Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 20, 2024 | Jun. 30, 2023 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 001-40349 | ||
Entity Registrant Name | DoubleVerify Holdings, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 82-2714562 | ||
Entity Address, Address Line One | 462 Broadway | ||
Entity Address, City or Town | New York | ||
Entity Address State Or Province | NY | ||
Entity Address, Postal Zip Code | 10013 | ||
City Area Code | 212 | ||
Local Phone Number | 631-2111 | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | DV | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 4,418,583,980 | ||
Entity Common Stock, Shares Outstanding | 171,253,902 | ||
Auditor Name | Deloitte & Touche LLP | ||
Auditor Firm ID | 34 | ||
Auditor Location | New York, New York | ||
Entity Central Index Key | 0001819928 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 310,131 | $ 267,813 |
Trade receivables, net of allowances for doubtful accounts of $9,442 and $8,893 as of December 31, 2023 and December 31, 2022, respectively | 206,941 | 167,122 |
Prepaid expenses and other current assets | 15,930 | 10,161 |
Total current assets | 533,002 | 445,096 |
Property, plant and equipment, net | 58,020 | 47,034 |
Operating lease right-of-use assets, net | 60,470 | 64,692 |
Goodwill | 436,008 | 343,011 |
Intangible assets, net | 140,883 | 135,429 |
Deferred tax assets | 13,077 | 35 |
Other non-current assets | 1,571 | 1,731 |
Total assets | 1,243,031 | 1,037,028 |
Current liabilities | ||
Trade payables | 12,932 | 6,675 |
Accrued expense | 44,264 | 33,085 |
Operating lease liabilities, current | 9,029 | 7,041 |
Income tax liabilities | 5,833 | 11,953 |
Current portion of finance lease obligations | 2,934 | 1,846 |
Other current liabilities | 8,863 | 8,310 |
Total current liabilities | 83,855 | 68,910 |
Operating lease liabilities, non-current | 71,563 | 74,086 |
Finance lease obligations | 2,865 | 779 |
Deferred tax liabilities | 8,119 | 12,890 |
Other non-current liabilities | 2,690 | 3,504 |
Total liabilities | 169,092 | 160,169 |
Commitments and contingencies (Note 16) | ||
Stockholders' equity | ||
Common stock, $0.001 par value, 1,000,000 shares authorized, 171,168 shares issued and 171,146 outstanding as of December 31, 2023; 1,000,000 shares authorized, 165,448 shares issued and 165,417 outstanding as of December 31, 2022 | 171 | 165 |
Additional paid-in capital | 878,331 | 756,299 |
Treasury stock, at cost, 22 shares and 31 shares as of December 31, 2023 and December 31, 2022, respectively | (743) | (796) |
Retained earnings | 198,983 | 127,517 |
Accumulated other comprehensive loss, net of income taxes | (2,803) | (6,326) |
Total stockholders' equity | 1,073,939 | 876,859 |
Total liabilities and stockholders' equity | $ 1,243,031 | $ 1,037,028 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
CONSOLIDATED BALANCE SHEETS | ||
Trade receivables, net of allowances | $ 9,442 | $ 8,893 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000 | 1,000,000 |
Common stock, shares issued | 171,168 | 165,448 |
Common stock, shares outstanding | 171,146 | 165,417 |
Treasury stock, shares | 22 | 31 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | |||
Revenue | $ 572,543 | $ 452,418 | $ 332,741 |
Cost of revenue (exclusive of depreciation and amortization shown separately below) | 106,631 | 77,866 | 54,382 |
Product development | 125,376 | 95,118 | 62,698 |
Sales, marketing and customer support | 125,953 | 107,416 | 77,312 |
General and administrative | 87,971 | 78,666 | 81,380 |
Depreciation and amortization | 40,885 | 34,328 | 30,285 |
Income from operations | 85,727 | 59,024 | 26,684 |
Interest expense | 1,066 | 905 | 1,172 |
Other income, net | (11,216) | (1,249) | (309) |
Income before income taxes | 95,877 | 59,368 | 25,821 |
Income tax expense (benefit) | 24,411 | 16,100 | (3,487) |
Net income | $ 71,466 | $ 43,268 | $ 29,308 |
Earnings per share: | |||
Basic | $ 0.43 | $ 0.26 | $ 0.20 |
Diluted | $ 0.41 | $ 0.25 | $ 0.18 |
Weighted-average common stock outstanding: | |||
Basic | 167,803 | 163,882 | 148,309 |
Diluted | 173,435 | 170,755 | 160,264 |
Comprehensive income: | |||
Net income | $ 71,466 | $ 43,268 | $ 29,308 |
Other comprehensive income (loss): | |||
Foreign currency cumulative translation adjustment | 3,523 | (5,555) | (1,782) |
Total comprehensive income | $ 74,989 | $ 37,713 | $ 27,526 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock Private Placement | Common Stock | Preferred Stock | Treasury Stock | Additional Paid-in Capital Private Placement | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income Net of Income Taxes | Private Placement | Total |
Balance at Dec. 31, 2020 | $ 140 | $ 610 | $ (260,686) | $ 620,679 | $ 54,941 | $ 1,011 | $ 416,695 | |||
Balance (in shares) at Dec. 31, 2020 | 140,222 | 61,006 | 15,146 | |||||||
Foreign currency translation adjustment | (1,782) | (1,782) | ||||||||
Shares repurchased for settlement of employee tax withholdings | $ (1,802) | (1,802) | ||||||||
Shares repurchased for settlement of employee tax withholdings (in shares) | 50 | |||||||||
Issuance of common stock as consideration for acquisition | $ 1 | 22,525 | 22,526 | |||||||
Issuance of common stock as consideration for acquisition (in shares) | 684 | |||||||||
Stock-based compensation expense | 21,887 | 21,887 | ||||||||
Issuance of stock | $ 1 | $ 10 | $ 29,999 | 269,380 | $ 30,000 | 269,390 | ||||
Issuance of stock (in shares) | 1,111 | 9,977 | ||||||||
Common stock issued under employee purchase plan | 404 | 404 | ||||||||
Common stock issued under employee purchase plan (in shares) | 15 | |||||||||
Common stock issued upon exercise of stock options | $ 5 | 12,435 | 12,440 | |||||||
Common stock issued upon exercise of stock options (in shares) | 4,782 | |||||||||
Common stock issued upon vesting of restricted stock units (in shares) | 366 | |||||||||
Conversion of Series A preferred stock to common stock | $ 5 | $ (610) | $ 260,686 | (260,081) | ||||||
Conversion of Series A preferred stock to common stock (in shares) | 5,190 | (61,006) | (15,146) | |||||||
Net income | 29,308 | 29,308 | ||||||||
Balance at Dec. 31, 2021 | $ 162 | $ (1,802) | 717,228 | 84,249 | (771) | 799,066 | ||||
Balance (in shares) at Dec. 31, 2021 | 162,347 | 50 | ||||||||
Foreign currency translation adjustment | (5,555) | (5,555) | ||||||||
Shares repurchased for settlement of employee tax withholdings | $ (10,244) | (10,244) | ||||||||
Shares repurchased for settlement of employee tax withholdings (in shares) | 402 | |||||||||
Stock-based compensation expense | 42,787 | 42,787 | ||||||||
Common stock issued under employee purchase plan | 1,734 | 1,734 | ||||||||
Common stock issued under employee purchase plan (in shares) | 91 | |||||||||
Common stock issued to non-employees (in shares) | 4 | |||||||||
Common stock issued upon exercise of stock options | $ 2 | 5,801 | 5,803 | |||||||
Common stock issued upon exercise of stock options (in shares) | 1,518 | |||||||||
Common stock issued upon vesting of restricted stock units | $ 1 | (1) | ||||||||
Common stock issued upon vesting of restricted stock units (in shares) | 1,488 | |||||||||
Conversion of Series A preferred stock to common stock (in shares) | (421) | |||||||||
Treasury stock reissued upon settlement of equity awards | $ 11,250 | (11,250) | ||||||||
Net income | 43,268 | 43,268 | ||||||||
Balance at Dec. 31, 2022 | $ 165 | $ (796) | 756,299 | 127,517 | (6,326) | 876,859 | ||||
Balance (in shares) at Dec. 31, 2022 | 165,448 | 31 | ||||||||
Foreign currency translation adjustment | 3,523 | 3,523 | ||||||||
Shares repurchased for settlement of employee tax withholdings | $ (4,586) | (4,586) | ||||||||
Shares repurchased for settlement of employee tax withholdings (in shares) | 142 | |||||||||
Issuance of common stock as consideration for acquisition | $ 2 | 52,935 | 52,937 | |||||||
Issuance of common stock as consideration for acquisition (in shares) | 1,642 | |||||||||
Stock-based compensation expense | 60,351 | 60,351 | ||||||||
Common stock issued under employee purchase plan | 2,723 | 2,723 | ||||||||
Common stock issued under employee purchase plan (in shares) | 105 | |||||||||
Common stock issued upon exercise of stock options | $ 3 | 10,663 | $ 10,666 | |||||||
Common stock issued upon exercise of stock options (in shares) | 2,634 | 2,701 | ||||||||
Common stock issued upon vesting of restricted stock units | $ 1 | (1) | ||||||||
Common stock issued upon vesting of restricted stock units (in shares) | 1,339 | |||||||||
Treasury stock reissued upon settlement of equity awards | $ 4,639 | (4,639) | ||||||||
Treasury stock reissued upon settlement of equity awards (in shares) | (151) | |||||||||
Net income | 71,466 | $ 71,466 | ||||||||
Balance at Dec. 31, 2023 | $ 171 | $ (743) | $ 878,331 | $ 198,983 | $ (2,803) | $ 1,073,939 | ||||
Balance (in shares) at Dec. 31, 2023 | 171,168 | 22 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities: | |||
Net income | $ 71,466 | $ 43,268 | $ 29,308 |
Adjustments to reconcile net income to net cash provided by operating activities | |||
Bad debt expense (recovery) | 10,075 | 5,033 | (711) |
Depreciation and amortization expense | 40,885 | 34,328 | 30,285 |
Amortization of debt issuance costs | 294 | 294 | 294 |
Non-cash lease expense | 6,727 | 7,339 | |
Deferred taxes | (25,046) | (19,581) | (7,866) |
Stock-based compensation expense | 59,244 | 42,307 | 21,887 |
Interest expense | 68 | 107 | 103 |
Loss on disposal of fixed assets | 5 | 1,353 | |
Impairment of long-lived assets | 1,510 | ||
Change in fair value of contingent consideration | (1,193) | 57 | |
Offering costs | 22,074 | ||
Other | 492 | 87 | 733 |
Changes in operating assets and liabilities, net of effects of business combinations | |||
Trade receivables | (43,691) | (49,765) | (22,004) |
Prepaid expenses and other assets | (5,591) | 9,094 | (7,567) |
Trade payables | 5,476 | 2,884 | (49) |
Accrued expenses and other liabilities | 530 | 16,604 | 16,205 |
Net cash provided by operating activities | 119,741 | 94,862 | 82,749 |
Investing activities: | |||
Purchase of property, plant and equipment | (17,009) | (39,981) | (9,397) |
Acquisition of businesses, net of cash acquired | (67,240) | (149,217) | |
Net cash used in investing activities | (84,249) | (39,981) | (158,614) |
Financing activities: | |||
Payments of long-term debt | (22,000) | ||
Payments to revolving credit facility | (50,000) | ||
Proceeds from revolving credit facility | 50,000 | ||
Payment of contingent consideration related to Zentrick acquisition | (3,247) | ||
Proceeds from common stock issued upon exercise of stock options | 10,666 | 5,803 | 12,440 |
Proceeds from common stock issued under employee purchase plan | 2,723 | 1,734 | 404 |
Proceeds from issuance of common stock upon initial public offering | 269,390 | ||
Proceeds from issuance of common stock in connection to concurrent private placement | 30,000 | ||
Payments related to offering costs | (6) | (22,069) | |
Finance lease payments | (2,314) | (1,924) | (1,918) |
Shares repurchased for settlement of employee tax withholdings | (4,586) | (10,244) | (1,802) |
Net cash provided by (used in) financing activities | 6,489 | (7,884) | 264,395 |
Deferred payment related to acquisition of assets | (50) | ||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | 338 | (784) | (200) |
Net (decrease) increase in cash, cash equivalents, and restricted cash | 42,319 | 46,213 | 188,330 |
Cash, cash equivalents, and restricted cash - Beginning of period | 267,938 | 221,725 | 33,395 |
Cash, cash equivalents, and restricted cash - End of period | 310,257 | 267,938 | 221,725 |
Supplemental cash flow information: | |||
Cash paid for taxes | 60,883 | 12,351 | 7,698 |
Cash paid for interest | 714 | 554 | 774 |
Non-cash investing and financing activities: | |||
Right-of-use assets obtained in exchange for new operating lease liabilities, net of impairments and tenant improvement allowances | 2,547 | 71,979 | |
Acquisition of equipment under finance lease | 5,479 | 1,518 | |
Capital assets financed by accounts payable and accrued expenses | 261 | 12 | 36 |
Stock-based compensation included in capitalized software development costs | 1,103 | $ 480 | |
Common stock issued in connection with acquisition | 52,937 | 22,526 | |
Liabilities for contingent consideration | $ 1,193 | ||
Treasury stock reissued upon the conversion of Series A preferred stock for common stock | 260,686 | ||
Offering costs included in accounts payable and accrued expense | $ 5 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
Cash and cash equivalents | $ 310,131 | $ 267,813 | $ 221,591 |
Restricted cash (included in prepaid expenses and other assets on the Consolidated Balance Sheets) | 126 | 125 | 134 |
Total cash and cash equivalents and restricted cash | $ 310,257 | $ 267,938 | $ 221,725 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2023 | |
Description of Business | |
Description of Business | 1. Description of Business DoubleVerify Holdings, Inc. (the “Company”) is one of the industry’s leading media effectiveness platforms that leverages AI to drive superior outcomes for global brands. By creating more effective, transparent ad transactions, we make the digital advertising ecosystem stronger, safer and more secure, thereby preserving the fair value exchange between buyers and sellers of digital media. The Company’s solutions provide advertisers unbiased data analytics that enable advertisers to increase the effectiveness, quality and return on their digital advertising investments. The DV Authentic Ad is our proprietary metric of digital media quality, which measures whether a digital ad was delivered in a brand suitable environment, fully viewable, by a real person and in the intended geography. The Company’s software interface, DV Pinnacle, delivers these metrics to our customers in real time, allowing them to access critical performance data on their digital transactions. The Company’s software solutions are integrated across the entire digital advertising ecosystem, including programmatic platforms, social media channels and digital publishers. The Company’s solutions are accredited by the Media Rating Council, which allows the Company’s data to be used as a single source standard in the evaluation and measurement of digital ads. The Company was incorporated on August 16, 2017, is registered in the state of Delaware and is the parent company of DoubleVerify Midco, Inc. (“MidCo”), which is in turn the parent company of DoubleVerify Inc. On August 18, 2017, DoubleVerify Inc. entered into an agreement and plan of merger (the “Agreement”), whereby the Company and Pixel Merger Sub, Inc. (“Merger Sub”), a wholly-owned subsidiary of the Company, agreed to provide for the merger of the Merger Sub with DoubleVerify Inc. pursuant to the terms and conditions of the Agreement. On the effective date, Merger Sub was merged with and into DoubleVerify Inc. whereupon the separate corporate existence of Merger Sub ceased and DoubleVerify Inc. continued as the surviving corporation. Through the merger, the Company acquired 100% of the outstanding equity instruments of DoubleVerify Inc., (the “Acquisition”) resulting in a change of control at the parent level. The merger resulted in the application of acquisition accounting under the provisions of Financial Accounting Standards Board (“FASB”) Topic Accounting Standards Codification (“ASC”) 805, Business Combinations. The Company is headquartered in New York, New York and has wholly owned subsidiaries in numerous jurisdictions, including Israel, the United Kingdom, the United Arab Emirates, Germany, Singapore, Australia, Canada, Brazil, Belgium, Mexico, France, Japan, Spain, Finland, Italy and India, and operates in one reportable segment. On April 23, 2021, the Company completed an IPO. See Footnote 14, Stockholders’ Equity. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation and Summary of Significant Accounting Policies | 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Preparation and Principles of Consolidation The accompanying Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and reflect the financial statements of the Company and all of its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates and Judgments in the Preparation of the Consolidated Financial Statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expense during the reporting periods. Significant estimates and judgments are inherent in the analysis and measurement of items including, but not limited to: revenue recognition criteria including the determination of principal versus agent revenue considerations, income taxes, the valuation and recoverability of goodwill and intangible assets, the assessment of potential loss from contingencies, assumptions in valuing acquired assets and liabilities assumed in business combinations, the allowance for doubtful accounts, and assumptions used in determining the fair value of stock-based compensation. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. These estimates are based on the information available as of the date of the Consolidated Financial Statements. Segment Reporting The Company’s operating segments are determined based on the units that constitute a business for which discrete financial information is available and for which operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”). The CODM is the highest level of management responsible for assessing the Company’s overall performance and making operational decisions. The Company operates in one single operating and reportable Fair Value Measurements The Company evaluates the fair value of certain assets and liabilities using the fair value hierarchy. Fair value is an exit price representing the amount that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the Company applies the three-tier GAAP value hierarchy which prioritizes the inputs used in measuring fair value as follows: Level 1—observable inputs such as quoted prices in active markets; Level 2—inputs other than the quoted prices in active markets that are observable either directly or indirectly; Level 3—unobservable inputs of which there is little or no market data, which require the Company to develop its own assumptions. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measure. The carrying amounts of accounts receivable, accounts payable, accrued expenses and other current liabilities approximate fair value due to the short-term nature of these instruments. Foreign Currency A majority of the Company’s revenues are generated in U.S. dollars. In addition, most of the Company’s costs are denominated and determined in U.S. dollars. Thus, the reporting currency of the Company is the U.S. dollar. The functional currency of the Company’s foreign subsidiaries is generally the local currency. The assets and liabilities of subsidiaries whose functional currency is a foreign currency are translated at the period-end exchange rates. Income statement items are translated at the average monthly rates for the year. The resulting translation adjustment is recorded as a component of Accumulated other comprehensive (loss) income, net of income taxes and is included in the Consolidated Statements of Stockholders’ Equity. Cash and Cash Equivalents The Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. Pursuant to the Company’s investment policy, its surplus funds are kept as cash or cash equivalents in treasury bills, money market funds and savings accounts to reduce its exposure to market risk. Trade Receivables Net of Allowances for Doubtful Accounts Trade receivables are non-interest bearing and are stated at gross invoice amounts. A receivable is recorded when the Company has an unconditional right to receive payment based on the satisfaction of performance obligations, such that only the passage of time is required before consideration is due, regardless of whether amounts are billed or unbilled. Included in trade receivables on the Consolidated Balance Sheets are unbilled receivable balances which have not yet been invoiced. The Company bills trade receivables one month The Company utilizes an expected loss methodology for its accounts receivable and the related allowance for doubtful accounts. In addition, the Company continues to evaluate specific accounts where information indicates the customers may have an inability to meet financial obligations, such as bankruptcy proceedings and receivable amounts outstanding for an extended period beyond contractual terms. Write-offs of accounts receivable are taken in the period when the Company has exhausted its efforts to collect overdue and unpaid receivables or otherwise has evaluated other circumstances that indicate that the Company should abandon such efforts. The following table presents changes in the accounts receivable allowance for doubtful accounts: Year Ended December 31, (in thousands) 2023 2022 2021 Beginning balance $ 8,893 $ 6,527 $ 7,049 Add: bad debt expense (recoveries) 10,075 5,033 (711) Less: write offs, net of recoveries (9,526) (2,667) 189 Ending balance $ 9,442 $ 8,893 $ 6,527 Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets on the Consolidated Balance Sheets consist primarily of prepaid taxes, other general prepaid expenses, prepaid insurance, and value added tax assets. Any expenses paid prior to the related services being rendered are recorded as prepaid expenses and amortized over the period of service. Restricted cash represents amounts pledged as collateral for certain agreements with third parties. Upon satisfying the terms of the agreements, the funds are expected to be released and available for use by the Company. As of December 31, 2023 and 2022, the Company had $0.1 million of restricted cash, respectively. Property, Plant and Equipment, Net Property, plant and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the following estimated useful lives of the assets: Computers and peripheral equipment 3 years Office furniture and equipment 4 - 7 years Leasehold improvements Remaining lease term Assets under finance leases are recorded at their net present value at the inception of the lease. Assets under finance leases and leasehold improvements are amortized over the shorter of the related lease terms or their useful lives. Expenditures which significantly improve or extend the life of an asset are capitalized, while charges for routine maintenance and repairs are expensed during the year incurred. Capitalized Software Capitalized software, which is included in Property, plant and equipment, net, consists of costs to purchase and develop internal-use software, which the Company uses to provide services to its customers. The costs to purchase and develop internal-use software are capitalized from the time that the preliminary project stage is completed, and it is considered probable that the software will be used to perform the function intended. These costs include personnel and related employee benefits for employees directly associated with the software development and external costs of the materials or services consumed in developing or obtaining the software. Any costs incurred during subsequent efforts to upgrade and enhance the functionality of the software are also capitalized. Once this software is ready for use in the Company’s products, these costs are amortized on a straight-line basis over the estimated useful life of the software, which is 3 years. During the years ended December 31, 2023 and December 31, 2022, the Company capitalized $14.5 million and $7.0 million in internal-use software cost, respectively. Amortization expense was $7.3 million, $5.5 million, and $3.7 million on capitalized internal-use software costs during the years ended December 31, 2023, 2022 and 2021, respectively. This is included within Depreciation and amortization in the Consolidated Statements of Operations and Comprehensive Income. Leases The Company has operating and financing leases for corporate offices, data centers, and certain equipment. The Company determines if an arrangement is a lease at inception and does not recognize a right-of-use (“ROU”) asset or lease liability with a term shorter than 12 months. Additionally, the Company does not separate lease components from non-lease components for the specified asset classes. An ROU asset represents the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are to be recognized at commencement date based on the present value of lease payments not yet paid over the lease term. The lease term includes the minimum unconditional term of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date that such options will be exercised. As the rate implicit for each of the Company’s leases is not readily determinable, the Company uses an incremental borrowing rate, based on the information available on the lease commencement date in determining the present value of lease payments not yet paid. The Company applies the portfolio approach in determining the incremental borrowing rate for each lease. The incremental borrowing rate for United States dollar denominated leases was calculated by considering current market yields and the Company’s existing debt rates to determine a yield. In order to assess a premium or discount for the lease tenor and develop an incremental borrowing rate curve, the analysis compared the Company’s existing debt yield to the appropriate market yield curve corresponding to the estimated secured credit rating of the Company. The curve one notch higher was used as the incremental borrowing rate focuses on secured borrowing rates, which tend to carry higher credit ratings when issued, in addition to calculating differences in expected recovery rates between secured and unsecured obligations. The corporate yield curve was adjusted based on the Company’s implied incremental borrowing rate premium or discount at each tenor to reach a concluded incremental borrowing rate curve. Using the calculated United States dollar incremental borrowing rate, the international incremental borrowing rates were determined by adjusting for specific country risk. The operating lease ROU assets include any lease payments made prior to the rent commencement date and exclude lease incentives. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term. Operating lease transactions are included in Operating lease right-of-use assets, net, and Operating lease liabilities, current and noncurrent, within the accompanying Consolidated Balance Sheets. Finance leases, formerly known as (“f/k/a”) capital leases, are included in Property, plant and equipment, net, Current portion of finance lease obligations, and Finance lease obligations within the accompanying Consolidated Balance Sheets. Refer to Footnote 7, Leases, for further information. Business Combinations The Company recognizes assets acquired and liabilities assumed at their fair value on the acquisition date. The Company allocates the purchase price of a business combination, which is the sum of the consideration provided, which may consist of cash, equity or a combination of the two, to the identifiable assets and liabilities of the acquired business at their acquisition date fair values. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill. 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 revenues and cash flows, discount rates and selection of comparable companies. The Company estimates the fair value of intangible assets acquired generally using a discounted cash flow approach, which includes an analysis of the future cash flows expected to be generated by the asset and the risk associated with achieving those cash flows. The key assumptions used in the discounted cash flow model include the discount rate that is applied to the forecasted future cash flows to calculate the present value of those cash flows and the estimate of future cash flows attributable to the acquired intangible asset, which include revenue, expenses and taxes. The carrying value of acquired working capital assets and liabilities approximates its fair value, given the short-term nature of these assets and liabilities. Acquisition-related costs are expensed as incurred. Goodwill Goodwill represents the excess of purchase price over the fair value of tangible net assets and identifiable intangible assets of the businesses acquired. The valuation of goodwill involves the use of management’s estimates and assumptions. The carrying value of goodwill is not amortized, but rather, is evaluated for impairment at least annually, as of October 1, and, additionally on an interim basis, whenever events or changes in circumstances indicate that the carrying amount of goodwill will not be recoverable. The Company has a single reporting unit. The Company’s review for impairment includes an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company performs a quantitative goodwill impairment test, which compares the fair value of the reporting unit with its carrying amounts. The Company estimates the fair value of its reporting unit considering both income and market-based approaches. The estimated fair value of a reporting unit is determined based on assumptions regarding estimated future cash flows, discount rates, long-term growth rates and market values. Intangible Assets, Net Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. The estimated useful lives of the Company’s finite-lived intangible assets are as follows: Trademarks and brands 5 - 15 years Customer relationships 5 - 14 years Developed technology 4 - 8 years Non-compete agreements 2 years Impairment of Long-Lived Assets Long-lived assets, such as property and equipment, ROU assets, and intangible assets subject to depreciation and amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than the Company had originally estimated. Recoverability of these assets is measured by comparison of the carrying amount of each asset or asset group to the future undiscounted cash flows the asset or asset group is expected to generate over their remaining lives. If the asset or asset group is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset or asset group. If the useful life is shorter than originally estimated, the Company amortizes the remaining carrying value over the new shorter useful life. Debt Issuance Costs The New Revolving Credit Facility, as defined in Footnote 9, Long-term Debt, includes debt issuance costs that meet the definition of an asset and are recorded in the Consolidated Balances Sheets in Other Non-Current Assets. Debt issuance costs for the New Revolving Credit Facility are amortized to interest expense over the contractual term of the underlying debt instrument on a straight-line basis through the maturity date of the instrument of October 1, 2025. As of December 31, 2023 and December 31, 2022, remaining debt issuance costs were $0.5 million and $0.8 million, respectively. Revenue Recognition In accordance with Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (ASC 606), the Company recognizes revenue under the core principle to depict the transfer of control to its customers in an amount reflecting the consideration to which it expected to be entitled. In order to achieve that core principle, the Company applies the following five-step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. The Company primarily maintains agreements with each customer in the form of master service agreements and master service orders, which set out the terms of the arrangement and access to the Company’s services. The Company invoices clients monthly for the services provided during the month. Invoice payment terms are typically between 30 to 60 days. The Company’s contracts with customers may include multiple promised services, consisting of the various impression measurement services the Company offers. For all revenue channels, the Company identifies performance obligations by evaluating whether the promised goods and services are capable of being distinct and distinct within the context of the contract at contract inception. Promised goods and services that are not distinct at contract inception are combined as one performance obligation. Once the Company identifies the performance obligations, the Company will determine the transaction price based on contractual amounts applied to the associated terms. The Company allocates the transaction price to each performance obligation based on the standalone selling price. The major sources of revenue include Measurement (f/k/a Advertiser – direct), Activation (f/k/a Advertiser – programmatic), and Supply-side customers. Measurement and Activation Revenue For Measurement revenue, advertisers can purchase the Company’s services to measure the quality and performance of ads purchased directly from digital properties, including publishers and social media platforms. Advertisers are provided access to the Company’s platform through the Company’s proprietary self-service software that provides the Company’s customers with access to data on all their digital ads and enables them to make changes to their ad strategies. In these arrangements, the customer pays a fee to the Company based on the ads measured. For Activation revenues, customers can elect to use the Company’s services for evaluating the quality and performance of advertising inventory they are considering purchasing. Advertisers purchase the Company’s social activation solutions direct and programmatic activation solutions through Demand Side Platforms that manage ad campaign auctions and inventories on their behalf on an advertising exchange. The ability to provide the Company’s programmatic solutions to customers requires that the Company enter into product integration agreements with Demand-Side Platforms who in turn make the Company’s services available to advertisers. In these arrangements, the customer pays a fee to the Company (collected by the Demand-Side Platform) for the successful execution of the purchase of advertising inventory on an exchange. For Measurement and Activation revenues, contracts with multiple performance obligations typically consist of services aimed at advertisers to help evaluate and ensure the success of a brand campaign by measuring authentic impressions. These services are generally delivered together as impressions are measured. For these services, each impression is distinct and has the same pattern of transfer to the customer. Revenue is recognized over time, as the Company is providing services that the customer is continuously consuming and receiving benefit from or upon completion of the service. The Company considers primarily the “right to invoice” practical expedient appropriate in the context of the Company’s contracts as this directly corresponds to the value of the Company’s performance to date. In this case, the Company’s pricing structure is (1) solely variable on the basis of the customer’s usage of the Company’s services, (2) is priced at a fixed rate per usage and (3) gives the entity the right to invoice the customer for its usage as it occurs. Certain customers receive cash-based incentives, credits, or discounts on the pricing of products or services once specific volume thresholds have been met. For the years ended December 31, 2023 and 2022, the Company had a liability for customer incentives of $8.4 million and $6.2 million, respectively, included in Other current liabilities in the Consolidated Balance Sheets. Where volume-based discounts are applied retrospectively, these amounts are accounted for as variable consideration which the Company estimates based on the expected consideration to be received by the customer. For volume-based discounts applied prospectively, the Company evaluates each contract to determine if the discount represents a material right which would be recognized as a separate performance obligation. Revenue is recognized using the output method based on digital ads measured at the effective rate for which consideration is expected to be received. Supply-Side Customer Supply-Side Customer revenues consist of arrangements with publishers and other supply-side customers to provide them with software solutions and data analytics to enable them to maximize revenue from their digital advertising inventory. Certain arrangements include minimum guaranteed fees that reset monthly and are recognized on a straight-line basis over the access period, which is usually one to two years. For contracts that contain overages, once the minimum guaranteed amount is achieved, overages are recognized as earned over time based on a tiered pricing structure. Such revenues are recognized on an input method time-elapsed basis, as the Company is providing services that the customer is continuously consuming and receiving benefit from, and such recognition best depicts the transfer of control to the customer. Overages give rise to variable consideration that is allocated to the distinct periods to which the overage relates. Transactions that Involve Third Parties For transactions that involve third parties, the Company evaluates which party in the arrangement obtains control of the Company’s services (and is therefore the Company’s customer), which impacts whether the Company reports as revenue the gross amounts paid by the advertiser through the Demand-Side Platform or the net amount paid by the Company’s Demand-Side Platform partners. For certain arrangements, advertisers (“customers”) may purchase the Company’s service offering through a Demand-Side Platform that manages various ad campaign auctions and inventory on behalf of the advertisers. Customers elect to use the Company’s service of evaluating the quality and performance of advertising inventory up for bid on an advertising exchange. The ability to provide these services to customers requires that the Company enter into product integration agreements with Demand-Side Platforms who in turn make the Company’s services available to advertisers. In these arrangements, the customer pays a fee to the Company (collected by the Demand-Side Platform) for the successful execution of the purchase of advertising inventory on an exchange. In these transactions, the Company transfers control of the Company’s services directly to the advertiser (who is the Company’s customer) and therefore revenue is recognized for the gross amount paid by the advertiser for the Company’s services. Specifically, the Company transfers control of the data that is influencing the purchasing decisions directly to the customer and the Company is primarily responsible for providing these services to the customer. That is, control of these services (or a right to these services) does not transfer to the Demand-Side Platform before they are transferred to the Company’s customers. Further, the Company has latitude in establishing the sales price with those customers as there is a fixed retail rate card that is included in the product integration agreements with the Demand-Side Platforms or are governed by contracts in place with the customers. Accordingly, the Company records revenue for the gross amounts paid by advertisers for these services and records the amounts retained by the Demand-Side Platforms as a cost of revenue. Contract assets relate to the Company’s conditional right to consideration for completed performance under the contract (e.g., unbilled receivables) and are included in Trade receivables, net of allowance for doubtful accounts. Costs to Fulfill or Obtain a Contract The Company recognizes direct fulfillment costs as an expense when incurred. These costs include commission programs to compensate employees for generating sales orders under the Company’s master services agreements or integration agreements, and are included in Sales, marketing, and customer support. The Company did not incur incremental costs to obtain contracts during the years ended December 31, 2023, 2022, and 2021, respectively. Operating Expenses Cost of revenue includes commissions related to revenue share arrangements with Demand Side Platforms and excludes depreciation and amortization. Cost of revenue also includes platform hosting fees, data center costs, software and other technology expenses, other costs directly associated with data infrastructure, personnel costs including salaries, bonuses, stock-based compensation, employee benefit costs and allocated overhead expenses for personnel who provide the Company’s customers with support in implementing and using the Company’s software platform. Product development expenses consist primarily of personnel costs, including salaries, bonuses, stock-based compensation, employee benefits costs, and allocated overhead expenses inclusive of engineering, product and technical operation expenses, third-party consultant costs associated with the ongoing research, development and maintenance of the Company’s software platform. Technology and development costs are expensed as incurred, except to the extent that such costs are associated with software development that qualifies for capitalization, which are then recorded as capitalized software and included in Property, plant and equipment, net on the Company’s Consolidated Balance Sheets. Sales, marketing and customer support expenses consist primarily of personnel costs, including salaries, bonuses, stock-based compensation, employee benefits costs, commission costs, and allocated overhead expenses for the Company’s sales, marketing and customer support personnel. Sales, marketing, and customer support expense also include costs for market development programs, advertising costs, attendance at events and trade shows, promotional and other marketing activities. Advertising costs include expenses associated with direct marketing but exclude the costs of attendance at events and trade shows. Advertising costs were $0.1 million for the years ended December 31, 2023, 2022 and 2021, respectfully. Commissions costs are expensed as incurred. General and administrative expenses consist primarily of personnel costs, including salaries, bonuses, stock-based compensation, employee benefits costs and other overhead expenses associated with the Company’s executive, finance, legal, human resources, compliance, and other administrative personnel, as well as accounting, tax, and legal professional services fees, rent, bad debt expense and other overhead expense related to human resource and finance activities, as well as other corporate costs including offering costs. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables. The Company maintains cash deposits with financial institutions that, from time to time, exceed applicable insurance limits. The Company reduces this risk by maintaining such deposits with high quality financial institutions that management believes are creditworthy. Cash and cash equivalents are maintained with several financial institutions domestically and internationally. The combined account balances held on deposit at each institution typically exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company monitors this credit risk and makes adjustments to the concentrations as necessary. As of December 31, 2023 and 2022, the Company had total domestic cash deposits and cash equivalents of $283.5 million and $256.7 million, respectively. Total domestic cash deposits exceeded the FDIC insurance coverage amounts. With respect to accounts receivable, credit risk is mitigated by the Company’s ongoing credit evaluation of its customers’ financial condition. No single customer accounted for more than 10% of trade receivables for the years ended December 31, 2023 and 2022. With respect to revenues, no single customer accounted for more than 10% of revenues for the years ended December 31, 2023, 2022 and 2021. Other Income, Net Other income, net consists primarily of interest income, change in fair value associated with contingent consideration, and the impact of foreign currency transaction gains and losses associated with monetary assets and liabilities. Interest income consists of interest earned on interest-bearing monetary assets. Income Taxes The Company accounts for income taxes using the asset and liability method, in accordance with ASC 740, Accounting for Income Taxes. This approach requires recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The Company records a valuation allowance when it is determined that it is more-likely-than-not, based upon all available evidence both positive and negative, that a portion or all its deferred tax assets will not be realized. At each reporting period, management assesses the realizability of its deferred tax assets. The Company records uncertain tax positions using a more-likely-than-not threshold based on the technical merits of the tax position taken. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefits determined on a cumulative probability basis, which are more-likely-than-not to be realized upon ultimate settlement in the financial statements. Interest and penalties are recognized as part of income tax expense. Stock-Based Compensation The Company accounts for stock based compensation awards issued to its employees and members of its Board of Directors (the “Board”) in accordance with ASC 718, Compensation—Stock Compensation. ASC 718 requires that the cost resulting from all share based payment transactions be recognized in the financial statements. This statement establishes fair value as the measurement objective in accounting for share based payment arrangements and requires |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2023 | |
Revenue | |
Revenue | 3. Revenue The following table disaggregates revenue between advertiser customers, where revenue is generated based on the number of ads measured for Measurement (f/k/a Advertiser – direct) or measured and purchased for Activation (f/k/a Advertiser – programmatic) and Supply-side customers, where revenue is generated based on contracts with minimum guarantees or contracts that contain overages after minimum guarantees are achieved. Disaggregated revenue by customer type was as follows: Year Ended December 31, (in thousands) 2023 2022 2021 Activation (f/k/a Advertiser - programmatic) $ 328,936 $ 251,198 $ 167,798 Measurement (f/k/a Advertiser - direct) 198,024 157,908 135,516 Supply-side customer 45,583 43,312 29,427 Total revenue $ 572,543 $ 452,418 $ 332,741 Contract assets relate to the Company’s conditional right to consideration for completed performance under the contract (e.g., unbilled receivables). Trade receivables, net of allowance for doubtful accounts, include unbilled receivable balances of $55.0 million and $52.7 million as of December 31, 2023 and 2022, respectively. Remaining Performance Obligations As of December 31, 2023, the Company had $10.9 million of remaining performance obligations which are expected to be recognized over the next one |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2023 | |
Business Combinations | |
Business Combinations | 4. Business Combinations Meetrics GmbH On August 31, 2021, the Company acquired all of the outstanding stock of Meetrics GmbH ("Meetrics"). Meetrics was founded in 2008 in Berlin, Germany and is a European-based ad verification provider – offering comprehensive media quality measurement solutions across viewability, fraud, brand safety and suitability. The aggregate net cash purchase price was $24.3 million. This acquisition expands DoubleVerify’s international presence as substantially all of Meetrics’ customer base and business operations are based in Europe. The following table summarizes the final fair value of assets acquired and liabilities assumed as of the acquisition date: (in thousands) Acquisition Date Assets: Cash and cash equivalents $ 1,007 Trade receivables 778 Other assets 96 Property, plant and equipment 10 Intangible assets: Technology 2,245 Customer relationships 7,208 Trademarks 47 Non-compete agreements 71 Total intangible assets 9,571 Goodwill 15,578 Total assets acquired $ 27,040 Liabilities: Trade payables $ 147 Other current liabilities 361 Deferred tax liability 1,233 Total liabilities assumed 1,741 Total purchase consideration $ 25,299 Cash acquired (1,007) Net cash purchase price $ 24,292 The acquired intangible assets of Meetrics will be amortized over their estimated useful lives. Based on facts and circumstances in existence as of the effective date of the acquisition, customer relationships will be amortized over fourteen years, developed technology will be amortized over four years, non-compete agreements will be amortized over two years, and trademarks will be amortized over one year. The total weighted-average useful life of the acquired intangible assets is 11.5 years. The Company recognized a deferred tax liability of $1.2 million in relation to the intangible assets acquired. The goodwill and identified intangible assets are not deductible for tax purposes. The Company incurred acquisition-related transaction costs of less than $0.1 million and $0.9 million included in General and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2022 and 2021, respectively. The goodwill associated with Meetrics includes the acquired assembled work force, the value associated with the opportunity to leverage the work force to continue to develop the future generations of verification technology assets, as well as the ability to grow the Company through adding additional customer relationships or new solutions in the future. The acquisition of Meetrics was immaterial to the Company's Consolidated Financial Statements for the year ended December 31, 2021, and therefore, supplemental information disclosure on an unaudited pro forma basis is not presented. Outrigger Media, Inc. On November 22, 2021, the Company acquired Outrigger Media, Inc. (d/b/a "OpenSlate"), a leading independent pre-campaign contextual targeting platform for social video and CTV. OpenSlate’s technology provides insight into the nature and quality of ad-supported content on large, video-driven social platforms, such as Facebook, TikTok and YouTube. The following table summarizes the components of purchase price that constitutes the consideration transferred: (in thousands) Cash, net of cash acquired $ 125,708 Common stock transferred 22,526 Total $ 148,234 The fair value of the Company’s common stock issued (684 shares of common stock) as consideration transferred was determined on the basis of market prices of our common stock available on November 22, 2021, the trading day on the acquisition date. The following table summarizes the final fair value of assets acquired and liabilities assumed as of the acquisition date: (in thousands) Acquisition Date Assets: Cash and cash equivalents $ 8,549 Trade receivables 5,460 Prepaid expenses 66 Escrow assets 2,000 Other assets 167 Property, plant and equipment — Intangible assets: Technology 11,900 Customer relationships 37,100 Total intangible assets 49,000 Goodwill 103,938 Total assets acquired $ 169,180 Liabilities: Trade payables $ 226 Other current liabilities 2,373 Escrow liabilities 2,000 Deferred tax liability 7,798 Total liabilities assumed 12,397 Total purchase consideration $ 156,783 Cash acquired (8,549) Net cash purchase price $ 148,234 The acquired intangible assets of OpenSlate are amortized over their estimated useful lives. Based on facts and circumstances in existence as of the effective date of the acquisition, the useful life of developed technology and customer relationships intangible assets acquired were determined to be five The goodwill and identified intangible assets are not deductible for tax purposes. The Company incurred acquisition-related transaction costs of $0.2 million and $2.2 million included in General and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2022 and 2021, respectively. The goodwill associated with OpenSlate includes the acquired assembled work force, the value associated with the opportunity to leverage the work force to continue to develop the future generations of verification technology assets, as well as the ability to grow the Company through adding additional customer relationships or new solutions in the future. The acquisition of OpenSlate was immaterial to the Company's Consolidated Financial Statements for the year ended December 31, 2021, and therefore, supplemental information disclosure on an unaudited pro forma basis is not