~~Table~~We use artificial intelligence in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of ~~Contents~~operations.

Our business relies on the incorporation of machine learning and predictive AI solutions into our platform, offerings, services and features. Our competitors or other third parties may incorporate AI into their products more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations. Additionally, if the content, analyses, or recommendations that AI applications assist in producing are or are alleged to be infringing, deficient, inaccurate, or biased, our business, financial condition, and results of operations may be adversely affected and we may be subject to the risk of litigation. We have also announced that we are experimenting with various generative AI capabilities with the goal of automating and significantly enhancing platform functionality, ad variety and overall engagement. Generative AI, however, also presents emerging ethical issues and if our use of AI becomes controversial, we may experience brand or reputational harm, competitive harm, or legal liability. The rapid evolution of AI, including government regulation of AI, may impede our ability to do business and will require significant resources to ensure compliance.

Failures or loss of ~~the~~our infrastructure, including hardware and software, with respect to us and ~~infrastructure~~other service providers on which we rely, ~~or security breaches,~~ could adversely affect our business.

We rely on owned and leased servers and other third-party hardware and infrastructure to support our operations. ~~Our third-party~~To support our business needs, we operate our own proprietary cloud infrastructure using third party data centers ~~are~~ co-located in three geographically separate locations managed by three different vendors in the United States. In addition, we also serve recommendations from a public cloud based in Europe. We do not have control over the ~~operation~~operations of these facilities or technology of our cloud and ~~such facilities could~~service providers, including any third-party vendors that collect, process and store personal data on our behalf. Our systems, servers and platforms and those of our service providers may be ~~subject~~vulnerable to ~~break-ins,~~ computer viruses, physical or electronic break-ins, sabotage, intentional acts of vandalism and other ~~misconduct.~~ misconduct that our security measures or the security measures of these service providers may not detect. Individuals able to circumvent such security measures may disrupt our operations, damage our hardware and infrastructure, misappropriate confidential or proprietary information or otherwise impair our reputation and business. Additionally, to the extent that our cloud and other service providers experience security breaches that result in the unauthorized or improper use of confidential data, employee data or personal data, we may not be indemnified for losses resulting from such breaches. There can be no assurance that we or our third-party providers will be successful in preventing security breaches, including as a result of cyber attacks, or successfully mitigating their effects.

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Further, our servers and data centers are vulnerable to damage or interruption from fires, natural disasters, terrorist attacks, power loss, telecommunications failures or similar catastrophic events. If a data center goes offline, an alternate data center would take over our serving and data storage needs, but our service may be slowed or degraded as a result until full data center operations are restored. We cannot assure you that future outages may not have material adverse consequences to our business. Moreover, if for any reason our arrangement with one or more of the providers of the servers that we use is terminated, we could incur additional expenses in establishing new facilities and support.

We cannot predict the extent to which the ongoing and evolving COVID-19 pandemic, including the resulting global economic uncertainty, and measures taken in response to the pandemic, could adversely affect our business, results of operations, and financial condition.

In March 2020, the World Health Organization characterized the rapid spread of the COVID-19 disease as a pandemic. Since then, the COVID-19 disease (including its variant strains) has disrupted the global economy and put unprecedented strains on governments, health care systems, educational institutions, businesses, and individuals around the world, resulting in regional quarantines, labor shortages or stoppages, changes in consumer purchasing patterns, disruptions to the ability of service providers to deliver data on a timely basis, or at all, and overall economic instability. The impact on the global population and the duration of the COVID-19 pandemic is difficult to assess or predict. It is also difficult to predict the impact on the global economic market, which depends upon the actions of governments, businesses, and other enterprises in response to the pandemic and the effectiveness of those actions. The pandemic has already caused, and could result in further, significant disruption of global financial markets and economic uncertainty. Although the advertising market and our business have generally recovered from the economic effects of the COVID-19 pandemic, it did initially impact our sales and operations adversely. Despite recovery, variables such as global supply chain disruptions, labor shortages and stoppages, and cost inflation impacted certain categories of advertisers, such as the automotive advertisers, and could adversely impact us in the future, including if our advertisers were to reduce or cut their advertising spend as a result of any of these factors. We continue to monitor our operations, and the operations of those in our ecosystem (including media partners, advertisers and agencies), as well as government recommendations.

In response to the COVID-19 pandemic, we required most employees to work remotely, suspended all non-essential travel worldwide for our employees, canceled or postponed company-sponsored events, and discouraged employee attendance at industry events and in-person work-related meetings. While we have rolled back or modified certain of these restrictions, we will continue to monitor the situation and adjust our current policies accordingly. The continuation of these restrictions or the implementation of any additional restrictions due to any resurgences or otherwise could negatively impact our marketing efforts, lengthen sales cycles, slow down our recruiting efforts, and/or create operational or other challenges, any of which could adversely affect our business, results of operations, and financial condition.

