in dollar amount as percent | 15% | ||||||||||
Per annum commitment fee | 8% | ||||||||||
Senior Secured Credit Facility | Line of Credit | Revolving credit facility | London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Variable rate (as percent) | 4.25% | ||||||||||
Alternate base rate (as percent) | 1% | ||||||||||
Senior Secured Credit Facility | Line of Credit | Revolving credit facility | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Variable rate (as percent) | 3.25% | ||||||||||
Stated rate (as percent) | 1.75% | ||||||||||
Senior Secured Credit Facility | Line of Credit | Revolving credit facility | Fed Funds Effective Rate Overnight Index Swap Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Alternate base rate (as percent) | 0.50% | ||||||||||
Senior Secured Credit Facility | Line of Credit | Revolving credit facility | Secured Overnight Financing Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Variable rate (as percent) | 4.25% | ||||||||||
Tranche A Term Loan Commitments | Line of Credit | Revolving credit facility | Subsequent Event | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Senior secured revolving credit facility | $ 22,000,000 |
Debt - Maturities of Long-term
Debt - Maturities of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
2024 | $ 2,750 | |
2025 | 26,233 | |
2026 | 269,035 | |
Total debt | $ 298,018 | $ 261,625 |
Leases - Operating Lease Maturi
Leases - Operating Lease Maturity (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Leases [Abstract] | |
2024 | $ 1,926 |
2025 | 465 |
Total | 2,391 |
Less: Imputed interest | (47) |
Present value of operating lease liabilities | $ 2,344 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Operating lease, weighted average remaining lease term (in years) | 1 year 3 months 18 days | |
Operating lease weighted average remaining discount rate (as percent) | 3.35% | |
Operating lease, payments | $ 2.1 | $ 2.1 |
Lease termination costs | $ 0.5 | $ 0.1 |
Leases - Operating Leases Cost
Leases - Operating Leases Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Operating lease costs | $ 1,047 | $ 1,228 |
Short-term lease costs | 350 | 263 |
Sub-lease income | (458) | (586) |
Total lease costs, net | $ 939 | $ 905 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 29, 2023 | Dec. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Debt instrument, face amount | $ 14,000 | |||
Warrants, term (in years) | 5 years | 5 years | ||
Common stock par value (in usd per share) | $ 0.0001 | $ 0.0001 | ||
Issuance costs | 900 | |||
Warrant exercise price (in usd per share) | $ 0.01 | $ 0.01 | ||
Minimum number of redemption days | 30 days | |||
Trading day threshold | 20 days | |||
Trading day period | 30 days | |||
Warrants outstanding (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | |
Convertible Debenture | Convertible Debt | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Debt instrument, face amount | $ 6,000 | |||
Series A Preferred Stock | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Number of shares issued in transaction (in shares) | 80,000 | |||
Series B Preferred Stock | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Number of shares issued in transaction (in shares) | 60,000 | |||
Class A Common Stock | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Preferred stock (in shares) | 963,000 | |||
Warrants, term (in years) | 5 years | |||
Common stock par value (in usd per share) | $ 9.6795 | $ 0.0001 | $ 0.0001 | |
Acceptance percentage threshold | 50% | |||
Threshold percentage of shares acquired | 50% | |||
Share price (in usd per share) | $ 270 | $ 270 | ||
Class A Common Stock | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Number of securities called by each warrant (in shares) | 1 | 1 | ||
Warrant exercise price (in usd per share) | $ 172.50 | $ 172.50 | ||
Preferred Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Additions | $ 8,700 | $ 8,667 | $ 0 | |
Private placement warrants - Class B common stock | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Additions | $ 0 | $ 0 | ||
Warrants outstanding (in shares) | 4,000,000 | 4,000,000 | ||
Private placement warrants - Class B common stock | Class A Common Stock | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Warrants exercised (in shares) | 267,000 | 267,000 |
Fair Value Measurements - Input
Fair Value Measurements - Inputs and Valuations (Details) - Preferred Warrants | Dec. 31, 2023 yr $ / shares |
Private Placement Warrants Fair Value Per Share | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants outstanding, measurement inputs | 0.06 |
Stock price - DMS Inc. Class A Common Stock | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants outstanding, measurement inputs | 0.13 |