presented. Zentrick NV On February 15, 2019, the Company acquired all of the outstanding stock of Zentrick NV ("Zentrick"). Zentrick, headquartered in Ghent, Belgium is a digital video technology company that provides middleware solutions that increase the performance of online video advertising for brand advertisers, advertising platforms and publishers. This acquisition integrates technology into the Company’s suite of products related to advertising viewability specifically on video formats, a growing segment of the advertising market and critical for the delivery of verification services to social platforms and CTV. The aggregate purchase price consists of 1) $23.2 million paid in cash at closing, which excluded closing adjustments of approximately $0.2 million paid in April 2019 2) $0.1 million in holdback payment of which 50% was payable 12 months after the closing date, and the remaining 50% was payable 24 months after the closing date and 3) up to $17.3 million of performance-based deferred payments that comprises two components (the “Zentrick Deferred Payment Terms”). The first component has a $4.0 million maximum payment related to four milestone tranches of $1.0 million each based on achievement of certain product milestones (“technical milestones”). The second component has a total maximum payment of $13.0 million and varies based upon certain revenue targets in fiscal 2019, 2020, and 2021 (“revenue targets”). Under the Zentrick Deferred Payment Terms, a portion of the technical milestones and revenue targets have been accounted at fair value as contingent consideration in the business combination with the remaining portion being accounted for as compensation expense under ASC 710, Compensation - General. The Company and the Zentrick selling stockholders reached an agreement for the early termination of the Zentrick Deferred Payment Terms and resolution of the contingent payments due for both the technical milestones and revenue targets. On February 16, 2022, pursuant to the terms of the Zentrick Early Termination Agreement, the Company made a payment of $5.6 million to the Zentrick selling stockholders and recorded $2.8 million of additional expense in General and administrative expense in the Consolidated Statements of Operations and Comprehensive Income. For the year ended December 31, 2021, the Company recorded a change in the fair value of the contingent consideration of $0.1 million and less than $0.1 million of compensation cost to the Consolidated Statements of Operations and Comprehensive Income. Scibids Technology SAS On August 14, 2023, the Company acquired all of the outstanding stock of Scibids Technology SAS (“Scibids”), a global leader in AI technology for digital campaign optimization. The acquisition combines DoubleVerify’s proprietary data with Scibids’ AI-powered optimization technology to provide advertiser customers with enhanced insights and control over their advertising performance. The following table summarizes the components of the purchase price that constitutes the consideration transferred: (in thousands) Cash, net of cash acquired $ 67,240 Common stock issued in connection with the acquisition 52,937 Fair value of contingent consideration 1,193 Total $ 121,370 The fair value of the Company’s common stock issued (1,642 shares of common stock) as consideration in the transaction was determined on the basis of market prices of our common stock available on August 14, 2023, the trading day on the acquisition date. The purchase price included a performance-based deferred payment that has a total maximum payout of $25.0 million (“Scibids Contingent Payment”) and varied based upon the achievement of certain performance metrics in fiscal year 2023 (“Earn-Out Period”). If the performance metrics during the Earn-Out Period did not exceed a certain threshold, no payment would be made. The Scibids Contingent Payment was accounted for at fair value as contingent consideration in the business combination at the date of acquisition. Refer to Footnote 8, Fair Value Measurement, for details upon conclusion of the Earn-out Period on December 31, 2023. The following table summarizes the preliminary fair value of assets acquired and liabilities assumed as of the acquisition date: (in thousands) Acquisition Date Assets: Cash and cash equivalents $ 1,705 Trade receivables 5,197 Prepaid expenses 50 Other assets 1,382 Intangible assets: Technology 18,000 Customer relationships 15,000 Total intangible assets 33,000 Goodwill 90,668 Total assets acquired $ 132,002 Liabilities: Trade payables $ 530 Other liabilities 1,259 Deferred tax liability 7,138 Total liabilities assumed 8,927 Total purchase consideration $ 123,075 Cash acquired (1,705) Purchase consideration, net of cash acquired $ 121,370 The acquired intangible assets of Scibids will be amortized over their estimated useful lives. Accordingly, customer relationships will be amortized over ten years and developed technology will be amortized over four years. The weighted-average useful life of the acquired intangible assets is 6.7 years. The Company recognized a deferred tax liability of $7.1 million in relation to the intangible assets acquired. The goodwill and identified intangible assets are not deductible for tax purposes. The Company incurred acquisition-related transaction costs of $1.3 million included in General and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income for the year ended December 31, 2023. The goodwill associated with Scibids includes the acquired assembled work force, the value associated with the opportunity to leverage the work force to continue to develop the future generations of AI technology assets, as well as the ability to grow the Company through adding additional customer relationships or new solutions in the future. The preliminary allocations of the purchase price for Scibids are subject to revisions as additional information is obtained about the facts and circumstances that existed as of the acquisition date. The revisions may have a significant impact on the accompanying Consolidated Financial Statements. The allocations of the purchase price will be finalized once all information is obtained and assessed, not to exceed one year from the acquisition date. The primary areas of the purchase price allocation that are not yet finalized relate to direct and indirect taxes and the finalization of working capital adjustments. The acquisition of Scibids was immaterial to the Company's Consolidated Financial Statements for the year ended December 31, 2023, and therefore, supplemental information disclosure on an unaudited pro forma basis is not presented. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 5. Goodwill and Intangible Assets The following is a summary of changes to the goodwill carrying value from January 1, 2022 through December 31, 2023: (in thousands) Goodwill as of January 1, 2022 $ 350,560 Measurement period adjustments (4,660) Foreign exchange impact (2,889) Goodwill as of December 31, 2022 343,011 Business combinations (Scibids) 90,668 Foreign exchange impact 2,329 Goodwill as of December 31, 2023 $ 436,008 The Company completed its analyses for each of the years ended December 31, 2023, 2022, and 2021 and determined that there was no impairment of Goodwill. The following table summarizes the Company’s intangible assets and related accumulated amortization: December 31, 2023 December 31, 2022 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying (in thousands) Amount Amortization Amount Amount Amortization Amount Trademarks and brands $ 11,734 $ (5,140) $ 6,594 $ 11,733 $ (4,294) $ 7,439 Customer relationships 161,173 (62,955) 98,218 145,834 (49,587) 96,247 Developed technology 93,013 (56,942) 36,071 76,677 (44,956) 31,721 Non-compete agreements 66 (66) — 64 (42) 22 Total intangible assets $ 265,986 $ (125,103) $ 140,883 $ 234,308 $ (98,879) $ 135,429 Amortization expense related to intangible assets amounted to $28.1 million, $25.1 million, and $18.8 million for the years ended December 31, 2023, 2022 and 2021, respectively. Estimated future expected amortization expense of intangible assets as of December 31, 2023 is as follows: (in thousands) 2024 $ 28,823 2025 26,894 2026 22,141 2027 18,187 2028 14,972 Thereafter 29,866 Total $ 140,883 The weighted-average remaining useful life by major asset classes as of December 31, 2023 is as follows: (In years) Trademarks and brands 9 Customer relationships 7 Developed technology 2 There were no impairments of Intangible assets identified during the years ended December 31, 2023, 2022 and 2021. |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment, net | |
Property, Plant and Equipment, net | 6. Property, Plant and Equipment, net Property, plant and equipment, net, including equipment under finance lease obligations and capitalized software development costs, consisted of the following: As of December 31, (in thousands) 2023 2022 Computers and peripheral equipment $ 25,013 $ 19,189 Office furniture and equipment 3,170 2,542 Leasehold improvements 32,595 29,678 Capitalized software development costs 35,039 22,026 Less accumulated depreciation and amortization (37,797) (26,401) Total property, plant and equipment, net $ 58,020 $ 47,034 For the years ended December 31, 2023, 2022 and 2021 total depreciation expense was $12.8 million, $9.2 million and $11.5 million, respectively. Property and equipment under finance lease obligations, consisting of computer equipment, totaled $17.8 million and $12.3 million as of December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, accumulated depreciation related to property and equipment under finance lease obligations totaled $12.9 million and $11.2 million, respectively, refer to Footnote 7, Leases. During the year ended December 31, 2022, the Company disposed of certain office furniture, equipment and leasehold improvements resulting in a loss on disposal of $1.4 million. The fixed asset disposals relate primarily to the transfer of fixed assets in a sublease office arrangement and the abandonment of fixed assets no longer in use. The loss on disposal was recorded in General and administrative expenses in the accompanying Consolidated Statements of Operations and Comprehensive Income. There were no impairments of Property, plant and equipment identified during the years ended December 31, 2023, 2022 and 2021. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Leases | 7. Leases The following table presents lease cost and cash paid for amounts included in the measurement of lease liabilities for finance and operating leases for the years ended December 31, 2023 and December 31, 2022, respectively. Year Ended December 31, (in thousands) 2023 2022 Lease cost: Operating lease cost (1) $ 10,359 $ 10,922 Finance lease cost Depreciation of finance lease assets (2) 1,770 1,191 Interest on finance lease liabilities (3) 223 139 Short-term lease cost (1) 1,058 1,080 Sublease income (1) (978) (622) Total lease cost $ 12,432 $ 12,710 Other information: Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows from operating leases $ 7,641 $ 5,367 Operating cash outflows from finance leases $ 155 $ 132 Financing cash outflows from finance leases $ 2,314 $ 1,924 (1) Included in Cost of revenue, Sales, marketing and customer support, Product development and General and administrative expenses in the accompanying Consolidated Statements of Operations and Comprehensive Income. (2) Included in Depreciation and amortization in the accompanying Consolidated Statements of Operations and Comprehensive Income. (3) Included in Interest expense in the accompanying Consolidated Statements of Operations and Comprehensive Income. The following table presents weighted-average remaining lease terms and weighted-average discount rates for finance and operating leases as of December 31, 2023 and December 31, 2022, respectively: Year Ended December 31, 2023 2022 Weighted-average remaining lease term - operating leases (in years) 13.6 14.2 Weighted-average remaining lease term - finance leases (in years) 2.2 1.6 Weighted-average discount rate - operating leases 4.6% 4.5% Weighted-average discount rate - finance leases 5.3% 3.7% Maturities of lease liabilities as of December 31, 2023 are as follows: December 31, 2023 (in thousands) Operating Leases Finance Leases 2024 $ 9,179 $ 3,214 2025 8,145 2,150 2026 6,857 819 2027 6,665 — 2028 6,753 — Thereafter 74,037 — Total lease payments 111,636 6,183 Less amount representing interest (31,044) (384) Present value of total lease payments $ 80,592 $ 5,799 During the year ended December 31, 2022, the Company entered into an agreement to sublease its leased office space located in New York, NY (“Sublease Transaction”) as the Company transitioned into a new headquarters. The sublease triggered an Operating lease right-of-use asset impairment of $1.5 million recorded in General and administrative expenses in the accompanying Consolidated Statements of Operations and Comprehensive Income. The fair value of the Operating lease right-of-use asset was determined as of May 27, 2022 using the transaction price per the Sublease Transaction executed agreement. The fair value measurement represents a Level 1 input. There were no impairments of Operating lease right-of-use assets identified during the years ended December 31, 2023 and 2021, respectively. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurement | |
Fair Value Measurement | 8. Fair Value Measurement The following tables present the Company’s financial instruments that are measured at fair value on a recurring basis: As of December 31, 2023 Quoted Market Prices in Active Significant Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Total Fair Value (in thousands) (Level 1) (Level 2) (Level 3) Measurements Assets: Cash equivalents: $ 61,463 $ — $ — $ 61,463 As of December 31, 2022 Quoted Market Prices in Active Significant Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Total Fair Value (in thousands) (Level 1) (Level 2) (Level 3) Measurements Assets: Cash equivalents: $ 11,710 $ — $ — $ 11,710 Cash equivalents, consisting of treasury bills and money market funds of $61.5 million and of money market funds of $11.7 million as of December 31, 2023 and December 31, 2022, respectively, were classified as Level 1 of the fair value hierarchy and valued using quoted market prices in active markets. As of December 31, 2023, the amortized cost of the Company’s treasury bills approximated fair value. For the year ended December 31, 2023, the Company did not record any unrealized gains, unrealized losses, or credit losses. Contingent consideration relates to potential payments that the Company may be required to make associated with a business combination. To the extent that the valuations of these liabilities are based on inputs that are less observable or not observable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for measures categorized in Level 3. Rollforward of the fair value measurements of the contingent consideration categorized with Level 3 inputs for the years ended December 31, 2023, 2022 and 2021 is as follows: (in thousands) Balance as of January 1, 2021 $ 1,660 Fair value adjustments 57 Balance as of December 31, 2021 1,717 Payments during the year (1,717) Balance as of December 31, 2022 — Fair value at date of acquisition 1,193 Fair value adjustments (1,193) Balance as of December 31, 2023 $ — Prior to the early termination of the Zentrick Deferred Payment Terms described in Footnote 4, Business Combinations, the fair value of the component of contingent consideration related to achievement of revenue targets have been estimated using a Monte Carlo model to simulate future performance of the acquired business under a risk-neutral framework; significant assumptions include a risk-adjusted discount rate of 13.5% and revenue volatility of 29.0% for December 31, 2021. The fair value of the component of contingent consideration related to achievement of four technical milestones have been estimated using situation-based modeling, which considers the probability-weighted present value of the expected payout amount. As described in Footnote 4, Business Combinations, on February 16, 2022, pursuant to the terms of the Zentrick Early Termination Agreement, the Company paid the remaining balance of the contingent consideration referred to as the Zentrick Deferred Payment Terms. The fair value of contingent consideration from the Scibids Contingent Payment related to the achievement of certain performance metrics have been estimated using a Black-Scholes option pricing model. As of the acquisition date, forecasted amounts for the Earn-Out Period were taken and discounted to the valuation date using a risk adjusted discount rate of 11.3%. Additional significant assumptions include volatility of 25.0% and operating leverage of 160%. Volatility was estimated based on asset volatilities of comparable companies, which were calculated based on observed equity volatilities, adjusted for financial leverage using the Merton Model. Operating leverage of the seller was calculated as the ratio of the present value of the forecasted fixed cost and EBITDA. The Earn-out Period concluded on December 31, 2023. For the year-ended December 31, 2023, there was a decrease in fair value of $1.2 million recorded as a gain in Other income, net in the Consolidated Statements of Operations and Comprehensive Income in relation to the Scibids Contingent Payment. The decrease in fair value was due to the actual performance metrics during the Earn-out Period not exceeding a certain threshold. |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2023 | |
Long-term Debt. | |
Long-term Debt | 9. Long-term Debt On October 1, 2020, DoubleVerify Inc., as borrower (the “Borrower”), and MidCo, as guarantor, entered into an amendment and restatement agreement with the banks and other financial institutions party thereto, as lenders, and Capital One, National Association, as administrative agent, letter of credit issuer and swing lender, and others, to (i) amend and restate the Company’s prior credit agreement, as amended and restated on October 1, 2020 (the “Credit Agreement”) and (ii) replace the Company’s prior credit facilities with a new senior secured revolving credit facility (the “New Revolving Credit Facility”) in an aggregate principal amount of $150.0 million (with a letter of credit facility of up to $15.0 million as a sublimit). Subject to certain terms and conditions, the Borrower is entitled to request additional term loan facilities or increases in the revolving credit commitments under the New Revolving Credit Facility. The New Revolving Credit Facility is payable in quarterly installments for interest, with the principal balance due in full at maturity on October 1, 2025. Additional fees paid quarterly include fees for the unused revolving facility and unused letter of credit. The commitment fee on any unused balance is payable periodically and may range from 0.25% to 0.40% based upon the Borrower’s total net leverage ratio calculated in accordance with the Credit Agreement. On March 29, 2023, the Company entered into an amendment to the New Revolving Credit Facility to replace the LIBOR based interest rate with a Secured Overnight Financing Rate (“SOFR”) based interest rate. The New Revolving Credit Facility bears interest at SOFR plus 2.00% or the Alternate Base Rate plus 1.00% (at the Company’s option), which may vary from time to time based on the Borrower’s total net leverage ratio calculated in accordance with the Credit Agreement. The New Revolving Credit Facility contains a number of significant negative covenants. Subject to certain exceptions, these covenants require the Borrower to comply with certain requirements and restrictions on its ability to, among other things: incur indebtedness; create liens; engage in mergers or consolidations; make investments, loans and advances; pay dividends or other distributions and repurchase capital stock; sell assets; engage in certain transactions with affiliates; enter into sale and leaseback transactions; and make certain accounting changes. As a result of these restrictions, substantially all of the net assets of the Borrower are restricted from distribution to the Company or any holders of its equity. The New Revolving Credit Facility has a first priority lien on substantially all of the assets of MidCo, the Borrower and Ad-Juster Inc. ("Ad-Juster"), the Company’s indirect subsidiary. The New Revolving Credit Facility requires the Borrower to remain in compliance with a maximum total net leverage ratio and a minimum fixed charge coverage ratio, each as defined in the Credit Agreement. As of December 31, 2023, the maximum total net leverage ratio and minimum fixed charge coverage ratio is 3.5x and 1.25x, respectively. The Borrower was in compliance with all covenants under the New Revolving Credit Facility as of December 31, 2023. During the three months ended March 31, 2023, the Company borrowed and repaid |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax | |
Income Tax | 10. Income Tax The components of income before income tax provision (benefit) were as follows: Year Ended December 31, (in thousands) 2023 2022 2021 Domestic $ 91,018 $ 54,162 $ 16,499 Foreign 4,859 5,206 9,322 Income before income taxes $ 95,877 $ 59,368 $ 25,821 Income tax provision (benefit) was as follows: Year Ended December 31, (in thousands) 2023 2022 2021 Current Federal $ 35,225 $ 20,599 $ 821 State 12,848 14,435 1,508 Foreign 1,399 711 1,999 Total current tax provision $ 49,472 $ 35,745 $ 4,328 Deferred Federal $ (17,694) $ (15,467) $ (5,545) State (6,806) (4,324) (2,241) Foreign (561) 146 (29) Total deferred tax benefit $ (25,061) $ (19,645) $ (7,815) Income tax provision (benefit) $ 24,411 $ 16,100 $ (3,487) A reconciliation of the statutory U.S. income tax rate to the effective income tax rate was as follows: Year Ended December 31, 2023 2022 2021 Statutory federal tax rate 21.0 % 21.0 % 21.0 % State taxes 5.1 9.7 (3.3) Tax credits (2.1) (5.6) (3.9) Foreign tax effects 0.5 0.2 — Non‑deductible items and other 0.4 1.5 (0.6) Changes in tax reserves (0.8) 1.7 1.9 Provision to return adjustment 1.7 (1.2) 0.5 Transaction costs 0.3 — 18.9 Global Intangible Low Tax Income 1.1 1.0 0.7 Foreign-Derived Intangible Income (2.9) — — Non-deductible officers' compensation 1.8 2.7 47.8 Non‑cash compensation (0.5) (3.9) (96.5) Effective tax rate 25.6 % 27.1 % (13.5) % Income Tax Provision (Benefit) The Company’s effective tax rate for the year ended December 31, 2023 was higher than the U.S. federal statutory income tax rate primarily due to the impact of state and foreign tax effects. For the year ended December 31, 2022, the Company’s effective tax rate was higher than the U.S. federal statutory income tax rate primarily due to the impact of state and foreign taxes and other permanent book-tax differences including non-deductible executive compensation and non-cash compensation. For the year ended December 31, 2021, the Company’s effective tax rate was lower than the U.S. federal statutory income tax rate primarily due to the impact of deductible non-cash compensation, non-deductible executive compensation, IPO related costs, foreign taxes, certain tax credits, provision to return adjustments and the impact of other permanent book-tax differences. Deferred Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes. The following table details the components of deferred tax assets and liabilities as of December 31, 2023 and December 31, 2022: As of December 31, (in thousands) 2023 2022 Deferred tax assets: Allowance for doubtful accounts $ 2,327 $ 2,338 Accrued expenses and other 5,271 6,299 Stock compensation 6,140 3,920 Capitalized costs 31,542 18,839 Lease liability 21,071 22,941 Net operating losses 3,719 4,117 Gross deferred tax assets 70,070 58,454 Valuation allowance (636) (500) Net deferred tax assets $ 69,434 $ 57,954 Deferred tax liabilities: ROU asset $ (15,464) $ (18,042) Purchased intangibles (38,360) (38,216) Depreciation and amortization (10,652) (14,551) Total deferred tax liabilities (64,476) (70,809) Net deferred tax asset (liability) $ 4,958 $ (12,855) The Company has not recorded a deferred tax liability for foreign withholding or other foreign local tax on the undistributed earnings from the Company’s international subsidiaries as such earnings are considered to be indefinitely reinvested. Under the Tax Cuts and Jobs Act of 2017, research and development costs are no longer fully deductible and are required to be capitalized and amortized for U.S. tax purposes effective January 1, 2022. The mandatory capitalization requirement increases our deferred tax assets and cash tax liabilities. On August 16, 2022, the U.S. government enacted the Inflation Reduction Act which, among other changes, imposes a 15% corporate alternative minimum tax (“CAMT”) and a 1% excise tax on stock repurchases. Once subject to the CAMT, a taxpayer will compute both its CAMT liability and its regular federal tax liability and pay the higher of the two. To the extent that the CAMT liability exceeds the regular federal tax liability, a taxpayer will receive a credit (“CAMT credit”) which can be used against its regular federal tax liability in the future when the taxpayer is no longer subject to the CAMT. The CAMT credit does not expire. The CAMT is effective for tax years beginning after December 31, 2022, which means it became applicable to the Company effective January 1, 2023. The excise tax on stock repurchases applies to stock repurchases occurring after December 31, 2022. The Company does not expect to be subject to CAMT or related excise tax. Tax Valuation Allowance The Company’s deferred tax assets and liabilities are primarily comprised of purchased intangibles, book to tax differences in depreciation and amortization, book and tax differing treatment of accruals, net operating losses, and differing timing of stock compensation deductions. As of each reporting date, management considers new evidence, both positive and negative, that could impact management’s view with regard to the future realization of deferred tax assets. As of December 31, 2023, (i) the Company’s taxable temporary differences will provide sufficient US future taxable income to realize the US deferred tax assets and (ii) the Company’s projected future pre-tax book income in the US and respective foreign countries is expected to provide sufficient taxable income to realize the deferred tax assets within each jurisdiction’s respective statutory carryforward period. Based on this analysis, the Company has concluded that it is more likely than not that the Company will realize most of its US and foreign deferred taxes assets. A valuation allowance is assessed to a small amount of foreign capital losses and US tax loss carryforwards. Net Operating Loss and Credit Carryforwards As of December 31, 2023, the Company had a Federal net operating loss carryforward of approximately $6.1 million and a state net operating loss carryforward of approximately $8.7 million. Of these carryforwards, approximately $4.0 million of Federal net operating losses and $1.3 million of state net operating losses were acquired with the OpenSlate acquisition in 2021. In addition, the Company had loss carryforwards for various foreign countries where the Company has business operations. Of these carryforwards, as of December 31, 2023, the Company had approximately $1.5 million of German net operating losses that were acquired with the Meetrics acquisition in 2021 and approximately $4.7 million of French net operating losses that were acquired with the Scibids acquisition in 2023. The remaining aggregate amount of foreign loss carryover is not significant as of December 31, 2023. Federal net operating loss carryforwards can be used to offset against taxable income in the future and begin to expire in 2031. The Company utilized approximately $4.1 million and $7.9 million of Federal and state net operating loss carryforwards, respectively, in 2023. Utilization of Federal net operating loss carryforwards may be subject to annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. The Company’s net operating loss carryforwards are subject to the annual limitation under Section 382 of the Internal Revenue Code. Uncertain Tax Positions The Company’s income tax returns are open to examination by federal and state authorities for the tax years ended December 31, 2020 and later. However, the Company believes that its tax positions are all highly certain of being upheld upon examination and intends to defend those positions if challenged by the Internal Revenue Service (“IRS”) or another taxing jurisdiction. The Company and its subsidiaries file income tax returns with the IRS in various state and international jurisdictions. The Company’s Israeli subsidiary is under audit by the Israeli Tax Authority for the 2021 and later tax years. Also, under audit by the Commonwealth of Massachusetts is the Company’s U.S. subsidiary for the 2019 and 2020 tax years. These examinations may lead to ordinary course adjustments or proposed adjustments to the Company’s taxes. Aside from the aforementioned, the Company is not currently under audit in any other jurisdiction. For uncertain tax positions, the Company uses a more-likely-than-not recognition threshold based on the technical merits of the tax position taken. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefits determined on a cumulative probability basis, which are more-likely-than-not to be realized upon ultimate settlement in the financial statements. The Company has unrecognized tax benefits, which are tax benefits related to uncertain tax positions which have been or will be reflected in income tax filings that have not been recognized in the financial statements due to potential adjustments by taxing authorities in the applicable jurisdictions. The Company's liabilities for unrecognized tax benefits, which include interest and penalties, were $2.7 million and $3.4 million as of December 31, 2023 and 2022, respectively. The amount of unrecognized tax benefits that, if recognized, would affect the Company's effective tax rate are $2.3 million and $3.3 million as of December 31, 2023 and 2022, respectively, and include the federal tax benefit of state deductions. The Company anticipates that no unrecognized tax benefits will reverse during the next year due to the expiration of statutes of limitation. Changes in the Company’s unrecognized tax benefits were as follows: Year Ended December 31, (in thousands) 2023 2022 Beginning balance $ 3,415 $ 2,363 Increase related to tax positions of prior years 62 432 Increase related to tax positions of the current year 250 620 Decrease due to lapse in statutes of limitations (1,037) — Ending balance $ 2,690 $ 3,415 |
Employee Contribution Plan
Employee Contribution Plan | 12 Months Ended |
Dec. 31, 2023 | |
Employee Contribution Plan | |
Employee Contribution Plan | 11. Employee Contribution Plan The Company has a 401(k) plan for the benefit of all U.S. employees who meet certain eligibility requirements. This plan covers substantially all of the Company’s full-time U.S. employees. The Company’s contributions costs are based on contributions made to the plan at the Company’s discretion and were $2.5 million, $1.8 million and $1.4 million for the years ended December 31, 2023, 2022 and 2021, respectively. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share | |
Earnings Per Share | 12. Earnings Per Share The following table reconciles the numerators and denominators used in computations of the basic and diluted EPS: Year Ended December 31, 2023 2022 2021 Numerator: Net Income (basic and diluted) $ 71,466 $ 43,268 $ 29,308 Denominator: Weighted‑average common shares outstanding 167,803 163,882 148,309 Dilutive effect of stock based awards 5,632 6,873 11,955 Weighted‑average dilutive shares outstanding 173,435 170,755 160,264 Basic earnings per share $ 0.43 $ 0.26 $ 0.20 Diluted earnings per share $ 0.41 $ 0.25 $ 0.18 Approximately 7.7 million, 5.1 million, and 1.4 million weighted average shares issuable under stock-based awards were not included in the diluted EPS calculation for the years ended December 31, 2023, 2022 and 2021, respectively, because they were antidilutive. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Stock-Based Compensation | |
Stock-Based Compensation | 13. Stock-Based Compensation Employee Equity Incentive Plan On September 20, 2017, the Company established its 2017 Omnibus Equity Incentive Program (the “2017 Plan”) which provides for the granting of equity-based awards to certain employees, directors, independent contractors, consultants and agents. Under the 2017 Plan, the Company may grant non-qualified stock options, stock appreciation rights, restricted stock units and other stock-based awards for up to 22,182 shares of common stock. On April 19, 2021, the Company established its 2021 Omnibus Equity Incentive Plan (“2021 Equity Plan”). The maximum number of shares of common stock available for issuance under the 2021 Equity Plan is equal to the sum of (i) 30,000 shares of common stock and (ii) an annual increase on the first day of each year beginning in 2022 and ending in and including 2031, equal to the lesser of (A) five percent (5%) of the outstanding shares of common stock on the last day of the immediately preceding fiscal year and (B) such lesser amount as determined by the Board’s compensation committee. The 2021 Equity Plan provides for the grant of stock options (including qualified incentive stock options and nonqualified stock options), stock appreciation rights, restricted stock, restricted stock units, performance stock units, dividend equivalents, and other stock or cash settled incentive awards. Any shares covered by an award, or portion of an award, granted under the 2021 Equity Plan that expires or is forfeited, canceled, cash-settled, or otherwise terminated for any reason will again be available for the grant of awards under the 2021 Equity Plan. Stock Options Options become exercisable subject to vesting schedules up to four years from the date of the grant and subject to certain timing restrictions upon an employee’s separation of service and no later than 10 years after the grant date. A summary of stock option activity as of and for the year ended December 31, 2023 is as follows: Stock Option Weighted Average Weighted Remaining Number of Average Contractual Life Aggregate Options Exercise Price (Years) Intrinsic Value Outstanding as of January 1, 2023 11,861 $ 13.43 7.17 $ 129,323 Options granted 918 25.46 Options exercised (2,701) 3.91 Options forfeited (86) 25.14 Outstanding as of December 31, 2023 9,992 $ 17.01 6.91 $ 197,598 Options expected to vest as of December 31, 2023 3,196 $ 24.86 8.21 $ 38,131 Options exercisable as of December 31, 2023 6,607 $ 12.94 6.22 $ 157,528 Stock options include grants to executives that contain both market-based and performance-based vesting conditions. On November 19, 2021, the Company filed a prospectus for certain selling stockholders to sell 8,000 shares of the Company’s common stock (“Secondary Offering”) pursuant to Rule 424(b)(4). The Company did not receive any proceeds from the sale of shares by the selling stockholders. Upon completion of the Secondary Offering, Providence received cumulative cash proceeds that exceeded two times its aggregate cash investment in the Company; therefore, the performance condition was achieved and the stock options tied to the performance condition vested. In connection with the vesting, the Company recorded $2.1 million in the Consolidated Statements of Operations and Comprehensive Income for the year ended December 31, 2021. There were no stock options granted that contain both market-based and performance-based vesting conditions during the year ended December 31, 2023. During the year ended December 31, 2023, 653 stock options were exercised and 1,373 market-based and performance-based stock options remain outstanding as of December 31, 2023. The weighted average grant date fair value of options granted for the years ended December 31, 2023, 2022, and 2021 was $12.57, $12.09 and $13.01, respectively. The total intrinsic value of options exercised during the years ended December 31, 2023, 2022 and 2021 was $75.6 million, $34.3 million and $141.0 million, respectively. The fair market value of each option granted for the years presented has been estimated on the grant date using the Black-Scholes-Merton option-pricing model with the following assumptions: 2023 2022 2021 Risk‑free interest rate (percentage) 3.6 2.0 - 3.7 0.6. - 1.4 Expected term (years) 6.1 6.1 5.8 - 6.1 Expected dividend yield (percentage) — — — Expected volatility (percentage) 46.5 42.8 - 46.0 42.1 - 43.6 The Company’s board of directors (the “Board”) did not declare or pay dividends on any Company stock during the years ended December 31, 2023 and 2022. RSUs RSUs are subject to vesting schedules up to four years from the date of the grant and subject to certain timing restrictions upon employee separation. A summary of RSUs activity as of and for the year ended December 31, 2023 is as follows: RSUs Weighted Average Grant Number of Date Fair Shares Value Outstanding as of January 1, 2023 3,154 $ 27.07 Granted 3,197 28.19 Vested (1,423) 26.42 Forfeited (208) 26.97 Outstanding as of December 31, 2023 4,720 $ 28.03 The total grant date fair value of RSUs that vested during the years ended December 31, 2023, 2022, and 2021 was $37.6 million, $35.3 million and $4.4 million, respectively. The weighted average grant date fair value of RSUs granted during the years ended December 31, 2022 and 2021 was $24.75 and $31.22, respectively. PSUs PSUs are subject to vesting and performance periods of up to approximately three years from the date of the grant. A summary of PSUs activity as of and for the year ended December 31, 2023 is as follows: PSUs Weighted Average Grant Number of Date Fair Shares Value Outstanding as of January 1, 2023 — $ — Granted 480 41.31 Vested — — Forfeited — — Outstanding as of December 31, 2023 480 $ 41.31 The fair market value of TSR PSUs granted for the years presented has been estimated on the grant date using the Monte Carlo Simulation model with the following assumptions: 2023 Risk‑free interest rate (percentage) 3.9 - 4.1 Expected dividend yield (percentage) — Expected volatility (percentage) 46.7 Stock-based Compensation Expense Total stock-based compensation expense recorded in the Consolidated Statements of Operations and Comprehensive Income was as follows: Year Ended December 31, (in thousands) 2023 2022 2021 Product development $ 22,955 $ 15,030 $ 4,369 Sales, marketing and customer support 18,299 14,265 6,375 General and administrative 17,990 13,012 11,143 Total stock‑based compensation $ 59,244 $ 42,307 $ 21,887 As of December 31, 2023, unrecognized stock-based compensation expense was $161.1 million, which is expected to be recognized over a weighted-average period of 1.4 years. ESPP In March 2021, the Board approved the Company’s 2021 ESPP and employees became eligible to enroll in August 2021. The ESPP qualifies as an “employee stock purchase plan” under Section 423 of the U.S. Internal Revenue Code of 1986, as amended. The Company reserved 3,000 shares of common stock for issuance under the ESPP. The share reserve increases on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (i) one percent (1%) of the aggregate number of shares of common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of common stock as is determined by the Board. Purchases are accomplished through participation in discrete offering periods. The ESPP is available to U.S.-based employees and was expanded to most of the Company’s non-U.S.-based employees in 2022. The current offering period began on December 1, 2023 and will end on May 31, 2024. The Company expects the program to continue consecutively for six-month offering periods for the foreseeable future. Under the ESPP, eligible employees are able to acquire shares of the Company’s common stock by accumulating funds through payroll deductions. Company employees in the United States generally are eligible to participate in the ESPP if they are a full-time employee and have completed six months of continuous service with the Company as of the last day of the enrollment period. Eligible employees are able to select a rate of payroll deduction between 1% and 15% of their eligible compensation, up to a $25 annual contribution limit. The purchase price for shares of common stock purchased under the ESPP is 85% of the lesser of the fair market value of the common stock on (i) the first trading day of the applicable offering period and (ii) the last trading day of the applicable offering period. Employees are required to hold shares purchased for minimum of six months following the purchase date. An employee’s participation automatically ends upon termination of employment for any reason. A participant may cancel enrollment or lower their contributions once during an offering period, but no later than 30 days before the end of an offering period. Upon the termination of an employee’s participation in the ESPP, payroll deductions will be stopped and refunded. Stock-based compensation expense for the ESPP is recognized on a straight-line basis over the requisite service period of each award. Stock-based compensation expense related to ESPP totaled $0.8 million, $0.6 million and $0.1 million for years ended December 31, 2023, 2022 and 2021, respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity | |
Stockholders' Equity | 14. Stockholders’ Equity On October 27, 2020, the Company entered into a Series A Preferred Stock Purchase Agreement (“Preferred Purchase Agreement) pursuant to which an investor group, led by Tiger Global Management, purchased 61,006 shares of Series A Preferred Stock (“preferred stock”) from the Company and certain of its existing stockholders for an aggregate purchase price of approximately $350.0 million. The preferred stock consisted of 15,568 shares issued and sold by the Company to the new investors, raising approximately $89.3 million in cash before transaction costs. 45,438 shares of common stock (prior to giving effect to the 1-for-3 reverse stock split) held by existing shareholders were exchanged on a 1:1 basis for newly issued shares of preferred stock and then sold to the new investors. All cash received related to the exchange was transferred to selling shareholders. The Company recorded the exchange of common stock for preferred stock as Treasury Stock at cost in the Consolidated Balance Sheets. The preferred stock issued in the transaction were non-participating, not redeemable, had no declared dividends and contained a liquidation preference. The liquidation preference allowed for holders of shares of preferred stock then outstanding to be entitled to be paid out before any payments to holders of the Company’s common stock up to the preferred stock issuance price plus any dividends declared but unpaid. On April 9, 2021, the Company entered into an arrangement with an affiliate of Tiger Investor whereby the Tiger Investor purchased $30.0 million of the Company’s common stock in a private placement (‘‘Concurrent Private Placement’’) concurrent with the completion of the IPO. The price per share was equal to the IPO price of $27.00, for a total of 1,111 shares. The Company received total aggregate net proceeds of $29.0 million, after deducting underwriting fees of $1.0 million. On April 23, 2021, the Company completed its IPO in which the Company issued and sold 9,977 shares of common stock at a public offering price of $27.00 per share, which included the full exercise of the underwriters’ option to purchase 1,350 additional shares of common stock. The Company received aggregate net proceeds of $253.2 million from the IPO, after deducting underwriting discount fees of $16.2 million. The Company incurred offering costs of approximately $27.1 million for the Concurrent Private Placement and IPO, of which $22.1 million and $3.6 million were included in General and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2021 and 2020, respectively. The IPO offering also included 5,356 shares sold by Providence VII U.S. Holdings L.P. (“Providence”) and other existing stockholders, which included the full exercise of the underwriters’ option to purchase 650 additional shares from Providence, in which the Company did not receive any proceeds from the shares sold. In connection with the Company’s IPO, all shares of the Company’s outstanding preferred stock automatically converted into 20,335 shares of common stock on a one for one In conjunction with the IPO, the Company increased the authorized shares of its capital stock. The Company’s capital stock consists of 1,000,000 shares of common stock, par value $0.001 per share and 100,000 shares of undesignated preferred stock, par value $0.01 per share. |
Supplemental Financial Statemen
Supplemental Financial Statement Information | 12 Months Ended |
Dec. 31, 2023 | |
Supplemental Financial Statement Information | |
Supplemental Financial Statement Information | 15. Supplemental Financial Statement Information Accrued Expenses Accrued expenses as of December 31, 2023 and December 31, 2022 were as follows: As of December 31, (in thousands) 2023 2022 Vendor payments $ 6,286 $ 4,824 Employee commissions and bonuses 20,809 17,718 Payroll and other employee related expense 10,602 7,024 401k and pension expense 2,982 2,144 Other taxes 3,585 1,375 Total accrued expense $ 44,264 $ 33,085 Other Income, Net The components of Other income, net recorded in the Consolidated Statements of Operations and Comprehensive Income were as follows: Year Ended December 31, (in thousands) 2023 2022 2021 Interest income $ (10,841) $ (2,305) $ (11) Change in fair value of contingent consideration (1,193) — 57 Foreign currency exchange loss (gain) 855 1,102 (102) Other miscellaneous income, net (37) (46) (253) Other income, net $ (11,216) $ (1,249) $ (309) |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 16. Commitments and Contingencies Contingencies Litigation From time to time, the Company is subject to various legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business. The Company records liabilities for contingencies including legal costs when it is probable that a liability has been incurred and when the amount can be reasonably estimated. Legal costs are expensed as incurred. Although the outcome of the various legal proceedings and claims cannot be predicted with certainty, management does not believe that any of these proceedings or other claims will have a material effect on the Company’s business, financial condition, results of operations or cash flows. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2023 | |
Segment Information | |
Segment Information | 17. Segment Information The Company has determined that it operates as one operating and reportable The Company has not disclosed certain geographic information pertaining to revenues and total assets as it is impracticable to disclose and is not utilized by the Company’s CODM to review operating results or make decisions about how to allocate resources. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events | |
Subsequent Events | 18. Subsequent Events On February 20, 2024, the Company granted 229 RSUs and 67 PSUs under the 2021 Equity Plan. |
Schedule I - Condensed Financia
Schedule I - Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2023 | |
Parent Company | Reportable Legal Entities | |
Schedule I - Condensed Financial Information of Registrant | SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF REGISTRANT DoubleVerify Holdings, Inc. (Parent Company Only) Condensed Statements of Balance Sheets (In thousands) As of December 31, (in thousands, except per share data) 2023 2022 Assets: Current assets Cash and cash equivalents $ 133,127 $ 184,693 Total current assets 133,127 184,693 Investment in subsidiaries 635,635 507,557 Due from subsidiaries 834,370 320,220 Total assets $ 1,603,132 $ 1,012,470 Liabilities and Stockholder’s Equity: Due to subsidiaries $ 528,930 $ 135,396 Accrued expense 263 215 Total liabilities 529,193 135,611 Stockholders’ equity Common stock, $0.001 par value, 1,000,000 shares authorized, 171,168 shares issued and 171,146 outstanding as of December 31, 2023; 1,000,000 shares authorized, 165,448 shares issued and 165,417 outstanding as of December 31, 2022 171 165 Additional paid‑in capital 878,331 756,299 Treasury stock, at cost, 22 shares and 31 shares as of December 31, 2023 and December 31, 2022, respectively (743) (796) Retained earnings 198,983 127,517 Accumulated other comprehensive loss, net of income taxes (2,803) (6,326) Total stockholders’ equity 1,073,939 876,859 Total liabilities and stockholders’ equity $ 1,603,132 $ 1,012,470 See accompanying notes to condensed financial statements. SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF REGISTRANT DoubleVerify Holdings, Inc. (Parent Company Only) Condensed Statements of Operations and Comprehensive Income (In thousands) Year Ended December 31, (in thousands) 2023 2022 2021 Revenue $ — $ — $ — Cost of revenue — — — Product development 22,955 15,030 4,369 Sales, marketing and customer support 18,299 14,265 6,374 General and administrative 18,532 13,220 28,513 Loss from operations (59,786) (42,515) (39,256) Other (income) expense, net (6,696) (679) 996 Equity in pre‑tax earnings of consolidated subsidiaries 148,967 101,204 66,073 Income before income taxes 95,877 59,368 25,821 Income tax expense (benefit) 24,411 16,100 (3,487) Net income 71,466 43,268 29,308 Foreign currency cumulative translation adjustment 3,523 (5,555) (1,782) Total comprehensive income $ 74,989 $ 37,713 $ 27,526 See accompanying notes to condensed financial statements. SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF REGISTRANT DoubleVerify Holdings, Inc. (Parent Company Only) Condensed Statements of Cash Flows (In thousands) Year Ended December 31, (in thousands) 2023 2022 2021 Operating activities: $ 396,748 $ 32,394 $ 67,294 Investing activities: Transfer of funds to subsidiaries (457,117) (32,099) (179,825) Net cash used in investing activities (457,117) (32,099) (179,825) Financing activities: Proceeds from common stock issued upon exercise of stock options 10,666 5,803 12,440 Proceeds from common stock issued under employee purchase plan 2,723 1,734 404 Proceeds from issuance of common stock upon initial public offering — — 269,390 Proceeds from issuance of common stock in connection to concurrent private placement — — 30,000 Payments for offering costs — — (17,214) Shares repurchased for settlement of employee tax withholdings (4,586) (10,244) (1,802) Net cash provided by (used in) financing activities 8,803 (2,707) 293,218 Effect of exchange rate changes on cash and cash equivalents — — — Net (decrease) increase in cash and cash equivalents (51,566) (2,412) 180,687 Cash and cash equivalents—Beginning of period 184,693 187,105 6,418 Cash and cash equivalents—End of period $ 133,127 $ 184,693 $ 187,105 Non ‑ cash investing and financing transactions: Common stock issued in connection with acquisition $ 52,937 $ — $ 22,526 Treasury stock reissued upon the conversion of Series A preferred stock for common stock $ — $ — $ 260,686 Stock-based compensation included in capitalized software development costs $ 1,103 $ 480 $ — Due to consolidated subsidiaries $ 29,659 $ 33,500 $ 68,940 See accompanying notes to condensed financial statements SCHEDULE I—CONDENSED FINANCIAL INFORMATION OF REGISTRANT DoubleVerify Holdings, Inc. (Parent Company Only) Notes to the Condensed Financial Statements (In thousands) 1. Organization DoubleVerify Holdings, Inc. (the “Company”) is one of the industry’s leading media effectiveness platforms that leverages AI to drive superior outcomes for global brands. By creating more effective, transparent ad transactions, we make the digital advertising ecosystem stronger, safer and more secure, thereby preserving the fair value exchange between buyers and sellers of digital media. The Company’s solutions provide advertisers unbiased data analytics that enable advertisers to increase the effectiveness, quality and return on their digital advertising investments. The DV Authentic Ad is our proprietary metric of digital media quality, which measures whether a digital ad was delivered in a brand suitable environment, fully viewable, by a real person and in the intended geography. The Company’s software interface, DV Pinnacle, delivers these metrics to our customers in real time, allowing them to access critical performance data on their digital transactions. The Company’s software solutions are integrated across the entire digital advertising ecosystem, including programmatic platforms, social media channels and digital publishers. The Company’s solutions are accredited by the Media Rating Council, which allows the Company’s data to be used as a single source standard in the evaluation and measurement of digital ads. The Company was incorporated on August 16, 2017, is registered in the state of Delaware and is the parent company of DoubleVerify Midco, Inc. (“MidCo”), which is in turn the parent company of DoubleVerify Inc. On August 18, 2017, DoubleVerify Inc. entered into an agreement and plan of merger (the “Agreement”), whereby the Company and Pixel Merger Sub, Inc. (“Merger Sub”), a wholly-owned subsidiary of the Company, agreed to provide for the merger of the Merger Sub with DoubleVerify Inc. pursuant to the terms and conditions of the Agreement. On the effective date, Merger Sub was merged with and into DoubleVerify Inc. whereupon the separate corporate existence of Merger Sub ceased and DoubleVerify Inc. continued as the surviving corporation. Through the merger, the Company acquired 100% of the outstanding equity instruments of DoubleVerify Inc., (the “Acquisition”) resulting in a change of control at the parent level. The merger resulted in the application of acquisition accounting under the provisions of Financial Accounting Standards Board (“FASB”) Topic Accounting Standards Codification (“ASC”) 805, Business Combinations. The Company is a holding company that does not conduct any business operations of its own and therefore its assets consist primarily of investments in subsidiaries and cash proceeds from stock option exercises, in accordance with the Company’s stock plan discussed further in Footnote 2, Basis of Presentation and Summary of Significant Accounting Policies, to the Company’s Consolidated Financial Statements. The amounts available to the Company to fulfill cash commitments or to pay cash dividends are also subject to the covenants and distribution restrictions in its subsidiaries’ loan agreements. 