By contrast, as the economy recovers, pandemic concerns ease and employees return to the office, certain media partners have experienced a decline in traffic from the height of traffic during the work-from-home peak digital usage periods, and may experience further declines. As a result, by comparison to our 2020 results of operations, our results of operations in future periods may be unpredictable.

We depend on highly skilled personnel to grow and ~~operate~~operate our business, and if we are unable to hire, retain and motivate our personnel, we may not be able to grow effectively.

Our future success depends upon contributions from our employees, in particular our senior management team. We do not maintain key person life insurance for any employee. From time to time, there may be changes in our senior management team, and such changes may be disruptive to our business.

Our growth strategy also depends on our ability to expand and retain our organization with highly skilled personnel. Identifying, recruiting, training and integrating qualified individuals will require significant time, expense and attention. In addition to hiring new employees, we must continue to focus on retaining our best employees. Competition for highly skilled personnel in our industry ~~has intensified over the last year and~~ is ~~expected to continue to be~~ challenging ~~in the future~~ across all

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our locations, particularly in New York City, where our headquarters isare located, and in Israel and Slovenia, where we conduct the majority of our research and development activities. We may need to invest significant amounts of cash and equityand, therefore, may be impacted by our share performance, to attract and retain employees and we may not realize returns on these investments. If we are not able to effectively add and retain employees, our ability to achieve our strategic objectives ~~will~~could be adversely impacted, and our business ~~will~~could be harmed.

Our corporate culture has contributed to our success, and if we cannot maintain it as ~~we grow,~~a result of our hybrid work model or otherwise, we could lose the innovation, creativity, and teamwork fostered by our culture, and our business may be harmed.

We believe our corporate culture has been a critical component of our success as we believe it fosters innovation, creativity, and teamwork across our business, helping to drive our success. We cannot ensure we can effectively maintain our corporate culture as we continue to ~~grow.~~grow and maintain the hybrid work model we established as a result of COVID-19. As we expand and change, in particular across multiple geographies, following acquisitions, in more remote environments or in ~~a more remote environment,~~global talent centers, it may be difficult to preserve our corporate culture, which could reduce our ability to innovate, create, and operate effectively. ~~In turn,~~Over time, factors such as expansion, dispersal and remote operations may also decrease the cohesiveness of our teams, which is critical to our corporate culture. The failure to preserve our culture could adversely affect our business, results of operations, and financial condition by negatively affecting our ability to attract, recruit, integrate and retain employees, continue to perform at current levels, and effectively execute our business strategy.

~~If currency exchange rates fluctuate substantially~~Utilizing labor in foreign countries may subject us to additional risks, which could have an adverse effect on our business, operating results and financial condition.

We have attempted to control our operating expenses by utilizing lower cost labor in foreign countries, such as India, and we may in the future expand our ~~results of operations, which are reported in U.S. dollars, could be adversely affected.~~

~~We are exposed to the effects of fluctuations in currency exchange rates. A significant percentage of our international revenue is from advertisers who pay us in currencies other than the U.S. dollar.~~ ~~We also incur operating expenses in local currencies, including with respect to employee compensation, at our offices~~reliance on off-shore labor. Countries outside of the United States may be subject to relatively higher degrees of political and ~~most significantly, in Israel as well as~~social instability and may lack the ~~United Kingdom. Fluctuations in the exchange rates between the U.S. dollar and those~~infrastructure to withstand political unrest, natural disasters, pandemics or other ~~currencies~~instability, which could interfere with work performed by these labor sources or could result in ~~the U.S. dollar equivalent of such foreign-denominated revenue being lower than would be the case if exchange rates were stable and the U.S. dollar equivalent of such expenses being higher.This could have a negative impact on~~ our reported operating results. We evaluate periodically the various currencies to which we are exposed and take hedging measures to reduce the potential adverse impact from the appreciation or the depreciation of our non-U.S.-dollar-denominated operations, as appropriate. Any such strategies, such as forward contracts, options and foreign exchange swaps related to transaction exposures that we may implement to mitigate this risk may not fully eliminate our exposure to foreign exchange fluctuations.

~~Our credit facility subjects us to operating restrictions and financial covenants that impose risk of default and may restrict our business and financing activities.~~

On November 2, 2021, we entered into the Second Amended and Restated Loan and Security Agreement with SVB that provides a senior secured revolving credit facility in the aggregate principal amount of up to $75 million. Borrowings under this agreement are secured by substantially all of our assets of our parent entity and certain domestic subsidiary co-borrowers, including all accounts receivable and proceeds from sales of our intellectual property, and are subject to a negative pledge on our intellectual property in favor of SVB. The credit facility contains representations and warranties, including, without limitation, with respect to collateral; accounts receivable; financials; litigation, indictment and compliance with laws; disclosure and no material adverse effect, each of which is a condition to funding. This credit facility includes events of default and is also subject to certain financial and other covenants, including, without limitation, restrictions on liens, indebtedness, investments, fundamental changes, dispositions, restricted payments and prepayment of the 2.95% Convertible Senior Notes due 2026 and of junior indebtedness. The credit facility contains a financial covenant that requires, in the event that credit extensions under the facility equal or exceed 85% of the available commitments under the Facility or upon the occurrence of an event of default, the Company and its subsidiaries to maintain a minimum consolidated monthly fixed charge coverage ratio of 1.00.

