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What changed in DoubleVerify Holdings, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of DoubleVerify Holdings, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+351 added−376 removedSource: 10-K (2024-02-28) vs 10-K (2023-03-01)

Top changes in DoubleVerify Holdings, Inc.'s 2023 10-K

351 paragraphs added · 376 removed · 285 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

67 edited+10 added−40 removed86 unchanged
Biggest changeWe own or perpetually license all aspects of our core software which we have built to be flexibly implemented on a variety of environments, allowing us to minimize cost while delivering the latency, growth and privacy needs of our global customers. 16 Table of Contents Our commitment to providing innovative and accurate advertising data and analytics is accomplished through the following core technology components: ● Configurable Settings : We have built a flexible configuration profile and settings distribution solution that allows customers to apply our software to their unique needs and brand preferences.
Biggest changeOur commitment to providing innovative and accurate advertising data and analytics is accomplished through the following core technology components: ● Configurable Settings : We have built a flexible configuration profile and settings distribution solution that allows customers to apply our software to their unique needs and brand preferences.
To receive these MRC accreditations, an independent third-party conducts annual audits of our solutions to evaluate whether they meet the MRC Minimum Standards, which include a technical review of our measurement and data analytics services and an evaluation of how we operate within the technical environments of the digital advertising ecosystem.
To receive these MRC accreditations, an independent third-party conducts annual audits of our solutions to evaluate whether they meet the MRC Minimum Standards, which include a technical review of our measurement and data analytics solutions and an evaluation of how we operate within the technical environments of the digital advertising ecosystem.
We operate customized analytics dashboards, configurable insights and data delivery engines and seamless data integrations that maximize the utility of the data produced by our software. ● Privacy Framework : We have built a privacy framework that is directly integrated into our measurement technology.
We operate customized analytics dashboards, configurable insights and data delivery engines and data integrations that maximize the utility of the data produced by our software. ● Privacy Framework : We have built a privacy framework that is directly integrated into our measurement technology.
We are able to scale our solutions efficiently and with limited incremental cost for new customers and additional solutions. We have grown our business rapidly while also achieving profitability, demonstrating the strength of our platform and business model.
We are able to scale our solutions efficiently and with limited incremental cost for new customers and additional solutions. We have grown our business while also achieving profitability, demonstrating the strength of our platform and business model.
We offer brands the ability to dynamically configure 73 avoidance categories, nearly half of which contain a risk tier aligned with the recently released industry- defined standards, such as disasters, inflammatory news and politics, and hate speech or profanity, allowing brand messages to be delivered in a curated and suitable environment.
We offer brands the ability to dynamically configure 74 avoidance categories, nearly half of which contain a risk tier aligned with the recently released industry- defined standards, such as disasters, inflammatory news and politics, and hate speech or profanity, allowing brand messages to be delivered in a curated and suitable environment.
In addition, we obtain third party security assessments and audits of our infrastructure and security. ● Reliable, Scalable and Redundant Infrastructure : We operate a global proprietary and redundant infrastructure that is highly available, fault tolerant and capital efficient. 17 Table of Contents Certifications and Accreditations Digital advertising measurement is subject to numerous governing industry standards, guidelines and best practices.
In addition, we obtain third party security assessments and audits of our infrastructure and security. 14 Table of Contents ● Reliable, Scalable and Redundant Infrastructure : We operate a global proprietary and redundant infrastructure that is highly available, fault tolerant and capital efficient. Certifications and Accreditations Digital advertising measurement is subject to numerous governing industry standards, guidelines and best practices.
Our sales professionals are responsible for driving the overall commercial strategy, establishing early connections and maintaining relationships with large, blue-chip brands and global advertising agencies and expanding our existing customer relationships. Our customer support team handles all aspects of customer relationships from pre-sale technical support to client onboarding, training and implementation of our services.
Our sales professionals are responsible for driving the overall commercial strategy, establishing early connections and maintaining relationships with large, blue-chip brands and global advertising agencies and expanding our existing customer relationships. Our customer support team handles all aspects of customer relationships from pre-sale technical support to client onboarding, training and implementation of our solutions.
The expansive coverage of our certifications and accreditations across metrics, standards, devices and regions represents a significant expenditure of capital and years of auditing that can be difficult for new market entrants to obtain. 18 Table of Contents Competition We operate in a competitive end market with multiple different types of competitors.
The expansive coverage of our certifications and accreditations across metrics, standards, devices and regions represents a significant expenditure of capital and years of auditing that can be difficult for new market entrants to obtain. 15 Table of Contents Competition We operate in a competitive end market with multiple different types of competitors.
As such, we rely on limited personally identifiable information to enable some aspects of our services. Our ability, like those of other advertising technology companies in the verification space, to use such tracking technologies is governed by U.S. and foreign laws and regulations, which change from time to time.
As such, we rely on limited personally identifiable information to enable some aspects of our solutions. Our ability, like those of other advertising technology companies in the verification space, to use such tracking technologies is governed by U.S. and foreign laws and regulations, which change from time to time.
Website addresses referred to in this Annual Report on Form 10-K are not intended to function as hyperlinks, and the information contained on our website is not incorporated into, and does not form a part of this Annual Report on Form 10-K or any other report or documents we file with or furnish to the SEC. ​ 21 Table of Contents
Website addresses referred to in this Annual Report on Form 10-K are not intended to function as hyperlinks, and the information contained on our website is not incorporated into, and does not form a part of this Annual Report on Form 10-K or any other report or documents we file with or furnish to the SEC. ​ 18 Table of Contents
In addition to locations in which we currently have a remote or contracted workforce, we serve our customers globally through our offices or commercial operations in 21 locations across 17 countries, including the United States, the United Kingdom, Israel, Singapore, Australia, Brazil, Germany and the United Arab Emirates. 6 Table of Contents We generate revenue from our advertising customers based on the volume of media transactions, or ads, that our software platform measures (“Media Transactions Measured”), for which we receive an analysis fee (“Measured Transaction Fee”), enabling us to grow as our customers increase their digital ad spend and as we integrate into new channels and platforms.
In addition to locations in which we currently have a remote or contracted workforce, we serve our customers globally through our offices or commercial operations in 30 locations across 24 countries, including the United States, the United Kingdom, Israel, Singapore, Australia, Brazil, Germany and the United Arab Emirates. 6 Table of Contents We generate revenue from our advertising customers based on the volume of media transactions, or ads, that our software platform measures (“Media Transactions Measured”), for which we receive an analysis fee (“Measured Transaction Fee”), enabling us to grow as our customers increase their digital ad spend and as we integrate into new channels and platforms.
The number of colleagues that are fully remote has increased and we continue to reimagine the future of work to support the needs of our people. 20 Table of Contents Regulatory Matters U.S. and international data security and privacy laws apply to our business.
The number of colleagues that are fully remote has increased and we continue to reimagine the future of work to support the needs of our people. 17 Table of Contents Regulatory Matters U.S. and international data security and privacy laws apply to our business.
Among the most sensitive topics currently being debated is the issue of the transfer of personally identifiable information between countries (known as onward transfers), with a particular focus on transfers from the European Union (“EU”) to the United States.
Among the most sensitive topics recently being debated is the issue of the transfer of personally identifiable information between countries (known as onward transfers), with a particular focus on transfers from the European Union (“EU”) to the United States.
We regularly seek to expand into new geographies based on demand from existing customers and the attractiveness of the potential market opportunity, including recent expansion in Japan, India and the Middle East region.
We regularly seek to expand into new geographies based on demand from existing customers and the attractiveness of the potential market opportunity, including recent expansion in southeast Asia, Japan, India and the Middle East region.
The strength of our solutions attracts new customers which increases the ad transactions we measure and data we collect, further strengthening the value of our network. Compelling Value Proposition Driving High Customer ROI . We enable our customers to optimize return on their marketing investments for a fraction of the underlying media cost.
The strength of our solutions attracts new customers which increases the ad transactions we measure and data we collect, further strengthening the value of our network. 8 Table of Contents Compelling Value Proposition Driving High Customer ROI . We enable our customers to optimize return on their marketing investments for a fraction of the underlying media cost.
This precision sets us apart from our competitors and allows us to combine and deliver performance measurements across fraud, brand safety and suitability, viewability and geography into a single, unique metric (the DV Authentic Ad), as well as the flexibility to disaggregate and analyze the individual measurements for each delivered ad.
This precision sets us apart from our competitors and allows us to combine and deliver performance measurements across fraud, brand safety and suitability, viewability and geography into a single, unique metric (the DV Authentic Ad), as well as the flexibility to disaggregate and analyze the individual measurements for each delivered ad. Broad Ecosystem Coverage .
To combat these issues, advertisers, digital publishers and media platforms rely on robust measurement solutions to validate the performance of their marketing campaigns and ensure that they are only paying for verified ads. 8 Table of Contents Rising Adoption of Independent, Cookie-Less, Cross-Platform Solutions .
To combat these issues, advertisers, digital publishers and media platforms rely on robust measurement solutions to validate the performance of their marketing campaigns and ensure that they are only paying for verified ads. Rising Adoption of Independent, Cookie-Less, Cross-Platform Solutions .
This framework allows us to modify our services in real-time based on the regulatory jurisdiction and data collection consent status of each individual measured ad.
This framework allows us to modify our solutions in real-time based on the regulatory jurisdiction and data collection consent status of each individual measured ad.
We serve over 1,000 customers that are diversified across all major industry verticals, including consumer packaged goods, financial services, telecommunications, technology, automotive and healthcare.
We serve over 1,800 customers that are diversified across all major industry verticals, including consumer packaged goods, financial services, telecommunications, technology, automotive and healthcare.
In addition, our solutions help our customers preserve one of their most important and invaluable assets — brand reputation — by ensuring ads are not shown near content that is inconsistent with their brand message. 9 Table of Contents Track Record of Successful Product Innovation .
In addition, our solutions help our customers preserve one of their most important and invaluable assets — brand reputation — by ensuring ads are not shown near content that is inconsistent with their brand message. Track Record of Successful Product Innovation .
More than ever, advertisers are being held accountable for brand and content alignment. In response, advertisers are adopting scalable, sophisticated brand suitability solutions to ensure effective use of their global digital media spend. Desire to Improve Media Quality and Effectiveness .
More than ever, advertisers are being held accountable for brand and content alignment. In response, advertisers are adopting scalable, sophisticated brand suitability solutions to ensure effective use of their global digital media spend. 7 Table of Contents Desire to Improve Media Quality and Effectiveness .
We also incorporate contracted resources when necessary or advisable to expand the reach of our full-time workforce. Diversity and Inclusion We are committed to fostering an equitable, intentionally inclusive culture, where differences are celebrated, marginalized voices are heard, and each employee is empowered by a sense of belonging.
We also incorporate contracted resources to expand the reach of our full-time workforce. Diversity and Inclusion We are committed to fostering an equitable, intentionally inclusive culture, where differences are celebrated, marginalized voices are heard, and each employee is empowered by a sense of belonging.
Our product team, consisting of 145 employees as of December 31, 2022, is responsible for working with our sales, account management, marketing and business development teams to understand customer input, assess the market opportunity and define the product roadmap.
Our product team, consisting of 175 employees as of December 31, 2023, is responsible for working with our sales, account management, marketing and business development teams to understand customer input, assess the market opportunity and define the product roadmap.
We have long-term relationships with many of our customers, with an average relationship of over seven years for our top 75 customers and over eight years for both our top 50 and 25 customers, and ongoing contractual agreements with a substantial portion of our customer base.
We have long-term relationships with many of our customers, with an average relationship of approximately eight years for our top 25, 50 and 75 customers, and ongoing contractual agreements with a substantial portion of our customer base.
Japan, Magnite, Teads, Epsilon, Tremor, LG Ads ● Ad Servers and Ratings/Workflow Platforms : Nielsen, Google and MediaOcean Prisma ● Social Platforms : Facebook, Instagram, YouTube, Twitter, Snapchat, Pinterest, TikTok ● CTV : Amazon, Netflix, and Roku Our advertising customers often purchase the Company’s solutions through a Demand-Side Platform.
Japan, Magnite, Teads, Epsilon, Nexxen, LG Ads ● Ad Servers and Ratings/Workflow Platforms : Innovid, Google and MediaOcean Prisma ● Social Platforms : Facebook, Instagram, YouTube, Twitter, Snapchat, Pinterest, TikTok ● CTV : Amazon, Netflix, Disney+, Hulu and Roku Our advertising customers often purchase the Company’s solutions through a Demand-Side Platform.
We believe that attracting, engaging, and retaining top talent is crucial to our continued success. We have 902 passionate, accountable, collaborative, employees who are “All In” on our mission to optimize advertising outcomes for global brands. 598 of our employees are based in New York, London, and Tel Aviv, and approximately 40% are located outside of the Americas.
We believe that attracting, engaging, and retaining top talent is crucial to our continued success. We have 1,101 passionate, accountable, collaborative, employees who are “All In” on our mission to optimize advertising outcomes for global brands. 657 of our employees are based in New York, London, and Tel Aviv, and approximately 41% are located outside of the Americas.
DV Pinnacle screenshot: 14 Table of Contents Integration and Channel Partnerships Our technology is integrated with leading digital advertising technology channels, supporting the distribution of our programmatic solutions and enabling us to analyze a broad footprint of data and deliver a comprehensive analysis for our customers.
Integration and Channel Partnerships Our technology is integrated with leading digital advertising technology channels, supporting the distribution of our programmatic solutions and enabling us to analyze a broad footprint of data and deliver a comprehensive analysis for our customers.
We have identified over 19,000 fraudulent CTV/mobile apps as of December 31, 2022. In addition, even when an ad is verified to be fraud- free, there is no certainty that it is actually viewable.
We have identified nearly 20,000 fraudulent CTV/mobile apps as of December 31, 2023. In addition, even when an ad is verified to be fraud- free, there is no certainty that it is actually viewable.
Our sales, marketing and customer support expenses were $107.4 million, $77.3 million and $62.2 million for each of the years ended December 31, 2022, December 31, 2021 and December 31, 2020. Product Development Ongoing product innovation is central to our business.
Our sales, marketing and customer support expenses were $126.0 million, $107.4 million and $77.3 million for each of the years ended December 31, 2023, December 31, 2022 and December 31, 2021. Product Development Ongoing product innovation is central to our business.
Each day, we identify over 10 million active fraudulent device signatures, distributing them to our partners nearly 100 times per day, thereby enhancing the protection we provide our customers. ● Brand Safety and Suitability : Our customers use the data analytics that our software platform provides to target desired contexts and help prevent their ads from appearing next to content that they do not deem appropriate for their brands.
Each day, we identify over 15 million active fraudulent device signatures, distributing them to our partners nearly 100 times per day. 9 Table of Contents ● Brand Safety and Suitability : Our customers use the data analytics that our software platform provides to target desired contexts and help prevent their ads from appearing next to content that they do not deem appropriate for their brands.
Further, COPPA applies to websites and other online services that are directed to children under thirteen (13) years of age and imposes certain restrictions on the collection, use and disclosure of personal information from these websites and online services.
Further, the Children’s Online Privacy Protection Act (“COPPA”) applies to websites and other online services that are directed to children under thirteen (13) years of age and imposes certain restrictions on the collection, use and disclosure of personal information from these websites and online services.
With respect to our overall business, we have delivered strong historical revenue growth, with a compounded annual growth rate of 35% from 2019 to 2022. Our History Our company was founded in 2008 and introduced our first brand safety and suitability solution in 2010.
With respect to our overall business, we have delivered strong historical revenue growth, with a compounded annual growth rate of 33% from 2020 to 2023. Our company was founded in 2008 and introduced our first brand safety and suitability solution in 2010.
In 2022, we had 78 customers who each represented at least $1 million of annual revenue, up from 64 such customers in 2021 and 45 and 41 such customers in 2020 and 2019, respectively, with no customer representing more than 10% of our revenue in 2022, 2021 or 2020.
In 2023, we had 93 customers who each represented at least $1 million of annual revenue, up from 78 such customers in 2022 and 64 such customers in 2021, with no customer representing more than 10% of our revenue in 2023, 2022 or 2021.
As of December 31, 2022, we had 169 software and data engineers employed with us throughout our six research and development centers focused on product development, including our office in Tel Aviv. We launched our first brand safety and suitability solution in 2010 and have continued to develop leading-edge solutions ever since.
As of December 31, 2023, we had 209 software and data engineers employed with us throughout our seven research and development centers focused on product development, including our office in Tel Aviv. We launched our first brand safety and suitability solution in 2010 and have continued to develop leading-edge solutions ever since. Loyal and Growing Customer Base .
We believe our products are difficult to replicate and we will continue to enhance our intellectual property portfolio as we develop new products and services for our customers. 19 Table of Contents We have two registered U.S. patents, four international patents (two in Europe and two in Japan) and six pending patent applications, including three in the U.S.
We believe our solutions are difficult to replicate and we will continue to enhance our intellectual property portfolio as we develop new solutions for our customers. 16 Table of Contents We have two registered U.S. patents, five international patents (three in Europe and two in Japan) and five pending patent applications.
With this foundation, we were able to drive net revenue retention of 127% in 2022, 126% in 2021 and 123% in 2020 through increased advertising volume and the successful launch of newly-introduced solutions.
With this foundation, we were able to drive net revenue retention of 124% in 2023, 127% in 2022 and 126% in 2021 through increased advertising volume and the successful launch of newly-introduced solutions. Scaled and Profitable Business Model .
DV Pinnacle allows our customers to adjust and deploy controls for their media plan and track campaign performance metrics across channels, formats and devices. Profile and Controls : DV Pinnacle allows brands to set profiles and adjust controls for their media plan’s verification settings which are then consistently and automatically deployed across all of an advertiser’s digital buying channels.
Profile and Controls : DV Pinnacle allows brands to set profiles and adjust controls for their media plan’s verification settings which are then consistently and automatically deployed across all of an advertiser’s digital buying channels.
As a result, advertisers are increasingly adopting full-suite solutions that are not dependent on cookies or cross-site individual-level data trackers and can be used seamlessly across devices, the open web and the walled gardens.
As a result, advertisers are increasingly adopting full-suite solutions that are not dependent on cookies or cross-site individual-level data trackers and can be used seamlessly across devices, the open web and the walled gardens. Artificial Intelligence. Generative AI tools are powerful and accessible to everyone – including bad actors.