Remaining contractual term in years | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants outstanding, measurement inputs | yr | 4.25 |
Estimated volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants outstanding, measurement inputs | 1.500 |
Dividend yield | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants outstanding, measurement inputs | 0 |
Risk free interest rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants outstanding, measurement inputs | 0.0387 |
Fair Value Measurements - Conti
Fair Value Measurements - Contingent Consideration Assumptions (Details) - ClickDealer | Dec. 31, 2023 d |
Revenue Volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.50 |
Iteration (actual) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 100,000 |
Risk adjustment discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.2375 |
Risk free / Credit risk | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.1250 |
Days from period end to payment | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 90 |
Fair Value Measurements - Liabi
Fair Value Measurements - Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liabilities | $ 82 | $ 600 |
Contingent consideration payable - current | 1,000 | 1,453 |
Contingent consideration payable - non-current | 512 | 0 |
Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 1,594 | 2,053 |
Fair Value, Recurring | Aramis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration payable - current | 1,000 | 1,000 |
Fair Value, Recurring | ClickDealer | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration payable - non-current | 512 | |
Fair Value, Recurring | Traverse | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration payable - current | 453 | |
Fair Value, Recurring | Private placement warrants - Class B common stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liabilities | 24 | 600 |
Fair Value, Recurring | Preferred Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liabilities | 58 | |
Fair Value, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 0 | 0 |
Fair Value, Recurring | Level 1 | Aramis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration payable - current | 0 | 0 |
Fair Value, Recurring | Level 1 | ClickDealer | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration payable - non-current | 0 | |
Fair Value, Recurring | Level 1 | Traverse | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration payable - current | 0 | |
Fair Value, Recurring | Level 1 | Private placement warrants - Class B common stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liabilities | 0 | 0 |
Fair Value, Recurring | Level 1 | Preferred Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liabilities | 0 | |
Fair Value, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 0 | 0 |
Fair Value, Recurring | Level 2 | Aramis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration payable - current | 0 | 0 |
Fair Value, Recurring | Level 2 | ClickDealer | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration payable - non-current | 0 | |
Fair Value, Recurring | Level 2 | Traverse | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration payable - current | 0 | |
Fair Value, Recurring | Level 2 | Private placement warrants - Class B common stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liabilities | 0 | 0 |
Fair Value, Recurring | Level 2 | Preferred Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liabilities | 0 | |
Fair Value, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 1,594 | 2,053 |
Fair Value, Recurring | Level 3 | Aramis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration payable - current | 1,000 | 1,000 |
Fair Value, Recurring | Level 3 | ClickDealer | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration payable - non-current | 512 | |
Fair Value, Recurring | Level 3 | Traverse | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration payable - current | 453 | |
Fair Value, Recurring | Level 3 | Private placement warrants - Class B common stock | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liabilities | 24 | $ 600 |
Fair Value, Recurring | Level 3 | Preferred Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liabilities | $ 58 |
Fair Value Measurements - Chang
Fair Value Measurements - Change in the Warrant Liability and Contingent Consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 29, 2023 | Dec. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Contingent Consideration | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $ 1,453 | $ 8,439 | ||
Additions | 2,457 | 431 | ||
Changes in fair value | $ (1,833) | 2,583 | ||
Settlements | (500) | (10,000) | ||
Other | (65) | |||
Ending balance | 1,512 | 1,512 | 1,453 | |
Preferred Warrants | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Ending balance | 58 | 58 | ||