An inability to make the required representations and warranties, including with respect to collateral, accounts receivable, financials, litigation, indictment and compliance with laws, disclosures and no material adverse effect, may limit our ability borrow and/or the covenants may restrict our ability to finance our operations and to pursue our business activities and strategies. Our ability to makes these representations and warranties, and/or comply with these covenants may be affected by events beyond our control. Our abilityhaving to replace or ~~supplement the existing facility~~reduce these labor sources. Moreover, we may ~~be limited due to various factors, including the status~~have difficulty in successfully staffing, transitioning knowledge of systems and controls, and managing our foreign operations, which could impact our business, ~~global credit market conditions,~~financial condition or results of operations. Doing business outside of the U.S. also increases our risk exposure to anti-corruption laws and ~~perceptions~~regulations such as the Foreign Corrupt Practices Act, any violation of ~~our business~~which could expose us to significant financial penalties or ~~industry by sources of financing. In addition, if credit is available, lenders may seek more restrictive covenants and higher interest rates~~consent orders that may ~~reduce~~curtail our borrowing capacity, increase our costs, and reduce our operating flexibility. If we do not have or are unable to generate sufficient cash available to repay our debt obligations when they become due and payable, either upon maturity or in the event of a default, we may not be able to obtain additional debt or equity financing on favorable terms, if at all.

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business.

We may engage in strategic transactions, which may not yield a positive financial outcome. Further, such activity may result in the company operating in businesses beyond its current core business with risk factors beyond those which are identified here.

From time to time, we may evaluate potential mergers and acquisitions or investment opportunities. We have made a number of acquisitions in the past. Any transactions that we enter into could be material to our financial condition and results of operations. The process of integrating an acquired company, business or technology could create unforeseen operating difficulties and expenditures. Acquisitions and investments carry with them a number of risks, including the following:

•diversion of management time and focus from operating our business;

•implementation or remediation of controls, procedures and policies of the acquired company;

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•integration of financial systems;

•coordination of product, engineering and selling and marketing functions;

•retention of employees from the acquired company;

•unforeseen liabilities;

•litigation or other claims arising in connection with the acquired company; and

•in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries.

Our failure to address these or other risks encountered in connection with acquisitions could cause us to fail to realize the anticipated benefits of such acquisitions, resulting in unanticipated liabilities and harming our business, results of operations and financial condition.

Risks Relating to Legal or Regulatory Matters

Our business is subject to political and regulatory risks in the various markets in which we operate; compliance with differing and changing regulatory requirements poses compliance challenges.

Our business is subject to regulation, which is rapidly evolving, and the business and regulatory environment in each of the international markets in which we operate may differ. For example, regulations relating to our business, including our employees, our arrangements with media partners and advertisers, stricter rules relating to content running through our network, and privacy related regulations affect how we conduct our business. The following are some of the political and regulatory risks and challenges we face across jurisdictions:

•greater difficulty in enforcing contracts;

•higher costs of doing business internationally, including costs incurred in establishing and maintaining office space and equipment for our international operations;

•risks associated with trade restrictions and foreign legal requirements, including any certification and localization of our platform that may be required in foreign countries;

•organizing or similar activity by workers, local unions, work councils, or other labor organizations;

•our ability to respond to competitive developments and other market and technological dynamics, such as the emergence of generative AI;

•greater risk of unexpected changes in regulatory practices, tariffs, and tax laws and treaties;

•compliance with anti-bribery laws, including, without limitation, compliance with the U.S. Foreign Corrupt Practices Act and the UK Bribery Act;

•compliance with data ~~collection~~protection and privacy law regimes of various ~~countries;~~countries, especially as our business relates to consumer online privacy and interested-based advertising;

•heightened risk of unfair or corrupt business practices in certain geographies and of improper or fraudulent sales arrangements that may impact financial results and result in restatements of, or irregularities in, financial statements;

•the uncertainty of protection for intellectual property rights in some countries;

•general economic and political conditions in these foreign markets, including political and economic instability in some countries;

•the potential for heightened regulation relating to content curation or discovery as a result of concerns relating to the spread of disinformation through technology platforms; and

•double taxation of our international earnings and potentially adverse tax consequences due to changes in the tax laws of the United States or the foreign jurisdictions in which we operate.

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We are subject to laws and regulations related to ~~data~~online privacy, data protection, ~~and~~ information security, content and consumer protection across different markets where we conduct our business, including in the United States and Europe. Such laws, regulations, and industry requirements are constantly evolving and changing and could potentially impact data collection and data usage for advertising and recommendations. Our actual or perceived failure to comply with such obligations could have an adverse effect on our business, results of operations, and financial condition.