Loyal and Growing Customer Base . Our customers currently include over 50 of the top 100 global advertisers, according to Ad Age, including Comcast, Best Buy, Mondelēz and Pfizer. In each of the years 2020-2022, we maintained over 95% gross revenue retention rates across our customer base and retained 100% of our top 75 customers.
Our customers currently include over 50 of the top 100 global advertisers, according to Ad Age. In each of the years 2021-2023, we maintained over 95% gross revenue retention rates across our customer base and retained 100% of our top 75 customers.
Custom Contextual enables advertisers to target audiences based on key points of interest even in web browsers and operating systems that have phased out or ended the use of third-party tracking technology, and also positions them to align with existing privacy regulations.
Custom Contextual enables advertisers to target audiences based on key points of interest even in web browsers and operating systems that have phased out or ended the use of third-party tracking technology, and also positions them to align with existing privacy regulations. 10 Table of Contents Scibids AI In August 2023, we acquired Scibids Technology SAS (“Scibids”), a global leader in AI-powered digital campaign optimization.
As of December 31, 2022, we had 408 professionals on our Commercial organization teams, of which 159 were sales professionals, 47 were marketing professionals and 202 were account managers and customer support representatives.
As of December 31, 2023, we had 448 professionals on our Commercial organization teams, of which 174 were sales professionals, 55 were marketing professionals and 219 were account managers and customer support representatives.
Our sales presentation is focused on the market challenges that we address, the benefits that customers have achieved utilizing our solutions and the product innovation and differentiation that drive our superior results.
Our sales presentation is focused on the market challenges that we address, the benefits that customers have achieved utilizing our solutions and the product innovation and differentiation that drive our superior results. We target the largest global advertisers and we believe that we offer the most comprehensive suite of solutions available in the market.
DV Authentic Attention DV Authentic Attention is DoubleVerify’s MRC-accredited, privacy-friendly attention measurement solution that provides actionable, comprehensive data to drive campaign performance — from the impact of an ad’s presentation to key dimensions of consumer engagement.
DV Authentic Attention DV Authentic Attention is DoubleVerify’s MRC-accredited, privacy-friendly attention measurement solution that provides actionable, comprehensive data to drive campaign performance — from the impact of an ad’s presentation to key dimensions of consumer engagement. Developed in 2020 and released in February 2021, this rich dataset enables granular attention measurement and campaign optimization at scale.
Additionally, as device manufacturers and walled garden platforms aggressively move to curtail the use of cookie-based data collection across their properties, measurement, targeting and advertising analytics solutions that are not based on these tracking and collection tools will benefit.
Additionally, as device manufacturers and walled garden platforms aggressively move to curtail the use of cookie-based data collection across their properties, measurement, advertising solutions that are not based on these tracking and collection tools will benefit. Our core software platform does not rely on third-party cookies, persistent identifiers or cross-site tracking technology to deliver our measurement and analytics solutions.
We believe the shift towards digital spend will continue as new distribution channels and advertising formats emerge that enable advertisers to more effectively reach their target audiences. Acceleration of Programmatic Ad Buying .
Magna Global estimated that global digital ad spend, excluding search, reached over $280 billion in 2023 and is expected to grow to $386 billion by 2027. We believe the shift towards digital spend will continue as new distribution channels and advertising formats emerge that enable advertisers to more effectively reach their target audiences. Acceleration of Programmatic Ad Buying .
Developed in 2020 and released in February 2021, this rich dataset enables granular attention measurement and campaign optimization at scale. 12 Table of Contents Building on the data we aggregate to deliver our definitive media quality metric, the DV Authentic Ad, DV Authentic Attention analyzes data points on the exposure of a digital ad and consumer’s engagement with a digital ad and device — in real-time.
Building on the data we aggregate to deliver our definitive media quality metric, the DV Authentic Ad, DV Authentic Attention analyzes data points on the exposure of a digital ad and consumer’s engagement with a digital ad and device — in real-time.
Our core software platform does not rely on third-party cookies, persistent identifiers or cross-site tracking technology to deliver our measurement and analytics solutions. Additionally, the core contextual data set that we use to provide our measurement and analytics solutions can also provide advertisers with an alternative source of data to deliver targeted advertising.
Additionally, the core contextual data set that we use to provide our measurement and analytics solutions can also provide advertisers with an alternative source of data to deliver targeted advertising.
We are also able to increase revenue per customer as we introduce new solutions, which has resulted in a compounded annual growth rate in average revenue for our top 100 customers of 35% from 2019 to 2022.The combination of high customer retention and multiple upsell opportunities has resulted in net revenue retention rates of 127% in 2022, 126% in 2021 and 123% in 2020.
We are also able to increase revenue per customer as we introduce new solutions, which has resulted in a compounded annual growth rate in average revenue for our top 100 customers of 28% from 2020 to 2023.
As new media formats emerge, the strength of our solutions and the flexibility of our software platform allows us to efficiently onboard new integration partners and secure new partnerships as selling channels for our solutions.
As new media formats emerge, the strength of our solutions and the flexibility of our software platform allows us to efficiently onboard new integration partners and secure new partnerships as selling channels for our solutions. Further, as we build new product sets, these flexible integrations and partnerships allow for seamless distribution of new services on existing partner platforms.
Because our advertiser customers obtain control of the Company’s solutions to inform their purchasing decision, rather than the programmatic partners providing access to the Demand-Side Platform, the Company records revenue for the gross amounts paid by its advertiser customers for these Company-provided solutions, and the amounts retained by the programmatic partners are recorded by the Company as a cost of sales.
Because our advertiser customers obtain control of the Company’s solutions to inform their purchasing decision, rather than the programmatic partners providing access to the Demand-Side Platform, the Company records revenue for the gross amounts paid by its advertiser customers for these Company-provided solutions, and the amounts retained by the programmatic partners are recorded by the Company as a cost of sales. 12 Table of Contents Sales, Marketing and Customer Support Our go-to-market strategy for new customers is focused on driving awareness for our solutions, and fostering relationships with senior brand executives and Chief Marketing Officers of leading brands, agencies and publishers.
This volume has enabled us to build a self-reinforcing, proprietary data asset which we redeploy in new solutions that further enhance and expand the analytics that we can deliver to our customers and partners. 11 Table of Contents Our Solutions The DV Authentic Ad The DV Authentic Ad is our definitive metric of digital media quality, which evaluates the existence of fraud, brand safety and suitability, viewability and geography for each digital ad: ● Fraud : Our solutions are designed to safeguard advertisers against increasingly sophisticated invalid digital traffic, such as bot fraud, site fraud, malware (including adware), and app fraud.
Our Solutions The DV Authentic Ad The DV Authentic Ad is our definitive metric of digital media quality, which evaluates the existence of fraud, brand safety and suitability, viewability and geography for each digital ad: ● Fraud : Our solutions are designed to safeguard advertisers against increasingly sophisticated invalid digital traffic, such as bot fraud, site fraud, malware (including adware), and app fraud.
We target the largest global advertisers and we believe that we offer the most comprehensive suite of solutions available in the market. 15 Table of Contents Our commercial organization is aligned by geographically focused teams, comprising sales and account management professionals in the Americas, EMEA and APAC, and professionals dedicated to global client and agency relationships.
Our commercial organization is aligned by geographically focused teams, comprising sales and account management professionals in the Americas, EMEA and APAC, and professionals dedicated to global client and agency relationships.
As new media formats emerge, the strength of our solutions and the flexibility of our software platform allows us to seamlessly onboard new integration partners and secure new partnerships as selling channels for our solutions.
As new media formats emerge, the strength of our solutions and the flexibility of our software platform allows us to seamlessly onboard new integration partners and secure new partnerships as selling channels for our solutions. For example, as CTV continues to become an increasingly prominent advertising channel, we have secured partnership agreements with multiple leading CTV platforms.
This challenge is further complicated by a significant increase in user-generated content, as ad spend on social platforms continues to expand. According to a study that we commissioned with The Harris Poll, nearly two-thirds of consumers expressed that they would stop using a brand or product that advertises next to false, objectionable or inflammatory content.
Context of ad placement has become as important to a brand as the content of the ad itself. According to a study that we commissioned with The Harris Poll, nearly two-thirds of consumers expressed that they would stop using a brand or product that advertises next to false, objectionable or inflammatory content.
Our software platform and unique position in the advertising ecosystem allows us to develop a significant data asset that accumulates over time as we measure an increasing number of media transactions.
We also analyze more than 17 billion digital ad transactions daily, measuring whether ads are delivered in a fraud-free, brand-suitable environment and are fully viewable in the intended geography. Our software platform and unique position in the advertising ecosystem allows us to develop a significant data asset that accumulates over time as we measure an increasing number of media transactions.
Rapid advancement of our product capabilities has enabled our business to meet customer needs in the dynamic digital advertising landscape. Through our innovation, we have been able to seamlessly add new capabilities to our solutions over time.
Rapid advancement of our product capabilities has enabled our business to meet customer needs in the dynamic digital advertising landscape. Through our innovation, we have been able to continuously add new capabilities to our solutions. Our engineering team, consisting of 297 employees as of December 31, 2023, is responsible for the development of software and the operations of our infrastructure.
This virtuous cycle allows us to deliver better results as we build broader data sets and enables us to enhance and expand the solutions we deliver to customers. We collected and analyzed data points on the approximately 5.5 trillion Media Transactions Measured by us in 2022, up from 4.5 trillion Media Transactions Measured in 2021 and 3.2 trillion in 2020.
This virtuous cycle allows us to deliver better results as we build broader data sets and enables us to enhance and expand the solutions we deliver to customers.
Supply-Side Solutions We provide our software solutions and data analytics to publishers and other supply-side customers to enable them to maximize revenue from their digital advertising inventory.
Scibids AI technology does not rely on digital identifiers such as cookies and can be activated across leading Demand-Side Platforms, such as The Trade Desk, DV360, and Xandr. Supply-Side Solutions We provide our software solutions and data analytics to publishers and other supply-side customers to enable them to maximize revenue from their digital advertising inventory.
Select integration and channel partners include: ● Demand-Side Platforms : Amazon, Google, The Trade Desk, Yahoo, Amobee, AppNexus, MediaMath, Adobe, Xandr ● Ad Platforms and Exchanges : Yahoo!
We maintain a team of dedicated business development professionals who manage existing partnerships and develop new channels. Select integration and channel partners include: ● Demand-Side Platforms : Amazon, Google, The Trade Desk, Yahoo, Nexxen, AppNexus, Infillion, Adobe, Xandr ● Ad Platforms and Exchanges : Yahoo!
This enables advertisers to gain a clear understanding of the quality and effectiveness of their digital media campaigns and allows them to take appropriate actions for campaign optimization.
These settings are then automatically uploaded into our customers’ programmatic platforms for complete synchronicity between their pre bid and post purchase measurement settings. 11 Table of Contents Analytics : DV Pinnacle enables advertisers to gain a clear understanding of the quality and effectiveness of their digital media campaigns and allows them to take appropriate actions for campaign optimization.
Our product development expenses were $95.1 million, $62.7 million and $47.0 million for each of the years ended December 31, 2022, December 31, 2021 and December 31, 2020. We intend to continue to invest in our research and development capabilities to extend our platform to cover a broader range of products, customers and geographies.
Our product development expenses were $125.4 million, $95.1 million and $62.7 million for each of the years ended December 31, 2023, December 31, 2022 and December 31, 2021.
Our technology stack enables us to develop proprietary advertising performance metrics on each digital ad transaction.
Our Strengths We believe the following attributes and capabilities form our core strengths and provide us with competitive advantages: Best-in-Class Software Platform . Our technology stack enables us to develop proprietary advertising performance metrics on each digital ad transaction.
Item 1. Business Our Company We are a leading software platform for digital media measurement and analytics. Our mission is to create stronger, safer, more secure digital transactions that drive optimal outcomes for global advertisers. Through our software platform and the metrics it provides, we help preserve the fair value exchange between buyers and sellers of digital media.
Item 1. Business Our Company We are one of the industry’s leading media effectiveness platforms that leverages artificial intelligence (“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.
Our broad market coverage of the digital advertising ecosystem and our leading software platform enables us to analyze billions of data points globally each day. We collected and analyzed data points on the approximately 5.5 trillion Media Transactions Measured by us in 2022, up from 4.5 trillion Media Transactions Measured in 2021 and 3.2 trillion in 2020.
We collected and analyzed data points on the approximately 7.0 trillion Media Transactions Measured (as defined below) by us in 2023, up from 5.5 trillion Media Transactions Measured in 2022 and 4.5 trillion in 2021.
The global advertising industry continues to shift from traditional forms of media to digital channels and platforms. Magna Global estimated that global digital ad spend, excluding search, reached over $253 billion in 2022 and is expected to grow to $352 billion by 2027.
Our Industry We believe that our business benefits from many of the most significant trends in digital marketing and advertising, including: Significant Growth in Digital Ad Spend . The global advertising industry continues to shift from traditional forms of media to digital channels and platforms.
New laws restricting the collection, processing and use of personal data have been enacted in California (the CCPA and the CPRA) and other states in the U.S., Brazil (the LGPD) and Europe (GDPR), and more are being considered that may affect our ability to implement our business models effectively.
New laws restricting the collection, processing and use of personal data have been enacted in California (the California Consumer Privacy Act (“CCPA”) and the California Privacy Rights and Enforcement Act (“CPRA”)) and other states in the U.S., the U.K.
Together, we work seamlessly to empower our partners by providing advertisers clarity and confidence in their digital investments across all key platforms. Our Customer Interface We believe our proprietary customer interface, DV Pinnacle, was the industry’s first unified service and analytics platform user interface.
Our Customer Interface We believe our proprietary customer interface, DV Pinnacle, was the industry’s first unified service and analytics platform user interface. DV Pinnacle allows our customers to adjust and deploy controls for their media plan and track campaign performance metrics across channels, formats and devices.
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Our technology enables programmatic media traders to evaluate approximately 300 billion transactions daily, ensuring that a digital ad meets the advertiser-defined quality criteria before it is purchased. We also analyze more than 11 billion digital ad transactions daily, measuring whether ads are delivered in a fraud-free, brand-suitable environment and are fully viewable in the intended geography.
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Our company was founded in 2008 and we introduced our first brand safety and suitability solution in 2010. As the global digital advertising market has evolved, we have continued to expand our capabilities through new product innovation and partnerships across emerging programmatic media buying platforms and digital media channels, including social and CTV.
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We have maintained exceptional customer retention with gross revenue retention rates of over 95%, and 100% retention of our top 75 customers, in each of 2022, 2021 and 2020.
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AI is being used to populate content farms, exacerbating the proliferation of clickbait articles, made-for-advertising (“MFA”) content and inaccurate and misleading information.
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Several key milestones since our company was founded include: ● 2008: Founded in Israel ● 2010: Launched first brand safety and suitability solution; Opened company headquarters in New York and established presence in London ● 2011: Launched first pre-bid targeting solution ● 2012: Launched first viewability solution ● 2013: Received first accreditation from the MRC ● 2014: Launched first fraud solution ● 2015: Integrated with programmatic partners, including The Trade Desk and Google ● 2017: Announced social platform partnerships with Facebook, Snap and YouTube; Providence acquired a majority equity interest in our company ● 2018: Launched partnership with Twitter; Opened international offices in EMEA (Germany, France), APAC (Singapore, Australia) and Brazil; Acquired Leiki Oy (“Leiki”) ● 2019: Launched Authentic Brand Suitability; Acquired Zentrick NV (“Zentrick”) and Ad-Juster Inc.
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The rapidly-evolving, AI-powered internet will amplify advertisers’ need to protect media quality and we believe that we offer the most robust and granular brand suitability avoidance and measurement solutions in the industry, including the industry’s first comprehensive toolkit for MFA classification, measurement and protection.
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(“Ad-Juster”) ● 2020: Expanded presence in APAC region (Japan, India); Launched partnership with Pinterest; Introduced CTV certification program; Developed and introduced new products, including DV Authentic Attention, DV Publisher Suite and our Custom Contextual solution; First third-party solution to gain MRC accreditation for integrated viewability measurement on Facebook ● 2021: Received MRC accreditations for display and video rendered ad impression measurement and sophisticated invalid traffic (SIVT) filtration, including app fraud, in the CTV media environment, and for video filtering, benchmarks, and CTV fully on-screen metrics; Completed our initial public offering of our common stock (“IPO”); Launched partnership with TikTok; Acquired Outrigger Media, Inc.
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Our solutions seek to ensure that advertisers’ marketing efforts are strategically aligned with brand goals and values, to foster deeper consumer engagement and trust, while also optimizing investments and performance. In addition, we are leveraging AI to accelerate content classification across languages as well as to deliver cost-effective video classification.
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(d/b/a “OpenSlate”) and Meetrics GmbH (“Meetrics”) ● 2022: Released Fully On-Screen pre-bid targeting and the DV Authentic Attention Snapshot; Received MRC accreditations for DV’s independent third-party calculation and reporting of 7 Table of Contents Google’s Ads Data Hub (ADH) Video Impressions, viewable impressions and related viewability metrics, Display and Video DV Authentic Attention, and Display and Video CTV Ad verification metrics in English as well as eight other languages; Announced partnerships with Reddit, Scope3, Twitch, LinkedIn and Netflix; Launched post-campaign Brand Safety and Suitability measurement on TikTok; Received ISO 27001:2013 certification for our information security management system ​ Our Industry We believe that our business benefits from many of the most significant trends in digital marketing and advertising, including: Significant Growth in Digital Ad Spend .
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Our Scibids AI solution empowers global brands to leverage Demand-Side Platform impression-level data, first-party data, measurement data and cost data in order to build algorithmic models that more effectively drive specific key performance indicators and tangible outcomes while improving operational efficiency and reducing manual lift.
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Context of ad placement has become as important to a brand as the content of the ad itself. Determining the context and content of a web page, streaming video or social post is more complex than verifying a keyword or article headline and often varies minute-by-minute.
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We intend to continue to invest in our research and development capabilities to extend our platform to cover a broader range of products, customers and geographies. 13 Table of Contents Technology Our technology is designed to provide our customers with precise, real-time decision-making and measurement data across their digital advertising campaigns.