Private Placement Warrants | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 600 | 3,960 | ||
Additions | 0 | 0 | ||
Changes in fair value | (576) | (3,360) | ||
Settlements | 0 | 0 | ||
Other | 0 | |||
Ending balance | 24 | 24 | 600 | |
Preferred Warrants | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 0 | 0 | ||
Additions | $ 8,700 | 8,667 | 0 | |
Changes in fair value | (8,609) | 0 | ||
Settlements | $ 0 | 0 | ||
Other | $ 0 | |||
Ending balance | $ 0 |
Equity - Additional Information
Equity - Additional Information (Details) | 3 Months Ended | 12 Months Ended | ||||||||||||
Apr. 12, 2024 USD ($) | Nov. 17, 2023 USD ($) | Aug. 28, 2023 shares | Jul. 03, 2023 USD ($) | Jun. 15, 2023 USD ($) | Mar. 29, 2023 trading_day $ / shares shares | Jan. 17, 2022 USD ($) | Dec. 31, 2023 USD ($) votingRight $ / shares shares | Sep. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) location votingRight $ / shares shares | Dec. 31, 2022 USD ($) shares | Aug. 27, 2023 shares | |||
Class of Stock [Line Items] | ||||||||||||||
Common stock authorized (in shares) | 600,000,000 | 600,000,000 | ||||||||||||
Common stock par value (in usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||||||
Preferred stock, authorized (in shares) | 100,000,000 | 100,000,000 | ||||||||||||
Preferred stock par value (usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||||||
Common stock outstanding (in shares) | 1,672,000 | 1,672,000 | ||||||||||||
Voting rights per each share | votingRight | 1 | 1 | ||||||||||||
Equity conversion ratio | 0.0667 | |||||||||||||
Warrant exercise price (in usd per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||||||||
Preferred stock, $0.0001 par value, 100,000 shares authorized; 80 Series A and 60 Series B convertible redeemable issued and outstanding, respectively at December 31, 2023 | $ | $ 16,300,000 | |||||||||||||
Preferred stock, accretion to redemption value | $ | 11,300,000 | |||||||||||||
Preferred stock, fair value of discount rate (as percent) | 11% | |||||||||||||
Dividend rate (as percent) | 4% | |||||||||||||
Preferred stock conversion price (in usd per share) | $ / shares | $ 8.40 | |||||||||||||
Percentage of alternate conversion price | 90% | |||||||||||||
Convertible threshold trading days | trading_day | 20 | |||||||||||||
Percentage of trading days prior to conversion rate | 90% | |||||||||||||
Conversion floor price (usd per share) | $ / shares | $ 7.26 | |||||||||||||
Redemption price percentage | 104% | |||||||||||||
Redemption price per share (in usd per share) | $ / shares | $ 111.11 | |||||||||||||
Percentage of accelerated redemption price | 90% | |||||||||||||
Mandatory redemption trading days | trading_day | 20 | |||||||||||||
Percentage of trading days prior to mandatory redemption rate | 90% | |||||||||||||
Accelerated redemption trading days | trading_day | 20 | |||||||||||||
Percentage of trading days prior to accelerated redemption rate | 90% | |||||||||||||
Percentage of triggered optional redemption price | 30% | |||||||||||||
Percentage of default redemption price | 115% | |||||||||||||
Percentage of bankruptcy redemption price | 115% | |||||||||||||
Percentage of change of control redemption price | 115% | |||||||||||||
Warrants, term (in years) | 5 years | 5 years | ||||||||||||
Warrants outstanding (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | |||||||||||
Transfers | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock issued during period, conversion of convertible securities | $ | $ (1,645,000) | $ (1,156,000) | ||||||||||||
Transfers | Prism Data | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock issued during period, conversion of convertible securities | $ | $ 1,520,900 | $ 41,200 | (68,836,000) | 0 | ||||||||||
Transfers | Smarter Chaos | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock issued during period, conversion of convertible securities | $ | $ 153,700 | $ 0 | $ (245,000) | |||||||||||
Transfers | Clairvest | Subsequent Event | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Stock issued during period, conversion of convertible securities | $ | $ 151,200 | |||||||||||||
Series A Certificate of Designation | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Share price (in usd per share) | $ / shares | $ 7.26 | $ 7.26 | ||||||||||||
Threshold trading days | location | 20 | |||||||||||||
Class A Common Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Number of securities called by each warrant (in shares) | 1 | 1 | ||||||||||||
Warrant exercise price (in usd per share) | $ / shares | $ 172.50 | $ 172.50 | ||||||||||||
Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Warrants issued (in shares) | 140,000 | |||||||||||||
Class A Common Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Antidilutive securities excluded (in shares) | 4,286,712 | 2,694,648 | ||||||||||||