We receive, store, and process data about or related to users in addition to our media partners, advertisers, services providers and employees. Our handling of this data is subject to a variety of federal, state, and foreign laws and regulations and is subject to regulation by various government authorities. Our data handling is also is subject to contractual obligations and ~~may be deemed to be subject to~~ industry standards.

The U.S. federal and various state and foreign governments have adopted or proposed limitations on the collection, distribution, use, and storage of data relating to individuals, including the use of contact information and ~~other data for marketing,~~online identifiers, advertising and other communications with individuals and businesses. ~~In the United States, various laws and regulations apply to the collection, processing, disclosure, and security of certain types of data.~~ Additionally, the Federal Trade Commission and many state attorneys general are interpreting federal and state consumer protection laws as imposing standards for the online collection, use, dissemination, and security of data and issuing separate guidance in this area. If we fail to comply with any such laws or regulations, we may be subject to enforcement actions that may not only expose us to litigation, fines, and civil and/or criminal penalties, but also require us to change our business practices as well as have an adverse effect on our business, results of operations, and financial condition.

The regulatory framework for ~~data~~online privacy issues ~~worldwide~~ is continuously evolving and is likely to ~~remain uncertain~~receive global scrutiny for the foreseeable future. The occurrence of unanticipated events often rapidly drives the adoption of legislation or regulation affecting the use, collection, or other processing of data and manners in which we conduct our business. Restrictions could be placed upon the collection, management, aggregation, and use of information, which could result in a material increase in the cost of collecting or otherwise obtaining certain kinds of data and could limit the ways in which we may use or disclose information. In particular ~~interest-based advertising, or~~ the use of data to draw inferences about a user’s interests and deliver relevant advertising to that user, and similar or related practices (sometimes referred to as interest-based advertising, behavioral advertising or personalized advertising), such as cross-device data collection and aggregation, steps taken to de-identify personal data, and to use and distribute the resulting data, including for purposes of personalization and the targeting of advertisements, havehas come under increasing scrutiny by legislative, regulatory, and self-regulatory bodies in the United States and abroad that focus on consumer protection or ~~data privacy (and also by app platforms, as discussed above).~~online privacy. Much of this scrutiny has focused on the use of cookies and other technologies to collect information about Internet users’ online browsing activity on web browsers, mobile devices, and other devices, to associate such data with user or device identifiers or de-identified identities across devices and channels. ~~Because~~As we rely upon large volumes of ~~such~~ data collected primarily through cookies and similar technologies, it is possible that these ~~efforts~~legislative and technical changes may have a substantial impact on our ability to collect and use the data ~~from~~of Internet ~~users, and it~~users. It is essential that we monitor global privacy developments ~~in this area domestically and globally,~~ and engage in responsible privacy practices, including providing users with notice of the types of data we collect and how we use that data to provide our services.

In the United States, the U.S. Congress and state legislatures, along with federal regulatory authorities have recently increased their attention on matters concerning the collection and use of consumer data. In the United States, non-sensitive consumer data generally may be used under current rules and regulations, subject to certain restrictions, so long as the person does not affirmatively “opt-out” of the collection or use of such data. If an “opt-in” model or other more restrictive regulations were to be widely adopted in the United States, less data would be available, and could adversely affect our business.

For example, California enacted ~~legislation,~~ the California Consumer Privacy Act, along with related regulations (together, the “CCPA”), which ~~became effective in 2020.~~was subsequently updated by the California Privacy Rights Act (“CPRA”). The CCPA creates individual privacy rights for California residents and increases the privacy and security obligations of businesses handling personal data and the CPRA imposes additional data protection obligations including limitation on the use and processing of sensitive personal data. The CCPA isand CPRA are enforceable by the California Attorney General and there is also a private right of action relating to certain data security incidents. The CCPA generally requires covered businesses to, among other things, provide disclosures to California consumers and afford California consumers abilities to opt-out of the sharing of personal data between parties, a concept that is defined broadly, ~~and~~with behavioral advertising ~~triggers~~triggering such requirements under the CCPA. The CCPA and CPRA or subsequent guidance may require us to further modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply. Decreased availability and increased costs of information could adversely affect our ability to meet our advertisers’ requirements and could have an adverse effect on our business, results of operations, and financial condition.

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Additionally, starting in January 2023, the California Privacy Rights Act (“CPRA”), which was voted into law in November 2020 and amends the CCPA, imposes additional data protection obligations on certain businesses doing business in California, including honoring additional consumer rights and limiting the use and processing of personal data including sensitive data. In addition, the CPRA explicitly requires businesses to provide consumers with the right to opt-out of sharing of personal data with third parties for behavioral advertising. Accordingly, the CPRA could have an adverse effect on our business, results of operations, and financial condition.