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Point solutions that only deliver single metrics, often on a limited amount of media, and which are based on challenged data aggregation methods, continue to lose traction with advertisers.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFor example, our amended and restated certificate of incorporation and amended and restated bylaws collectively: ● authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to thwart a takeover attempt; ● provide for a classified board of directors, which divides our board of directors into three classes, with members of each class serving staggered three-year terms, which prevents stockholders from electing an entirely new board of directors at an annual meeting; ● limit the ability of stockholders to remove directors if Providence ceases to beneficially own at least 40% of the outstanding shares of our common stock; ● provide that vacancies on our board of directors, including vacancies resulting from an enlargement of our board of directors, may be filled only by a majority vote of directors then in office; ● prohibit stockholders from calling special meetings of stockholders if Providence ceases to beneficially own at least 40% of the outstanding shares of our common stock; ● prohibit stockholder action by written consent, thereby requiring all actions to be taken at a meeting of the stockholders, if Providence ceases to beneficially own at least 40% of the outstanding shares of our common stock; 43 Table of Contents ● establish advance notice requirements for nominations of candidates for election as directors or to bring other business before an annual meeting of our stockholders; and ● require the approval of holders of at least 66 2 ∕ 3 % in voting power of the outstanding shares of our capital stock to amend our amended and restated bylaws and certain provisions of our amended and restated certificate of incorporation if Providence ceases to beneficially own at least 40% of the outstanding shares of our common stock.
Biggest changeFor example, our amended and restated certificate of incorporation and amended and restated bylaws collectively: ● authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to thwart a takeover attempt; ● provide for a classified board of directors, which divides our board of directors into three classes, with members of each class serving staggered three-year terms, which prevents stockholders from electing an entirely new board of directors at an annual meeting; ● limit the ability of stockholders to remove directors; ● provide that vacancies on our board of directors, including vacancies resulting from an enlargement of our board of directors, may be filled only by a majority vote of directors then in office; ● prohibit stockholders from calling special meetings of stockholders; 40 Table of Contents ● prohibit stockholder action by written consent, thereby requiring all actions to be taken at a meeting of the stockholders; ● establish advance notice requirements for nominations of candidates for election as directors or to bring other business before an annual meeting of our stockholders; and ● require the approval of holders of at least 66 2 ∕ 3 % in voting power of the outstanding shares of our capital stock to amend our amended and restated bylaws and certain provisions of our amended and restated certificate of incorporation.
Additionally, changes in our strategy or significant technical developments could significantly impact the recoverability of our intangible assets. If the assumptions used in our analysis are not realized, it is possible that an impairment charge may need to be recorded in the future. We identified impairment of long-lived assets of $1.5 million for the year ended December 31, 2022.
Additionally, changes in our strategy or significant technical developments could significantly impact the recoverability of our intangible assets. If the assumptions used in our analysis are not realized, it is possible that an impairment charge may need to be recorded in the future. We identified an impairment of long-lived assets of $1.5 million for the year ended December 31, 2022.
While our core technology and solutions do not rely on persistent identifiers or cookie-based or cross-site tracking, these changes and other updates to software functionality in these environments could hurt our ability to effectively deliver our services and make them less effective if our services are restricted from operating.
While our core technology and solutions do not rely on persistent identifiers or cookie-based or cross-site tracking, these changes and other updates to software functionality in these environments could hurt our ability to effectively deliver our solutions and make them less effective if our solutions are restricted from operating.
Our amended and restated certificate of incorporation contains provisions eliminating a director’s personal liability to the fullest extent permitted by the DGCL for monetary damages resulting from a breach of fiduciary duty, except in circumstances involving: ● any breach of the director’s duty of loyalty; ● acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law; ● under Section 174 of the DGCL (unlawful dividends); or ● any transaction from which the director derives an improper personal benefit. 45 Table of Contents The principal effect of the limitation on liability provision is that a stockholder will be unable to prosecute an action for monetary damages against a director unless the stockholder can demonstrate a basis for liability for which indemnification is not available under the DGCL.
Our amended and restated certificate of incorporation contains provisions eliminating a director’s personal liability to the fullest extent permitted by the DGCL for monetary damages resulting from a breach of fiduciary duty, except in circumstances involving: ● any breach of the director’s duty of loyalty; ● acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law; ● under Section 174 of the DGCL (unlawful dividends); or ● any transaction from which the director derives an improper personal benefit. 42 Table of Contents The principal effect of the limitation on liability provision is that a stockholder will be unable to prosecute an action for monetary damages against a director unless the stockholder can demonstrate a basis for liability for which indemnification is not available under the DGCL.
Acquisitions involve numerous risks, any of which could harm our business and financial performance, including: ● the difficulty of assimilating the operations and personnel of the acquired companies; ● the potential disruption of our business; ● the inability of our management to maximize our financial and strategic position by the successful incorporation of acquired technology into our platform; ● unanticipated liabilities associated with an acquisition, including (i) technology, intellectual property and infringement issues, (ii) employment, retirement or severance related claims, (iii) claims by or amounts owed to customers or suppliers, (iv) adverse tax consequences and (v) other legal disputes; ● difficulty maintaining uniform standards, controls, procedures and policies, with respect to accounting matters and otherwise; ● the potential loss of key personnel of acquired companies; ● the impairment of relationships with employees and customers as a result of changes in management and operational structure; ● increased indebtedness to finance the acquisition; ● entrance into new geographic markets or new product segments that subjects us to different laws and regulations that may have an adverse impact on our business; and ● the diversion of management time and focus from operating our business to addressing acquisition integration challenges.
Acquisitions involve numerous risks, any of which could harm our business and financial performance, including: ● the difficulty of assimilating the operations and personnel of the acquired companies; ● the potential disruption of our business; 24 Table of Contents ● the inability of our management to maximize our financial and strategic position by the successful incorporation of acquired technology into our platform; ● unanticipated liabilities associated with an acquisition, including (i) technology, intellectual property and infringement issues, (ii) employment, retirement or severance related claims, (iii) claims by or amounts owed to customers or suppliers, (iv) adverse tax consequences and (v) other legal disputes; ● difficulty maintaining uniform standards, controls, procedures and policies, with respect to accounting matters and otherwise; ● the potential loss of key personnel of acquired companies; ● the impairment of relationships with employees and customers as a result of changes in management and operational structure; ● increased indebtedness to finance the acquisition; ● entrance into new geographic markets or new product segments that subjects us to different laws and regulations that may have an adverse impact on our business; and ● the diversion of management time and focus from operating our business to addressing acquisition integration challenges.
Risk Factors Summary Below is a summary of the principal factors that make an investment in our common stock speculative or risky: ● If we fail to respond to technological developments or evolving industry standards, our solutions may become obsolete or less competitive. ​ ● The market in which we participate is highly competitive. ​ ● System failures, security breaches, cyberattacks or natural disasters could interrupt the operation of our platform and data centers and significantly harm our business, financial condition and results of operations. ​ ● Our solutions rely on integrations with demand- and supply-side advertising platforms, ad servers and social platforms. ​ ● Economic downturns and unstable market conditions could adversely affect our business, financial condition and results of operations. ​ ● We have completed several acquisitions in the past and may consummate additional acquisitions in the future, which may be difficult to integrate, disrupt our business, expose us to unanticipated liabilities, dilute stockholder value or divert management attention. ​ ● We are subject to payment-related risks, and if our ability to accurately and timely collect payments is impaired, our business, financial condition and results of operations may be adversely affected. ​ ● Defects, errors or inaccuracies associated with our solutions could negatively impact our business, financial condition and results of operations. ​ ● We often have long sales cycles, which can result in significant time between initial contact with a prospect and execution of a contractual agreement, making it difficult to project when, if at all, we will generate revenue from new customers. ​ ● We depend on our senior management team and other key personnel to manage our business effectively, and if we are unable to retain such key personnel or hire additional qualified personnel, our ability to compete could be harmed. ​ 22 Table of Contents ● Increasing scrutiny and evolving expectations from customers, employees, regulators and other stakeholders with respect to our environmental, social and governance (“ESG”) practices may expose us to new or additional risks. ​ ● Data privacy legislation and regulation on digital advertising and privacy and data protection may adversely affect our business. ​ ● Public criticism of digital advertising technology in the U.S. and internationally, including digital advertising on social media platforms, could adversely affect the demand for and use of our solutions. ​ ● The success of our business depends in large part on our ability to protect and enforce our intellectual property rights. ​ ● An assertion from a third party that we are infringing its intellectual property rights, whether such assertion is valid or not, could subject us to costly and time-consuming litigation, expensive licenses or other impacts to our business. ​ ● We are exposed to the risks of operating internationally. ​ ● Exposure to foreign currency exchange rate fluctuations could negatively impact our results of operations. ​ ● Our use of “open source” software could subject our technology to general release or require us to re-engineer our platform, or subject us to litigation, which could harm our business, financial condition and results of operations. ​ ● Seasonal fluctuations in advertising activity could have a negative impact on our revenue, cash flow and operating results. ​ ● We have a limited operating history, which makes it difficult to evaluate our business and prospects and may increase the risks associated with your investment. ​ ● Our revenues and results of operations may fluctuate in the future.
Risk Factors Summary Below is a summary of the principal factors that make an investment in our common stock speculative or risky: ● If we fail to respond to technological developments or evolving industry standards, our solutions may become obsolete or less competitive. ​ ● The market in which we participate is highly competitive. ​ ● System failures, security breaches, cyberattacks or natural disasters could interrupt the operation of our platform and data centers and significantly harm our business, financial condition and results of operations. ​ ● Our solutions rely on integrations with demand- and supply-side advertising platforms, ad servers and social platforms. ​ ● Economic downturns and unstable market conditions could adversely affect our business, financial condition and results of operations. ​ ● We have completed several acquisitions in the past and may consummate additional acquisitions in the future, which may be difficult to integrate, disrupt our business, expose us to unanticipated liabilities, dilute stockholder value or divert management attention. ​ ● We are subject to payment-related risks, and if our ability to accurately and timely collect payments is impaired, our business, financial condition and results of operations may be adversely affected. ​ ● Defects, errors or inaccuracies associated with our solutions could negatively impact our business, financial condition and results of operations. ​ ● We often have long sales cycles, which can result in significant time between initial contact with a prospect and execution of a contractual agreement, making it difficult to project when, if at all, we will generate revenue from new customers. ​ ● We depend on our senior management team and other key personnel to manage our business effectively, and if we are unable to retain such key personnel or hire additional qualified personnel, our ability to compete could be harmed. ​ 19 Table of Contents ● Increasing scrutiny and evolving expectations from customers, employees, regulators and other stakeholders with respect to our environmental, social and governance (“ESG”) practices may expose us to new or additional risks. ​ ● Data privacy legislation and regulation on digital advertising and privacy and data protection may adversely affect our business. ​ ● Public criticism of digital advertising technology in the U.S. and internationally, including digital advertising on social media platforms, could adversely affect the demand for and use of our solutions. ​ ● The success of our business depends in large part on our ability to protect and enforce our intellectual property rights. ​ ● An assertion from a third party that we are infringing its intellectual property rights, whether such assertion is valid or not, could subject us to costly and time-consuming litigation, expensive licenses or other impacts to our business. ​ ● We may face risks associated with our use of artificial intelligence and machine learning models. ​ ● We are exposed to the risks of operating internationally. ​ ● Exposure to foreign currency exchange rate fluctuations could negatively impact our results of operations. ​ ● Our use of “open source” software could subject our technology to general release or require us to re-engineer our platform, or subject us to litigation, which could harm our business, financial condition and results of operations. ​ ● Seasonal fluctuations in advertising activity could have a negative impact on our revenue, cash flow and operating results. ​ ● We have a limited operating history, which makes it difficult to evaluate our business and prospects and may increase the risks associated with your investment. ​ ● Our revenues and results of operations may fluctuate in the future.
In addition, Delaware law imposes additional requirements that may restrict our ability to pay dividends to holders of our common stock. 44 Table of Contents Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or stockholders.
In addition, Delaware law imposes additional requirements that may restrict our ability to pay dividends to holders of our common stock. 41 Table of Contents Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or stockholders.
If we are unable to compete successfully against our current and future competitors, we may not be able to retain and acquire customers and our business, financial condition and results of operations could be adversely affected. 24 Table of Contents System failures, security breaches, cyberattacks or natural disasters could interrupt the operation of our platform and data centers and significantly harm our business, financial condition and results of operations.
If we are unable to compete successfully against our current and future competitors, we may not be able to retain and acquire customers and our business, financial condition and results of operations could be adversely affected. 21 Table of Contents System failures, security breaches, cyberattacks or natural disasters could interrupt the operation of our platform and data centers and significantly harm our business, financial condition and results of operations.
In addition, our services are delivered in web browsers, mobile apps and other software environments where online advertising is displayed, and certain of these environments have announced future plans to phase out or end the use of cookies and other third-party tracking technology on their operating systems in order to provide more consumer privacy.
In addition, our solutions are delivered in web browsers, mobile apps and other software environments where online advertising is displayed, and certain of these environments have announced future plans to phase out or end the use of cookies and other third-party tracking technology on their operating systems in order to provide more consumer privacy.
We may require additional capital in the future to develop and execute our long-term growth strategy. We believe our existing cash and cash generated from operations, together with the undrawn balance under the New Revolving Credit Facility, will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months.
We may require additional capital in the future to develop and execute our growth strategy. We believe our existing cash and cash generated from operations, together with the undrawn balance under the New Revolving Credit Facility, will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months.
This public criticism could result in increased data privacy and anti-trust regulation in the digital advertising industry in the U.S. and internationally.
This public criticism could result in increased data privacy, anti-trust and other regulation in the digital advertising industry in the U.S. and internationally.
As a result, we may fail to meet the expectations of securities analysts or investors, which could cause our stock price to decline. ​ 23 Table of Contents Risks Relating to Our Business If we fail to respond to technological developments or evolving industry standards, our solutions may become obsolete or less competitive.
As a result, we may fail to meet the expectations of securities analysts or investors, which could cause our stock price to decline. ​ 20 Table of Contents Risks Relating to Our Business If we fail to respond to technological developments or evolving industry standards, our solutions may become obsolete or less competitive.
We have also experienced significant growth in social media-related revenues and generate significant revenue from the use of our solutions on social media platforms, which have been and may in the future be the subject of avoidance campaigns or similar events, including ad boycotts on Facebook and Twitter.
We have also experienced significant growth in social media-related revenues and generate significant revenue from the use of our solutions on social media platforms, which have been and may in the future be the subject of avoidance campaigns or similar events, including ad boycotts on Facebook and X (formerly Twitter).
Providence has significant influence over us and may not always exercise its influence in a way that benefits our public stockholders. Providence VII U.S. Holdings L.P. owns approximately 40% of the outstanding shares of our common stock.
Providence has significant influence over us and may not always exercise its influence in a way that benefits our public stockholders. Providence VII U.S. Holdings L.P. owns approximately 15% of the outstanding shares of our common stock.
Failure to comply with the requirements of being a public company could potentially subject us to sanctions or investigations by the SEC, the NYSE or other regulatory authorities, delisting of our common stock, and potentially civil litigation. 42 Table of Contents Additionally, the Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
Failure to comply with the requirements of being a public company could potentially subject us to sanctions or investigations by the SEC, the NYSE or other regulatory authorities, delisting of our common stock, and potentially civil litigation. Additionally, the Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
The New Revolving Credit Facility contains limitations on the ability of the Credit Group to, among other things: ● pay dividends or purchase, redeem or retire capital stock; ● grant liens; ● incur or guarantee additional debt; ● make investments and acquisitions; ● enter into transactions with affiliates; 38 Table of Contents ● enter into any merger, consolidation or amalgamation or dispose of all or substantially all property or business; and ● dispose of property, including issuing capital stock.
The New Revolving Credit Facility contains limitations on the ability of the Credit Group to, among other things: ● pay dividends or purchase, redeem or retire capital stock; ● grant liens; ● incur or guarantee additional debt; ● make investments and acquisitions; ● enter into transactions with affiliates; ● enter into any merger, consolidation or amalgamation or dispose of all or substantially all property or business; and ● dispose of property, including issuing capital stock.
Any errors, failures, interruptions or delays experienced in connection with our integration partners could adversely affect our business, reputation and financial condition. 26 Table of Contents Economic downturns and unstable market conditions could adversely affect our business, financial condition and results of operations.
Any errors, failures, interruptions or delays experienced in connection with our integration partners could adversely affect our business, reputation and financial condition. 23 Table of Contents Economic downturns and unstable market conditions could adversely affect our business, financial condition and results of operations.
Current or future economic downturns or unstable market conditions in the markets and geographies that we currently serve, and associated macroeconomic conditions such as growing inflation, rising interest rates, recessionary fears, changes in foreign currency exchange rates, the conditions caused by the 2019 novel coronavirus (“COVID-19”) or other future health pandemics and the impact of geopolitical instability in many parts of the world, may make it difficult for our customers and us to accurately forecast and plan future business activities, and could cause our customers to decrease their advertising budgets or slow the growth of their digital ad spend, which could adversely affect our business, financial condition and results of operations.
Current or future economic downturns or unstable market conditions in the markets and geographies that we currently serve, and associated macroeconomic conditions such as high inflation rates, high interest rates, recessionary fears, changes in foreign currency exchange rates, the conditions caused by the 2019 novel coronavirus or other future health pandemics and the impact of geopolitical instability in many parts of the world, may make it difficult for our customers and us to accurately forecast and plan future business activities, and could cause our customers to decrease their advertising budgets or slow the growth of their digital ad spend, which could adversely affect our business, financial condition and results of operations.
As a result, Providence will continue to exercise significant influence over all matters requiring stockholder approval for the foreseeable future, including approval of significant corporate transactions, which may reduce the market price of our common stock. Because Providence’s interests may differ from your interests, actions Providence takes as a stockholder with significant influence may not be favorable to you.
As a result, Providence will continue to exercise influence over all matters requiring stockholder approval for the foreseeable future, including approval of significant corporate transactions, which may reduce the market price of our common stock. 38 Table of Contents Because Providence’s interests may differ from your interests, actions Providence takes as a stockholder with influence may not be favorable to you.