2. Basis of Preparation The accompanying condensed parent company-only financial statements are required in accordance with Rule 5-04 of Regulation S-X. These condensed financial statements have been presented on a standalone basis for the Company and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s financial statements should be read in conjunction with the Company’s annual Consolidated Financial Statements. 3. Income Taxes The income tax provision of $24.4 million, tax provision of $16.1 million, and tax benefit of $3.5 million for years ended December 31, 2023, 2022 and 2021, respectively, represent the Company’s consolidated income tax expense (benefit) as it relates to the Company’s subsidiaries, which have not been consolidated for this presentation. 4. Distributions There were no distributions made to DoubleVerify Holdings, Inc. by its subsidiaries, for the years ended December 31, 2023, 2022 and 2021. 5. Long-term debt and credit facilities As of December 31, 2023 and 2022, DoubleVerify Holdings, Inc. held no debt. Certain subsidiaries of the Company are subject to debt agreements. For further discussion on the nature and terms of these agreements, refer to Footnote 9, Long-term Debt, to the Company’s Consolidated Financial Statements. 6. Commitments and Contingencies For a discussion of commitments and contingencies, refer to Footnote 16, Commitments and Contingencies, to the Company’s Consolidated Financial Statements. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2023 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | SCHEDULE II DoubleVerify Holdings, Inc. Valuation and Qualifying Accounts (In thousands) Balance at Charges (Deductions) Balance at Beginning of (Recoveries) to Costs Additions ‑ End of Description Year and Expenses Write off Year Allowance for doubtful accounts Year ended December 31, 2023 $ 8,893 $ 10,075 $ (9,526) $ 9,442 Year ended December 31, 2022 $ 6,527 $ 5,033 $ (2,667) $ 8,893 Year ended December 31, 2021 $ 7,049 $ (711) $ 189 $ 6,527 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Preparation and Principles of Consolidation | Basis of Preparation and Principles of Consolidation The accompanying Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and reflect the financial statements of the Company and all of its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates and Judgments in the Preparation of the Condensed Consolidated Financial Statements | Use of Estimates and Judgments in the Preparation of the Consolidated Financial Statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expense during the reporting periods. Significant estimates and judgments are inherent in the analysis and measurement of items including, but not limited to: revenue recognition criteria including the determination of principal versus agent revenue considerations, income taxes, the valuation and recoverability of goodwill and intangible assets, the assessment of potential loss from contingencies, assumptions in valuing acquired assets and liabilities assumed in business combinations, the allowance for doubtful accounts, and assumptions used in determining the fair value of stock-based compensation. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. These estimates are based on the information available as of the date of the Consolidated Financial Statements. |
Segment Reporting | Segment Reporting The Company’s operating segments are determined based on the units that constitute a business for which discrete financial information is available and for which operating results are regularly reviewed by the Chief Operating Decision Maker (“CODM”). The CODM is the highest level of management responsible for assessing the Company’s overall performance and making operational decisions. The Company operates in one single operating and reportable |
Fair Value Measurements | Fair Value Measurements The Company evaluates the fair value of certain assets and liabilities using the fair value hierarchy. Fair value is an exit price representing the amount that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the Company applies the three-tier GAAP value hierarchy which prioritizes the inputs used in measuring fair value as follows: Level 1—observable inputs such as quoted prices in active markets; Level 2—inputs other than the quoted prices in active markets that are observable either directly or indirectly; Level 3—unobservable inputs of which there is little or no market data, which require the Company to develop its own assumptions. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measure. The carrying amounts of accounts receivable, accounts payable, accrued expenses and other current liabilities approximate fair value due to the short-term nature of these instruments. |
Foreign Currency | Foreign Currency A majority of the Company’s revenues are generated in U.S. dollars. In addition, most of the Company’s costs are denominated and determined in U.S. dollars. Thus, the reporting currency of the Company is the U.S. dollar. The functional currency of the Company’s foreign subsidiaries is generally the local currency. The assets and liabilities of subsidiaries whose functional currency is a foreign currency are translated at the period-end exchange rates. Income statement items are translated at the average monthly rates for the year. The resulting translation adjustment is recorded as a component of Accumulated other comprehensive (loss) income, net of income taxes and is included in the Consolidated Statements of Stockholders’ Equity. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. Pursuant to the Company’s investment policy, its surplus funds are kept as cash or cash equivalents in treasury bills, money market funds and savings accounts to reduce its exposure to market risk. |
Trade Receivables Net of Allowances for Doubtful Accounts | Trade Receivables Net of Allowances for Doubtful Accounts Trade receivables are non-interest bearing and are stated at gross invoice amounts. A receivable is recorded when the Company has an unconditional right to receive payment based on the satisfaction of performance obligations, such that only the passage of time is required before consideration is due, regardless of whether amounts are billed or unbilled. Included in trade receivables on the Consolidated Balance Sheets are unbilled receivable balances which have not yet been invoiced. The Company bills trade receivables one month The Company utilizes an expected loss methodology for its accounts receivable and the related allowance for doubtful accounts. In addition, the Company continues to evaluate specific accounts where information indicates the customers may have an inability to meet financial obligations, such as bankruptcy proceedings and receivable amounts outstanding for an extended period beyond contractual terms. Write-offs of accounts receivable are taken in the period when the Company has exhausted its efforts to collect overdue and unpaid receivables or otherwise has evaluated other circumstances that indicate that the Company should abandon such efforts. The following table presents changes in the accounts receivable allowance for doubtful accounts: Year Ended December 31, (in thousands) 2023 2022 2021 Beginning balance $ 8,893 $ 6,527 $ 7,049 Add: bad debt expense (recoveries) 10,075 5,033 (711) Less: write offs, net of recoveries (9,526) (2,667) 189 Ending balance $ 9,442 $ 8,893 $ 6,527 |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets on the Consolidated Balance Sheets consist primarily of prepaid taxes, other general prepaid expenses, prepaid insurance, and value added tax assets. Any expenses paid prior to the related services being rendered are recorded as prepaid expenses and amortized over the period of service. Restricted cash represents amounts pledged as collateral for certain agreements with third parties. Upon satisfying the terms of the agreements, the funds are expected to be released and available for use by the Company. As of December 31, 2023 and 2022, the Company had $0.1 million of restricted cash, respectively. |
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net Property, plant and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated using the straight-line method over the following estimated useful lives of the assets: Computers and peripheral equipment 3 years Office furniture and equipment 4 - 7 years Leasehold improvements Remaining lease term Assets under finance leases are recorded at their net present value at the inception of the lease. Assets under finance leases and leasehold improvements are amortized over the shorter of the related lease terms or their useful lives. Expenditures which significantly improve or extend the life of an asset are capitalized, while charges for routine maintenance and repairs are expensed during the year incurred. |
Capitalized Software | Capitalized Software Capitalized software, which is included in Property, plant and equipment, net, consists of costs to purchase and develop internal-use software, which the Company uses to provide services to its customers. The costs to purchase and develop internal-use software are capitalized from the time that the preliminary project stage is completed, and it is considered probable that the software will be used to perform the function intended. These costs include personnel and related employee benefits for employees directly associated with the software development and external costs of the materials or services consumed in developing or obtaining the software. Any costs incurred during subsequent efforts to upgrade and enhance the functionality of the software are also capitalized. Once this software is ready for use in the Company’s products, these costs are amortized on a straight-line basis over the estimated useful life of the software, which is 3 years. During the years ended December 31, 2023 and December 31, 2022, the Company capitalized $14.5 million and $7.0 million in internal-use software cost, respectively. Amortization expense was $7.3 million, $5.5 million, and $3.7 million on capitalized internal-use software costs during the years ended December 31, 2023, 2022 and 2021, respectively. This is included within Depreciation and amortization in the Consolidated Statements of Operations and Comprehensive Income. |
Leases | Leases The Company has operating and financing leases for corporate offices, data centers, and certain equipment. The Company determines if an arrangement is a lease at inception and does not recognize a right-of-use (“ROU”) asset or lease liability with a term shorter than 12 months. Additionally, the Company does not separate lease components from non-lease components for the specified asset classes. An ROU asset represents the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are to be recognized at commencement date based on the present value of lease payments not yet paid over the lease term. The lease term includes the minimum unconditional term of the lease, and may include options to extend or terminate the lease when it is reasonably certain at the commencement date that such options will be exercised. As the rate implicit for each of the Company’s leases is not readily determinable, the Company uses an incremental borrowing rate, based on the information available on the lease commencement date in determining the present value of lease payments not yet paid. The Company applies the portfolio approach in determining the incremental borrowing rate for each lease. The incremental borrowing rate for United States dollar denominated leases was calculated by considering current market yields and the Company’s existing debt rates to determine a yield. In order to assess a premium or discount for the lease tenor and develop an incremental borrowing rate curve, the analysis compared the Company’s existing debt yield to the appropriate market yield curve corresponding to the estimated secured credit rating of the Company. The curve one notch higher was used as the incremental borrowing rate focuses on secured borrowing rates, which tend to carry higher credit ratings when issued, in addition to calculating differences in expected recovery rates between secured and unsecured obligations. The corporate yield curve was adjusted based on the Company’s implied incremental borrowing rate premium or discount at each tenor to reach a concluded incremental borrowing rate curve. Using the calculated United States dollar incremental borrowing rate, the international incremental borrowing rates were determined by adjusting for specific country risk. The operating lease ROU assets include any lease payments made prior to the rent commencement date and exclude lease incentives. Operating lease expense for lease payments is recognized on a straight-line basis over the lease term. Operating lease transactions are included in Operating lease right-of-use assets, net, and Operating lease liabilities, current and noncurrent, within the accompanying Consolidated Balance Sheets. Finance leases, formerly known as (“f/k/a”) capital leases, are included in Property, plant and equipment, net, Current portion of finance lease obligations, and Finance lease obligations within the accompanying Consolidated Balance Sheets. Refer to Footnote 7, Leases, for further information. |
Business Combinations | Business Combinations The Company recognizes assets acquired and liabilities assumed at their fair value on the acquisition date. The Company allocates the purchase price of a business combination, which is the sum of the consideration provided, which may consist of cash, equity or a combination of the two, to the identifiable assets and liabilities of the acquired business at their acquisition date fair values. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill. 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 revenues and cash flows, discount rates and selection of comparable companies. The Company estimates the fair value of intangible assets acquired generally using a discounted cash flow approach, which includes an analysis of the future cash flows expected to be generated by the asset and the risk associated with achieving those cash flows. The key assumptions used in the discounted cash flow model include the discount rate that is applied to the forecasted future cash flows to calculate the present value of those cash flows and the estimate of future cash flows attributable to the acquired intangible asset, which include revenue, expenses and taxes. The carrying value of acquired working capital assets and liabilities approximates its fair value, given the short-term nature of these assets and liabilities. Acquisition-related costs are expensed as incurred. |
Goodwill | Goodwill Goodwill represents the excess of purchase price over the fair value of tangible net assets and identifiable intangible assets of the businesses acquired. The valuation of goodwill involves the use of management’s estimates and assumptions. The carrying value of goodwill is not amortized, but rather, is evaluated for impairment at least annually, as of October 1, and, additionally on an interim basis, whenever events or changes in circumstances indicate that the carrying amount of goodwill will not be recoverable. The Company has a single reporting unit. The Company’s review for impairment includes an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, the Company performs a quantitative goodwill impairment test, which compares the fair value of the reporting unit with its carrying amounts. The Company estimates the fair value of its reporting unit considering both income and market-based approaches. The estimated fair value of a reporting unit is determined based on assumptions regarding estimated future cash flows, discount rates, long-term growth rates and market values. |
Intangible Assets, Net | Intangible Assets, Net Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. The estimated useful lives of the Company’s finite-lived intangible assets are as follows: Trademarks and brands 5 - 15 years Customer relationships 5 - 14 years Developed technology 4 - 8 years Non-compete agreements 2 years |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, such as property and equipment, ROU assets, and intangible assets subject to depreciation and amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable or that the useful life is shorter than the Company had originally estimated. Recoverability of these assets is measured by comparison of the carrying amount of each asset or asset group to the future undiscounted cash flows the asset or asset group is expected to generate over their remaining lives. If the asset or asset group is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset or asset group. If the useful life is shorter than originally estimated, the Company amortizes the remaining carrying value over the new shorter useful life. |
Debt Issuance Costs | Debt Issuance Costs The New Revolving Credit Facility, as defined in Footnote 9, Long-term Debt, includes debt issuance costs that meet the definition of an asset and are recorded in the Consolidated Balances Sheets in Other Non-Current Assets. Debt issuance costs for the New Revolving Credit Facility are amortized to interest expense over the contractual term of the underlying debt instrument on a straight-line basis through the maturity date of the instrument of October 1, 2025. As of December 31, 2023 and December 31, 2022, remaining debt issuance costs were $0.5 million and $0.8 million, respectively. |
Revenue Recognition | Revenue Recognition In accordance with Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (ASC 606), the Company recognizes revenue under the core principle to depict the transfer of control to its customers in an amount reflecting the consideration to which it expected to be entitled. In order to achieve that core principle, the Company applies the following five-step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. The Company primarily maintains agreements with each customer in the form of master service agreements and master service orders, which set out the terms of the arrangement and access to the Company’s services. The Company invoices clients monthly for the services provided during the month. Invoice payment terms are typically between 30 to 60 days. The Company’s contracts with customers may include multiple promised services, consisting of the various impression measurement services the Company offers. For all revenue channels, the Company identifies performance obligations by evaluating whether the promised goods and services are capable of being distinct and distinct within the context of the contract at contract inception. Promised goods and services that are not distinct at contract inception are combined as one performance obligation. Once the Company identifies the performance obligations, the Company will determine the transaction price based on contractual amounts applied to the associated terms. The Company allocates the transaction price to each performance obligation based on the standalone selling price. The major sources of revenue include Measurement (f/k/a Advertiser – direct), Activation (f/k/a Advertiser – programmatic), and Supply-side customers. Measurement and Activation Revenue For Measurement revenue, advertisers can purchase the Company’s services to measure the quality and performance of ads purchased directly from digital properties, including publishers and social media platforms. Advertisers are provided access to the Company’s platform through the Company’s proprietary self-service software that provides the Company’s customers with access to data on all their digital ads and enables them to make changes to their ad strategies. In these arrangements, the customer pays a fee to the Company based on the ads measured. For Activation revenues, customers can elect to use the Company’s services for evaluating the quality and performance of advertising inventory they are considering purchasing. Advertisers purchase the Company’s social activation solutions direct and programmatic activation solutions through Demand Side Platforms that manage ad campaign auctions and inventories on their behalf on an advertising exchange. The ability to provide the Company’s programmatic solutions to customers requires that the Company enter into product integration agreements with Demand-Side Platforms who in turn make the Company’s services available to advertisers. In these arrangements, the customer pays a fee to the Company (collected by the Demand-Side Platform) for the successful execution of the purchase of advertising inventory on an exchange. For Measurement and Activation revenues, contracts with multiple performance obligations typically consist of services aimed at advertisers to help evaluate and ensure the success of a brand campaign by measuring authentic impressions. These services are generally delivered together as impressions are measured. For these services, each impression is distinct and has the same pattern of transfer to the customer. Revenue is recognized over time, as the Company is providing services that the customer is continuously consuming and receiving benefit from or upon completion of the service. The Company considers primarily the “right to invoice” practical expedient appropriate in the context of the Company’s contracts as this directly corresponds to the value of the Company’s performance to date. In this case, the Company’s pricing structure is (1) solely variable on the basis of the customer’s usage of the Company’s services, (2) is priced at a fixed rate per usage and (3) gives the entity the right to invoice the customer for its usage as it occurs. Certain customers receive cash-based incentives, credits, or discounts on the pricing of products or services once specific volume thresholds have been met. For the years ended December 31, 2023 and 2022, the Company had a liability for customer incentives of $8.4 million and $6.2 million, respectively, included in Other current liabilities in the Consolidated Balance Sheets. Where volume-based discounts are applied retrospectively, these amounts are accounted for as variable consideration which the Company estimates based on the expected consideration to be received by the customer. For volume-based discounts applied prospectively, the Company evaluates each contract to determine if the discount represents a material right which would be recognized as a separate performance obligation. Revenue is recognized using the output method based on digital ads measured at the effective rate for which consideration is expected to be received. Supply-Side Customer Supply-Side Customer revenues consist of arrangements with publishers and other supply-side customers to provide them with software solutions and data analytics to enable them to maximize revenue from their digital advertising inventory. Certain arrangements include minimum guaranteed fees that reset monthly and are recognized on a straight-line basis over the access period, which is usually one to two years. For contracts that contain overages, once the minimum guaranteed amount is achieved, overages are recognized as earned over time based on a tiered pricing structure. Such revenues are recognized on an input method time-elapsed basis, as the Company is providing services that the customer is continuously consuming and receiving benefit from, and such recognition best depicts the transfer of control to the customer. Overages give rise to variable consideration that is allocated to the distinct periods to which the overage relates. Transactions that Involve Third Parties For transactions that involve third parties, the Company evaluates which party in the arrangement obtains control of the Company’s services (and is therefore the Company’s customer), which impacts whether the Company reports as revenue the gross amounts paid by the advertiser through the Demand-Side Platform or the net amount paid by the Company’s Demand-Side Platform partners. For certain arrangements, advertisers (“customers”) may purchase the Company’s service offering through a Demand-Side Platform that manages various ad campaign auctions and inventory on behalf of the advertisers. Customers elect to use the Company’s service of evaluating the quality and performance of advertising inventory up for bid on an advertising exchange. The ability to provide these services to customers requires that the Company enter into product integration agreements with Demand-Side Platforms who in turn make the Company’s services available to advertisers. In these arrangements, the customer pays a fee to the Company (collected by the Demand-Side Platform) for the successful execution of the purchase of advertising inventory on an exchange. In these transactions, the Company transfers control of the Company’s services directly to the advertiser (who is the Company’s customer) and therefore revenue is recognized for the gross amount paid by the advertiser for the Company’s services. Specifically, the Company transfers control of the data that is influencing the purchasing decisions directly to the customer and the Company is primarily responsible for providing these services to the customer. That is, control of these services (or a right to these services) does not transfer to the Demand-Side Platform before they are transferred to the Company’s customers. Further, the Company has latitude in establishing the sales price with those customers as there is a fixed retail rate card that is included in the product integration agreements with the Demand-Side Platforms or are governed by contracts in place with the customers. Accordingly, the Company records revenue for the gross amounts paid by advertisers for these services and records the amounts retained by the Demand-Side Platforms as a cost of revenue. Contract assets relate to the Company’s conditional right to consideration for completed performance under the contract (e.g., unbilled receivables) and are included in Trade receivables, net of allowance for doubtful accounts. Costs to Fulfill or Obtain a Contract The Company recognizes direct fulfillment costs as an expense when incurred. These costs include commission programs to compensate employees for generating sales orders under the Company’s master services agreements or integration agreements, and are included in Sales, marketing, and customer support. The Company did not incur incremental costs to obtain contracts during the years ended December 31, 2023, 2022, and 2021, respectively. |