~~The CCPA has led to “copycat” laws in other~~Other states across the country have been implementing similar privacy laws, such as in Virginia, Colorado, Connecticut and ~~Colorado,~~Utah. Any disparity between federal and ~~likely in Connecticut, Florida, New York, Oklahoma, and Washington. This legislation~~state laws may add additional complexity, including a variation in requirements, restrictions, and potential legal risk, and may require additional investment in ~~resources to~~ compliance programs, ~~and could impact strategies and availability of previously useful data and could~~ result in ~~increased compliance costs and/~~disjointed internal approaches to the collection and use of data as a result of state-based differences or changes in business practices and policies. Such new privacy laws add additional complexity, requirements, restrictions, and potential legal risk, require additional investment in resources to compliance programs, and could impact ~~trading~~ strategies and availability of previously useful data.

In Europe, the General Data Protection Regulation (EU) 2016/679 (“GDPR”) took effect on May 25, 2018 and applies to products and services that we provide in Europe, as well as the processing of personal data of European Economic Area (“EEA”) ~~citizens,~~residents, wherever that processing occurs. The GDPR includes operational requirements for companies that receive or process personal data of residents of the EEA that are different from those that were in place in the EEA prior to the GDPR. Failure to comply with GDPR, or its implementation in the United Kingdom through the Data Protection Act 2018 (“UK GDPR”), may result in significant penalties for non-compliance, ~~ranging from €10 million to €20 million or 2% to 4% of an enterprise’s global annual revenue, whichever is greater~~ in the ~~case of the GDPR or~~United Kingdom, the greater of £17.5 million or 4% of the total worldwide turnover in the preceding financial year or, in the case of the ~~United Kingdom.~~GDPR, whichever is greater €20 million or 4% of an enterprise’s global annual revenue. In addition to the foregoing, a breach of the GDPR or the UK GDPR could result in regulatory investigations, reputational damage, orders to cease/change our processing of our data, enforcement notices, and/or assessment notices (for a compulsory audit). We may also face civil claims including representative actions and other class

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action type litigation (where individuals have suffered harm), potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm.

~~There~~In addition, there is ~~an increasing~~increased focus on the self-regulatory mechanisms created to further compliance ~~requirements~~ with ~~respect to the digital advertising ecosystem, including criticism that~~these regulations. For example, the Internet Advertising Bureau (“IAB”) Transparency & Consent Framework (“TCF”) ishas been criticized for being inherently incompatible with ~~GDPR given the high velocity personal data trading. The Belgian Autorité de Protection des Données fined the IAB €250,000 in February 2022 because~~GDPR. As a result, loss of alleged breaches of GDPR. The IAB has indicated that it will appeal the decision. In the interim, our publishers may need to implement changes to the TCF in order for Outbrain to continue personalizing recommendations. Further, in light of this decision, the industry may lose confidence in ~~the TCF~~such mechanisms and ~~further challenges to the TCF~~slow adoption rates create may undermine the viability of the TCF such that there is no industry standard for requesting and obtaining consent, all of which could negatively affect our business, results of operations, and ~~final~~financial condition. In addition, the UK Information Commissioner’s Office (“ICO”), the Irish Data Protection Commission and the French Commission Nationale de ~~l”Informatique~~l’Informatique et de Libertés (“CNIL”) ~~are investigating~~ continue to investigate the ad tech industry and the use of cookies.

Further, in the European Union, current national laws that implement the ePrivacy Directive (2002/58/EC) will be replaced by ~~an EU Regulation, known as~~ the ePrivacy Regulation, which will significantly increase fines for non-compliance and impose burdensome requirements around placing cookies. While the text of the ePrivacy Regulation is still under development, ~~a European court decision and regulators’ recent guidance in~~ the ~~Court of Justice of the European Union (“CJEU”)~~CJEU Fashion ID, ~~case~~Planet 49, Wirtschaftsakademie cases are driving increased attention to cookies and tracking ~~technologies. On April 7, 2021,~~technologies and impacting compliance requirements across the Austrian online privacy campaign group NYOB announced that it filed a complaint with the CNIL, against the use of the Google Android Advertising Identifier on the ground that users do not have the opportunity to meaningfully give consent to digital advertising and that this amounts to a violation of ePrivacy laws.ecosystem. As regulators start to enforce a strict approach ~~(which has already begun to occur in Germany, where data protection authorities have initiated a probe into third-party cookies), this has led to systems~~regarding the use of cookies, we expect further system changes, ~~limits~~limitations on the effectiveness of our ~~marketing~~advertising activities, and ~~diverts the attention of our technology personnel, and in the future~~compliance requirements, which may adversely affect our margins, increase costs, and subject us to additional liabilities.

Though GDPR intended to harmonize the privacy ~~and data protection~~ laws across the EEA, member state interpretations of the law continue to vary making ~~an already detailed regulatory framework~~compliance increasingly ~~complex to comply with.~~complex. For example, ~~some countries in the EU, such as~~ France and Germany, have adopted a strict approach to the dropping of any cookies without consent, even if cookies are used strictly for technical delivery and not for personalization. ~~Countries in the EU or the UK may adopt similar interpretations regarding strictly technical cookies. Though~~Although we developed technical solutions to comply with such cookie limitations, evolving interpretations of required limitations may result in unintended consequences with respect to our operations, such as fraud identification or user experience.