If our customers significantly reduce or eliminate their digital ad spend in response to the public criticism of the digital advertising industry or its related effects, our business, financial condition and results of operations could be adversely affected. The success of our business depends in large part on our ability to protect and enforce our intellectual property rights.
If our customers significantly reduce or eliminate their digital ad spend in response to the public criticism of the digital advertising industry or its related effects, our business, financial condition and results of operations could be adversely affected. 29 Table of Contents The success of our business depends in large part on our ability to protect and enforce our intellectual property rights.
Foreign Corrupt Practices Act and other applicable anti-corruption and anti- bribery laws; ● difficulties in staffing and managing international operations, including complex and costly hiring and termination requirements; ● reduced or varied protection for intellectual property rights in some countries; ● challenges caused by distance, language and cultural differences; ● political, social and economic instability abroad, terrorist attacks and security concerns; ● trade disruptions or political tensions between the U.S. and foreign countries (including as a result of Russia’s invasion of Ukraine); ● fluctuations in currency exchange rates; ● potentially adverse tax consequences and the complexities of foreign value-added taxes and the repatriation of earnings; 34 Table of Contents ● increased accounting and reporting burdens and complexities; and ● difficulties and expenses associated with tailoring our platform and solutions to local markets as may be required by local customers, regulations and local industry organizations.
Foreign Corrupt Practices Act and other applicable anti-corruption and anti- bribery laws; ● difficulties in staffing and managing international operations, including complex and costly hiring and termination requirements; ● reduced or varied protection for intellectual property rights in some countries; ● challenges caused by distance, language and cultural differences; ● political, social and economic instability abroad, terrorist attacks and security concerns, including due to the current war between Israel and Hamas; ● trade disruptions or political tensions between the U.S. and foreign countries (including as a result of Russia’s invasion of Ukraine); ● fluctuations in currency exchange rates; ● potentially adverse tax consequences and the complexities of foreign value-added taxes and the repatriation of earnings; 31 Table of Contents ● increased accounting and reporting burdens and complexities; and ● difficulties and expenses associated with tailoring our platform and solutions to local markets as may be required by local customers, regulations and local industry organizations.
The macroeconomic conditions described above may affect how our customers conduct their businesses and adversely affect our customers’ willingness to utilize our solutions and delay prospective customers’ purchasing decisions. Our customers may decrease their overall advertising budgets as a response to economic uncertainty, a decline in their business activity, and other COVID-19-related impacts on their business or industry.
The macroeconomic conditions described above may affect how our customers conduct their businesses and adversely affect our customers’ willingness to utilize our solutions and delay prospective customers’ purchasing decisions. Our customers may decrease their overall advertising budgets as a response to economic uncertainty, a decline in their business activity, and other macroeconomic impacts on their business or industry.
See Note 5 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further discussion on the goodwill recognized from our recent acquisitions. Restrictions in the New Revolving Credit Facility could adversely affect our business, financial condition and results of operations.
See Note 5 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further discussion on the goodwill recognized from our recent acquisitions. 35 Table of Contents Restrictions in the New Revolving Credit Facility could adversely affect our business, financial condition and results of operations.
Additionally, Providence will continue to have the right to designate for nomination for election one or more of our directors so long as it beneficially owns at least 5% of our common stock.
Additionally, Providence will continue to have the right to designate for nomination for election one of our directors so long as it beneficially owns at least 5% of our common stock.
If publishers or advertisers believe our categorizations are faulty or unreliable, they may decrease or cease to use our services, which could affect our business, financial condition and results of operations.
If publishers or advertisers believe our categorizations are faulty or unreliable, they may decrease or cease to use our solutions, which could affect our business, financial condition and results of operations.
We or our third-party service providers could be adversely affected if legislation or regulations are expanded to require changes in our or our third-party service providers’ business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our or our third-party service providers’ business, results of operations or financial condition.
We or our third-party service providers could be adversely affected if legislation or regulations are expanded 28 Table of Contents to require changes in our or our third-party service providers’ business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our or our third-party service providers’ business, results of operations or financial condition.
The timing of receipt of payment from our customers and integration partners may impact our cash flows and working capital. Defects, errors or inaccuracies associated with our solutions could negatively impact our business, financial condition and results of operations. The technology underlying our platform may contain material defects or errors.
The timing of receipt of payment from our customers and integration partners may impact our cash flows and working capital. 25 Table of Contents Defects, errors or inaccuracies associated with our solutions could negatively impact our business, financial condition and results of operations. The technology underlying our platform may contain material defects or errors.
In addition, the tax authorities in any applicable jurisdiction, including the U.S., may disagree with the positions we have taken or intend to take regarding the tax treatment or characterization of any of our transactions. 36 Table of Contents Our revenues and results of operations may fluctuate in the future.
In addition, the tax authorities in any applicable jurisdiction, including the U.S., may disagree with the positions we have taken or intend to take regarding the tax treatment or characterization of any of our transactions. Our revenues and results of operations may fluctuate in the future.
However, we may need to raise additional funds in the future in order to, among other things: ● finance working capital requirements, capital investments or refinance existing or future indebtedness; ● acquire complementary businesses, technologies or products; ● develop or enhance our technological infrastructure and our existing platform and solutions; ● fund strategic relationships; and ● respond to competitive pressures.
However, we may need to raise additional funds in the future in order to, among other things: ● finance working capital requirements, capital investments or refinance existing or future indebtedness; ● acquire complementary businesses, technologies or products; ● develop or enhance our technological infrastructure and our existing platform and solutions; ● fund strategic relationships; and 36 Table of Contents ● respond to competitive pressures.
Although no customer accounted for more than 10% of our revenue in 2022, two programmatic partner platforms collected approximately 17% and 14% each of our total revenue in 2022 on behalf of our advertiser customers using their platforms. In addition, each of our customers and integration partners may have different payment methods and cycles.
Although no customer accounted for more than 10% of our revenue in 2023, two programmatic partner platforms collected approximately 18% and 17% each of our total revenue in 2023 on behalf of our advertiser customers using their platforms. In addition, each of our customers and integration partners may have different payment methods and cycles.
We did not identify impairment of goodwill or long-lived assets for the years ended December 31, 2021 or December 31, 2020. We cannot predict the amount and timing of any future impairment of goodwill or other intangible assets.
We did not identify any impairments of goodwill or long-lived assets for the years ended December 31, 2023 and December 31, 2021. We cannot predict the amount and timing of any future impairment of goodwill or other intangible assets.
Our clients have in the past, and may in the future, dispute the way we calculate billing for our solutions. If we are unable to resolve such disputes, we may lose clients or clients may decrease their use of our solutions and our financial performance and growth may be adversely affected.
Our clients have in the past, and may in the future, dispute the way we calculate billing for our solutions or the data on which rely to calculate billing. If we are unable to resolve such disputes, we may lose clients or clients may decrease their use of our solutions and our financial performance and growth may be adversely affected.
However, the application, interpretation and enforcement of these laws and regulations are often uncertain and continue to evolve, particularly in the new and rapidly evolving industry in which we operate, and may be interpreted and applied inconsistently between states within a country or between countries, and our current policies and practices may be found not to comply.
However, the application, interpretation and enforcement of these laws and regulations are often uncertain and continue to evolve, particularly in the new and rapidly evolving industry in which we operate, and may be interpreted and applied inconsistently between states within a country or between countries, and our current policies and practices may be found not to comply, which could subject us to legal or regulatory action.
In response to the COVID-19 pandemic, we have transitioned to a “hybrid” working model, combining both in-office and remote work environments. Remote working arrangements may expose us to increased security risk and privacy concerns and there may be heightened sensitivity from government regulators with respect to privacy compliance in the current environment.
We utilize a “hybrid” working model, combining both in-office and remote work environments. Remote working arrangements may expose us to increased security risk and privacy concerns and there may be heightened sensitivity from government regulators with respect to privacy compliance in the current environment.
For example, we have implemented policies and procedures to comply with applicable data privacy laws and regulations and rely on contractual representations made to us by customers and partners that the information they provide to us and their use of our solutions do not violate these laws and regulations or their own privacy policies.
For example, we have implemented policies and procedures to comply with applicable data privacy laws and regulations, we complete several external privacy-related audits each calendar year and we rely on contractual representations made to us by customers and partners that the information they provide to us and their use of our solutions do not violate these laws and regulations or their own privacy policies.
Factors that may cause fluctuations in our revenues or results of operations include: ● our ability to retain and grow relationships with existing customers and attract new customers; ● the loss of demand-side platforms as integration partners; ● the timing and success of new product introductions, including the introduction of new technologies or offerings, by us, our competitors or others in the advertising marketplace; ● changes in the pricing of our solutions or those of our competitors; ● our failure to accurately estimate or control costs, including those incurred as a result of investments, other business or product development initiatives and the integration of acquired businesses; ● multi-year commitments with minimum purchase requirements; ● the effects of acquisitions and their integration; ● changes and uncertainty in the regulatory environment; ● the amount and timing of capital expenditures and operating costs related to the maintenance and expansion of our operations and infrastructure; ● service outages, other technical difficulties or security breaches; ● limitations relating to the capacity of our networks, systems and processes; ● maintaining appropriate staffing levels and capabilities relative to projected growth, or retaining key personnel; ● the risks associated with operating internationally; and ● general economic, political, regulatory, industry and market conditions and those conditions specific to internet usage and digital media.
Factors that may cause fluctuations in our revenues or results of operations include: ● our ability to retain and grow relationships with existing customers and attract new customers; ● the loss of demand-side platforms as integration partners; ● the timing and success of new product introductions, including the introduction of new technologies or offerings, by us, our competitors or others in the advertising marketplace; ● changes in the pricing of our solutions or those of our competitors; ● our failure to accurately estimate or control costs, including those incurred as a result of investments, other business or product development initiatives and the integration of acquired businesses; ● multi-year commitments with minimum purchase requirements; ● the effects of acquisitions and their integration; ● changes and uncertainty in the regulatory environment; ● the amount and timing of capital expenditures and operating costs related to the maintenance and expansion of our operations and infrastructure; ● service outages, other technical difficulties or security breaches; ● limitations relating to the capacity of our networks, systems and processes; ● maintaining appropriate staffing levels and capabilities relative to projected growth, or retaining key personnel; ● the risks associated with operating internationally; and ● general economic, political, regulatory, industry and market conditions and those conditions specific to internet usage and digital media. 34 Table of Contents Based upon the factors above and others both within and beyond our control, we have a limited ability to forecast our future revenue, costs and expenses, and as a result, our operating results may, from time to time, fall below our estimates or the expectations of analysts and investors.
Further, the Children’s Online Privacy Protection Act (“COPPA”) applies to websites and other online services that are directed to children under thirteen (13) years of age and imposes certain restrictions on the collection, use and disclosure of personal information from these websites and online services.
Further, the COPPA applies to websites and other online services that are directed to children under thirteen (13) years of age and imposes certain restrictions on the collection, use and disclosure of personal information from these websites and online services.
Among the factors that could affect our stock price are: ● actual or anticipated fluctuations in our quarterly operating results; ● changes in securities analysts’ estimates of our financial performance or lack of research coverage and reports by industry analysts; ● actions by institutional stockholders or other large stockholders (including Providence), including future sales of our common stock; ● failure to meet any guidance given by us or any change in any guidance given by us, or changes by us in our guidance practices; ● industry, regulatory or general market conditions; ● domestic and international economic factors unrelated to our performance; ● changes in our customers’ or partners’ preferences; ● changes in law or regulation; ● lawsuits, enforcement actions and other claims by third parties or governmental authorities; ● adverse publicity related to us or another industry participant; ● announcements by us of significant impairment charges; ● speculation in the press or investment community; ● investor perception of us and our industry; ● changes in market valuations or earnings of similar companies; ● announcements by us or our competitors of significant contracts, acquisitions, dispositions or strategic partnerships; ● war (including Russia’s invasion of Ukraine), terrorist acts and epidemic disease (including the COVID-19 pandemic); ● any future offerings of our common stock or other securities; ● additions or departures of key personnel; and ● misconduct or other improper actions of our employees. 40 Table of Contents In particular, we cannot assure you that you will be able to resell your shares at or above your purchase price.
Among the factors that could affect our stock price are: ● actual or anticipated fluctuations in our quarterly operating results; ● changes in securities analysts’ estimates of our financial performance or lack of research coverage and reports by industry analysts; ● actions by institutional stockholders or other large stockholders (including Providence), including future sales of our common stock; ● failure to meet any guidance given by us or any change in any guidance given by us, or changes by us in our guidance practices; ● industry, regulatory or general market conditions; ● domestic and international economic factors unrelated to our performance; ● changes in our customers’ or partners’ preferences; ● changes in law or regulation; ● lawsuits, enforcement actions and other claims by third parties or governmental authorities; ● adverse publicity related to us or another industry participant; ● announcements by us of significant impairment charges; ● speculation in the press or investment community; ● investor perception of us and our industry; ● changes in market valuations or earnings of similar companies; ● announcements by us or our competitors of significant contracts, acquisitions, dispositions or strategic partnerships; 37 Table of Contents ● war (including Russia’s invasion of Ukraine and Hamas’ attack against Israel), terrorist acts and epidemic disease; ● any future offerings of our common stock or other securities; ● additions or departures of key personnel; and ● misconduct or other improper actions of our employees.
Although we take reasonable efforts to comply with all applicable laws and regulations, there can be no assurance that we will not be subject to regulatory action, including fines, in the event of an incident.
Our efforts to comply with all applicable laws and regulations may be ineffective, and there can be no assurance that we will not be subject to regulatory action, including fines, in the event of an incident.
Our company is led by a strong management team that has extensive experience leading technology and digital marketing companies. Our success and future growth depend to a significant degree on the leadership, knowledge, skills and continued services of our senior management team and other key personnel. The loss of any of these persons could adversely affect our business.
Our company is led by a strong management team that has extensive experience leading technology and digital marketing companies. Our success and future growth depend to a significant degree on the leadership, knowledge, skills and continued services of our senior management team and other key personnel.
Our business depends, in part, on the demand for digital advertising technology. The digital advertising industry has been and may in the future be subject to reputational harm, negative media attention and public complaint relating to, among other things, the alleged lack of transparency and anti-competitive behavior among advertising technology companies.
The digital advertising industry has been and may in the future be subject to reputational harm, negative media attention and public complaint relating to, among other things, the alleged lack of transparency and anti-competitive behavior among advertising technology companies.
There is significant intellectual property development activity in the measurement and authentication of digital ads. Third-party intellectual property rights may cover significant aspects of our technologies or business methods or block us from expanding our platform and delivering new solutions, and we cannot be certain that our current operations do not infringe the rights of a third party.
Third-party intellectual property rights may cover significant aspects of our technologies or business methods or block us from expanding our platform and delivering new solutions, and we cannot be certain that our current operations do not infringe the rights of a third party.
With 348 employees based outside of the Americas as of December 31, 2022, including 108 employees in our Tel Aviv office and 70 employees in our London office, we are exposed to a number of additional country-specific risks.
With 453 employees based outside of the Americas as of December 31, 2023, including 127 employees in our Tel Aviv office and 79 employees in our London office, we are exposed to a number of additional country-specific risks.
In particular, we may encounter difficulties integrating the business, technologies, products, personnel or operations of an acquired company, and we may have difficulty retaining the customers or employees of any acquired business due to changes in management and ownership.
Our recent acquisitions and any future acquisitions or investments may result in unforeseen operating difficulties and expenditures. In particular, we may encounter difficulties integrating the business, technologies, products, personnel or operations of an acquired company, and we may have difficulty retaining the customers or employees of any acquired business due to changes in management and ownership.
In November 2020, California voters passed the California Privacy Rights and Enforcement Act (“CPRA”), which expands the CCPA with additional data privacy compliance requirements that go into effect on January 1, 2023 and may impact our business, and establishes a regulatory agency dedicated to enforcing those requirements.
In November 2020, California voters passed the CPRA, which expands the CCPA with additional data privacy compliance requirements that went into effect in 2023 and may impact our business, and establishes a regulatory agency dedicated to enforcing those requirements.
We continue to monitor changes in laws and regulations, and the costs of compliance with, and the other burdens imposed by, these and other new laws or regulatory actions may increase our costs.
We continue to monitor changes in laws and regulations, and the costs of compliance with, and the other burdens imposed by, these and other new laws or regulatory actions may increase our costs. Our AI initiatives may also subject us to increased compliance costs associated with future laws and regulations.
See “We are exposed to the risks of operating internationally.” 30 Table of Contents Increasing scrutiny and evolving expectations from customers, employees, regulators and other stakeholders with respect to our environmental, social and governance (“ESG”) practices may expose us to new or additional risks.
See “We are exposed to the risks of operating internationally.” Increasing scrutiny and evolving expectations from customers, employees, regulators and other stakeholders with respect to our environmental, social and governance (“ESG”) practices may expose us to new or additional risks. Customers, employees, governmental organizations, investors, proxy advisory services and other stakeholders are increasingly focused on ESG practices.
As of December 31, 2022, we had $343.0 million of goodwill and $248.9 million of other long-lived assets, including property, plant and equipment and intangible assets.
As of December 31, 2023, we had $436.0 million of goodwill and $274.0 million of other long-lived assets, including property, plant and equipment and intangible assets.
Any failure, or perceived failure, by us to adhere to our stated ESG goals, comply fully with developing ESG law and regulation or failure to satisfy stakeholders with our ESG practices or the speed at which we implement them could harm our business, reputation, financial condition and operating results.
Any failure, or perceived failure, by us to adhere to our stated ESG goals, comply fully with developing ESG law and regulation or failure to satisfy stakeholders with our ESG practices or the speed at which we implement them could harm our business, reputation, financial condition and operating results. 27 Table of Contents Data privacy legislation and regulation on digital advertising and privacy and data protection may adversely affect our business.
Our sales cycle, from initial contact to contract execution and implementation, is often long and time consuming. Our sales efforts involve educating our customers about the use, technical capabilities and benefits of our software platform. Some of our customers undertake an evaluation process that involves reviewing the offerings of our competitors in addition to our platform.
Our sales efforts involve educating our customers about the use, technical capabilities and benefits of our software platform. Some of our customers undertake an evaluation process that involves reviewing the offerings of our competitors in addition to our platform.