Operating Expenses | Operating Expenses Cost of revenue includes commissions related to revenue share arrangements with Demand Side Platforms and excludes depreciation and amortization. Cost of revenue also includes platform hosting fees, data center costs, software and other technology expenses, other costs directly associated with data infrastructure, personnel costs including salaries, bonuses, stock-based compensation, employee benefit costs and allocated overhead expenses for personnel who provide the Company’s customers with support in implementing and using the Company’s software platform. Product development expenses consist primarily of personnel costs, including salaries, bonuses, stock-based compensation, employee benefits costs, and allocated overhead expenses inclusive of engineering, product and technical operation expenses, third-party consultant costs associated with the ongoing research, development and maintenance of the Company’s software platform. Technology and development costs are expensed as incurred, except to the extent that such costs are associated with software development that qualifies for capitalization, which are then recorded as capitalized software and included in Property, plant and equipment, net on the Company’s Consolidated Balance Sheets. Sales, marketing and customer support expenses consist primarily of personnel costs, including salaries, bonuses, stock-based compensation, employee benefits costs, commission costs, and allocated overhead expenses for the Company’s sales, marketing and customer support personnel. Sales, marketing, and customer support expense also include costs for market development programs, advertising costs, attendance at events and trade shows, promotional and other marketing activities. Advertising costs include expenses associated with direct marketing but exclude the costs of attendance at events and trade shows. Advertising costs were $0.1 million for the years ended December 31, 2023, 2022 and 2021, respectfully. Commissions costs are expensed as incurred. General and administrative expenses consist primarily of personnel costs, including salaries, bonuses, stock-based compensation, employee benefits costs and other overhead expenses associated with the Company’s executive, finance, legal, human resources, compliance, and other administrative personnel, as well as accounting, tax, and legal professional services fees, rent, bad debt expense and other overhead expense related to human resource and finance activities, as well as other corporate costs including offering costs. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables. The Company maintains cash deposits with financial institutions that, from time to time, exceed applicable insurance limits. The Company reduces this risk by maintaining such deposits with high quality financial institutions that management believes are creditworthy. Cash and cash equivalents are maintained with several financial institutions domestically and internationally. The combined account balances held on deposit at each institution typically exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company monitors this credit risk and makes adjustments to the concentrations as necessary. As of December 31, 2023 and 2022, the Company had total domestic cash deposits and cash equivalents of $283.5 million and $256.7 million, respectively. Total domestic cash deposits exceeded the FDIC insurance coverage amounts. With respect to accounts receivable, credit risk is mitigated by the Company’s ongoing credit evaluation of its customers’ financial condition. No single customer accounted for more than 10% of trade receivables for the years ended December 31, 2023 and 2022. With respect to revenues, no single customer accounted for more than 10% of revenues for the years ended December 31, 2023, 2022 and 2021. |
Other Income, Net | Other Income, Net Other income, net consists primarily of interest income, change in fair value associated with contingent consideration, and the impact of foreign currency transaction gains and losses associated with monetary assets and liabilities. Interest income consists of interest earned on interest-bearing monetary assets. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method, in accordance with ASC 740, Accounting for Income Taxes. This approach requires recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The Company records a valuation allowance when it is determined that it is more-likely-than-not, based upon all available evidence both positive and negative, that a portion or all its deferred tax assets will not be realized. At each reporting period, management assesses the realizability of its deferred tax assets. The Company records uncertain tax positions using a more-likely-than-not threshold based on the technical merits of the tax position taken. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefits determined on a cumulative probability basis, which are more-likely-than-not to be realized upon ultimate settlement in the financial statements. Interest and penalties are recognized as part of income tax expense. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock based compensation awards issued to its employees and members of its Board of Directors (the “Board”) in accordance with ASC 718, Compensation—Stock Compensation. ASC 718 requires that the cost resulting from all share based payment transactions be recognized in the financial statements. This statement establishes fair value as the measurement objective in accounting for share based payment arrangements and requires all entities to apply a fair value based measurement method in accounting for these transactions with employees. The Company’s stock based compensation awards consist of restricted stock units (“RSUs”), stock options, performance-based restricted stock units (“PSUs”) and awards granted under the Company’s employee stock purchase plan (“ESPP”). Each RSU and PSU forming part of an award represents the right to receive one share of the Company’s common stock upon vesting and settlement. Stock based compensation is measured at grant date based on the estimated fair value of the award and is expensed over the requisite service period net of an estimated forfeiture rate. The Company uses historical data to estimate forfeitures. For stock-based compensation awards with only service conditions, expense is recognized on a straight-line basis. For stock-based compensation awards with multiple conditions, expense is recognized using the accelerated attribution method. The fair value of RSU awards that vest only upon the satisfaction of a service condition is determined on the grant date based on the grant date closing stock price. The grant date fair value is determined with the assistance of third-party valuation specialists for PSUs with market-based and service-based vesting conditions (“TSR PSUs”). TSR PSUs vest based on relative total shareholder return as compared to the Russell 3000 index during the defined performance periods, subject to the recipient’s continued service during an explicit service period. The valuation of the TSR PSUs employed the Monte Carlo simulation model, which includes certain key assumptions that were applied to the Company and the applicable peer group. Those key assumptions included valuation date stock price, expected volatility, correlation coefficients, risk-free interest rate, and expected dividend yield. The valuation date stock price is based on the closing price on the grant date. Expected volatility is calculated using the applicable peer group for a period that is commensurate with the length of the applicable performance period. The correlation coefficients are based on the price data used to calculate the historical volatilities. The risk-free interest rate is based on the yield of U.S. Treasury zero coupon securities with a maturity equal to the length of the applicable performance period. The expected dividend yield was based on the Company and peer group’s expected dividend rate over the applicable performance period assuming dividends distributed during the performance period are reinvested in additional shares of the underlying stock on the ex-dividend date. To the extent that market-based and service-based vesting conditions are met, between 0% and 200% of the target TSR PSUs will vest. For PSUs with performance-based and service-based vesting conditions (“Financial PSUs”), the grant date fair value is determined using the grant date closing stock price. Financial PSUs are tied to the achievement of the Company’s revenue performance during the defined performance period for each award, subject to the recipient’s continued service during an explicit service period. Stock-based compensation expense for Financial PSUs are initially based on the probable outcome of the performance condition vesting and is evaluated each reporting period to account for changes in the shares estimated to vest or actual shares that vest at the conclusion of the performance period. To the extent the performance-based and service-based vesting conditions are met, between 0% and 150% of the target Financial PSUs will vest. The fair value of stock option awards and awards under the ESPP is determined on the grant date using the Black Scholes Merton option pricing model. The option pricing model requires a number of assumptions, of which the most significant are the expected stock price volatility, the expected option term, the risk-free interest rate, and the fair market value of the Company’s common stock. Since there is no extensive history for the Company’s public common stock, the Company bases its estimates of expected volatility on the median historical volatility of a group of publicly traded companies it believes are comparable to the Company, and uses the average of i) the weighted average vesting period and ii) the contractual life of the option, calculated using the “simplified method”. The simplified method allows for estimating the expected life based on an average of the option vesting term and option life, provided that all options meet certain criteria of “plain vanilla” options. The risk-free interest rate is based on the yield from U.S. treasury bonds as of the expected term. Additionally, the Company has assumed that dividends will not be paid. Certain grants of stock options to executives contain certain vesting conditions, whereby, subject to the option holders continued employment with the Company, the award will vest upon the date Providence has received cumulative cash proceeds in respect of its investment in the Company equal to two times its aggregate cash investment in the Company. This is a market condition, but the requirement that the award vest on the basis of sufficient proceeds distributed to Providence represents a performance condition. Prior to the year ended December 31, 2021, the outcome of that performance condition was not considered probable, and therefore the Company did not recognize any expense associated with these stock options. During the year ended December 31, 2021, all outstanding performance conditions were achieved and the underlying stock options vested. The Company recorded expense associated with these stock options described in Footnote 13, Stock-Based Compensation. |
Earnings Per Share | Earnings Per Share Basic and diluted earnings per share (“EPS”) are determined in accordance with ASC 260, Earnings per Share. Basic EPS is calculated by dividing net income by the weighted average number of common stock outstanding during the period. Diluted EPS is based upon the weighted average number of outstanding shares of common stock and dilutive common stock equivalents in the period. Common stock equivalents arise from dilutive stock options, RSUs, ESPP and PSUs which are computed using the treasury stock method. ESPP and PSUs are treated as contingently issuable shares under the treasury stock method. Anti-dilutive common stock equivalents are excluded from diluted EPS. |
Emerging Growth Company Status | Emerging Growth Company Status The Company was an emerging growth company, as defined in the JOBS Act for the year ended December 31, 2021. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company elected to use this extended transition period for complying with certain new or revised accounting standards during the year ended December 31, 2021. As a result, the Company’s financial statements for periods prior to and during which it was an emerging growth company may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. The Company no longer meets the requirement of being an emerging growth company and has filed its Annual Report on Form 10-K for the fiscal years ended December 31, 2023 and 2022 as a large accelerated filer. |
Offering Costs | Offering Costs Offering costs consist of expenses incurred during the Company’s preparation of its IPO. These expenses include registration fees, filing fees, specific legal and accounting fees which are directly related to the Company’s efforts to raise capital through an IPO. The Company expenses offering costs as they are incurred. For the years ended December 31, 2023 and 2022 there were no offering costs. For the year ended December 31, 2021, offering costs were $22.1 million and recorded in General and administrative in the Consolidated Statements of Operations and Comprehensive Income. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Segment Reporting – Improvements to Reportable Segment Disclosures In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The updated standard is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and the update requires retrospective application to all prior periods presented. The Company is currently in the process of evaluating the impact of this standard on the Company’s Consolidated Financial Statements. Income Taxes – Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which expands annual disclosure requirements related to the rate reconciliation and income taxes paid disclosures. ASU 2023-09 requires consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid to be disaggregated by jurisdiction. The updated standard is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted and the update may be applied on a prospective basis with retrospective application permitted. The Company is currently in the process of evaluating the impact of this standard on the Company’s Consolidated Financial Statements . |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Schedule of changes in the accounts receivable allowance for doubtful accounts | Year Ended December 31, (in thousands) 2023 2022 2021 Beginning balance $ 8,893 $ 6,527 $ 7,049 Add: bad debt expense (recoveries) 10,075 5,033 (711) Less: write offs, net of recoveries (9,526) (2,667) 189 Ending balance $ 9,442 $ 8,893 $ 6,527 |
Schedule of estimated useful lives of assets | Computers and peripheral equipment 3 years Office furniture and equipment 4 - 7 years Leasehold improvements Remaining lease term |
schedule of finite-lived intangible assets estimated useful lives | Trademarks and brands 5 - 15 years Customer relationships 5 - 14 years Developed technology 4 - 8 years Non-compete agreements 2 years |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue | |
Schedule of disaggregated revenue | Year Ended December 31, (in thousands) 2023 2022 2021 Activation (f/k/a Advertiser - programmatic) $ 328,936 $ 251,198 $ 167,798 Measurement (f/k/a Advertiser - direct) 198,024 157,908 135,516 Supply-side customer 45,583 43,312 29,427 Total revenue $ 572,543 $ 452,418 $ 332,741 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Meetrics GmbH | |
Business Combinations | |
Schedule of fair value of assets acquired and liabilities assumed | (in thousands) Acquisition Date Assets: Cash and cash equivalents $ 1,007 Trade receivables 778 Other assets 96 Property, plant and equipment 10 Intangible assets: Technology 2,245 Customer relationships 7,208 Trademarks 47 Non-compete agreements 71 Total intangible assets 9,571 Goodwill 15,578 Total assets acquired $ 27,040 Liabilities: Trade payables $ 147 Other current liabilities 361 Deferred tax liability 1,233 Total liabilities assumed 1,741 Total purchase consideration $ 25,299 Cash acquired (1,007) Net cash purchase price $ 24,292 |
OpenSlate | |
Business Combinations | |
Schedule of components of consideration transferred | (in thousands) Cash, net of cash acquired $ 125,708 Common stock transferred 22,526 Total $ 148,234 |
Schedule of fair value of assets acquired and liabilities assumed | (in thousands) Acquisition Date Assets: Cash and cash equivalents $ 8,549 Trade receivables 5,460 Prepaid expenses 66 Escrow assets 2,000 Other assets 167 Property, plant and equipment — Intangible assets: Technology 11,900 Customer relationships 37,100 Total intangible assets 49,000 Goodwill 103,938 Total assets acquired $ 169,180 Liabilities: Trade payables $ 226 Other current liabilities 2,373 Escrow liabilities 2,000 Deferred tax liability 7,798 Total liabilities assumed 12,397 Total purchase consideration $ 156,783 Cash acquired (8,549) Net cash purchase price $ 148,234 |
Scibids | |
Business Combinations | |
Schedule of components of consideration transferred | (in thousands) Cash, net of cash acquired $ 67,240 Common stock issued in connection with the acquisition 52,937 Fair value of contingent consideration 1,193 Total $ 121,370 |
Schedule of fair value of assets acquired and liabilities assumed | (in thousands) Acquisition Date Assets: Cash and cash equivalents $ 1,705 Trade receivables 5,197 Prepaid expenses 50 Other assets 1,382 Intangible assets: Technology 18,000 Customer relationships 15,000 Total intangible assets 33,000 Goodwill 90,668 Total assets acquired $ 132,002 Liabilities: Trade payables $ 530 Other liabilities 1,259 Deferred tax liability 7,138 Total liabilities assumed 8,927 Total purchase consideration $ 123,075 Cash acquired (1,705) Purchase consideration, net of cash acquired $ 121,370 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets | |
Summary of changes to the goodwill carrying value | (in thousands) Goodwill as of January 1, 2022 $ 350,560 Measurement period adjustments (4,660) Foreign exchange impact (2,889) Goodwill as of December 31, 2022 343,011 Business combinations (Scibids) 90,668 Foreign exchange impact 2,329 Goodwill as of December 31, 2023 $ 436,008 |
Schedule of intangible assets and related accumulated amortization | December 31, 2023 December 31, 2022 Gross Net Gross Net Carrying Accumulated Carrying Carrying Accumulated Carrying (in thousands) Amount Amortization Amount Amount Amortization Amount Trademarks and brands $ 11,734 $ (5,140) $ 6,594 $ 11,733 $ (4,294) $ 7,439 Customer relationships 161,173 (62,955) 98,218 145,834 (49,587) 96,247 Developed technology 93,013 (56,942) 36,071 76,677 (44,956) 31,721 Non-compete agreements 66 (66) — 64 (42) 22 Total intangible assets $ 265,986 $ (125,103) $ 140,883 $ 234,308 $ (98,879) $ 135,429 (In years) Trademarks and brands 9 Customer relationships 7 Developed technology 2 |
Schedule of estimated future expected amortization expense of intangible assets | (in thousands) 2024 $ 28,823 2025 26,894 2026 22,141 2027 18,187 2028 14,972 Thereafter 29,866 Total $ 140,883 |
Property, Plant and Equipment_2
Property, Plant and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment, net | |
Schedule of property, plant and equipment | As of December 31, (in thousands) 2023 2022 Computers and peripheral equipment $ 25,013 $ 19,189 Office furniture and equipment 3,170 2,542 Leasehold improvements 32,595 29,678 Capitalized software development costs 35,039 22,026 Less accumulated depreciation and amortization (37,797) (26,401) Total property, plant and equipment, net $ 58,020 $ 47,034 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Schedule of lease cost and other information about leases | Year Ended December 31, (in thousands) 2023 2022 Lease cost: Operating lease cost (1) $ 10,359 $ 10,922 Finance lease cost Depreciation of finance lease assets (2) 1,770 1,191 Interest on finance lease liabilities (3) 223 139 Short-term lease cost (1) 1,058 1,080 Sublease income (1) (978) (622) Total lease cost $ 12,432 $ 12,710 Other information: Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows from operating leases $ 7,641 $ 5,367 Operating cash outflows from finance leases $ 155 $ 132 Financing cash outflows from finance leases $ 2,314 $ 1,924 (1) Included in Cost of revenue, Sales, marketing and customer support, Product development and General and administrative expenses in the accompanying Consolidated Statements of Operations and Comprehensive Income. (2) Included in Depreciation and amortization in the accompanying Consolidated Statements of Operations and Comprehensive Income. (3) Included in Interest expense in the accompanying Consolidated Statements of Operations and Comprehensive Income. |
Schedule of weighted-average remaining lease terms and discount rates | The following table presents weighted-average remaining lease terms and weighted-average discount rates for finance and operating leases as of December 31, 2023 and December 31, 2022, respectively: Year Ended December 31, 2023 2022 Weighted-average remaining lease term - operating leases (in years) 13.6 14.2 Weighted-average remaining lease term - finance leases (in years) 2.2 1.6 Weighted-average discount rate - operating leases 4.6% 4.5% Weighted-average discount rate - finance leases 5.3% 3.7% |
Schedule of the future operating lease commitment under agreement | December 31, 2023 (in thousands) Operating Leases Finance Leases 2024 $ 9,179 $ 3,214 2025 8,145 2,150 2026 6,857 819 2027 6,665 — 2028 6,753 — Thereafter 74,037 — Total lease payments 111,636 6,183 Less amount representing interest (31,044) (384) Present value of total lease payments $ 80,592 $ 5,799 |
Schedule of maturities of finance lease liabilities | December 31, 2023 (in thousands) Operating Leases Finance Leases 2024 $ 9,179 $ 3,214 2025 8,145 2,150 2026 6,857 819 2027 6,665 — 2028 6,753 — Thereafter 74,037 — Total lease payments 111,636 6,183 Less amount representing interest (31,044) (384) Present value of total lease payments $ 80,592 $ 5,799 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurement | |
Schedule of financial instruments measured at fair value on recurring basis | As of December 31, 2023 Quoted Market Prices in Active Significant Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Total Fair Value (in thousands) (Level 1) (Level 2) (Level 3) Measurements Assets: Cash equivalents: $ 61,463 $ — $ — $ 61,463 As of December 31, 2022 Quoted Market Prices in Active Significant Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Total Fair Value (in thousands) (Level 1) (Level 2) (Level 3) Measurements Assets: Cash equivalents: $ 11,710 $ — $ — $ 11,710 |
Schedule of fair value measurements of the contingent consideration categorized with Level 3 | (in thousands) Balance as of January 1, 2021 $ 1,660 Fair value adjustments 57 Balance as of December 31, 2021 1,717 Payments during the year (1,717) Balance as of December 31, 2022 — Fair value at date of acquisition 1,193 Fair value adjustments (1,193) Balance as of December 31, 2023 $ — |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax | |
Components of income before income tax (benefit) provision | Year Ended December 31, (in thousands) 2023 2022 2021 Domestic $ 91,018 $ 54,162 $ 16,499 Foreign 4,859 5,206 9,322 Income before income taxes $ 95,877 $ 59,368 $ 25,821 |
Schedule of income tax provision (benefit) | Year Ended December 31, (in thousands) 2023 2022 2021 Current Federal $ 35,225 $ 20,599 $ 821 State 12,848 14,435 1,508 Foreign 1,399 711 1,999 Total current tax provision $ 49,472 $ 35,745 $ 4,328 Deferred Federal $ (17,694) $ (15,467) $ (5,545) State (6,806) (4,324) (2,241) Foreign (561) 146 (29) Total deferred tax benefit $ (25,061) $ (19,645) $ (7,815) Income tax provision (benefit) $ 24,411 $ 16,100 $ (3,487) |
Schedule of reconciliation of the statutory U.S. income tax rate to the effective income tax rate | Year Ended December 31, 2023 2022 2021 Statutory federal tax rate 21.0 % 21.0 % 21.0 % State taxes 5.1 9.7 (3.3) Tax credits (2.1) (5.6) (3.9) Foreign tax effects 0.5 0.2 — Non‑deductible items and other 0.4 1.5 (0.6) Changes in tax reserves (0.8) 1.7 1.9 Provision to return adjustment 1.7 (1.2) 0.5 Transaction costs 0.3 — 18.9 Global Intangible Low Tax Income 1.1 1.0 0.7 Foreign-Derived Intangible Income (2.9) — — Non-deductible officers' compensation 1.8 2.7 47.8 Non‑cash compensation (0.5) (3.9) (96.5) Effective tax rate 25.6 % 27.1 % (13.5) % |
Components of deferred tax assets and liabilities | As of December 31, (in thousands) 2023 2022 Deferred tax assets: Allowance for doubtful accounts $ 2,327 $ 2,338 Accrued expenses and other 5,271 6,299 Stock compensation 6,140 3,920 Capitalized costs 31,542 18,839 Lease liability 21,071 22,941 Net operating losses 3,719 4,117 Gross deferred tax assets 70,070 58,454 Valuation allowance (636) (500) Net deferred tax assets $ 69,434 $ 57,954 Deferred tax liabilities: ROU asset $ (15,464) $ (18,042) Purchased intangibles (38,360) (38,216) Depreciation and amortization (10,652) (14,551) Total deferred tax liabilities (64,476) (70,809) Net deferred tax asset (liability) $ 4,958 $ (12,855) |
Schedule of unrecognized tax benefits | Year Ended December 31, (in thousands) 2023 2022 Beginning balance $ 3,415 $ 2,363 Increase related to tax positions of prior years 62 432 Increase related to tax positions of the current year 250 620 Decrease due to lapse in statutes of limitations (1,037) — Ending balance $ 2,690 $ 3,415 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share | |
Schedule of computations of the basic and diluted EPS | Year Ended December 31, 2023 2022 2021 Numerator: Net Income (basic and diluted) $ 71,466 $ 43,268 $ 29,308 Denominator: Weighted‑average common shares outstanding 167,803 163,882 148,309 Dilutive effect of stock based awards 5,632 6,873 11,955 Weighted‑average dilutive shares outstanding 173,435 170,755 160,264 Basic earnings per share $ 0.43 $ 0.26 $ 0.20 Diluted earnings per share $ 0.41 $ 0.25 $ 0.18 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stock-Based Compensation | |
Schedule of stock option activity | Stock Option Weighted Average Weighted Remaining Number of Average Contractual Life Aggregate Options Exercise Price (Years) Intrinsic Value Outstanding as of January 1, 2023 11,861 $ 13.43 7.17 $ 129,323 Options granted 918 25.46 Options exercised (2,701) 3.91 Options forfeited (86) 25.14 Outstanding as of December 31, 2023 9,992 $ 17.01 6.91 $ 197,598 Options expected to vest as of December 31, 2023 3,196 $ 24.86 8.21 $ 38,131 Options exercisable as of December 31, 2023 6,607 $ 12.94 6.22 $ 157,528 |
Schedule of valuation assumptions | 2023 2022 2021 Risk‑free interest rate (percentage) 3.6 2.0 - 3.7 0.6. - 1.4 Expected term (years) 6.1 6.1 5.8 - 6.1 Expected dividend yield (percentage) — — — Expected volatility (percentage) 46.5 42.8 - 46.0 42.1 - 43.6 |
Schedule of restricted stock activity | RSUs Weighted Average Grant Number of Date Fair Shares Value Outstanding as of January 1, 2023 3,154 $ 27.07 Granted 3,197 28.19 Vested (1,423) 26.42 Forfeited (208) 26.97 Outstanding as of December 31, 2023 4,720 $ 28.03 |
Schedule of PSUs activity | PSUs Weighted Average Grant Number of Date Fair Shares Value Outstanding as of January 1, 2023 — $ — Granted 480 41.31 Vested — — Forfeited — — Outstanding as of December 31, 2023 480 $ 41.31 |
Schedule of stock-based compensation expense | Year Ended December 31, (in thousands) 2023 2022 2021 Product development $ 22,955 $ 15,030 $ 4,369 Sales, marketing and customer support 18,299 14,265 6,375 General and administrative 17,990 13,012 11,143 Total stock‑based compensation $ 59,244 $ 42,307 $ 21,887 |
Performance share units (PSUs) | |
Stock-Based Compensation | |
Schedule of valuation assumptions | 2023 Risk‑free interest rate (percentage) 3.9 - 4.1 Expected dividend yield (percentage) — Expected volatility (percentage) 46.7 |
Supplemental Financial Statem_2
Supplemental Financial Statement Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Supplemental Financial Statement Information | |
Schedule of accrued expenses | As of December 31, (in thousands) 2023 2022 Vendor payments $ 6,286 $ 4,824 Employee commissions and bonuses 20,809 17,718 Payroll and other employee related expense 10,602 7,024 401k and pension expense 2,982 2,144 Other taxes 3,585 1,375 Total accrued expense $ 44,264 $ 33,085 |
Schedule of Other Income, Net | Year Ended December 31, (in thousands) 2023 2022 2021 Interest income $ (10,841) $ (2,305) $ (11) Change in fair value of contingent consideration (1,193) — 57 Foreign currency exchange loss (gain) 855 1,102 (102) Other miscellaneous income, net (37) (46) (253) Other income, net $ (11,216) $ (1,249) $ (309) |
Description of Business (Detail
Description of Business (Details) - segment | 12 Months Ended | |
Dec. 31, 2023 | Aug. 18, 2017 | |
Business Combinations | ||
Number of reportable segments | 1 | |
DoubleVerify Inc. | ||
Business Combinations | ||
Ownership percentage acquired | 100% |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Segment reporting (Details) | 12 Months Ended |
Dec. 31, 2023 segment | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Trade receivables (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Changes in the accounts receivable allowance for doubtful accounts | |||
Beginning balance | $ 8,893 | $ 6,527 | $ 7,049 |
Add: bad debt expense (recoveries) | 10,075 | 5,033 | (711) |
Less: write offs, net of recoveries | (9,526) | (2,667) | 189 |
Ending balance | $ 9,442 | $ 8,893 | $ 6,527 |
Trade receivables | 1 month |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Prepaid expenses and other current assets (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Basis of Presentation and Summary of Significant Accounting Policies | ||
Restricted cash | $ 0.1 | $ 0.1 |
Basis of Presentation and Sum_7
Basis of Presentation and Summary of Significant Accounting Policies - Capitalized software (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 28.1 | $ 25.1 | $ 18.8 |
Capitalized internal-use software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful life | 3 years | ||
Capitalized assets | $ 14.5 | 7 | |
Amortization expense | $ 7.3 | $ 5.5 | $ 3.7 |
Basis of Presentation and Sum_8
Basis of Presentation and Summary of Significant Accounting Policies - Property, plant and equipment, net (Details) | Dec. 31, 2023 |
Computers and peripheral equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Office furniture and equipment. | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 4 years |
Office furniture and equipment. | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Basis of Presentation and Sum_9
Basis of Presentation and Summary of Significant Accounting Policies - Intangible assets, net (Details) | Dec. 31, 2023 |
Technology | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 4 years |
Technology | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 8 years |
Customer relationships | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 5 years |
Customer relationships | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 14 years |
Trademarks | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 5 years |
Trademarks | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 15 years |
Non-compete agreements | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 2 years |
Basis of Presentation and Su_10
Basis of Presentation and Summary of Significant Accounting Policies - Debt issuance and Revenue Recognition (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) | |
Basis of Presentation and Summary of Significant Accounting Policies | ||
Debt issuance costs | $ 0.5 | $ 0.8 |
Revenue Recognition | ||
Number of Performance Obligation for Contracted Goods and Services | item | 1 | |
Customer incentives liability | $ 8.4 | $ 6.2 |
Basis of Presentation and Su_11
Basis of Presentation and Summary of Significant Accounting Policies - Operating expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Basis of Presentation and Summary of Significant Accounting Policies | |||
Advertising costs | $ 0.1 | $ 0.1 | $ 0.1 |
Basis of Presentation and Su_12
Basis of Presentation and Summary of Significant Accounting Policies - Concentrations of credit risk & Other income (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Basis of Presentation and Summary of Significant Accounting Policies | ||
Domestic deposits | $ 283.5 | $ 256.7 |
Basis of Presentation and Su_13
Basis of Presentation and Summary of Significant Accounting Policies - Offering costs (Details) - USD ($) $ in Millions | 12 Months Ended | 24 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2023 | |
General and administrative | |||
Subsidiary, Sale of Stock [Line Items] | |||
Offering costs | $ 22.1 | $ 22.1 | $ 0 |
Basis of Presentation and Su_14
Basis of Presentation and Summary of Significant Accounting Policies - Stock-based compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 59,244 | $ 42,307 | $ 21,887 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 17,990 | $ 13,012 | $ 11,143 |
TSR PSU | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage | 0% | ||
TSR PSU | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage | 200% | ||
TSR PSU | Treasury Bills | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Investment Interest Rate | 0% | ||
Financial PSUs | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage | 0% | ||
Financial PSUs | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage | 150% |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of revenue | |||
Total revenue | $ 572,543 | $ 452,418 | $ 332,741 |
Unbilled receivable | 55,000 | 52,700 | |
Revenue obligation | $ 10,900 | ||
Minimum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |||
Disaggregation of revenue | |||
Remaining performance obligations | 3 years | ||
Maximum | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |||
Disaggregation of revenue | |||
Remaining performance obligations | 1 year | ||
Advertiser - direct | |||
Disaggregation of revenue | |||
Total revenue | $ 328,936 | 251,198 | 167,798 |
Advertiser - programmatic | |||
Disaggregation of revenue | |||
Total revenue | 198,024 | 157,908 | 135,516 |
Supply-side customer | |||
Disaggregation of revenue | |||
Total revenue | $ 45,583 | $ 43,312 | $ 29,427 |
Supply-side revenue | 8% |
Business Combinations - Acquisi
Business Combinations - Acquisition (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||||
Aug. 14, 2023 | Nov. 22, 2021 | Aug. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||||
Change in fair value of contingent consideration | $ (1,193) | $ 57 | ||||
Customer relationships | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 14 years | |||||
Customer relationships | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 5 years | |||||
Meetrics GmbH | ||||||
Business Acquisition [Line Items] | ||||||
Weighted-average useful life | 11 years 6 months | |||||
Acquisition cost | $ 100 | $ 900 | ||||
Deferred tax liabilities | $ 1,233 | |||||
Meetrics GmbH | Developed technology | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 4 years | |||||
Meetrics GmbH | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 14 years | |||||
OpenSlate | ||||||
Business Acquisition [Line Items] | ||||||
Weighted-average useful life | 8 years 9 months 18 days | |||||
Acquisition cost | 200 | 2,200 | ||||
Deferred tax liabilities | $ 7,798 | $ 2,300 | ||||
Company common stock issued | 684 | |||||
OpenSlate | Developed technology | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 5 years | |||||
OpenSlate | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 10 years | |||||
Scibids | ||||||
Business Acquisition [Line Items] | ||||||
Weighted-average useful life | 6 years 8 months 12 days | |||||
Acquisition cost | $ 1,300 | |||||
Deferred tax liabilities | $ 7,138 | |||||
Company common stock issued | 1,642 | |||||
Scibids | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Performance based deferred payment | $ 25,000 | |||||
Scibids | Developed technology | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 4 years | |||||
Scibids | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Estimated useful life | 10 years |
Business Combinations - Compone
Business Combinations - Components of consideration transferred (Details) - USD ($) $ in Thousands | Aug. 14, 2023 | Nov. 22, 2021 |
OpenSlate | ||
Business Acquisition [Line Items] | ||
Cash, net of cash acquired | $ 125,708 | |
Common stock issued in connection with the acquisition | 22,526 | |
Total | $ 148,234 | |
Scibids | ||
Business Acquisition [Line Items] | ||
Cash, net of cash acquired | $ 67,240 | |
Common stock issued in connection with the acquisition | 52,937 | |
Fair value of contingent consideration | 1,193 | |
Total | $ 121,370 |
Business Combinations - Assets
Business Combinations - Assets acquired and liabilities assumed (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Aug. 14, 2023 | Nov. 22, 2021 | Aug. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible assets: | ||||||
Goodwill | $ 436,008 | $ 343,011 | $ 350,560 | |||
Liabilities | ||||||
Aggregate net cash purchase price | $ 67,240 | $ 149,217 | ||||
Non-compete agreements | ||||||
Liabilities | ||||||
Estimated useful life | 2 years | |||||
Meetrics GmbH | ||||||
Assets | ||||||
Cash and cash equivalents | $ 1,007 | |||||
Trade receivables | 778 | |||||
Other assets | 96 | |||||
Property, plant and equipment | 10 | |||||
Intangible assets: | ||||||
Total intangible assets | 9,571 | |||||
Goodwill | 15,578 | |||||
Total assets acquired | 27,040 | |||||
Liabilities | ||||||
Trade payables | 147 | |||||
Other current liabilities | 361 | |||||
Deferred tax liability | 1,233 | |||||
Total liabilities assumed | 1,741 | |||||
Total purchase consideration | 25,299 | |||||
Purchase consideration, net of cash acquired | 24,292 | |||||
Aggregate net cash purchase price | $ 24,300 | |||||
Weighted-average useful life | 11 years 6 months | |||||
Acquisition cost | $ 100 | 900 | ||||
Meetrics GmbH | Developed technology | ||||||
Intangible assets: | ||||||
Total intangible assets | $ 2,245 | |||||
Liabilities | ||||||
Estimated useful life | 4 years | |||||
Meetrics GmbH | Customer relationships | ||||||
Intangible assets: | ||||||
Total intangible assets | $ 7,208 | |||||
Liabilities | ||||||
Estimated useful life | 14 years | |||||
Meetrics GmbH | Trademarks | ||||||
Intangible assets: | ||||||
Total intangible assets | $ 47 | |||||
Liabilities | ||||||
Estimated useful life | 1 year | |||||
Meetrics GmbH | Non-compete agreements | ||||||
Intangible assets: | ||||||
Total intangible assets | $ 71 | |||||
Liabilities | ||||||
Estimated useful life | 2 years | |||||
OpenSlate | ||||||
Assets | ||||||
Cash and cash equivalents | $ 8,549 | |||||
Trade receivables | 5,460 | |||||
Escrow assets | 2,000 | |||||
Prepaid expenses | 66 | |||||
Other assets | 167 | |||||
Intangible assets: | ||||||
Total intangible assets | 49,000 | |||||
Goodwill | 103,938 | |||||
Total assets acquired | 169,180 | |||||
Liabilities | ||||||
Trade payables | 226 | |||||
Other current liabilities | 2,373 | |||||
Escrow liabilities | 2,000 | |||||
Deferred tax liability | 7,798 | 2,300 | ||||
Total liabilities assumed | 12,397 | |||||
Total purchase consideration | 156,783 | |||||
Purchase consideration, net of cash acquired | 148,234 | |||||
Cash acquired | $ (8,549) | |||||
Weighted-average useful life | 8 years 9 months 18 days | |||||
Acquisition cost | 200 | $ 2,200 | ||||
OpenSlate | Developed technology | ||||||
Intangible assets: | ||||||
Total intangible assets | $ 11,900 | |||||
Liabilities | ||||||
Estimated useful life | 5 years | |||||
OpenSlate | Customer relationships | ||||||
Intangible assets: | ||||||
Total intangible assets | $ 37,100 | |||||
Liabilities | ||||||
Estimated useful life | 10 years | |||||
Scibids | ||||||
Assets | ||||||
Cash and cash equivalents | $ 1,705 | |||||
Trade receivables | 5,197 | |||||
Prepaid expenses | 50 | |||||
Other assets | 1,382 | |||||
Intangible assets: | ||||||
Total intangible assets | 33,000 | |||||
Goodwill | 90,668 | |||||
Total assets acquired | 132,002 | |||||
Liabilities | ||||||
Trade payables | 530 | |||||
Other current liabilities | 1,259 | |||||
Deferred tax liability | 7,138 | |||||
Total liabilities assumed | 8,927 | |||||
Total purchase consideration | 123,075 | |||||
Purchase consideration, net of cash acquired | 121,370 | |||||
Cash acquired | $ (1,705) | |||||
Weighted-average useful life | 6 years 8 months 12 days | |||||
Acquisition cost | $ 1,300 | |||||
Scibids | Developed technology | ||||||
Intangible assets: | ||||||
Total intangible assets | $ 18,000 | |||||
Liabilities | ||||||
Estimated useful life | 4 years | |||||
Scibids | Customer relationships | ||||||
Intangible assets: | ||||||
Total intangible assets | $ 15,000 | |||||
Liabilities | ||||||
Estimated useful life | 10 years |
Business Combinations - Zentric
Business Combinations - Zentrick NV acquisition - Narrative (Details) $ in Thousands | 12 Months Ended | |||
Feb. 16, 2022 USD ($) | Feb. 15, 2019 USD ($) component Milestone | Dec. 31, 2023 USD ($) | Dec. 31, 2021 USD ($) | |
Business Combinations | ||||
Unrealized gain | $ (1,193) | $ 57 | ||
Zentrick NV | ||||
Business Combinations | ||||
Cash, net of cash acquired | $ 23,200 | |||
Closing adjustments | 200 | |||
Consideration held back | 100 | |||
Performance based deferred payment | $ 17,300 | |||
Number of component | component | 2 | |||
Performance based deferred payment, First component | $ 4,000 | |||
Unrealized gain | 100 | |||
Number of milestone | Milestone | 4 | |||
Amour per milestone | $ 1,000 | |||
Performance based deferred payment, Second component | $ 13,000 | |||
Payment of contingent consideration | $ 5,600 | |||
Business Acquisition, Transaction Costs | 2,800 | |||
Zentrick NV | Maximum | ||||
Business Combinations | ||||
Compensation Cost | $ 100 | |||
Zentrick NV | Tranche one | ||||
Business Combinations | ||||
Percentage of holdback payments | 50% | |||
Holdback payments payable period | 12 months | |||
Zentrick NV | Tranche two | ||||
Business Combinations | ||||
Percentage of holdback payments | 50% | |||
Holdback payments payable period | 24 months |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Changes to the goodwill carrying value | ||
Goodwill at Beginning | $ 343,011 | $ 350,560 |
Business combinations (Scibids) | 90,668 | |
Measurement period adjustments | (4,660) | |
Foreign exchange impact | 2,329 | (2,889) |
Goodwill at Ending | $ 436,008 | $ 343,011 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Company's intangible assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 265,986 | $ 234,308 | |
Accumulated Amortization | (125,103) | (98,879) | |
Total | 140,883 | 135,429 | |
Amortization expense | 28,100 | 25,100 | $ 18,800 |
Trademarks and brands | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 11,734 | 11,733 | |
Accumulated Amortization | (5,140) | (4,294) | |
Total | 6,594 | 7,439 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 161,173 | 145,834 | |
Accumulated Amortization | (62,955) | (49,587) | |
Total | 98,218 | 96,247 | |
Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 93,013 | 76,677 | |
Accumulated Amortization | (56,942) | (44,956) | |
Total | 36,071 | 31,721 | |
Non-compete agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 66 | 64 | |
Accumulated Amortization | $ (66) | (42) | |
Total | $ 22 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Estimated future expected amortization expense (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2024 | $ 28,823 | |
2025 | 26,894 | |
2026 | 22,141 | |
2027 | 18,187 | |
2028 | 14,972 | |
Thereafter | 29,866 | |
Total | $ 140,883 | $ 135,429 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Weighted-average remaining useful life (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of intangible assets | $ 0 | $ 0 | $ 0 |
Trademarks and brands | |||
Finite-Lived Intangible Assets [Line Items] | |||
Remaining useful life | 9 years | ||
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Remaining useful life | 7 years | ||
Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Remaining useful life | 2 years |
Property, Plant and Equipment_3
Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Less accumulated depreciation and amortization | $ (37,797) | $ (26,401) | |
Total property, plant and equipment, net | 58,020 | 47,034 | |
Depreciation expense | 12,800 | 9,200 | $ 11,500 |
Loss on disposition of property plant equipment | 1,400 | ||
Impairments of Property, plant and equipment | 1,510 | ||
Property, plant and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Impairments of Property, plant and equipment | 0 | 0 | $ 0 |
Computers and peripheral equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment gross | 25,013 | 19,189 | |
Finance lease assets, gross | 17,800 | 12,300 | |
Finance lease assets, accumulated depreciation | 12,900 | 11,200 | |
Office furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment gross | 3,170 | 2,542 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment gross | 32,595 | 29,678 | |
Capitalized software development costs | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment gross | $ 35,039 | $ 22,026 |
Leases - Leases Cost (Details)
Leases - Leases Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Lease cost: | |||
Operating lease cost (1) | $ 10,359 | $ 10,922 | |
Finance lease cost | |||
Depreciation of finance lease assets (2) | 1,770 | 1,191 | |
Interest on finance lease liabilities (3) | 223 | 139 | |
Short-term lease cost (1) | 1,058 | 1,080 | |
Sublease income (1) | (978) | (622) | |
Total lease cost | 12,432 | 12,710 | |
Cash paid for amounts included in the measurement of lease liabilities | |||
Operating cash outflows from operating leases | 7,641 | 5,367 | |
Operating cash outflows from finance leases | 155 | 132 | |
Financing cash outflows from finance leases | 2,314 | 1,924 | $ 1,918 |
Operating lease right-of-use asset impairment | $ 0 | $ 1,500 | $ 0 |
Leases - Weighted-average remai
Leases - Weighted-average remaining lease terms and discount rates (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Leases | ||
Weighted-average remaining lease term - operating leases (in years) | 13 years 7 months 6 days | 14 years 2 months 12 days |
Weighted-average remaining lease term - finance leases (in years) | 2 years 2 months 12 days | 1 year 7 months 6 days |
Weighted-average discount rate - operating leases | 4.60% | 4.50% |
Weighted-average discount rate - finance leases | 5.30% | 3.70% |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Maturities of operating lease liabilities | |
2024 | $ 9,179 |
2025 | 8,145 |
2026 | 6,857 |
2027 | 6,665 |
2028 | 6,753 |
Thereafter | 74,037 |
Total lease payments | 111,636 |
Less amount representing interest | (31,044) |
Present value of total lease payments | $ 80,592 |
Leases - Maturities of Finance
Leases - Maturities of Finance Lease Liabilities (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Maturities of finance lease liabilities | |
2024 | $ 3,214 |
2025 | 2,150 |
2026 | 819 |
Total lease payments | 6,183 |
Less amount representing interest | (384) |
Present value of total lease payments | $ 5,799 |
Fair Value Measurement - Fair v
Fair Value Measurement - Fair value on a recurring basis (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets: | ||
Cash equivalents | $ 61,463 | $ 11,710 |
Level 1 | ||
Assets: | ||
Cash equivalents | $ 61,463 | $ 11,710 |
Fair Value Measurement - Rollfo
Fair Value Measurement - Rollforward (Details) - Contingent Consideration - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning Balance | $ 1,717 | $ 1,660 | |
Fair value at date of acquisition | $ 1,193 | ||
Fair value adjustments | $ (1,193) | 57 | |
Payments | $ (1,717) | ||
Ending Balance | $ 1,717 |
Fair Value Measurement - Narrat
Fair Value Measurement - Narrative (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) Milestone | Dec. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Number of technical milestones | Milestone | 4 | ||
Discount rate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value inputs | 11.3 | ||
Price volatility | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value inputs | 25 | ||
Operating leverage rate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value inputs | 160 | ||
Level 1 | Money market funds and time deposits | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents | $ 61,500 | $ 11,700 | |
Contingent Consideration | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Decrease in fair value | $ 1,193 | $ (57) | |
Business combination contingent consideration liability | Discount rate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value inputs | 13.5 | ||
Business combination contingent consideration liability | Revenue Volatility | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value inputs | 29 |
Long-term Debt (Details)
Long-term Debt (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 29, 2023 | Oct. 01, 2020 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||||
Maximum total net leverage ratio | 3.5 | |||||
Minimum fixed charge coverage ratio | 1.25 | |||||
Payments to revolving credit facility | $ 50,000 | |||||