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~~Any failure to achieve required data protection standards may result in lawsuits, regulatory fines, or other actions or liability, all of which may harm our results of operations.~~ It is possible that CCPA (and other U.S. privacy laws), GDPR, UK GDPR and the ePrivacy Regulation in Europe and related standards may be interpreted and applied in manners that are, or are asserted to be, inconsistent with our data management practices or the technological features of our ~~solutions. The risk is further exacerbated because of the evolving interpretation~~solutions, and ~~application of privacy and~~any failure to achieve required data protection ~~laws.~~standards may result in lawsuits, regulatory fines, or other actions or liability, all of which may harm our results of operations.

In addition to government regulation, privacy advocacy and industry groups may propose new and different self-regulatory standards that either legally or contractually apply to us, our media partners or our ~~advertisers.~~advertisers, such as the IAB U.S. Global Privacy Platform and Multi-State Privacy Agreement. We are members of self-regulatory bodies that impose additional requirements related to the collection, use, and disclosure of consumer ~~data. Under~~data, such as the ~~requirements~~right to opt out of ~~these self-regulatory bodies, in addition to other compliance obligations, we are obligated to provide consumers with notice about our use~~the sharing or the sale of ~~cookies and other technologies to collect consumer data and of our collection and use of consumer data~~their personal information for ~~certain purposes, and to provide consumers with certain choices relating to the use of consumer data.~~interest-based advertising purposes. Some of these self-regulatory bodies have the ability to discipline members or participants, which could result in fines, penalties, and/or public censure (which could in turn cause reputational harm). Additionally, some of these self-regulatory bodies might refer violations of their requirements to the Federal Trade Commission or other regulatory bodies. If we were to be found responsible for such a violation, it could adversely affect our reputation, as well as our business, our compliance with self-regulatory frameworks, results of operations, and financial condition.

In Europe, the Digital Services Act (EU) 2022/2065 (“DSA”) will be enforceable from February 2024 and applies to digital services that connect consumers to goods, services, or content in the EEA. Although we have not been classified as a “very large online platform” under the DSA, we may still be required to comply with the provisions of the DSA or support our partners’ compliance with the provisions of the DSA. The DSA imposes stricter obligations on curbing harmful or unlawful content, such as implementing tools to automatically monitor, detect and take down illegal online content; implementing a mechanism for users to easily flag content and to cooperate with “trusted flaggers” (such as NGOs); reinforcing traceability of our customers; implementing a mechanism for the public and businesses to challenge content moderation decisions and seek redress; providing access to vetted researchers to the key data and provision of access to NGOs to public data; increased transparency on the algorithms used for recommending content to users; implementing risk-based controls to prevent the misuse of our tools and independent audits of our risk management systems; implementing mechanisms to adapt swiftly and efficiently in reaction to crises affecting public security or public health; preventing the use of targeted advertising with respect to children targeting and sensitive personal data. Sanctions under the DSA include fines of up to 6% of global turnover in the event of non-compliance and can lead to a ban on operating in the EU in cases of repeated serious breaches. A similar piece of legislation, the Online Safety Bill, is currently being discussed in the UK. In addition to the foregoing, a breach of the DSA could result in regulatory investigations, reputational damage, orders to cease/change our services, enforcement notices, and/or assessment notices (for a compulsory audit). We may also face civil claims including representative actions and other class action type litigation (where individuals have suffered harm), potentially amounting to significant compensation or damages liabilities, as well as associated costs, diversion of internal resources, and reputational harm. In addition, we may be required to indemnify media partners against claims with respect to our advertising content. Our advertisers may not have the ability to satisfy their indemnification obligations to us, in whole or in part, and pursuing any claims for indemnification may be costly or unsuccessful. As a result, we may be required to satisfy indemnification obligations to media partners, or claims against us, with our own assets.

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If media partners, advertisers, and data providers do not obtain necessary and requisite consents from consumers for us to process their personal data, we could be subject to fines and liability.

Pursuant to GDPR, the UK GDPR and related ePrivacy laws, media partners and any downstream partners are required to obtain unambiguous consent from EEA data subjects to process their personal data, which the industry has addressed through the release and widespread adoption of the IAB ~~TCF in April 2018 and subsequent 2.0 update in August 2020.~~TCF. Because we do not have direct relationships with users, we rely on media partners, advertisers, and data providers, as applicable, to implement notice or choice mechanisms required under applicable laws, and transmit notification of the consent (or no consent) of the user to us. Where applicable, we may only use user data to deliver interest-based advertisements where we have consent. If media partners, advertisers, or data providers do not follow the process (and in any event as the legal requirements in this area continue to evolve and develop), we could be subject to fines and liability. We may not have adequate insurance or contractual indemnity arrangements to protect us against any such claims ~~and~~or losses.