Class B Common Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Antidilutive securities excluded (in shares) | 151,191 | 1,713,298 | ||||||||||||
Class A Common Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Common stock authorized (in shares) | 500,000,000 | 500,000,000 | ||||||||||||
Common stock par value (in usd per share) | $ / shares | $ 9.6795 | $ 0.0001 | $ 0.0001 | |||||||||||
Common stock outstanding (in shares) | 2,700,000 | 2,766,000 | 2,766,000 | 41,000,000 | ||||||||||
Common stock issued (in shares) | 2,766,000 | 2,766,000 | 41,000,000 | |||||||||||
Shares issued as a result of the Reverse Stock Split (in shares) | 2,700,000 | |||||||||||||
Share price (in usd per share) | $ / shares | $ 270 | $ 270 | ||||||||||||
Warrants, term (in years) | 5 years | |||||||||||||
Class A Common Stock | Series A Warrant | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Warrants exercised (in shares) | 550,268 | |||||||||||||
Number of securities called by each warrant (in shares) | 1 | |||||||||||||
Warrant exercise price (in usd per share) | $ / shares | $ 100 | |||||||||||||
Class A Common Stock | Series B Warrant | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Warrants exercised (in shares) | 412,701 | |||||||||||||
Number of securities called by each warrant (in shares) | 1 | |||||||||||||
Class B Common Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Common stock authorized (in shares) | 60,000,000 | 60,000,000 | ||||||||||||
Common stock par value (in usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||||||
Common stock outstanding (in shares) | 1,700,000 | 25,100,000 | ||||||||||||
Common stock issued (in shares) | 1,672,000 | 1,672,000 | 25,100,000 | |||||||||||
Shares issued as a result of the Reverse Stock Split (in shares) | 1,700,000 | |||||||||||||
Class C common stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Common stock authorized (in shares) | 40,000,000 | 40,000,000 | ||||||||||||
Common stock par value (in usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||||||
Common stock outstanding (in shares) | 0 | 0 | ||||||||||||
Common stock issued (in shares) | 0 | 0 | ||||||||||||
Equity conversion ratio | 1 | |||||||||||||
Series A Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Warrants issued (in shares) | 80,000 | |||||||||||||
Conversion floor price (usd per share) | $ / shares | $ 2.415 | |||||||||||||
Liquidation rights of percentage | 115% | |||||||||||||
Preferred stock, liquidation preference per share (in usd per share) | $ / shares | $ 111.11 | |||||||||||||
Mandatory redemption value | $ | $ 9,300,000 | |||||||||||||
Series A Preferred Stock | Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Warrants issued (in shares) | [1] | 80,000 | ||||||||||||
Preferred stock dividends | $ | $ 89,000 | $ 89,000 | $ 267,000 | [1],[2] | ||||||||||
Dividends payable | $ | $ 468,000 | $ 468,000 | ||||||||||||
Series B Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Warrants issued (in shares) | 60,000 | |||||||||||||
Liquidation rights of percentage | 115% | |||||||||||||
Preferred stock, liquidation preference per share (in usd per share) | $ / shares | $ 111.11 | |||||||||||||
Series B Preferred Stock | Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Warrants issued (in shares) | [1] | 60,000 | ||||||||||||
Preferred stock dividends | $ | [1],[2] | $ 201,000 | ||||||||||||
[1] See Note 10. Fair Value Measurements and Note 11. Equity Represents Series A and Series B preferred stock dividends, which have not been paid. |
Equity - Authorized Capitalizat
Equity - Authorized Capitalization (Details) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Class A Common Stock | ||
Class of Stock [Line Items] | ||
Antidilutive securities excluded (in shares) | 4,286,712 | 2,694,648 |
Company Stock, Economic Ownership in Affiliate | 96.60% | 61.10% |
Class B Common Stock | ||
Class of Stock [Line Items] | ||
Antidilutive securities excluded (in shares) | 151,191 | 1,713,298 |
Company Stock, Economic Ownership in Affiliate | 3.40% | 38.90% |
Common Stock | ||
Class of Stock [Line Items] | ||
Antidilutive securities excluded (in shares) | 4,437,903 | 4,407,946 |
Company Stock, Economic Ownership in Affiliate | 100% | 100% |
Equity - Noncontrolling Interes
Equity - Noncontrolling Interest (Details) - DMSH - shares | Dec. 31, 2023 | Dec. 31, 2022 |
Noncontrolling Interest [Line Items] | ||
Ownership, Including Noncontrolling Interests, Shares | 4,437,903 | 4,407,946 |
Ownership Percentage, Including Noncontrolling Interests | 1 | 1 |
Prism and Clairvest Direct Seller | ||
Noncontrolling Interest [Line Items] | ||
Noncontrolling interest, ownership by noncontrolling owners (in shares) | 151,191 | 1,713,298 |