For example, the concentration of ownership held by Providence could delay, defer or prevent a change of control of us or impede a merger, takeover or other business combination that another stockholder may otherwise view favorably.
For example, the concentration of ownership held by Providence could delay, defer or prevent a change of control of us or impede a merger, takeover or other business combination that another stockholder may otherwise view favorably. Other potential conflicts could arise, for example, over matters such as employee retention or recruiting, or our dividend policy.
We have a large and diverse customer and integration partner base. At any given time, one or more of our customers or partners may experience financial difficulty, file for bankruptcy protection or cease operations. Unfavorable economic and financial conditions could result in an increase in customer or partner financial difficulties which could adversely affect us.
At any given time, one or more of our customers or partners may experience financial difficulty, file for bankruptcy protection or cease operations. Unfavorable economic and financial conditions could result in an increase in customer or partner financial difficulties which could adversely affect us. In addition, we rely on data from third parties to invoice our clients.
Some of our integration partners have developed products that compete with us and we cannot assure you that other partners will not also develop competing products in the future.
We also cannot assure you that our customers will continue to use our solutions available on these digital media platforms. Some of our integration partners have developed products that compete with us and we cannot assure you that other partners will not also develop competing products in the future.
In addition, we may be forced to re-engineer our platform or discontinue use of certain open source software, and related solutions provided by our platform that use such open source software. Any of these events could adversely affect our business, financial condition and results of operations.
In addition, we may be forced to re-engineer our platform or discontinue use of certain open source software, and related solutions provided by our platform that use such open source software.
Stock markets have experienced extreme volatility in recent years that has been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock.
In particular, we cannot assure you that you will be able to resell your shares at or above your purchase price. Stock markets have experienced extreme volatility in recent years that has been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock.
For example, the EU’s General Data Protection Regulation (“GDPR”), which became effective on May 25, 2018, and has resulted and will continue to result in significantly greater compliance burdens and costs for companies with users and operations in the EU and European Economic Area (“EEA”).
For example, the EU GDPR, which became effective on May 25, 2018, and has resulted and will continue to result in significantly greater compliance burdens and costs for companies with users and operations in the EU and European Economic Area (“EEA”). In addition, the UK GDPR, which became effective in January 2021, imposes similar requirements as the EU GDPR.
Our business was founded in 2008 and, as a result, we have a limited operating history upon which our business and prospects may be evaluated. Although we have experienced substantial revenue growth in our limited operating history, we may not be able to sustain this rate of growth or maintain our current revenue levels.
Although we have experienced substantial revenue growth in our limited operating history, we may not be able to sustain this rate of growth or maintain our current revenue levels.
Alternatively, if adequate funds are not available or are not available on acceptable terms, our ability to fund our strategic initiatives, take advantage of unanticipated opportunities, develop or enhance our technology or services or otherwise respond to competitive pressures could be significantly limited. 39 Table of Contents Risks Related to Our Common Stock The market price of our common stock may be volatile and could decline regardless of our operating performance.
Alternatively, if adequate funds are not available or are not available on acceptable terms, our ability to fund our strategic initiatives, take advantage of unanticipated opportunities, develop or enhance our technology or services or otherwise respond to competitive pressures could be significantly limited.
Market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate. Our estimates and forecasts relating to the size and expected growth of our market may prove to be inaccurate.
Our estimates of market opportunity and forecasts of market growth included in this Annual Report on Form 10-K may prove to be inaccurate. Market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate.
Any perception of our practices, platform or solutions delivery as a violation of privacy rights may subject us to public criticism, loss of customers or partners, class action lawsuits, reputational harm, or investigations or claims by regulators, industry groups or other third parties, all of which could significantly disrupt our business and expose us to liability in ways that negatively affect our business, results of operations and financial condition. 31 Table of Contents In addition, U.S. and foreign governments have enacted or are considering enacting new legislation related to privacy, data protection, data security and digital advertising and we expect to see an increase in, or changes to, legislation and regulation that affects our industry.
Any perception of our practices, platform or solutions delivery as a violation of privacy rights may subject us to public criticism, loss of customers or partners, class action lawsuits, reputational harm, or investigations or claims by regulators, industry groups or other third parties, all of which could significantly disrupt our business and expose us to liability in ways that negatively affect our business, results of operations and financial condition.
Future acquisitions could also result in the incurrence or assumption of debt, contingent liabilities, amortization expenses or the impairment of goodwill, any of which could harm our business, financial condition and results of operations.
Future acquisitions could also result in the incurrence or assumption of debt, contingent liabilities, amortization expenses or the impairment of goodwill, any of which could harm our business, financial condition and results of operations. We cannot assure you that we will continue to acquire businesses at attractive valuations or that we will complete future acquisitions at all.
We cannot assure you that we will be successful in addressing these and other challenges we may face in the future. If we are unable to do so, our business may suffer, our revenue and operating results may decline and we may not be able to achieve further growth or sustain profitability. We are subject to taxation in multiple jurisdictions.
If we are unable to do so, our business may suffer, our revenue and operating results may decline and we may not be able to achieve further growth or sustain profitability. 33 Table of Contents We are subject to taxation in multiple jurisdictions.
A failure to protect our intellectual property rights in the U.S. or elsewhere could adversely affect our business, financial condition and results of operations. 33 Table of Contents An assertion from a third party that we are infringing its intellectual property rights, whether such assertion is valid or not, could subject us to costly and time-consuming litigation, expensive licenses or other impacts to our business.
An assertion from a third party that we are infringing its intellectual property rights, whether such assertion is valid or not, could subject us to costly and time-consuming litigation, expensive licenses or other impacts to our business. There is significant intellectual property development activity in the measurement and authentication of digital ads.
The market price of our common stock may fluctuate significantly based on a number of factors that are outside of our control.
Risks Related to Our Common Stock The market price of our common stock may be volatile and could decline regardless of our operating performance. The market price of our common stock may fluctuate significantly based on a number of factors that are outside of our control.
We currently have operations in numerous foreign countries, including the United Kingdom, Israel, Singapore, Australia, Brazil, Mexico, France, Germany, Finland, Belgium and Japan, and expect to continue to expand our operations internationally. Our international operations are subject to varying degrees of regulation in each of the jurisdictions in which our services are provided.
Our international operations are important to our current and future strategy, growth and prospects. We currently have operations in numerous foreign countries, including the United Kingdom, Israel, Singapore, Australia, Brazil, Mexico, France, Germany, Finland, Belgium, Japan, Italy and India, and expect to continue to expand our operations internationally.
Any regulatory or civil action that is brought against us, even if unsuccessful, may distract our management’s attention, divert our resources, negatively affect our public image or reputation among our customers and partners and within our industry, and, consequently, harm our business, results of operations and financial condition. 32 Table of Contents Public criticism of digital advertising technology in the U.S. and internationally, including digital advertising on social media platforms, could adversely affect the demand for and use of our solutions.
Any regulatory or civil action that is brought against us, even if unsuccessful, may distract our management’s attention, divert our resources, negatively affect our public image or reputation among our customers and partners and within our industry, and, consequently, harm our business, results of operations and financial condition.
Our historical revenue growth has masked the impact of seasonality, but if our growth rate declines or seasonal spending becomes more pronounced, seasonality could have a more significant impact on our revenue, cash flow and operating results from period to period. 35 Table of Contents We have a limited operating history, which makes it difficult to evaluate our business and prospects and may increase the risks associated with your investment.
Our historical revenue growth has masked the impact of seasonality, but if our growth rate declines or seasonal spending becomes more pronounced, seasonality could have a more significant impact on our revenue, cash flow and operating results from period to period.
In addition, we have a research and development center located in Tel Aviv, Israel, with a significant presence of software and data engineers and employees focused on product development.
In addition, we have a research and development center located in Tel Aviv, Israel, with a significant presence of software and data engineers and employees focused on product development. On October 7, 2023, the Hamas terrorist organization launched attacks against Israel, and conflict and disruption in the region is ongoing.
Any inaccuracy or perceived inaccuracy in the solutions we provide could lead to consequences that adversely impact our business, financial condition and results of operations, including: ● loss of customers; ● the incurrence of substantial costs to correct any material defect or error; ● potential litigation; ● interruptions in the availability of our platform; ● diversion of development resources; ● loss of MRC or other industry accreditation; ● lost sales or delayed market acceptance of our solutions; and ● damage to our brand. 29 Table of Contents We often have long sales cycles, which can result in significant time between initial contact with a prospect and execution of a contractual agreement, making it difficult to project when, if at all, we will generate revenue from new customers.
Any inaccuracy or perceived inaccuracy in the solutions we provide could lead to consequences that adversely impact our business, financial condition and results of operations, including: ● loss of customers; ● the incurrence of substantial costs to correct any material defect or error; ● potential litigation; ● interruptions in the availability of our platform; ● diversion of development resources; ● loss of MRC or other industry accreditation; ● lost sales or delayed market acceptance of our solutions; and ● damage to our brand.
These and other data privacy laws and their interpretations continue to develop and may be inconsistent from jurisdiction to jurisdiction. Noncompliance with these laws could result in penalties or significant legal liability.
The continued uncertainty around the feasibility of onward transfers from the EU to the United States has the potential to adversely affect our operations and business. These and other data privacy laws and their interpretations continue to develop and may be inconsistent from jurisdiction to jurisdiction. Noncompliance with these laws could result in penalties or significant legal liability.
In addition, the laws of some foreign countries where our platform is utilized do not protect our proprietary rights to the same extent as do the laws of the United States.
In addition, the laws of some foreign countries where our platform is utilized do not protect our proprietary rights to the same extent as do the laws of the United States. A failure to protect our intellectual property rights in the U.S. or elsewhere could adversely affect our business, financial condition and results of operations.
Although in 2022 EU and U.S. officials announced an agreement on “Privacy Shield 2.0” had been reached, it has not yet been officially adopted by the European Union. The continued uncertainty around the feasibility of onward transfers from the EU to the United States has the potential to adversely affect our operations and business.
In 2022, EU and U.S. officials announced that an agreement had been reached on a framework for data transferred from the EU to the United States referred to as “Privacy Shield 2.0”, but it has not yet been officially adopted by the European Union.
In addition, our ability to operate our platform and deliver our solutions may be interrupted by computer viruses, cyberattacks and security breaches. For example, unauthorized parties have in the past and may attempt in the future to gain access to our information systems and data.
For example, unauthorized parties have in the past and may attempt in the future to gain access to our information systems and data.
We have completed several strategic acquisitions, including of OpenSlate and Meetrics in 2021, Ad-Juster and Zentrick in 2019 and Leiki in 2018. As part of our growth strategy, we regularly evaluate and may consummate additional acquisitions in the future to enhance our technology platform, expand our product offerings, broaden our geographic footprint, or for other strategic reasons.
As part of our growth strategy, we regularly evaluate and may consummate additional acquisitions in the future to enhance our technology platform, expand our product offerings, broaden our geographic footprint, or for other strategic reasons. We also may evaluate and enter into discussions regarding an array of potential strategic investments, including acquiring complementary products or technologies.
Outside parties have in the past and may also attempt in the future to fraudulently induce our employees or users of our platform to disclose sensitive information via illegal electronic spamming, phishing or other tactics. Our IT and security teams regularly review our systems and security measures and evaluate ways to enhance our processes and controls.
Outside parties have in the past and may also attempt in the future to fraudulently induce our employees or users of our platform to disclose sensitive information via illegal electronic spamming, social engineering, phishing, account takeovers, mobile phone malware and SIM card swapping, credential stuffing or other tactics.
Data privacy legislation and regulation on digital advertising and privacy and data protection may adversely affect our business. There are a growing number of data privacy and protection laws and regulations in the digital advertising industry that apply to our business.
There are a growing number of data privacy and protection laws and regulations in the digital advertising industry that apply to our business. We have dedicated, and expect to continue to dedicate, significant resources in our efforts to comply with such laws and regulations.
Further, new employees often require significant training and we may lose new or existing employees to our competitors or other companies before we realize the benefit of our investment in recruiting and training them. In addition, changes to labor and immigration laws and regulations may adversely affect our access to technical and professional talent.
New regulations that prohibit the use of certain restrictive covenants in agreements with our employees could impact our ability to retain existing employees. Further, new employees often require significant training and we may lose new or existing employees to our competitors or other companies before we realize the benefit of our investment in recruiting and training them.
Our inability to retain and attract the necessary personnel could adversely affect our business, financial condition and results of operations. In addition, our international expansion has led to an increasing number of employees based in countries outside of North America.
In addition, our international expansion has led to an increasing number of employees based in countries outside of North America.
In addition, the California Consumer Privacy Act (“CCPA”), which went into effect on January 1, 2020, limits how we may collect and use personal data. The effects of the CCPA potentially are far-reaching and may require us to modify our data processing practices and policies and incur substantial compliance-related costs and expenses.
The effects of the CCPA potentially are far-reaching and may require us to modify our data processing practices and policies and incur substantial compliance-related costs and expenses.
We believe that our revenues and results of operations on a year-over-year and sequential quarter-over-quarter basis may vary significantly in the future.
We believe that our revenues and results of operations on a year-over-year and sequential quarter-over-quarter basis may vary significantly in the future. Investors are cautioned not to rely on the results of prior periods as an indication of future performance. We maintain cash deposits in excess of federally insured limits.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe outcome of legal proceedings is unpredictable and may have an adverse impact on our business or financial condition. ​ Item 4. Mine Safety Disclosures Not applicable. 46 Table of Contents PART II
Biggest changeThe outcome of legal proceedings is unpredictable and may have an adverse impact on our business or financial condition. ​ Item 4. Mine Safety Disclosures Not applicable. 44 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 46 ​ ​ PART II 47 ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 47 Item 6. [Reserved] 48 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 49 Item 7A. Quantitative and Qualitative Disclosure about Market Risk 68 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 44 ​ ​ PART II 45 ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 45 Item 6. [Reserved] 46 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 47 Item 7A. Quantitative and Qualitative Disclosure about Market Risk 64 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThere has been no material change in the planned use of the IPO net proceeds as described in our final prospectus, dated April 20, 2021 and filed with the SEC, pursuant to Rule 424(b)(4) under the Securities Act, on April 22, 2021 (the “Prospectus”).
Biggest changeAs of December 31, 2023, all IPO net proceeds have been used to fund acquisitions and for working capital, as described in our final prospectus, dated April 20, 2021 and filed with the SEC, pursuant to Rule 424(b)(4) under the Securities Act, on April 22, 2021 (the “Prospectus”).
Stock Performance Graph The following graph compares the cumulative total stockholder return on an initial investment of $100 in our common stock between April 21, 2021, and December 31, 2022, with the comparative cumulative total returns of the Standard & Poor’s (“S&P”) 500 Index, Nasdaq Composite Index and Russell 3000 Index over the same period.
Stock Performance Graph The following graph compares the cumulative total stockholder return on an initial investment of $100 in our common stock between April 21, 2021, and December 31, 2023, with the comparative cumulative total returns of the Standard & Poor’s (“S&P”) 500 Index, Nasdaq Composite Index and Russell 3000 Index over the same period.
On April 23, 2021, concurrent with the completion of the IPO, an affiliate of Tiger Global Management, LLC (“Tiger Investor”) purchased from us 1,111 thousand shares of our common stock in a private placement at a price per share equal to the IPO price of $27.00.
On April 23, 2021, concurrent with the completion of the IPO, an affiliate of Tiger Global Management, LLC (“Tiger Investor”) purchased from us 1,111 thousand shares of our common stock in a private placement at a price per share equal to the IPO price of $27.00 (the “Concurrent Private Placement”).
We received aggregate net proceeds of $29.0 million from the concurrent private placement, after deducting fees of $1.0 million. 47 Table of Contents On April 30, 2021, we used a portion of the net proceeds from the IPO and concurrent private placement to pay the entire outstanding balance under the New Revolving Credit Facility of $22.0 million.
We received aggregate net proceeds of $29.0 million from the Concurrent Private Placement, after deducting fees of $1.0 million. 45 Table of Contents On April 30, 2021, we used a portion of the net proceeds from the IPO and Concurrent Private Placement to pay the entire outstanding balance under the New Revolving Credit Facility of $22.0 million.
We did not declare or pay any dividends on our common stock in 2022, 2021 or 2020. Purchases of Equity Securities by the Issuer and Affiliated Purchases None. Recent Sales of Unregistered Securities None.
We did not declare or pay any dividends on our common stock in 2023, 2022 or 2021. Purchases of Equity Securities by the Issuer and Affiliated Purchases None. Recent Sales of Unregistered Securities None.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Holders of Record Our common stock is listed on the NYSE under the symbol “DV”. As of February 21, 2023, we had 165,537,166 shares of common stock outstanding and 106 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Holders of Record Our common stock is listed on the NYSE under the symbol “DV”. As of February 20, 2024, we had 171,253,902 shares of common stock outstanding and 103 holders of record of our common stock.