~~Rulings from~~Evolving legislation and mechanisms governing the ~~Court~~transfer of ~~Justice of the European Union invalidated the EU-U.S. Privacy Shield as a lawful means for transferring~~ personal data from the EEA or the UK to the United States; ~~this introduces~~introduce increased uncertainty and may require us to change our EEA/UK data practices and/or rely on an alternative legally sufficient compliance measure.

The GDPR and the UK GDPR, generally prohibit the transfer of personal data of EEA/UK subjects outside of the EEA/UK, unless a lawful data transfer solution has been implemented or a data transfer derogation applies. ~~On July 16,~~In 2023, the EU-U.S. Data Privacy Framework (DPF) was adopted as the replacement mechanism for transfer of EU data to the US after the 2020 ~~in a case known as Schrems II, the CJEU ruled on the validity of two~~invalidation of the ~~primary data transfer solutions. The first method, EU-U.S.~~prior E.U.-U.S. Privacy Shield ~~operated~~mechanism. The DPF is a voluntary certification program administered by the ~~U.S.~~US Department of Commerce ~~(the “Privacy Shield”), was declared invalid as a~~which requires companies to self-certify compliance with the DPF principles. Although we are certified under the DPF, this mechanism is already facing legal ~~mechanism to transfer data from EEA/UK to the United States. As a result, despite the fact that we had certified our compliance~~scrutiny and challenges, similar to the Privacy Shield, ~~we can no longer rely on this mechanism as a lawful means~~and its invalidation may impact our ability to transfer EEA/UK data to ~~us in~~ the United States. While the United States and the European Union are in discussions regarding a replacement to the Privacy Shield, we cannot predict if it will happen or if it does, what impact it will have on our business and industry.

The second mechanism, the UK and EEA Standard Contractual Clauses (“SCCs”), were upheld as a valid legal ~~mechanisms~~mechanism for transnational data transfer. However, the ruling requires that European organizations seeking to rely on the EU SCCs to export data out of the EEA ensure the data is protected to a standard that is “essentially equivalent” to that in the EEA including, where necessary, by taking “supplementary measures” to protect the data. Since the July 28, 2021 UK Adequacy Decision, we rely on such decision for the transfer of data from the EEA to the UK, and the UK SCCs transfers from the UK to the US, with supplementary measures as per the June 2021 European Data Protection Guidelines. Despite such decision, ~~more recent~~ rulings in 2022 from the Austrian Datenschutzbehörde and the French Commission de l’Informatique et des Libertés (CNIL) stated that publishers using Google Analytics are breaching GDPR because the data is sent to the U.S. and Google does not have sufficient protective measures in place for such transfer. It remains unclearbring into question whether supplemental measures for the transfer of data outside of the UK and EEA will be deemed sufficient by media partners, regulatory bodies and ~~courts and, if~~courts. If such supplementary measures are found to be inadequate, this may adversely affect our business, results of operations and financial condition.

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In the event that use of the DFP, the SCCs or relying on the UK adequacy decision ~~is subsequently~~are invalidated as ~~a solution~~solutions for data transfers to the ~~United States,~~U.S., or there are additional changes to the data protection regime in the EEA/UK resulting in any inability to transfer personal data from the EEA/UK to the ~~United States~~U.S. in compliance with data protection laws, European media partners and advertisers may be more inclined to work with businesses that do not rely on such compliance mechanisms to ensure legal and regulatory compliance, such as EEA/UK-based companies or other competitors that do not need to transfer personal data to the ~~United States~~U.S. in order to avoid the above-identified risks and legal issues. Such changes could cause us to incur penalties under GDPR or UK GDPR, could increase the cost and complexity of operating our business, or adversely impact ~~adverse~~ our business, results of operations, and financial condition.

If the security of the confidential information or personal data of our media partners and the users of our media partner properties stored in our systems is breached or otherwise subjected to unauthorized access, our reputation may be harmed and we may be exposed to liability.

We believe that we take reasonable steps to protect the security, integrity and confidentiality of the information we collect and store, but there is no guarantee that inadvertent (e.g., software bugs or other technical malfunctions, employee error or malfeasance, or other factors) or unauthorized disclosure will not occur or that third parties will not gain unauthorized access to this information despite our efforts. To reduce our vulnerability, we have a dedicated information security team responsible for improving and coordinating security across the company. We (i) conduct routine employee training sessions and onboarding security training, including phishing simulation, to increase awareness of phishing and other cyber threats; (ii) require multi-factor authentication access methods for all employees into our network; (iii) operate general monitoring and service protections that are subject to continuous enhancements to detect and mitigate various threats, including performing ongoing manual and automatic vulnerability assessment tests; (iv) manage an ongoing cyber risk-management framework to assess internal technological changes, as well as external systems and services as part of supply chain risk; and (v) maintain ISO 27001 security certification. However, since techniques used to obtain unauthorized access frequently evolve, we may be unable to anticipate these techniques or to implement adequate preventative measures. If our security measures are breached because of third-party action, employee error, malfeasance or otherwise, or if design flaws in our software are exposed and exploited, and, as a result, a third party obtains unauthorized access to any of our users’ data, our relationships with our users may be damaged, and we could incur significant liability and reputational harm. In addition, some jurisdictions have enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal data, and our agreements with certain partners require us to notify them in the event of a security incident. These mandatory disclosures regarding a security breach sometimes lead to negative publicity and may cause our users, media partners or advertisers to lose confidence in the effectiveness of our data security measures. In the European Union/United Kingdom a data breach involving personal data will generally require notification of the national Information Commissioner’s Office and, where the risk to individuals is high, notification of the affected individuals themselves. In the European Union/United Kingdom there is a possibility of significant fines being imposed in the event of a security breach. Any security breach, whether actual or perceived, may harm our reputation, and we could lose users or fail to acquire new users, media partners or advertisers, all of whom may, in addition, have claims against us as a result of a security breach. Users also may be able to bring a class action against us. In addition, security breaches of our media partners, advertisers, vendors or other third parties working with us could also have a negative impact on our reputation and operations.