Noncontrolling interest, ownership percentage by noncontrolling owners | 3.40% | 38.90% |
DMSH | ||
Noncontrolling Interest [Line Items] | ||
Noncontrolling interest, ownership by parent (in shares) | 4,286,712 | 2,694,648 |
Noncontrolling interest, ownership percentage | 96.60% | 61.10% |
Equity - Summary of Changes in
Equity - Summary of Changes in Ownership (Details) - USD ($) | 12 Months Ended | ||||
Nov. 17, 2023 | Jul. 03, 2023 | Jan. 17, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Class of Stock [Line Items] | |||||
Net loss | $ (122,693,000) | $ (52,500,000) | |||
Transfers | |||||
Class of Stock [Line Items] | |||||
Net loss | (81,681,000) | (31,952,000) | |||
Stock issued during period, conversion of convertible securities | (1,645,000) | (1,156,000) | |||
Treasury stock purchased under the 2020 Omnibus Incentive Plan | 326,000 | 219,000 | |||
Net transfers from non-controlling interests | (70,155,000) | (5,939,000) | |||
Change from net income attributable to DMS Inc. shareholders and transfers from non-controlling interests | (151,836,000) | (37,891,000) | |||
Prism Data | Transfers | |||||
Class of Stock [Line Items] | |||||
Stock issued during period, conversion of convertible securities | $ 1,520,900 | $ 41,200 | (68,836,000) | 0 | |
Crisp Results | |||||
Class of Stock [Line Items] | |||||
Shares issued in connection with the Crisp Earnout (Note 7) | 10,000,000 | ||||
Crisp Results | Transfers | |||||
Class of Stock [Line Items] | |||||
Shares issued in connection with the Crisp Earnout (Note 7) | 0 | (4,757,000) | |||
Smarter Chaos | Transfers | |||||
Class of Stock [Line Items] | |||||
Stock issued during period, conversion of convertible securities | $ 153,700 | $ 0 | $ (245,000) |
Related Party Transactions - Re
Related Party Transactions - Registration Rights (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Related Party Transactions [Abstract] | |
Shelf takedown, aggregate minimum amount | $ 20 |
Shelf takedown, period per incident | 6 months |
Related Party Transactions - Am
Related Party Transactions - Amended Partnership Agreement (Details) | 12 Months Ended | |
Aug. 28, 2023 | Dec. 31, 2023 | |
Related Party Transaction [Line Items] | ||
Equity conversion ratio | 0.0667 | |
Non-Blocker Members | Amended Partnership Agreement | ||
Related Party Transaction [Line Items] | ||
Equity conversion ratio | 1 |
Related Party Transactions - Ta
Related Party Transactions - Tax Receivable Agreement (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Related Party Transactions [Abstract] | ||
Tax Receivable Agreement liability | $ 164 | $ 164 |
Related Party Transactions - Pr
Related Party Transactions - Prism Incentive Agreement (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||
Payments to acquire business | $ 33,564 | $ 2,502 | |
Prism Data | |||
Related Party Transaction [Line Items] | |||
Payments to acquire business | $ 850 | ||
Loss contingency accrual | $ 2,000 |
Related Party Transactions - DM
Related Party Transactions - DMSH Member Tax Distributions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Related Party Transactions [Abstract] | ||
Tax distributions to members | $ 0 | $ 0 |
Related Party Transactions - _2
Related Party Transactions - Private Placement of Convertible Preferred Stock and Warrants (Details) - USD ($) $ in Millions | Mar. 30, 2023 | Mar. 29, 2023 |
Related Party Transaction [Line Items] | ||
Debt instrument, face amount | $ 14 | |
Percentage of original issue discount | 10% | |
Convertible Debt | ||
Related Party Transaction [Line Items] | ||
Number of Warrants | $ 15.5 | |
Convertible Debenture | Convertible Debt | ||
Related Party Transaction [Line Items] | ||
Debt instrument, face amount | $ 6 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions (Details) - shares | Apr. 26, 2023 | Mar. 29, 2023 | Dec. 31, 2023 | Dec. 31, 2022 |
Related Party Transaction [Line Items] | ||||
Warrants outstanding (in shares) | 10,000,000 | 10,000,000 | ||
Series B Preferred Stock | ||||
Related Party Transaction [Line Items] | ||||
Warrants outstanding (in shares) | 6,190,476,000 | |||
Class of warrant or right, outstanding, (as percent) | 100% | |||
Series B Preferred Stock | Lion Capital (Guernsey) BridgeCo Limited | ||||
Related Party Transaction [Line Items] | ||||
Warrants outstanding (in shares) | 2,958,098,000 | |||
Class of warrant or right, outstanding, (as percent) | 47.70% | |||
Series B Preferred Stock | Leo Investors Limited Partnership | ||||
Related Party Transaction [Line Items] | ||||
Warrants outstanding (in shares) | 1,168,886,000 | |||
Class of warrant or right, outstanding, (as percent) | 18.90% | |||
Series B Preferred Stock | Fernando Borghese | ||||
Related Party Transaction [Line Items] | ||||
Warrants outstanding (in shares) | 1,031,746,000 | |||