Added
On August 14, 2023, we used a portion of the net proceeds from the IPO and Concurrent Private Placement to purchase all of the outstanding stock of Scibids for $121.4 million, which included net cash of $67.2 million, common stock issued of $52.9 million, and a fair value of the Scibids Contingent Payment of $1.2 million.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

106 edited+21 added−39 removed52 unchanged
Biggest changeWe believe that the year-over- year comparison of results more appropriately reflects the overall performance of the business. 58 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ Dec 31, ​ Sep 30, ​ Jun 30, ​ Mar 31, ​ Dec 31, ​ Sep 30, ​ Jun 30, ​ Mar 31, ​ 2022 2022 2022 2022 2021 2021 2021 2021 ​ ​ (In Thousands) Revenue ​ $ 133,636 $ 112,254 $ 109,805 $ 96,723 $ 105,533 $ 83,098 $ 76,524 $ 67,586 Cost of revenue (exclusive of depreciation and amortization shown separately below) ​ 22,830 ​ 19,323 ​ 18,836 ​ 16,877 ​ 18,453 ​ 13,435 ​ 12,291 ​ 10,203 Product development ​ 26,376 ​ 23,932 ​ 23,222 ​ 21,588 ​ 17,040 ​ 16,359 ​ 15,120 ​ 14,179 Sales, marketing and customer support ​ 28,881 ​ 27,118 ​ 24,733 ​ 26,684 ​ 22,659 ​ 19,539 ​ 19,580 ​ 15,534 General and administrative ​ 18,067 ​ 19,395 ​ 21,529 ​ 19,675 ​ 23,063 ​ 14,465 ​ 32,017 ​ 11,835 Depreciation and amortization ​ 8,882 ​ 8,089 ​ 8,317 ​ 9,040 ​ 8,296 ​ 7,492 ​ 7,440 ​ 7,057 Income (loss) from operations ​ 28,600 ​ 14,397 ​ 13,168 ​ 2,859 ​ 16,022 ​ 11,808 ​ (9,924) ​ 8,778 Interest expense ​ 224 ​ 226 ​ 223 ​ 232 ​ 236 ​ 249 ​ 297 ​ 390 Other (income) expense, net ​ (1,671) ​ 231 ​ 145 ​ 46 ​ (674) ​ 365 ​ 49 ​ (49) Income (loss) before income taxes ​ 30,047 ​ 13,940 ​ 12,800 ​ 2,581 ​ 16,460 ​ 11,194 ​ (10,270) ​ 8,437 Income tax expense (benefit) ​ 11,979 ​ 3,609 ​ 2,510 ​ (1,998) ​ (11,848) ​ 3,270 ​ 2,298 ​ 2,793 Net income (loss) ​ $ 18,068 ​ $ 10,331 ​ $ 10,290 ​ $ 4,579 ​ $ 28,308 ​ $ 7,924 ​ $ (12,568) ​ $ 5,644 ​ The following table sets forth our unaudited consolidated results of operations for the specified periods as a percentage of revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ Dec 31, ​ ​ Sep 30, ​ ​ Jun 30, ​ ​ Mar 31, ​ ​ Dec 31, ​ ​ Sep 30, ​ ​ Jun 30, ​ ​ Mar 31, ​ ​ 2022 ​ 2022 ​ ​ 2022 ​ ​ 2022 ​ ​ 2021 ​ ​ 2021 ​ ​ 2021 ​ ​ 2021 ​ ​ ​ (as % of Revenue) Revenue 100 % ​ 100 % ​ 100 % ​ 100 % ​ 100 % ​ 100 % ​ 100 % ​ 100 % Cost of revenue (exclusive of depreciation and amortization shown separately below) 17 ​ 17 ​ ​ 17 ​ ​ 17 ​ ​ 17 ​ ​ 16 ​ ​ 16 ​ ​ 15 ​ Product development 20 ​ 21 ​ ​ 21 ​ ​ 22 ​ ​ 16 ​ ​ 20 ​ ​ 20 ​ ​ 21 ​ Sales, marketing and customer support 22 ​ 24 ​ ​ 23 ​ ​ 28 ​ ​ 21 ​ ​ 24 ​ ​ 26 ​ ​ 23 ​ General and administrative 14 ​ 17 ​ ​ 20 ​ ​ 20 ​ ​ 22 ​ ​ 17 ​ ​ 42 ​ ​ 18 ​ Depreciation and amortization 7 ​ 7 ​ ​ 8 ​ ​ 9 ​ ​ 8 ​ ​ 9 ​ ​ 10 ​ ​ 10 ​ Income (loss) from operations 21 ​ 13 ​ ​ 12 ​ ​ 3 ​ ​ 15 ​ ​ 14 ​ ​ (13) ​ ​ 13 ​ Interest expense — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1 ​ Other (income) expense, net (1) ​ — ​ ​ — ​ ​ — ​ ​ (1) ​ ​ — ​ ​ — ​ ​ — ​ Income (loss) before income taxes 22 ​ 12 ​ ​ 12 ​ ​ 3 ​ ​ 16 ​ ​ 13 ​ ​ (13) ​ ​ 12 ​ Income tax expense (benefit) 9 ​ 3 ​ ​ 2 ​ ​ (2) ​ ​ (11) ​ ​ 4 ​ ​ 3 ​ ​ 4 ​ Net income (loss) 14 % ​ 9 % ​ 9 % ​ 5 % ​ 27 % ​ 10 % ​ (16) % ​ 8 % ​ 59 Table of Contents The following table presents a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to the most directly comparable financial measure prepared in accordance with GAAP. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Dec 31, ​ Sep 30, ​ Jun 30, ​ Mar 31, ​ Dec 31, ​ Sep 30, ​ Jun 30, ​ Mar 31, ​ 2022 2022 2022 2022 2021 2021 2021 2021 ​ (In Thousands) Net income $ 18,068 ​ $ 10,331 ​ $ 10,290 ​ $ 4,579 ​ $ 28,308 ​ $ 7,924 ​ $ (12,568) ​ $ 5,644 Net income margin 14% ​ 9% ​ 9% ​ 5% ​ 27% ​ 10% ​ (16%) ​ 8% Depreciation and amortization 8,882 ​ 8,089 ​ 8,317 ​ 9,040 ​ 8,296 ​ 7,492 ​ 7,440 ​ 7,057 Stock-based compensation 11,083 ​ 10,971 ​ 9,259 ​ 10,994 ​ 9,787 ​ 4,848 ​ 4,714 ​ 2,538 Interest expense 224 ​ 226 ​ 223 ​ 232 ​ 237 ​ 249 ​ 297 ​ 390 Income tax expense (benefit) 11,979 ​ 3,609 ​ 2,510 ​ (1,998) ​ (11,848) ​ 3,270 ​ 2,298 ​ 2,793 M&A and restructuring costs (recoveries) 5 ​ 39 ​ 527 ​ 653 ​ 2,382 ​ 1,079 ​ 67 ​ (18) Offering, IPO readiness and secondary offering costs 566 ​ 726 ​ — ​ — ​ 1,099 ​ 318 ​ 18,886 ​ 3,261 Other (recoveries) costs (245) ​ (228) ​ 2,690 ​ 1,197 ​ 2,825 ​ 878 ​ — ​ 109 Other (income) expense (1,671) ​ 231 ​ 145 ​ 46 ​ (674) ​ 365 ​ 49 ​ (49) Adjusted EBITDA $ 48,891 ​ $ 33,994 ​ $ 33,961 ​ $ 24,743 ​ $ 40,412 ​ $ 26,423 ​ $ 21,183 ​ $ 21,725 Adjusted EBITDA margin 37% ​ 30% ​ 31% ​ 26% ​ 38% ​ 32% ​ 28% ​ 32% ​ Liquidity and Capital Resources The Company’s operations are financed primarily through cash generated from operations.
Biggest changeWe believe that the year-over-year comparison of results more appropriately reflects the overall performance of the business. 55 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ Dec 31, ​ Sep 30, ​ Jun 30, ​ Mar 31, ​ Dec 31, ​ Sep 30, ​ Jun 30, ​ Mar 31, ​ 2023 2023 2023 2023 2022 2022 2022 2022 ​ ​ (In Thousands) Revenue ​ $ 172,231 $ 143,974 $ 133,744 $ 122,594 $ 133,636 $ 112,254 $ 109,805 $ 96,723 Cost of revenue (exclusive of depreciation and amortization shown separately below) ​ 30,022 ​ 26,466 ​ 26,191 ​ 23,952 ​ 22,830 ​ 19,323 ​ 18,836 ​ 16,877 Product development ​ 32,565 ​ 32,315 ​ 31,941 ​ 28,555 ​ 26,376 ​ 23,932 ​ 23,222 ​ 21,588 Sales, marketing and customer support ​ 35,733 ​ 32,971 ​ 31,537 ​ 25,712 ​ 28,881 ​ 27,118 ​ 24,733 ​ 26,684 General and administrative ​ 24,748 ​ 23,280 ​ 19,755 ​ 20,188 ​ 18,067 ​ 19,395 ​ 21,529 ​ 19,675 Depreciation and amortization ​ 11,520 ​ 10,706 ​ 9,676 ​ 8,983 ​ 8,882 ​ 8,089 ​ 8,317 ​ 9,040 Income from operations ​ 37,643 ​ 18,236 ​ 14,644 ​ 15,204 ​ 28,600 ​ 14,397 ​ 13,168 ​ 2,859 Interest expense ​ 275 ​ 288 ​ 247 ​ 256 ​ 224 ​ 226 ​ 223 ​ 232 Other (income) expense, net ​ (4,373) ​ (1,633) ​ (2,476) ​ (2,734) ​ (1,671) ​ 231 ​ 145 ​ 46 Income before income taxes ​ 41,741 ​ 19,581 ​ 16,873 ​ 17,682 ​ 30,047 ​ 13,940 ​ 12,800 ​ 2,581 Income tax expense (benefit) ​ 8,636 ​ 6,234 ​ 4,034 ​ 5,507 ​ 11,979 ​ 3,609 ​ 2,510 ​ (1,998) Net income ​ $ 33,105 ​ $ 13,347 ​ $ 12,839 ​ $ 12,175 ​ $ 18,068 ​ $ 10,331 ​ $ 10,290 ​ $ 4,579 ​ The following table sets forth our unaudited consolidated results of operations for the specified periods as a percentage of revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ Dec 31, ​ ​ Sep 30, ​ ​ Jun 30, ​ ​ Mar 31, ​ ​ Dec 31, ​ ​ Sep 30, ​ ​ Jun 30, ​ ​ Mar 31, ​ ​ 2023 ​ 2023 ​ ​ 2023 ​ ​ 2023 ​ ​ 2022 ​ ​ 2022 ​ ​ 2022 ​ ​ 2022 ​ ​ ​ (as % of Revenue) Revenue 100 % ​ 100 % ​ 100 % ​ 100 % ​ 100 % ​ 100 % ​ 100 % ​ 100 % Cost of revenue (exclusive of depreciation and amortization shown separately below) 17 ​ 18 ​ ​ 20 ​ ​ 20 ​ ​ 17 ​ ​ 17 ​ ​ 17 ​ ​ 17 ​ Product development 19 ​ 22 ​ ​ 24 ​ ​ 23 ​ ​ 20 ​ ​ 21 ​ ​ 21 ​ ​ 22 ​ Sales, marketing and customer support 21 ​ 23 ​ ​ 24 ​ ​ 21 ​ ​ 22 ​ ​ 24 ​ ​ 23 ​ ​ 28 ​ General and administrative 14 ​ 16 ​ ​ 15 ​ ​ 16 ​ ​ 14 ​ ​ 17 ​ ​ 20 ​ ​ 20 ​ Depreciation and amortization 7 ​ 7 ​ ​ 7 ​ ​ 7 ​ ​ 7 ​ ​ 7 ​ ​ 8 ​ ​ 9 ​ Income from operations 22 ​ 13 ​ ​ 11 ​ ​ 12 ​ ​ 21 ​ ​ 13 ​ ​ 12 ​ ​ 3 ​ Interest expense — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ Other (income) expense, net (3) ​ (1) ​ ​ (2) ​ ​ (2) ​ ​ (1) ​ ​ — ​ ​ — ​ ​ — ​ Income before income taxes 24 ​ 14 ​ ​ 13 ​ ​ 14 ​ ​ 22 ​ ​ 12 ​ ​ 12 ​ ​ 3 ​ Income tax expense (benefit) 5 ​ 4 ​ ​ 3 ​ ​ 4 ​ ​ 9 ​ ​ 3 ​ ​ 2 ​ ​ (2) ​ Net income 19 % ​ 9 % ​ 10 % ​ 10 % ​ 14 % ​ 9 % ​ 9 % ​ 5 % ​ Note: Percentages may not sum due to rounding. 56 Table of Contents The following table presents a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to the most directly comparable financial measure prepared in accordance with GAAP. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Dec 31, ​ Sep 30, ​ Jun 30, ​ Mar 31, ​ Dec 31, ​ Sep 30, ​ Jun 30, ​ Mar 31, ​ 2023 2023 2023 2023 2022 2022 2022 2022 ​ (In Thousands) Net income $ 33,105 ​ $ 13,347 ​ $ 12,839 ​ $ 12,175 ​ $ 18,068 ​ $ 10,331 ​ $ 10,290 ​ $ 4,579 Net income margin 19% ​ 9% ​ 10% ​ 10% ​ 14% ​ 9% ​ 9% ​ 5% Depreciation and amortization 11,520 ​ 10,706 ​ 9,676 ​ 8,983 ​ 8,882 ​ 8,089 ​ 8,317 ​ 9,040 Stock-based compensation 16,473 ​ 15,791 ​ 15,167 ​ 11,813 ​ 11,083 ​ 10,971 ​ 9,259 ​ 10,994 Interest expense 275 ​ 288 ​ 247 ​ 256 ​ 224 ​ 226 ​ 223 ​ 232 Income tax expense (benefit) 8,636 ​ 6,234 ​ 4,034 ​ 5,507 ​ 11,979 ​ 3,609 ​ 2,510 ​ (1,998) M&A and restructuring (recoveries) costs (359) ​ 921 ​ 700 ​ — ​ 5 ​ 39 ​ 527 ​ 653 Offering, IPO readiness and secondary offering costs 315 ​ 286 ​ 122 ​ 187 ​ 566 ​ 726 ​ — ​ — Other (recoveries) costs (164) ​ (267) ​ (266) ​ (267) ​ (245) ​ (228) ​ 2,690 ​ 1,197 Other (income) expense (4,373) ​ (1,633) ​ (2,476) ​ (2,734) ​ (1,671) ​ 231 ​ 145 ​ 46 Adjusted EBITDA $ 65,428 ​ $ 45,673 ​ $ 40,043 ​ $ 35,920 ​ $ 48,891 ​ $ 33,994 ​ $ 33,961 ​ $ 24,743 Adjusted EBITDA margin 38% ​ 32% ​ 30% ​ 29% ​ 37% ​ 30% ​ 31% ​ 26% ​ Liquidity and Capital Resources The Company’s operations are financed primarily through cash generated from operations.
Non-cash charges primarily consisted of $34.3 million in depreciation and amortization, $42.3 million in stock-based compensation, and $7.3 million in non-cash lease expenses, offset by $19.6 million in deferred taxes.
Non-cash charges consisted primarily of $34.3 million in depreciation and amortization, $42.3 million in stock-based compensation, and $7.3 million in non-cash lease expenses, offset by $19.6 million in deferred taxes.
Financing Activities For the year ended December 31, 2022, cash used in financing activities of $7.9 million was primarily due to $10.2 million of shares repurchased for settlement of employee tax withholdings, $3.2 million of contingent consideration related to the acquisition of Zentrick, partially offset by $5.8 million of proceeds from common stock issued upon exercise of stock options.
For the year ended December 31, 2022, cash used in financing activities of $7.9 million was due primarily to $10.2 million of shares repurchased for settlement of employee tax withholdings, $3.2 million of contingent consideration related to the acquisition of Zentrick, partially offset by $5.8 million of proceeds from common stock issued upon exercise of stock options.
Some of the limitations of these measures are: ● they do not reflect changes in, or cash requirements for, working capital needs; ● Adjusted EBITDA does not reflect capital expenditures or future requirements for capital expenditures or contractual commitments; ● they do not reflect income tax expense or the cash requirements to pay income taxes; ● they do not reflect interest expense or the cash requirements necessary to service interest or principal payments on debt; and ● although depreciation and amortization are non-cash charges related mainly to intangible assets, certain assets being depreciated and amortized will have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.
Some of the limitations of these measures are: ● they do not reflect changes in, or cash requirements for, working capital needs; ● Adjusted EBITDA does not reflect capital expenditures or future requirements for capital expenditures or contractual commitments; ● they do not reflect income tax expense or the cash requirements to pay income taxes; ● they do not reflect interest expense or the cash requirements necessary to service interest or principal debt payments; and ● although depreciation and amortization are non-cash charges related mainly to intangible assets, certain assets being depreciated and amortized will have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.
Based on the Total Enterprise Value from the Private Placement and our board of directors’ belief that it is customary and standard practice for high growth companies in the Company’s industry to use a revenue multiplier to value a company, our board of directors determined that the most appropriate representation of the value of the Company was to attribute value based on LTM Revenue multiplied by 14, less a Liquidity Discount.
Based on the Total Enterprise Value from the Concurrent Private Placement and our board of directors’ belief that it is customary and standard practice for high growth companies in the Company’s industry to use a revenue multiplier to value a company, our board of directors determined that the most appropriate representation of the value of the Company was to attribute value based on LTM Revenue multiplied by 14, less a Liquidity Discount.
We recognize revenue from advertisers in the period in which we provide our measurement solutions. Advertisers typically leverage the full suite of our proprietary DV Authentic Ad metric to evaluate and measure the existence of fraud, brand suitability, viewability and geography for their digital ad investments.
We recognize revenue from advertisers in the period in which we provide our measurement and activation solutions. Advertisers typically leverage the full suite of our proprietary DV Authentic Ad metric to evaluate and measure the existence of fraud, brand suitability, viewability and geography for their digital ad investments.
The increase was primarily due to growth in Activation (f/k/a Advertiser – programmatic) revenue which drove increases in partner costs from revenue-sharing arrangements, as well as accelerated investments in cloud services to provide scale and flexibility necessary to support future growth.
The increase was due primarily to growth in Activation (f/k/a Advertiser – programmatic) revenue which drove increases in partner costs from revenue-sharing arrangements, as well as investments in cloud services to provide scale and flexibility necessary to support future growth.
(b) Offering, IPO readiness and secondary offering costs for the year ended December 31, 2022 consist of third-party costs incurred for the Company’s filing of a “shelf” registration statement on Form S-3, and costs incurred for an underwritten secondary public offering by certain stockholders of the Company.
Offering, IPO readiness and secondary offering costs for the year ended December 31, 2022 consist of third-party costs incurred for the Company’s filing of a “shelf” registration statement on Form S-3, and costs incurred for an underwritten secondary public offering by certain stockholders of the Company.
(c) Other costs for the year ended December 31, 2022 consist of costs related to the departures of the Company’s former Chief Operating Officer and Chief Customer Officer, impairment related to a subleased office space and costs related to the disposal of furniture for unoccupied lease office space, partially offset by sublease income for lease office space.
Other costs for the year ended December 31, 2022 consist of costs related to the departures of the Company’s former Chief Operating Officer and Chief Customer Officer, impairment related to a subleased office space and costs related to the disposal of furniture for unoccupied lease office space, partially offset by sublease income for lease office space.