Proceeds from revolving credit facility | $ 50,000 | |||||
Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of commitment fee payable periodically | 0.25% | |||||
Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of commitment fee payable periodically | 0.40% | |||||
Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 15,000 | |||||
New Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 150,000 | |||||
Outstanding amount | $ 0 | $ 0 | ||||
Payments for line of credit facility | $ 50,000 | |||||
Proceeds from revolving credit facility | $ 50,000 | |||||
New Revolving Credit Facility | SOFR | ||||||
Debt Instrument [Line Items] | ||||||
Spread rate | 2% | |||||
New Revolving Credit Facility | Alternate Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Spread rate | 1% |
Income Tax - Components of inco
Income Tax - Components of income (loss) before income tax (benefit) provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Contingency [Line Items] | |||
Income before income taxes | $ 95,877 | $ 59,368 | $ 25,821 |
Domestic | |||
Income Tax Contingency [Line Items] | |||
Income before income taxes | 91,018 | 54,162 | 16,499 |
Foreign | |||
Income Tax Contingency [Line Items] | |||
Income before income taxes | $ 4,859 | $ 5,206 | $ 9,322 |
Income Tax - Income tax provisi
Income Tax - Income tax provision (benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current | |||
Federal | $ 35,225 | $ 20,599 | $ 821 |
State | 12,848 | 14,435 | 1,508 |
Foreign | 1,399 | 711 | 1,999 |
Total current tax provision | 49,472 | 35,745 | 4,328 |
Deferred | |||
Federal | (17,694) | (15,467) | (5,545) |
State | (6,806) | (4,324) | (2,241) |
Foreign | (561) | 146 | (29) |
Total deferred tax benefit | (25,061) | (19,645) | (7,815) |
Income tax provision (benefit) | $ 24,411 | $ 16,100 | $ (3,487) |
Income Tax - Reconciliation (De
Income Tax - Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Effective income tax rate reconciliation | |||
Statutory federal tax rate | 21% | 21% | 21% |
State taxes | 5.10% | 9.70% | (3.30%) |
Tax credits | (2.10%) | (5.60%) | (3.90%) |
Foreign taxes | 0.50% | 0.20% | |
Nondeductible items and other | 0.40% | 1.50% | (0.60%) |
Changes in tax reserves | (0.80%) | 1.70% | 1.90% |
Provision to return adjustment | 1.70% | (1.20%) | 0.50% |
Transaction costs | 0.30% | 18.90% | |
Global Intangible Low Tax Income | 1.10% | 1% | 0.70% |
Foreign-Derived Intangible Income | (2.90%) | ||
Non-deductible officers' compensation | 1.80% | 2.70% | 47.80% |
Noncash compensation | (0.50%) | (3.90%) | (96.50%) |
Effective tax rate | 25.60% | 27.10% | (13.50%) |
Income Tax - Components of defe
Income Tax - Components of deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 2,327 | $ 2,338 |
Accrued expenses and other | 5,271 | 6,299 |
Stock compensation | 6,140 | 3,920 |
Capitalized costs | 31,542 | 18,839 |
Lease liability | 21,071 | 22,941 |
Net operating losses | 3,719 | 4,117 |
Gross deferred tax assets | 70,070 | 58,454 |
Valuation allowance | (636) | (500) |
Net deferred tax assets | 69,434 | 57,954 |
Deferred tax liabilities: | ||
ROU asset | (15,464) | (18,042) |
Purchased intangibles | (38,360) | (38,216) |
Depreciation and amortization | (10,652) | (14,551) |
Total deferred tax liabilities | (64,476) | (70,809) |
Net deferred tax assets | $ 4,958 | |
Net deferred tax liability | $ (12,855) |
Income Tax - Net Operating Loss
Income Tax - Net Operating Loss and Credit Carryforwards, Uncertain Tax Positions (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Contingency [Line Items] | ||
Interest and penalties | $ 2.7 | $ 3.4 |
Unrecognized tax benefits that would impact the effective tax rate | 2.3 | $ 3.3 |
Reversal of unrecognized tax benefits in subsequent period | 0 | |
Meetrics GmbH | ||
Income Tax Contingency [Line Items] | ||
Net operating loss carryforwards | 1.5 | |
Domestic | ||
Income Tax Contingency [Line Items] | ||
Net operating loss carryforwards | 6.1 | |
Net operating loss carryforwards utilized | 4.1 | |
Domestic | OpenSlate | ||
Income Tax Contingency [Line Items] | ||
Net operating loss carryforwards | 4 | |
Domestic | Scibids | ||
Income Tax Contingency [Line Items] | ||
Net operating loss carryforwards | 4.7 | |
State | ||
Income Tax Contingency [Line Items] | ||
Net operating loss carryforwards | 8.7 | |
Net operating loss carryforwards utilized | 7.9 | |
State | OpenSlate | ||
Income Tax Contingency [Line Items] | ||
Net operating loss carryforwards | $ 1.3 |
Income Tax - Unrecognized tax b
Income Tax - Unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax | ||
Beginning balance | $ 3,415 | $ 2,363 |
Increase related to tax positions of prior years | 62 | 432 |
Increase related to tax positions of the current year | 250 | 620 |
Decrease due to lapse in statutes of limitations | (1,037) | |
Ending balance | $ 2,690 | $ 3,415 |
Employee Contribution Plan (Det
Employee Contribution Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Contribution Plan | |||
Employer's contribution | $ 2.5 | $ 1.8 | $ 1.4 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator: | |||
Net income | $ 71,466 | $ 43,268 | $ 29,308 |
Denominator: | |||
Weighted-average common shares outstanding | 167,803 | 163,882 | 148,309 |
Dilutive effect of share-based awards | 5,632 | 6,873 | 11,955 |
Weighted-average dilutive shares outstanding | 173,435 | 170,755 | 160,264 |
Basic earnings per share | $ 0.43 | $ 0.26 | $ 0.20 |
Diluted earnings per share | $ 0.41 | $ 0.25 | $ 0.18 |
Weighted average shares issuable under stock-based awards, excluded from diluted EPS calculation | 7,700 | 5,100 | 1,400 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - shares shares in Thousands | 12 Months Ended | ||
Apr. 19, 2021 | Dec. 31, 2023 | Sep. 20, 2017 | |
2021 Omnibus Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized | 30,000 | ||
Share-based compensation arrangement by share-based payment award, annual increase in shares authorized as a percentage of outstanding common shares | 5% | ||
Equity Incentive Program | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized | 22,182 | ||
Term of award | 10 years | ||
Employee Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Performance share units (PSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock option activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Number of Options | ||
Outstanding beginning balance | 11,861 | |
Options granted | 918 | |
Options exercised | (2,701) | |
Options forfeited | (86) | |
Outstanding Ending balance | 9,992 | 11,861 |
Options expected to vest | 3,196 | |
Options exercisable | 6,607 | |
Weighted Average Exercise Price | ||
Outstanding beginning balance (in dollars per share) | $ 13.43 | |
Options granted (in dollars per share) | 25.46 | |
Options exercised (in dollars per share) | 3.91 | |
Options forfeited (in dollars per share) | 25.14 | |
Outstanding ending balance (in dollars per share) | 17.01 | $ 13.43 |
Options expected to vest (in dollars per share) | 24.86 | |
Options exercisable (in dollars per share) | $ 12.94 | |
Additional disclosures | ||
Weighted Average Remaining Contractual Life (Years) | 6 years 10 months 28 days | 7 years 2 months 1 day |
Options expected to vest (in years) | 8 years 2 months 15 days | |
Options exercisable (Years) | 6 years 2 months 19 days | |
Aggregate Intrinsic Value, outstanding (Beginning balance) | $ 129,323 | |
Aggregate Intrinsic Value, outstanding (ending balance) | 197,598 | $ 129,323 |
Aggregate Intrinsic Value, expected to vest | 38,131 | |
Aggregate Intrinsic Value, exercisable | $ 157,528 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Nov. 19, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding Ending balance | 9,992 | 11,861 | ||
Weighted average grant date fair value (in dollars per share) | $ 12.57 | $ 12.09 | $ 13.01 | |
Intrinsic value | $ 75,600 | $ 34,300 | $ 141,000 | |
Options exercised | 2,701 | |||
Stock-based compensation expense | $ 59,244 | 42,307 | 21,887 | |
Performance and Market Based Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted | 0 | |||
Outstanding Ending balance | 1,373 | |||
Options exercised | 653 | |||
Stock-based compensation expense | 2,100 | |||
Performance and Market Based Options | Selling Stockholders | Secondary Offerings | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Company common stock Secondary Offering | 8,000 | |||
Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted | 3,197 | |||
Vested | 1,423 | |||
Vested, Fair value | $ 37,600 | $ 35,300 | $ 4,400 | |
Granted, Weighted average grant date fair value | $ 28.19 | $ 24.75 | $ 31.22 |
Stock-Based Compensation - Valu
Stock-Based Compensation - Valuation Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Risk - free interest rate (percentage), minimum | 2% | 0.60% | |
Risk - free interest rate (percentage) | 3.60% | ||
Risk - free interest rate (percentage), maximum | 3.70% | 1.40% | |
Expected term (years) | 6 years 1 month 6 days | 6 years 1 month 6 days | |
Expected volatility (percentage), minimum | 42.80% | 42.10% | |
Expected volatility (percentage) | 46.50% | ||
Expected volatility (percentage), maximum | 46% | 43.60% | |
Performance share units (PSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Risk - free interest rate (percentage), minimum | 3.90% | ||
Risk - free interest rate (percentage), maximum | 4.10% | ||
Expected volatility (percentage) | 46.70% | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected term (years) | 5 years 9 months 18 days | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |||
Expected term (years) | 6 years 1 month 6 days |
Stock-Based Compensation - RSUs
Stock-Based Compensation - RSUs and PSUs (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted Stock Units (RSUs) | |||
Number of Shares | |||
Outstanding beginning balance | 3,154 | ||
Granted | 3,197 | ||
Vested | (1,423) | ||
Forfeited | (208) | ||
Outstanding ending balance | 4,720 | 3,154 | |
Weighted Average Grant Date Fair Value | |||
Outstanding beginning balance (in dollars per share) | $ 27.07 | ||
Granted (in dollars per share) | 28.19 | $ 24.75 | $ 31.22 |
Vested (in dollars per share) | 26.42 | ||
Forfeited (in dollars per share) | 26.97 | ||
Outstanding ending balance (in dollars per share) | $ 28.03 | $ 27.07 | |
Performance share units (PSUs) | |||
Number of Shares | |||
Granted | 480 | ||
Outstanding ending balance | 480 | ||
Weighted Average Grant Date Fair Value | |||
Granted (in dollars per share) | $ 41.31 | ||
Outstanding ending balance (in dollars per share) | $ 41.31 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-based compensation expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based payment arrangements information | |||
Total stock-based compensation | $ 59,244 | $ 42,307 | $ 21,887 |
Unrecognized stock-based compensation expense | $ 161,100 | ||
Weighted-average period over which unrecognized stock-based compensation expense are expected to be recognized | 1 year 4 months 24 days | ||
Product development | |||
Share-based payment arrangements information | |||
Total stock-based compensation | $ 22,955 | 15,030 | 4,369 |
Sales, marketing and customer support | |||
Share-based payment arrangements information | |||
Total stock-based compensation | 18,299 | 14,265 | 6,375 |
General and administrative | |||
Share-based payment arrangements information | |||
Total stock-based compensation | $ 17,990 | $ 13,012 | $ 11,143 |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee stock purchase plan (Details) - USD ($) shares in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 59,244 | $ 42,307 | $ 21,887 | |
2021 Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Capital shares reserved for future issuance | 3,000 | |||
Share-based compensation arrangement by share-based payment award, annual increase in shares authorized as a percentage of outstanding common shares | 1% | |||
Maximum | 2021 Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 800 | $ 600 | $ 100 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||||||
Apr. 23, 2021 USD ($) $ / shares shares | Apr. 09, 2021 USD ($) $ / shares shares | Oct. 27, 2020 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2023 $ / shares shares | |
Issuance of stock | $ 269,390 | ||||||
Underwriting discount fees | $ 6 | 22,069 | |||||
Stock offering cost | 22,074 | ||||||
Treasury stock, shares reissued | $ 15,146 | ||||||
Common stock, shares authorized | shares | 1,000,000 | 1,000,000 | |||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||||
Preferred Purchase Agreement | |||||||
Number of shares issued | shares | 15,568 | ||||||
Common stock available for conversion | shares | 45,438 | ||||||
Dividend declared (in dollars per share) | $ / shares | $ 0 | ||||||
Stock split, conversion ratio | 1 | ||||||
Preferred Purchase Agreement | Series A preferred stock | |||||||
Number of shares issued | shares | 61,006 | ||||||
Issuance of stock | $ 350,000 | ||||||
Proceeds from Series A preferred stock issuance, net of issuance costs | $ 89,300 | ||||||
Private Placement | |||||||
Issuance of stock | 30,000 | ||||||
Private Placement | Tiger Global Management, LLC | |||||||
Number of shares issued | shares | 1,111 | ||||||
Gross proceeds | $ 30,000 | ||||||
Purchase price per share | $ / shares | $ 27 | ||||||
Aggregate net proceeds | $ 29,000 | ||||||
Underwriting discount fees | $ 1,000 | ||||||
Private Placement | Providence | |||||||
Number of shares issued | shares | 5,356 | ||||||
IPO | |||||||
Number of shares issued | shares | 9,977 | ||||||
Purchase price per share | $ / shares | $ 27 | ||||||
Aggregate net proceeds | $ 253,200 | ||||||
Underwriting discount fees | 16,200 | ||||||
Stock offering cost | $ 27,100 | ||||||
Number of shares converted | shares | 20,335 | ||||||
Convertible preferred stock, conversion ratio | 0.333 | ||||||
Common stock, shares authorized | shares | 1,000,000 | ||||||
Common stock, par value | $ / shares | $ 0.001 | ||||||
Preferred stock, shares authorized | shares | 100,000 | ||||||
Preferred stock, par value | $ / shares | $ 0.01 | ||||||
IPO | General and administrative | |||||||
Stock offering cost | $ 22,100 | $ 3,600 | |||||
Underwriter Option | |||||||
Number of shares issued | shares | 1,350 | ||||||
Underwriter Option | Providence | |||||||
Number of shares issued | shares | 650 |
Supplemental Financial Statem_3
Supplemental Financial Statement Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accrued Expenses | |||
Vendor payments | $ 6,286 | $ 4,824 | |
Employee commissions and bonuses | 20,809 | 17,718 | |
Payroll and other employee related expense | 10,602 | 7,024 | |
401k and pension expense | 2,982 | 2,144 | |
Other taxes | 3,585 | 1,375 | |
Total accrued expense | 44,264 | 33,085 | |
Other Income, Net | |||
Interest income | (10,841) | (2,305) | $ (11) |
Change in fair value of contingent consideration | (1,193) | 57 | |
Foreign currency exchange loss (gain) | 855 | 1,102 | (102) |
Other miscellaneous income, net | (37) | (46) | (253) |
Other income, net | $ (11,216) | $ (1,249) | $ (309) |
Segment Information (Details)
Segment Information (Details) | 12 Months Ended |
Dec. 31, 2023 segment | |
Segment Information | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Subsequent Events (Details)
Subsequent Events (Details) - shares shares in Thousands | 12 Months Ended | |
Feb. 20, 2024 | Dec. 31, 2023 | |
Restricted Stock Units (RSUs) | ||
Subsequent Event [Line Items] | ||
Granted | 3,197 | |
Performance share units (PSUs) | ||
Subsequent Event [Line Items] | ||
Granted | 480 | |
Subsequent Event | 2021 Omnibus Equity Incentive Plan | Restricted Stock Units (RSUs) | ||
Subsequent Event [Line Items] | ||
Granted | 229 | |
Subsequent Event | 2021 Omnibus Equity Incentive Plan | Performance share units (PSUs) | ||
Subsequent Event [Line Items] | ||
Granted | 67 |
Schedule I - Condensed Financ_2
Schedule I - Condensed Financial Information of Registrant - Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets | ||||
Cash and cash equivalents | $ 310,131 | $ 267,813 | $ 221,591 | |
Trade receivables | 206,941 | 167,122 | ||
Total current assets | 533,002 | 445,096 | ||
Total assets | 1,243,031 | 1,037,028 | ||
Liabilities and Stockholder's Equity: | ||||
Due to subsidiaries | 2,690 | 3,504 | ||
Accrued expense | 44,264 | 33,085 | ||
Total liabilities | 169,092 | 160,169 | ||
Stockholders' equity | ||||
Common stock, $0.001 par value, 1,000,000 shares authorized, 171,168 shares issued and 171,146 outstanding as of December 31, 2023; 1,000,000 shares authorized, 165,448 shares issued and 165,417 outstanding as of December 31, 2022 | 171 | 165 | ||
Additional paid-in capital | 878,331 | 756,299 | ||
Treasury stock, at cost, 22 shares and 31 shares as of December 31, 2023 and December 31, 2022, respectively | (743) | (796) | ||
Retained earnings | 198,983 | 127,517 | ||
Accumulated other comprehensive loss, net of income taxes | (2,803) | (6,326) | ||
Total stockholders' equity | 1,073,939 | 876,859 | $ 799,066 | $ 416,695 |
Total liabilities and stockholders' equity | 1,243,031 | 1,037,028 | ||
Parent Company | Reportable Legal Entities | ||||
Current assets | ||||
Cash and cash equivalents | 133,127 | 184,693 | ||
Total current assets | 133,127 | 184,693 | ||
Investment in subsidiary | 635,635 | 507,557 | ||
Due from subsidiaries | 834,370 | 320,220 | ||
Total assets | 1,603,132 | 1,012,470 | ||
Liabilities and Stockholder's Equity: | ||||
Due to subsidiaries | 528,930 | 135,396 | ||
Accrued expense | 263 | 215 | ||
Total liabilities | 529,193 | 135,611 | ||
Stockholders' equity | ||||
Common stock, $0.001 par value, 1,000,000 shares authorized, 171,168 shares issued and 171,146 outstanding as of December 31, 2023; 1,000,000 shares authorized, 165,448 shares issued and 165,417 outstanding as of December 31, 2022 | 171 | 165 | ||
Additional paid-in capital | 878,331 | 756,299 | ||
Treasury stock, at cost, 22 shares and 31 shares as of December 31, 2023 and December 31, 2022, respectively | (743) | (796) | ||
Retained earnings | 198,983 | 127,517 | ||
Accumulated other comprehensive loss, net of income taxes | (2,803) | (6,326) | ||
Total stockholders' equity | 1,073,939 | 876,859 | ||
Total liabilities and stockholders' equity | $ 1,603,132 | $ 1,012,470 |
Schedule I - Condensed Financ_3
Schedule I - Condensed Financial Information of Registrant - Balance Sheets (Parenthetical) (Details) - $ / shares shares in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Condensed Balance Sheet Statements | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000 | 1,000,000 |
Common stock, shares issued | 171,168 | 165,448 |
Common stock, shares outstanding | 171,146 | 165,417 |
Treasury stock, shares | 22 | 31 |
Parent Company | Reportable Legal Entities | ||
Condensed Balance Sheet Statements | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000 | 1,000,000 |
Common stock, shares issued | 171,168 | 165,448 |
Common stock, shares outstanding | 171,146 | 165,417 |
Treasury stock, shares | 22 | 31 |
Schedule I - Condensed Financ_4
Schedule I - Condensed Financial Information of Registrant - Statements of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Condensed Income Statements | |||
Revenue | $ 572,543 | $ 452,418 | $ 332,741 |
Cost of revenue | 106,631 | 77,866 | 54,382 |
Product development | 125,376 | 95,118 | 62,698 |
Sales, marketing and customer support | 125,953 | 107,416 | 77,312 |
General and administrative | 87,971 | 78,666 | 81,380 |
Income from operations | 85,727 | 59,024 | 26,684 |
Other income (expense), net | 11,216 | 1,249 | 309 |
Income before income taxes | 95,877 | 59,368 | 25,821 |
Income tax expense (benefit) | 24,411 | 16,100 | (3,487) |
Net income | 71,466 | 43,268 | 29,308 |
Foreign currency cumulative translation adjustment | 3,523 | (5,555) | (1,782) |
Total comprehensive income | 74,989 | 37,713 | 27,526 |
Parent Company | Reportable Legal Entities | |||
Condensed Income Statements | |||
Product development | 22,955 | 15,030 | 4,369 |
Sales, marketing and customer support | 18,299 | 14,265 | 6,374 |
General and administrative | 18,532 | 13,220 | 28,513 |
Income from operations | (59,786) | (42,515) | (39,256) |
Other income (expense), net | 6,696 | 679 | (996) |
Equity in pretax earnings of consolidated subsidiaries | 148,967 | 101,204 | 66,073 |
Income before income taxes | 95,877 | 59,368 | 25,821 |
Income tax expense (benefit) | 24,411 | 16,100 | (3,487) |
Net income | 71,466 | 43,268 | 29,308 |
Foreign currency cumulative translation adjustment | 3,523 | (5,555) | (1,782) |
Total comprehensive income | $ 74,989 | $ 37,713 | $ 27,526 |
Schedule I - Condensed Financ_5
Schedule I - Condensed Financial Information of Registrant - Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Condensed Cash Flow Statements | |||
Operating activities: | $ 119,741 | $ 94,862 | $ 82,749 |
Investing activities: | |||
Net cash used in investing activities | (84,249) | (39,981) | (158,614) |
Financing activities | |||
Proceeds from common stock issued upon exercise of stock options | 10,666 | 5,803 | 12,440 |
Proceeds from common stock issued under employee purchase plan | 2,723 | 1,734 | 404 |
Proceeds from issuance of common stock upon initial public offering | 269,390 | ||
Proceeds from issuance of common stock in connection to concurrent private placement | 30,000 | ||
Payments for offering costs | (6) | (22,069) | |
Shares repurchased for settlement of employee tax withholdings | (4,586) | (10,244) | (1,802) |
Net cash provided by (used in) financing activities | 6,489 | (7,884) | 264,395 |
Effect of exchange rate changes on cash and cash equivalents | 338 | (784) | (200) |
Net (decrease) increase in cash, cash equivalents, and restricted cash | 42,319 | 46,213 | 188,330 |
Cash, cash equivalents, and restricted cash - Beginning of period | 267,938 | 221,725 | 33,395 |
Cash, cash equivalents, and restricted cash - End of period | 310,257 | 267,938 | 221,725 |
Noncash investing and financing transactions: | |||
Common stock issued in connection with acquisition | 52,937 | 22,526 | |
Treasury stock reissued upon the conversion of Series A preferred stock for common stock | 260,686 | ||
Stock-based compensation included in capitalized software development costs | 1,103 | 480 | |
Parent Company | Reportable Legal Entities | |||
Condensed Cash Flow Statements | |||
Operating activities: | 396,748 | 32,394 | 67,294 |
Investing activities: | |||
Transfer of funds to subsidiary | (457,117) | (32,099) | (179,825) |
Net cash used in investing activities | (457,117) | (32,099) | (179,825) |
Financing activities | |||
Proceeds from common stock issued upon exercise of stock options | 10,666 | 5,803 | 12,440 |
Proceeds from common stock issued under employee purchase plan | 2,723 | 1,734 | 404 |
Proceeds from issuance of common stock upon initial public offering | 269,390 | ||
Proceeds from issuance of common stock in connection to concurrent private placement | 30,000 | ||
Payments for offering costs | (17,214) | ||
Shares repurchased for settlement of employee tax withholdings | (4,586) | (10,244) | (1,802) |
Net cash provided by (used in) financing activities | 8,803 | (2,707) | 293,218 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (51,566) | (2,412) | 180,687 |
Cash, cash equivalents, and restricted cash - Beginning of period | 184,693 | 187,105 | 6,418 |
Cash, cash equivalents, and restricted cash - End of period | 133,127 | 184,693 | 187,105 |
Noncash investing and financing transactions: | |||
Common stock issued in connection with acquisition | 52,937 | 22,526 | |
Treasury stock reissued upon the conversion of Series A preferred stock for common stock | 260,686 | ||
Stock-based compensation included in capitalized software development costs | 1,103 | 480 | |
Due to consolidated subsidiaries | $ 29,659 | $ 33,500 | $ 68,940 |
Schedule I - Condensed Financ_6
Schedule I - Condensed Financial Information of Registrant - Notes to Condensed Financial Statements (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Aug. 18, 2017 | |
Income tax expense (benefit) | $ 24,411 | $ 16,100 | $ (3,487) | |
DoubleVerify Inc. | ||||
Ownership percentage acquired | 100% | |||
Parent Company | Reportable Legal Entities | ||||
Income tax expense (benefit) | 24,411 | 16,100 | (3,487) | |
Distributions from subsidiaries | $ 0 | $ 0 | $ 0 | |
Parent Company | Reportable Legal Entities | DoubleVerify Inc. | ||||
Ownership percentage acquired | 100% |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - Allowance for doubtful accounts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Year | $ 8,893 | $ 6,527 | $ 7,049 |
Charges (Recoveries) to Costs and Expenses | 10,075 | 5,033 | (711) |
(Deductions) Additions - Write off | (9,526) | (2,667) | 189 |
Balance at End of Year | $ 9,442 | $ 8,893 | $ 6,527 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ 71,466 | $ 43,268 | $ 29,308 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 shares | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | Securities Trading Plans of Directors and Executive Officers During the three months ended December 31, 2023, the following directors and "officers" (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted, modified or terminated “Rule 10b5-1 trading arrangements” (as defined in Item 408 of Regulation S-K). The trading arrangements are intended to satisfy the affirmative defense in Rule 10b5-1(c): Name Position Adoption Date Total Shares to be Sold Expiration Date Nicola T. Allais Chief Financial Officer November 14, 2023 180,000 November 15, 2024 Andrew E. Grimmig Chief Legal Officer December 15, 2023 209,346 September 30, 2024 |
Rule 10b5-1 Arrangement Adopted | true |
Rule 10b5-1 Arrangement Terminated | true |
Rule 10b5-1 Arrangement Modified | true |
Nicola T. Allais | |
Trading Arrangements, by Individual | |
Name | Nicola T. Allais |
Title | Chief Financial Officer |
Adoption Date | November 14, 2023 |
Aggregate Available | 180,000 |
Expiration Date | November 15, 2024 |
Andrew E. Grimmig | |
Trading Arrangements, by Individual | |
Name | Andrew E. Grimmig |
Title | Chief Legal Officer |
Adoption Date | December 15, 2023 |
Aggregate Available | 209,346 |
Expiration Date | September 30, 2024 |