Class of warrant or right, outstanding, (as percent) | 16.70% | |||
Series B Preferred Stock | Joseph Marinucci | ||||
Related Party Transaction [Line Items] | ||||
Warrants outstanding (in shares) | 773,809,000 | |||
Class of warrant or right, outstanding, (as percent) | 12.50% | |||
Series B Preferred Stock | Matthew Goodman | ||||
Related Party Transaction [Line Items] | ||||
Warrants outstanding (in shares) | 257,937,000 | |||
Class of warrant or right, outstanding, (as percent) | 4.20% | |||
Series B Preferred Stock | ||||
Related Party Transaction [Line Items] | ||||
Preferred stock issued (in shares) | 60,000,000 | |||
Preferred stock outstanding (in shares) | 60,000,000 | |||
Preferred stock, shares outstanding, (as percent) | 100% | |||
Series B Preferred Stock | Lion Capital (Guernsey) BridgeCo Limited | ||||
Related Party Transaction [Line Items] | ||||
Preferred stock issued (in shares) | 28,671,000 | |||
Preferred stock issued (as percent) | 47.70% | |||
Series B Preferred Stock | Leo Investors Limited Partnership | ||||
Related Party Transaction [Line Items] | ||||
Preferred stock issued (in shares) | 11,329,000 | |||
Preferred stock issued (as percent) | 18.90% | |||
Series B Preferred Stock | Fernando Borghese | ||||
Related Party Transaction [Line Items] | ||||
Preferred stock issued (in shares) | 10,000,000 | |||
Preferred stock issued (as percent) | 16.70% | |||
Series B Preferred Stock | Joseph Marinucci | ||||
Related Party Transaction [Line Items] | ||||
Preferred stock issued (in shares) | 7,500,000 | |||
Preferred stock issued (as percent) | 12.50% | |||
Series B Preferred Stock | Matthew Goodman | ||||
Related Party Transaction [Line Items] | ||||
Preferred stock issued (in shares) | 2,500,000 | |||
Preferred stock issued (as percent) | 4.20% |
Employee and Director Incenti_3
Employee and Director Incentive Plans - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||
Aug. 04, 2022 | Jul. 01, 2022 | Apr. 12, 2022 | Oct. 28, 2020 | Jul. 15, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock based compensation expense | $ 3.1 | $ 6.7 | |||||
Weighted-average remaining period of RSUs | 1 year 7 months 24 days | ||||||
Contract period | 10 years | ||||||
Employer discretionary contribution amount | $ 0.8 | $ 0.9 | |||||
Nonemployee Consultants | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock based compensation expense | 1.6 | ||||||
Stock-based compensation fair value | $ 1.8 | ||||||
Class A Common Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of securities called by each warrant (in shares) | 1 | ||||||
Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares granted (in shares) | 0 | 76,000 | |||||
Stock-based compensation (in shares) | 22,000 | 50,800 | |||||
Fair value of vested restricted stock units | $ 0.2 | $ 1.4 | |||||
Restricted Stock Units (RSUs) | Nonemployee Consultants | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares issued (in shares) | 2,036 | ||||||
Restricted Stock Units (RSUs) | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Continuous service period | 3 years | ||||||
Restricted Stock Units (RSUs) | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Continuous service period | 4 years | ||||||
Stock Options | Nonemployee Consultants | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares issued (in shares) | 5,726 | ||||||
Performance Shares | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation (in shares) | 10,900 | 25,000 | |||||
Performance Shares | Share-based Payment Arrangement, Tranche One | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights rate per year | 25% | ||||||
Performance Shares | Share-based Payment Arrangement, Tranche Two | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights rate per year | 25% | ||||||
Performance Shares | Share-based Payment Arrangement, Tranche Three | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights rate per year | 25% | ||||||
Performance Shares | Share-Based Payment Arrangement, Tranche Four | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights rate per year | 25% | ||||||
Time-based, RSU | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period (in years) | 4 years | ||||||
Stock-based compensation (in shares) | 25,400 | ||||||
Time-based, RSU | Share-based Payment Arrangement, Tranche One | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights rate per year | 25% | ||||||
Time-based, RSU | Share-based Payment Arrangement, Tranche Two | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights rate per year | 25% | ||||||
Time-based, RSU | Share-based Payment Arrangement, Tranche Three | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights rate per year | 25% | ||||||
Time-based, RSU | Share-Based Payment Arrangement, Tranche Four | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights rate per year | 25% | ||||||