In November 2020, the Private Placement Investors invested in the Company in the Private Placement at a total enterprise value (the “Total Enterprise Value”) based on arm’s length negotiations, which resulted in a per share valuation of $17.22 (adjusted for the reverse stock split).
In November 2020, the Concurrent Private Placement Investors invested in the Company in the Concurrent Private Placement at a total enterprise value (the “Total Enterprise Value”) based on arm’s length negotiations, which resulted in a per share valuation of $17.22 (adjusted for the reverse stock split).
The Liquidity Discount was determined by our board of directors to be 15% for the valuation following the Private Placement, resulting in the following formula: Valuation = (LTM Revenue × 14) x 0.85. The liquidity discount decreased over time leading up to the IPO.
The Liquidity Discount was determined by our board of directors to be 15% for the valuation following the Concurrent Private Placement, resulting in the following formula: Valuation = (LTM Revenue × 14) x 0.85. The liquidity discount decreased over time leading up to the IPO.
We plan to continue to invest in sales and marketing to grow our existing customer relationships and acquire new customers. In addition, we have completed five acquisitions since 2018 and maintain an active pipeline of potential M&A targets and intend to continue evaluating add-on opportunities to bolster our current solutions suite and complement our organic growth initiatives.
We plan to continue to invest in sales and marketing to grow our existing customer relationships and acquire new customers. In addition, we have completed six acquisitions since 2018 and maintain an active pipeline of potential M&A targets and intend to continue evaluating add-on opportunities to bolster our current solutions suite and complement our organic growth initiatives.
These inputs are subjective and generally requires significant judgment and estimation by management. ● Expected Term: we have opted to use the “simplified method” for estimating the expected term of employee options, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option, generally 10 years. ● Expected Volatility: we have based our estimate of expected volatility on the historical stock volatility of a group of similar companies that are publicly traded over a period equivalent to the expected term of the stock-based awards. ● Risk-Free Interest Rate: the risk-free rate assumption is based on the U.S.
These inputs are subjective and generally requires significant judgment and estimation by management. 61 Table of Contents ● Expected Term: we have opted to use the “simplified method” for estimating the expected term of employee options, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option, generally 10 years. ● Expected Volatility: we have based our estimate of expected volatility on the historical stock volatility of a group of similar companies that are publicly traded over a period equivalent to the expected term of the stock-based awards. ● Risk-Free Interest Rate: the risk-free rate assumption is based on the U.S.
Discussion of historical items and year-to-year comparisons between 2021 and 2020 that are not included in this discussion can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2021.
Discussion of historical items and year-to-year comparisons between 2022 and 2021 that are not included in this discussion can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2022.
In addition, other companies in the industry may calculate these non-GAAP financial measures differently, therefore limiting their usefulness as a comparative measure. You should compensate for these limitations by relying primarily on the Company’s GAAP results and using the non-GAAP financial measures only supplementally.
In addition, other companies in our industry may calculate these non-GAAP financial measures differently, therefore limiting their usefulness as a comparative measure. You should compensate for these limitations by relying primarily on our GAAP results and using the non-GAAP financial measures only supplementally.
Recent Accounting Pronouncements See Note 2, Basis of Presentation and Summary of Significant Accounting Policies to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information on the adoption of recent accounting pronouncements. 67 Table of Contents ​
Recent Accounting Pronouncements See Note 2, Basis of Presentation and Summary of Significant Accounting Policies to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for more information on the adoption of recent accounting pronouncements. 63 Table of Contents ​
Changes in our strategy or market conditions could significantly impact these judgments and require an impairment to be recorded to intangible assets and goodwill. There have been no goodwill impairment indicators subsequent to the impairment test performed as of October 1, 2022.
Changes in our strategy or market conditions could significantly impact these judgments and require an impairment to be recorded to intangible assets and goodwill. There have been no goodwill impairment indicators subsequent to the impairment test performed as of October 1, 2023.
For each of the years ended December 31, 2022 and December 31, 2021, there were no impairments related to our intangible assets. We allocate the fair value of the purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values.
For each of the years ended December 31, 2023 and December 31, 2022, there were no impairments related to our intangible assets. We allocate the fair value of the purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values.
We generate revenue for certain supply-side arrangements that include minimum guaranteed fees that reset monthly and are recognized on a straight-line basis over the access period, which is usually 12 months.
We generate revenue for certain supply-side arrangements that include minimum guaranteed fees that reset monthly and are recognized on a straight-line basis over the access period, which is usually twelve months.
Our customers include many of the largest digital advertisers in the world and we have maintained exceptional customer retention with gross revenue retention rates of over 95% in each of the years ended December 31, 2022 and 2021.
Our customers include many of the largest digital advertisers in the world and we have maintained exceptional customer retention with gross revenue retention rates of over 95% in each of the years ended December 31, 2023 and 2022.
Advertisers can also purchase our services through programmatic platforms to evaluate the quality of ad inventories before they are purchased, which we track as Activation (f/k/a Advertiser – programmatic) revenue. We generate revenue from advertisers by charging a Measured Transaction Fee based on the volume of Media Transactions Measured on behalf of our customers.
Advertisers can also purchase our services through programmatic and social media platforms to evaluate the quality of ad inventories before they are purchased, which we track as Activation (f/k/a Advertiser – programmatic) revenue. We generate the majority of revenue from advertisers by charging a Measured Transaction Fee based on the volume of Media Transactions Measured on behalf of our customers.
Accordingly, the Company records revenue for the gross amounts of the Measured Transaction Fees paid by advertisers for these services and records the amounts retained by the Demand-Side Platforms as a cost of revenue. Goodwill and Intangibles Goodwill represents the excess of purchase price over the fair value of tangible net assets and identifiable intangible assets of the businesses acquired.
Accordingly, the Company records revenue for the gross amounts of the Measured Transaction Fees paid by advertisers for these services and records the amounts retained by the Demand-Side Platforms as a cost of revenue. 60 Table of Contents Goodwill and Intangibles Goodwill represents the excess of purchase price over the fair value of tangible net assets and identifiable intangible assets of the businesses acquired.
Cost of revenue primarily consists of platform hosting fees, data center costs, software and other technology expenses, and other costs directly associated with data infrastructure; personnel costs, including salaries, bonuses, stock-based compensation and benefits, directly associated with the support and delivery of our software platform and data solutions; and costs from revenue-sharing arrangements with our partners. Product development.
Cost of revenue consists primarily of costs from revenue-sharing arrangements with our partners, platform hosting fees, data center costs, software and other technology expenses, other costs directly associated with data infrastructure, and personnel costs, including salaries, bonuses, stock-based compensation and benefits, directly associated with the support and delivery of our software platform and data solutions. 50 Table of Contents Product development.
Selected Quarterly Results of Operations The following tables set forth our unaudited consolidated quarterly results of operations for each of the 8 quarters within the period from January 1, 2021 to December 31, 2022.
Selected Quarterly Results of Operations The following tables set forth our unaudited consolidated quarterly results of operations for each of the 8 quarters within the period from January 1, 2022 to December 31, 2023.
In October 2020, the Company entered into the New Revolving Credit Facility with available borrowings of $150 million. The Company had no outstanding debt under the New Revolving Credit Facility as of December 31, 2022.
In October 2020, the Company entered into the New Revolving Credit Facility with available borrowings of $150 million. The Company had no outstanding debt under the New Revolving Credit Facility as of December 31, 2023.
Product development expenses primarily consist of personnel costs, including salaries, bonuses, stock-based compensation and benefits, third party vendors and outsourced engineering services, and allocated overhead. We allocate overhead such as information technology infrastructure, rent and occupancy charges based on headcount.
Product development expenses consist primarily of personnel costs, including salaries, bonuses, stock-based compensation and benefits, third party vendors and outsourced engineering services, and allocated overhead. Overhead costs such as information technology infrastructure, rent and occupancy charges are allocated based on headcount.
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 year ended December 31, 2022 as a large accelerated filer.
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.
The New Revolving Credit Facility also requires us to remain in compliance with certain financial ratios and is in compliance as of December 31, 2022. For more information about the Prior Credit Facilities and the New Revolving Credit Facility, see Note 9 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
The New Revolving Credit Facility also requires us to remain in compliance with certain financial ratios and is in compliance as of December 31, 2023. For more information about the New Revolving Credit Facility, see Note 9 to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
On December 24, 2020, DoubleVerify Inc. prepaid $68.0 million of the outstanding principal amount under the New Revolving Credit Facility with a portion of the proceeds from the Private Placement (as defined herein). As of December 31, 2020, $22.0 million was outstanding under the New Revolving Credit Facility.
On December 24, 2020, DoubleVerify Inc. prepaid $68.0 million of the outstanding principal amount under the New Revolving Credit Facility with a portion of the proceeds from the Concurrent Private Placement. As of December 31, 2020, $22.0 million was outstanding under the New Revolving Credit Facility.
In addition to looking at historical revenue, our board of directors also considered projected 2021 revenue in setting the valuation for grants of stock options and restricted stock units subsequent to closing of the Private Placement, primarily as a guidepost to ensure that the historical LTM revenue formula was reasonable.
In addition to looking at historical revenue, our board of directors also considered projected 2021 revenue in setting the valuation for grants of stock options and RSUs subsequent to closing of the Concurrent Private Placement, primarily as a guidepost to ensure that the historical LTM revenue formula was reasonable.
You should compensate for these limitations by relying primarily on the Company’s GAAP results and using the non-GAAP financial measures only supplementally. ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 Advertiser revenue retention: ​ ​ ​ Gross revenue retention ​ > 95% ​ > 95% Net revenue retention 127% 126% ​ New Solutions and Channels.
You should compensate for these limitations by relying primarily on the Company’s GAAP results and using the non-GAAP financial measures only supplementally. ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 Advertiser revenue retention: ​ ​ ​ Gross revenue retention ​ > 95% ​ > 95% Net revenue retention 124% 127% ​ New Solutions and Channels.
The increase was primarily due to an increase in personnel costs, including stock-based compensation and sales commissions, of $23.5 million to support sales and account management efforts globally, and drive continued expansion with existing and new customers.
The increase was due primarily to an increase in personnel costs, including stock-based compensation and sales commissions, of $13.6 million to support sales and account management efforts globally, and drive continued expansion with existing and new customers.
At the end of 2018, we launched our Authentic Brand Suitability solution that allows advertisers to create a centralized set of brand suitability controls that can be automatically deployed across multiple programmatic buying platforms and campaigns. Authentic Brand Suitability, which significantly reduces wasted ad spend, generated $123.3 million and $84.6 million of revenue in 2022 and 2021, respectively.
At the end of 2018, we launched our Authentic Brand Suitability solution that allows advertisers to create a centralized set of brand suitability controls that can be automatically deployed across multiple programmatic buying platforms and campaigns. Authentic Brand Suitability, which significantly reduces wasted ad spend, generated $182.0 million and $123.3 million of revenue in 2023 and 2022, respectively.
We have long-term relationships with many of our customers, with an average relationship of over seven years for our top 75 customers and over eight years for both our top 50 and 25 customers, and ongoing contractual agreements with a substantial portion of our customer base.
We have long-term relationships with many of our customers, with an average relationship of approximately eight years for our top 25, 50 and 75 customers, and ongoing contractual agreements with a substantial portion of our customer base.
Magna Global estimated that global digital ad spend, excluding search, reached over $253 billion in 2022 and is expected to grow to $352 billion by 2027. Our revenues have grown substantially as a result of the growth in digital advertising as well as the continued adoption of digital measurement solutions and analytics.
Magna Global estimated that global digital ad spend, excluding search, reached over $280 billion in 2023 and is expected to grow to $386 billion by 2027. Our revenues have grown substantially as a result of the growth in digital advertising as well as the continued adoption of digital measurement solutions and analytics.
The following generally discusses 2022 and 2021 items and year-to-year comparisons between 2022 and 2021.
The following generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
Adjusted EBITDA is a non-GAAP financial measure. For information on how we compute Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, see “Results of Operations — Adjusted EBITDA.” For the years ended December 31, 2022 and December 31, 2021, we generated 90% and 91% of our revenue, respectively, from advertiser customers.
Adjusted EBITDA is a non-GAAP financial measure. For information on how we compute Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, see “Results of Operations — Adjusted EBITDA.” 47 Table of Contents For the years ended December 31, 2023 and December 31, 2022, we generated 92% and 90% of our revenue, respectively, from advertiser customers.
In the year ended December 31, 2021, the revenue we generated by providing our activation solutions through programmatic and social integrations and our measurement solutions through social integrations grew 45% and 47%, respectively, over the prior year period. 50 Table of Contents Growth of Existing Customers.
In the year ended December 31, 2022, the revenue we generated by providing our activation solutions through programmatic and social integrations and our measurement solutions through social integrations grew 50% and 28%, respectively, over the prior year period. 48 Table of Contents Growth of Existing Customers.
Product development expenses 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 development costs included in Property, plant and equipment, net on our Consolidated Balance Sheets.
Product development expenses 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 development costs included in Property, plant and equipment, net on our Consolidated Balance Sheets. Capitalized software development costs are amortized to depreciation and amortization. Sales, marketing, and customer support.
In the year ended December 31, 2022, the revenue we generated by providing our activation solutions through programmatic and social integrations and our measurement solutions through social integrations grew 50% and 28%, respectively, over the prior year period.
In the year ended December 31, 2023, the revenue we generated by providing our activation solutions through programmatic and social integrations and our measurement solutions through social integrations grew 31% and 48%, respectively, over the prior year period.
For the years ended December 31, 2022 and 2021, we generated 10% and 9% of our revenue, respectively, from supply-side customers who use our data analytics to validate the quality of their ad inventory and provide data to their customers to facilitate targeting and purchasing digital ads.
For the years ended December 31, 2023 and 2022, we generated 8% and 10% of our revenue, respectively, from supply-side customers who use our data analytics to validate the quality of their ad inventory and provide data to their customers to facilitate targeting and purchasing of digital ads, which we refer to as Supply-side revenue.
We enter into product integration agreements with our Demand-Side Platform partners. In these arrangements, the customer pays a Measured Transaction Fee to the Company (collected by the Demand-Side Platform) for the successful execution of the purchase of advertising inventory on an exchange. We recognize revenue over time when we satisfy a performance obligation by transferring promised services to a customer.
In these arrangements, the customer pays a Measured Transaction Fee to the Company (collected by the Demand-Side Platform) for the successful execution of the purchase of advertising inventory on an exchange. We recognize revenue over time when we satisfy a performance obligation by transferring promised services to a customer.
We have generated strong historical net revenue retention rates, with 127% for the year ended December 31, 2022 and 126% for the year ended December 31, 2021.
We have generated strong historical net revenue retention rates, with 124% for the year ended December 31, 2023 and 127% for the year ended December 31, 2022.
For Supply-side revenue, we offer to our supply-side platform partners arrangements to measure all ads on their platform. These arrangements are typically subscription-based with minimum guarantees, and are recognized on a straight-line basis over the term of the contract, usually twelve months.
For Supply-side revenue, we offer to our supply-side platform partners arrangements to measure all ads on their platform. These arrangements are typically subscription-based with minimum guarantees, and are recognized on a straight-line basis over the term of the contract, generally spanning from one to two years.
Further, our services are not reliant on any single source of impressions and we can service our customers as their digital advertising needs change. In 2022, we estimate that approximately 55% and 45% of Media Transactions Measured were for display and for video ad formats, respectively.
Further, our services are not reliant on any single source of impressions and we can service our customers as their digital advertising needs change. In 2023, we estimate that approximately 52% and 48% of Media Transactions Measured within post-campaign measurement were for display and for video ad formats, respectively.
In 2021, approximately 72%, 25% and 3% of Media Transactions Measured were for mobile devices, desktop devices, and emerging digital channels, respectively. For the years ended December 31, 2022 and December 31, 2021, 10% and 9% of our revenue, respectively, was generated from our supply-side customers to validate the quality of their ad inventory.
In 2022, approximately 76%, 20% and 4% of Media Transactions Measured were for mobile devices, desktop devices, and emerging digital channels, respectively. For the years ended December 31, 2023 and December 31, 2022, 8% and 10% of our revenue, respectively, was generated from our supply-side customers to validate the quality of their ad inventory.
During the measurement period, which is not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset primarily made to goodwill.
During the measurement period, which is not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset made primarily to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.
Marketing activities, including advertising, promotions, events and other activities increased $1.1 million, personnel travel and entertainment expenses to support marketing and sales activities increased $2.2 million, and allocated rent expense increased $2.2 million.
Marketing activities, including advertising, promotions, events and other activities, increased $1.1 million, and personnel travel and entertainment expenses to support marketing and sales activities increased $1.6 million.
We have experienced rapid growth and achieved significant profitability in recent years as evidenced by the following: ● We generated revenue of $452.4 million for the year ended December 31, 2022 and $332.7 million for the year ended December 31, 2021, representing an increase of 36%. ● Our net income was $43.3 million for the year ended December 31, 2022 and $29.3 million for the year ended December 31, 2021. ● Our Adjusted EBITDA was $141.6 million for the year ended December 31, 2022 and $109.7 million for the year ended December 31, 2021.
We have experienced rapid growth and achieved significant profitability in recent years as evidenced by the following: ● We generated revenue of $572.5 million for the year ended December 31, 2023 and $452.4 million for the year ended December 31, 2022, representing an increase of 27%. ● Our net income was $71.5 million for the year ended December 31, 2023 and $43.3 million for the year ended December 31, 2022. ● Our Adjusted EBITDA was $187.1 million for the year ended December 31, 2023 and $141.6 million for the year ended December 31, 2022.
We provide a consistent, cross-platform measurement standard across all major forms of digital media, making it easier for advertiser and supply-side customers to benchmark performance across all of their digital ads and to optimize business outcomes in real time.
Our customers include many of the largest global advertisers and digital ad platforms and publishers. We provide a consistent, cross-platform measurement standard across all major forms of digital media, making it easier for advertisers and supply-side customers to benchmark performance across all of their digital ads and optimize business outcomes in real-time.
We believe our existing cash and cash generated from operations, together with the undrawn balance under the New Revolving Credit Facility, will be sufficient to meet the Company’s working capital and capital expenditure requirements on a short-term and long-term basis. We anticipate that our capital expenditures, including capitalized software, will be approximately $15 million to $25 million for 2023.
We believe our existing cash and cash generated from operations, together with the undrawn balance under the New Revolving Credit Facility, will be sufficient to meet the Company’s working capital and capital expenditure requirements on a short-term and long-term basis.
While the factors above may present significant opportunities for us, they also pose significant risks and challenges. See “Risk Factors” for more information on risks and uncertainties that may impact our business and financial results. Components of Our Results of Operations We manage our business operations and report our financial results in a single segment.
While the factors above may present significant opportunities for us, they also pose significant risks and challenges. See “Risk Factors” for more information on risks and uncertainties that may impact our business and financial results.
We derive revenue from our advertising customers based on the volume of Media Transactions Measured on our software platform. Advertisers utilize the DV Authentic Ad, our definitive metric of digital media quality, to evaluate the existence of fraud, brand suitability, viewability and geography for each digital ad.
We derive revenue primarily from our advertiser customers based on the volume of media transactions, or ads, that our software platform measures (“Media Transactions Measured”). Advertisers utilize the DV Authentic Ad, our definitive metric of digital media quality, to evaluate the existence of fraud, brand safety, viewability and geography for each digital ad.
Product Development Expenses Product development expenses increased by $32.4 million, or 52%, from $62.7 million in the year ended December 31, 2021 to $95.1 million in the year ended December 31, 2022.
Product Development Expenses Product development expenses increased by $30.3 million, or 32%, from $95.1 million in the year ended December 31, 2022 to $125.4 million in the year ended December 31, 2023.
As of December 31, 2022, the Company had cash of $267.8 million and net working capital, consisting of current assets (excluding cash) less current liabilities, of $108.4 million. As of December 31, 2021, the Company had cash of $221.6 million and net working capital, consisting of current assets (excluding cash) less current liabilities, of $89.2 million.
As of December 31, 2023, the Company had cash of $310.1 million and net working capital, consisting of current assets (excluding cash) less current liabilities, of $139.0 million. As of December 31, 2022, the Company had cash of $267.8 million and net working capital, consisting of current assets (excluding cash) less current liabilities, of $108.4 million.
We generate revenue from our advertising customers based on the volume of Media Transactions Measured on our software platform and from supply-side customers based on contracts with minimum guarantees or contracts that have tiered pricing after minimum guarantees are achieved. 52 Table of Contents For the years ended December 31, 2022 and 2021, we generated 90% and 91% of our revenue, respectively, from advertiser customers.
We generate revenue from our advertising customers based on the volume of Media Transactions Measured on our software platform, and for supply-side customers, based on contracts with minimum guarantees or contracts that have tiered pricing after minimum guarantees are achieved.
Advertisers can purchase our services to measure the quality and performance of ads purchased directly from digital properties, including publishers and social media platforms, which we track as Measurement (f/k/a Advertiser – direct) revenue.
For the years ended December 31, 2023 and 2022, we generated 92% and 90% of our revenue, respectively, from advertiser customers. Advertisers can purchase our services to measure the quality and performance of ads after they are purchased directly from digital properties, including publishers and social media platforms, which we track as Measurement (f/k/a Advertiser – direct) revenue.
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.
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.
With offices or commercial operations in 21 locations across 17 countries, our expansion to new geographies has helped us to win the international business of our existing customers and to establish relationships with some of the world’s largest international advertisers.
With offices or commercial operations in 30 locations across 24 countries, our expansion to new geographies has helped us to win the international business of our existing customers and to establish relationships with some of the world’s largest international advertisers. As of December 31, 2023, 453 of our employees were based outside of the Americas.
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. We recognize interest and penalties related to income tax matters in income tax expense.
For certain tax positions, we use 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.
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.
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. Overages give rise to variable consideration that is allocated to the distinct periods to which the overage relates.
General and Administrative Expenses General and administrative expenses decreased by $2.7 million, or 3%, from $81.4 million in the year ended December 31, 2021 to $78.7 million in the year ended December 31, 2022. Personnel costs, including stock-based compensation, increased $6.2 million.
General and Administrative Expenses General and administrative expenses increased by $9.3 million, or 12%, from $78.7 million in the year ended December 31, 2022 to $88.0 million in the year ended December 31, 2023. Personnel costs, including stock-based compensation, increased by $8.9 million.
For the year ended December 31, 2021, cash provided by operating activities was $82.7 million, attributable to net income of $29.3 million, adjusted for non-cash charges of $66.9 million and net cash outflows of $13.4 million used in changes in operating assets and liabilities.
For the year ended December 31, 2022, cash provided by operating activities was $94.9 million, attributable to net income of $43.3 million, adjusted for non-cash charges of $72.8 million and net cash outflows of $21.2 million used in changes in operating assets and liabilities.
Off-Balance Sheet Arrangements During the periods presented, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. 62 Table of Contents Critical Accounting Policies and Estimates Management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with GAAP.
Off-Balance Sheet Arrangements During the periods presented, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
The following table presents a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to the most directly comparable financial measure prepared in accordance with GAAP. ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 ​ (In Thousands) Net income $ 43,268 ​ $ 29,308 Net income margin 10% ​ 9% Depreciation and amortization 34,328 ​ 30,285 Stock-based compensation 42,307 ​ 21,887 Interest expense 905 ​ 1,172 Income tax expense (benefit) 16,100 ​ (3,487) M&A and restructuring costs (a) 1,224 ​ 3,510 Offering, IPO readiness and secondary offering costs (b) 1,292 ​ 23,564 Other costs (c) 3,414 ​ 3,812 Other income (d) (1,249) ​ (309) Adjusted EBITDA $ 141,589 ​ $ 109,742 Adjusted EBITDA margin 31% ​ 33% ​ (a) M&A and restructuring costs for the year ended December 31, 2022 consist of transaction costs, integration and restructuring costs related to the acquisition of OpenSlate.
The following table presents a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to the most directly comparable financial measure prepared in accordance with GAAP. ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 ​ (In Thousands) Net income $ 71,466 ​ $ 43,268 Net income margin 12% ​ 10% Depreciation and amortization 40,885 ​ 34,328 Stock-based compensation 59,244 ​ 42,307 Interest expense 1,066 ​ 905 Income tax expense 24,411 ​ 16,100 M&A and restructuring costs (a) 1,262 ​ 1,224 Offering, IPO readiness and secondary offering costs (b) 910 ​ 1,292 Other (recoveries) costs (c) (964) ​ 3,414 Other income (d) (11,216) ​ (1,249) Adjusted EBITDA $ 187,064 ​ $ 141,589 Adjusted EBITDA margin 33% ​ 31% ​ (a) M&A and restructuring costs for the year ended December 31, 2023 consist of transaction costs related to the acquisition of Scibids.
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.
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. 59 Table of Contents For Measurement (f/k/a Advertiser – direct) revenue, our contracts with our customers typically consist of the various ad measurement services that we offer.
Depreciation and Amortization Depreciation and amortization increased by $4.0 million, or 13%, from $30.3 million in the year ended December 31, 2021 to $34.3 million in the year ended December 31, 2022.
Depreciation and Amortization Depreciation and amortization increased by $6.6 million, or 19%, from $34.3 million in the year ended December 31, 2022 to $40.9 million in the year ended December 31, 2023.
On April 30, 2021, we used a portion of the net proceeds from the IPO and the concurrent private placement to pay the entire outstanding balance of $22.0 million under the New Revolving Credit Facility. 60 Table of Contents The New Revolving Credit Facility is secured by substantially all of the assets of the Credit Group (subject to customary exceptions) and contain customary affirmative and restrictive covenants, including with respect to our ability to enter into fundamental transactions, incur additional indebtedness, grant liens, pay dividends or make distributions to our stockholders and engage in transactions with our affiliates.
The New Revolving Credit Facility is secured by substantially all of the assets of the Credit Group (subject to customary exceptions) and contain customary affirmative and restrictive covenants, including with respect to our ability to enter into fundamental transactions, incur additional indebtedness, grant liens, pay dividends or make distributions to our stockholders and engage in transactions with our affiliates.
In 2021, approximately 59% and 41% of Media Transactions Measured were for display and for video ad formats, respectively. In 2022, approximately 76%, 20% and 4% of Media Transactions Measured were for mobile devices, desktop devices, and emerging digital channels, respectively.
In 2022, approximately 55% and 45% of Media Transactions Measured were for display and for video ad formats, respectively. In 2023, approximately 78%, 17% and 5% of Media Transactions Measured were for mobile devices, desktop devices, and emerging digital channels, respectively.
We believe that these non-GAAP financial measures are useful to investors for period to period comparisons of the core business and for understanding and evaluating trends in operating results on a consistent basis by excluding items that we do not believe are indicative of the core operating performance of the Company. 57 Table of Contents These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for an analysis of the Company’s results as reported under GAAP.
We believe that these non-GAAP financial measures are useful to investors for period to period comparisons of our core business and for understanding and evaluating trends in operating results on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.
Fair Value of Common Stock Historical Valuation Approach Given the absence of a public trading market for our common stock prior to our IPO, our board of directors exercised reasonable judgment and considered a number of objective and subjective factors to determine the best estimate of the fair value of our common stock, including, with input from management, our financial and operating history, equity market conditions affecting comparable public companies, and the lack of marketability of our common stock. 65 Table of Contents In addition, our board of directors considered valuations of our common stock prepared by an unrelated third-party valuation firm in accordance with the guidance provided by the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensatio n.
Fair Value of Common Stock Historical Valuation Approach Given the absence of a public trading market for our common stock prior to our IPO, our board of directors exercised reasonable judgment and considered a number of objective and subjective factors to determine the best estimate of the fair value of our common stock, including, with input from management, our financial and operating history, equity market conditions affecting comparable public companies, and the lack of marketability of our common stock.
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. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ Change ​ 2022 2021 ​ $ % ​ (In Thousands) ​ ​ ​ ​ ​ ​ Revenue by customer type: ​ ​ ​ ​ ​ ​ Measurement (f/k/a Advertiser - direct) $ 157,908 ​ $ 135,516 ​ $ 22,392 ​ 17 % Activation (f/k/a Advertiser - programmatic) 251,198 ​ 167,798 ​ ​ 83,400 ​ 50 ​ Supply-side customer 43,312 ​ 29,427 ​ ​ 13,885 ​ 47 ​ Total revenue $ 452,418 ​ $ 332,741 ​ $ 119,677 ​ 36 % ​ See “Critical Accounting Policies and Estimates — Revenue Recognition” for a description of our revenue recognition policies.
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. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ Change ​ 2023 2022 ​ $ % ​ (In Thousands) ​ ​ ​ ​ ​ ​ Revenue by customer type: ​ ​ ​ ​ ​ ​ Activation (f/k/a Advertiser - programmatic) $ 328,936 ​ $ 251,198 ​ $ 77,738 ​ 31 % Measurement (f/k/a Advertiser - direct) 198,024 ​ 157,908 ​ ​ 40,116 ​ 25 ​ Supply-side customer 45,583 ​ 43,312 ​ ​ 2,271 ​ 5 ​ Total revenue $ 572,543 ​ $ 452,418 ​ $ 120,125 ​ 27 % ​ See “Critical Accounting Policies and Estimates — Revenue Recognition” for a description of our revenue recognition policies.
For share-based awards that vest subject to the satisfaction of a service requirement, the fair value measurement date for stock-based compensation awards is the date of grant and the expense is recognized using the accelerated attribution method over the vesting period net of an estimated forfeiture rate.
We estimate the fair value of stock options issued using a Black-Scholes option-pricing model. For share-based awards that vest subject to the satisfaction of only a service requirement, expense is recognized on a straight-line basis over the vesting period net of an estimated forfeiture rate. For PSUs, expense is recognized using the accelerated attribution method over the requisite service period.
The LTM Revenue utilized in the per share valuation for the Private Placement was the twelve months ended September 30, 2020, which was the most recent month ended prior to the Company entering into a definitive agreement for the Private Placement and the most recent historical financial information provided to the Private Placement Investors.
The LTM Revenue utilized in the per share valuation for the Concurrent Private Placement was the twelve months ended September 30, 2020, which was the most recent month ended prior to the Company entering into a definitive agreement for the Concurrent Private Placement and the most recent historical financial information provided to the Concurrent Private Placement Investors. 62 Table of Contents For grants of stock options and RSUs subsequent to closing of the Concurrent Private Placement (summarized above), our board of directors continued to utilize this formula of (LTM Revenue × 14) x Liquidity Discount.
Offering, IPO readiness and secondary offering costs for the year ended December 31, 2021 consist of third-party costs incurred for the Company’s IPO, and costs for an underwritten secondary public offering by certain stockholders of the Company.
M&A and restructuring costs for the year ended December 31, 2022 consist of transaction costs, integration and restructuring costs related to the acquisition of OpenSlate. (b) Offering, IPO readiness and secondary offering costs for the year ended December 31, 2023 consist of third-party costs incurred for underwritten secondary public offerings by certain stockholders of the Company.
The determination of the fair value of restricted stock units utilizing the Monte Carlo Simulation model is affected by a number of assumptions including expected volatility, risk free rate and the fair market value of the Company’s common stock.
The determination of the fair value of PSUs with a market condition utilizing the Monte Carlo Simulation model is affected by a number of assumptions including expected volatility, valuation date stock price, correlation coefficients, risk-free interest rates and expected dividend yield.
Advertisers pay us a Measured Transaction Fee per thousand impressions based on the volume of Media Transactions Measured on their behalf. 49 Table of Contents We maintain an expansive set of direct integrations across the entire digital advertising ecosystem, including with leading programmatic and social platforms, which enables us to deliver our metrics across platforms where our customers buy ads.
We maintain an expansive set of direct integrations across the entire digital advertising ecosystem, including with leading programmatic, CTV, and social platforms, which enable us to deliver our metrics to the platforms where our customers buy ads.
(d) Other income for the years ended December 31, 2022 and 2021 consists of interest income earned on monetary assets, changes in fair value associated with contingent consideration, and the impact of changes in foreign currency exchange rates.
(d) Other income for the years ended December 31, 2023 and 2022 consists of interest income earned on interest-bearing monetary assets, changes in fair value associated with contingent consideration, and the impact of changes in foreign currency exchange rates. 54 Table of Contents We use Adjusted EBITDA and Adjusted EBITDA Margin as measures of operational efficiency to understand and evaluate our core business operations.
For purposes of calculating stock-based compensation, we estimate the fair value of the restricted stock units using the grant date stock price or a Monte Carlo Simulation model in instances where a market condition exists. We estimate the fair value of stock options issued using a Black-Scholes option-pricing model.
Stock-Based Compensation Our stock-based compensation awards relate to restricted stock units (“RSUs”), stock options and performance-based restricted stock units (“PSUs”). For purposes of calculating stock-based compensation, we estimate the fair value of RSUs and PSUs that contain a performance condition using the grant date stock price. For PSUs where a market condition exists, we apply a Monte Carlo Simulation model.
Our coverage spans nearly 100 countries where our customers activate our services and covers all key digital media channels, formats and devices. Our company was founded in 2008 and introduced our first brand safety and suitability solution in 2010. We launched our first viewability and fraud solutions in 2013 and 2014, respectively.
Our company was founded in 2008 and introduced our first brand safety and suitability solution in 2010. We launched our first viewability and fraud solutions in 2013 and 2014, respectively.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2022, December 31, 2021 and December 31, 2020, we had $0, $0 and $22.0 million, respectively, in variable rate debt outstanding. The New Revolving Credit Facility entered into on October 1, 2020 matures in October 2025 and accrues interest at LIBOR plus a floating rate per annum.
Biggest changeAs of December 31, 2023, December 31, 2022 and December 31, 2021, we had $0, respectively, in variable rate debt outstanding. The New Revolving Credit Facility entered into on October 1, 2020 matures in October 2025 and bears interest at SOFR plus 2.00% or the Alternate Base Rate plus 1.00% (at the Company’s option) per annum.
Item 7A. Quantitative and Qualitative Disclosure about Market Risk Interest Rate Risk We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate sensitivities.
Item 7A. Quantitative and Qualitative Disclosure about Market Risk Interest Rate Risk We are exposed to market risks in the ordinary course of our business. These risks include primarily interest rate sensitivities.
As of December 31, 2022, we have no outstanding variable rate indebtedness and have $150 million of availability under the New Revolving Credit Facility. Foreign Currency Exchange Risk As we expand internationally, our results of operations and cash flows may become increasingly subject to fluctuations due to changes in foreign currency exchange rates.
As of December 31, 2023, we have no outstanding variable rate indebtedness and have $150 million of availability under the New Revolving Credit Facility. Foreign Currency Exchange Risk As we expand internationally, our results of operations and cash flows may become increasingly subject to fluctuations due to changes in foreign currency exchange rates.
Our revenue is denominated primarily in U.S. dollars. Our expenses are generally denominated in the currencies in which our operations are located, which is primarily in the United States. Movements in foreign currency exchange rates versus the U.S. dollar did not have a material effect on our revenue for 2022.
Our revenue is denominated in primarily U.S. dollars. Our expenses are generally denominated in the currencies in which our operations are located, which is primarily in the United States. Movements in foreign currency exchange rates versus the U.S. dollar did not have a material effect on our revenue for 2023.
To date, we have not entered into any material foreign currency hedging contracts, although we may do so in the future. ​ 68 Table of Contents ​
To date, we have not entered into any material foreign currency hedging contracts, although we may do so in the future. ​ 64 Table of Contents ​
A hypothetical 10% change in exchange rates versus the U.S. dollar would not have resulted in a material change to our 2022 earnings.
A hypothetical 10% change in exchange rates versus the U.S. dollar would not have resulted in a material change to our 2023 earnings.
Our cash, cash equivalents and short-term investments as of December 31, 2022, December 31, 2021 and December 31, 2020 consisted of $267.8 million, $221.6 million and $33.4 million, respectively, in bank deposits and money market funds. Such interest-earning instruments carry a degree of interest rate risk.
Our cash, cash equivalents and short-term investments as of December 31, 2023, December 31, 2022 and December 31, 2021 consisted of $310.1 million, $267.8 million and $221.6 million, respectively, in bank deposits, treasury bills and money market funds. Such interest-earning instruments carry a degree of interest rate risk.

Other DV 10-K year-over-year comparisons