Time-Based Vesting Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation (in shares) | 10,900 | ||||||
2020 Omnibus Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Capital shares reserved for future issuance (in shares) | 800,000 | ||||||
2020 Omnibus Incentive Plan | Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Contract period | 10 years | ||||||
Shares granted (in shares) | 3,500 | 80,000 | |||||
Continuous service period | 3 years | ||||||
2020 Omnibus Incentive Plan | Restricted Stock Units (RSUs) | Share-based Payment Arrangement, Tranche One | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights rate per year | 33.33% | ||||||
2020 Omnibus Incentive Plan | Restricted Stock Units (RSUs) | Share-based Payment Arrangement, Tranche Two | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights rate per year | 33.33% | ||||||
2020 Omnibus Incentive Plan | Restricted Stock Units (RSUs) | Share-based Payment Arrangement, Tranche Three | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting rights rate per year | 33.33% | ||||||
2020 Omnibus Incentive Plan | Restricted Stock Units (RSUs) | Director | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares granted (in shares) | 4,000 | ||||||
2020 Omnibus Incentive Plan | Restricted Stock Units (RSUs) | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period (in years) | 3 years | ||||||
2020 Omnibus Incentive Plan | Restricted Stock Units (RSUs) | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period (in years) | 4 years |
Employee and Director Incenti_4
Employee and Director Incentive Plans - RSU Activity (Details) - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Number of Restricted Stock | ||
Vested (in shares) | 119 | |
Weighted-Average Grant Date Fair Value | ||
Vested, Weighted average grant date fair value (usd per share) | $ 107.86 | |
Restricted Stock Units (RSUs) | ||
Number of Restricted Stock | ||
Beginning balance (in shares) | 100 | 96 |
Granted (in shares) | 0 | 76 |
Vested (in shares) | 31 | 48 |
Forfeited/Canceled (in shares) | 30 | 24 |
Ending balance (in shares) | 39 | 100 |
Weighted-Average Grant Date Fair Value | ||
Beginning balance, Weighted average grant date fair value (usd per share) | $ 70.95 | $ 119.70 |
Granted, Weighted average grant date fair value (usd per share) | 0 | 40.65 |
Vested, Weighted average grant date fair value (usd per share) | 94.31 | 115.50 |
Forfeited/Canceled, Weighted average grant date fair value (usd per share) | 46.18 | 81.75 |
Ending balance, Weighted average grant date fair value (usd per share) | $ 79.05 | $ 70.95 |
Employee and Director Incenti_5
Employee and Director Incentive Plans - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Total Intrinsic Value of Restricted Stock Options Exercisable | |||
Total intrinsic value of stock options outstanding at beginning of period | $ 0 | $ 0 | |
Total intrinsic value of stock options granted | 0 | 0 | |
Total intrinsic value of stock options exercised | 0 | 0 | |
Total intrinsic value of stock options forfeited/expired | 0 | 0 | |
Total intrinsic value of stock options outstanding at end of period | 0 | $ 0 | $ 0 |
Total intrinsic value of stock options exercisable | $ 0 | ||
Stock Options | |||
Number of Stock Options | |||
Beginning balance (in shares) | 123 | 139 | |
Granted (in shares) | 0 | 0 | |
Exercised (in shares) | 0 | 0 | |
Forfeited/expired (in shares) | 25 | 16 | |
Ending balance (in shares) | 98 | 123 | 139 |
Exercisable (in shares) | 53 | ||
Weighted-Average Grant Date Fair Value | |||
Beginning balance (usd per share) | $ 50.25 | $ 58.80 | |
Granted (usd per share) | 0 | 0 | |
Exercised (usd per share) | 0 | 0 | |
Forfeited/expired (usd per share) | 59.05 | 58.20 | |
Ending balance (usd per share) | 59.10 | $ 50.25 | $ 58.80 |
Exercisable (usd per share) | $ 58.77 | ||
Weighted-Average Remaining Contractual Term (in Years) | |||
Outstanding (in years) | 7 years | 6 years 9 months 18 days | 6 years 1 month 6 days |
Exercisable (in years) | 7 years |
Income Taxes - (Benefit) Provis
Income Taxes - (Benefit) Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current: | ||
Federal | $ 195 | $ 73 |
State | (187) | (70) |
Total Current | 8 | 3 |
Deferred: | ||
Federal | (928) | (3,466) |
State | 130 | (642) |
Total Deferred | (798) | (4,108) |
Income tax benefit | $ (790) | $ (4,105) |
Income Taxes - Tax Rate Reconci
Income Taxes - Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit from federal statutory rate | $ (25,931) | $ (11,888) |
Tax on income not subject to entity level federal income tax | 6,584 | 4,085 |
State income taxes, net of federal tax effect | (4,304) | (1,639) |
Change in fair value of warrant liabilities | (1,929) | (705) |
Other permanent adjustments | 950 | 26 |
Permanent adjustments - goodwill impairment | 4,087 | 0 |
Permanent adjustments - Tax Receivable Agreement | 0 | (176) |
Equity Conversion | (15,443) | 0 |
True-ups and other | (3,094) | (2,343) |
Uncertain tax position reserve | 8,304 | 0 |
Research and development credit | 0 | (250) |
Undistributed earnings | 749 | 171 |
Foreign rate differential | (562) | 0 |
Valuation allowance | 30,113 | 8,857 |
Tax credits | (314) | (243) |
Income tax benefit | $ (790) | $ (4,105) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Examination [Line Items] | |||
Income tax benefit | $ (790,000) | $ (4,105,000) | |
Tax credit carryforward | 800,000 | ||
Deferred tax assets, valuation allowance | 71,942,000 | 41,829,000 | |
Unrecognized tax benefits | 33,589,000 | 0 | $ 0 |
Unrecognized tax benefits, income tax penalties and interest accrued | 0 | ||
Unrecognized tax benefits, period increase (decrease) | 8,300,000 | 0 | |
Current tax receivable agreement | 164,000 | 164,000 | |
Private placement warrants - Class B common stock | |||
Income Tax Examination [Line Items] | |||
Income tax benefit | 0 | ||
Domestic Tax Authority | |||
Income Tax Examination [Line Items] | |||
Operating loss carryforwards | 25,200,000 | ||
Foreign | |||
Income Tax Examination [Line Items] | |||
Operating loss carryforwards | $ 3,900,000 | ||
State and Local Jurisdiction | |||
Income Tax Examination [Line Items] | |||
Operating loss carryforwards | $ 10,500,000 | ||
DMSH | DMSH | |||
Income Tax Examination [Line Items] | |||
Equity method investment, ownership percentage | 96.60% | 61.10% |
Income Taxes - Components Of Ne
Income Taxes - Components Of Net Loss Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ (111,785) | $ (56,605) |
Foreign | (11,698) | 0 |
Total Net loss before taxes | $ (123,483) | $ (56,605) |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Investment in DMS Holdings LLC | $ 58,622 | $ 34,137 |
Reserve accruals | 65 | 156 |
Charitable contributions | 23 | 18 |
Interest carryforward | 10,681 | 5,131 |
Tax credit carryforwards | 823 | 1,013 |
Property and equipment | 0 | (7) |
Intangibles | 1,709 | 0 |
Operating lease liabilities | 190 | 343 |
Net operating loss | 1,851 | 2,863 |
Total gross deferred tax assets | 73,964 | 43,654 |
Less: Valuation allowance | (71,942) | (41,829) |
Total deferred tax assets, net | 2,022 | 1,825 |
Deferred tax liabilities: | ||
Intangibles | 0 | (1,295) |
Property and equipment | (1) | 0 |
Operating lease right-of-use assets | (62) | (119) |
Undistributed earnings | (2,273) | (1,523) |
Total deferred tax liabilities | (2,336) | (2,937) |
Net deferred tax liabilities | $ (314) | $ (1,112) |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance, beginning of year | $ 0 | $ 0 |
Additions for tax positions of the current years | 33,589 | 0 |
Additions for tax positions of the prior years | 0 | 0 |
Reductions for tax positions of prior years | 0 | 0 |
Expiration of applicable statutes of limitations | 0 | 0 |
Balance, end of year | $ 33,589 | $ 0 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Numerator: | ||
Net loss | $ (122,693) | $ (52,500) |
Net loss attributable to non-controlling interest | (41,012) | (20,548) |
Accretion and dividend Series A and B convertible redeemable preferred stock | (11,653) | 0 |
Net loss attributable to Digital Media Solutions, Inc. - Class A common stock - basic | $ (93,334) | $ (31,952) |
Denominator: | ||
Weighted-average Class A common shares outstanding – basic (in shares) | 2,920 | 2,581 |
Add: dilutive effects of equity awards under the 2020 Omnibus Incentive Plan (in shares) | 0 | 2 |
Weighted-average Class A common shares outstanding – diluted (in shares) | 2,920 | 2,583 |
Net loss per common share: | ||
Basic – per Class A common shares (in usd per share) | $ (31.96) | $ (12.38) |
Diluted – per Class A common shares (in usd per share) | $ (31.96) | $ (12.37) |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Class B Common Stock | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 151,191 | 1,713,298 |
Series A Preferred Stock | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 80,000 | |
Series B Preferred Stock | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 60,000 | |
Private Warrant | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 4,000,000 | 4,000,000 |
Public Warrant | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 10,000,000 | 10,000,000 |
Preferred Warrant | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 14,400,000 | |
Stock Options | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 100,000 | 100,000 |
Restricted Stock Units (RSUs) | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 27,400 | 100,000 |
Performance Shares | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 12,000 | 20,000 |