Any governmental investigations, legal proceedings, or claims against us could result in liability, harm our reputation and could be costly and time-consuming to defend.

From time to time, we ~~may be~~have been subject to litigation claims, whether arising in connection with employment, competition, or commercial ~~matters, including certain terms in our commercial agreements.~~matters. We also may be exposed to potential claims brought by third parties against us, our media partners or our advertisers. Such claims may allege, for example, that our advertisers’ recommendations (including the destination page reached) infringe the intellectual property or other rights of third parties, isare false, deceptive, misleading or offensive, or that our advertisers’ products are defective or harmful.

In addition, we may be involved in regulatory issues and government investigations, including, but not limited to, actions relating to competition law. For example, on April 29, 2021, we were notified that the Antitrust Division of the U.S. Department of Justice is conducting a criminal investigation into the hiring activities in our industry that includes us. We continue to cooperate with the Antitrust Division. While there can be no assurance regarding the ultimate resolution of this matter, we do not believe that our conduct violated applicable law.

Our reputation as a business with high standards of regulatory compliance depends in part on our media partners’ and advertisers’ adherence to laws and regulations of multiple jurisdictions concerning copyright, trademark and other intellectual property rights, unfair competition, privacy and data protection, and truth in-advertising, and their use of our platform in ways

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consistent with users’ expectations. In general, we require our media partners and advertisers to comply with all applicable laws, including all applicable intellectual property, content, privacy and data protection regulations. We rely on contractual representations from media partners and advertisers that they will comply with all such applicable laws. We make reasonable efforts to enforce contractual notice requirements, but, due to the nature of our business, we are unable to audit fully our media partners’ and advertisers’ compliance with our recommended disclosures or with applicable laws and regulations. If our media partners or advertisers were to breach their contractual or other requirements in this regard, or a court or governmental agency

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were to determine that we, our media partners and/or our advertisers failed to comply with any applicable law, then we may be subject to potentially adverse publicity, damages and related possible investigation, litigation or other regulatory activity. In addition, any perception that we, our media partners and/or our advertisers fail to comply with current or future regulations and industry practices may expose us to public criticism, collective redress actions, reputational harm or claims by regulators, which could disrupt our industry and/or operations and expose us to increased liability.

In some instances, we may be required to indemnify media partners against such claims with respect to our advertisers’ campaigns. Therefore, we may require our advertisers to indemnify us for any damages from any such claim, although in certain cases we may not be so indemnified. We cannot assure prospective investors that our advertisers will have the ability to satisfy their indemnification obligations to us, in whole, in part or at all, and pursuing any claims for indemnification may be costly or unsuccessful. As a result, we may be required to satisfy indemnification obligations to media partners, or claims against us, with our own assets.

As a result of any of the above, we ~~could become~~have been involved in litigation or governmental investigations, whether on our own, or involving or concerning our media partners or advertisers, including class action claims, ~~and,~~or as third-parties required to comply with requests for information or subpoenas. As a result of such actions, we may become subject to significant liability, including claims for damages, financial penalties, and ~~financial penalties.~~costs of compliance. Claims may be expensive to defend, divert management’s attention from our business operations, and affect the cost and availability of insurance, even if we ultimately prevail. If any of this occurs, it may have a material adverse effect on our reputation, business operations, financial position, competitive position and prospects.

We may be unable to obtain, maintain and protect our intellectual property rights and proprietary information or prevent third parties from making unauthorized use of our intellectual property.

Our intellectual property rights are important to our business. We rely on a combination of confidentiality clauses, trade secrets, copyrights, patents and trademarks to protect our intellectual property and know-how. However, the steps we take to protect our intellectual property may be inadequate. We will not be able to protect our intellectual property if we are unable to enforce our rights or if we do not detect unauthorized use of our intellectual property. Despite our precautions, it may be possible for unauthorized third parties, including our employees, consultants, service providers, media partners or advertisers, to copy our products and/or obtain and use information that we regard as proprietary to create solutions and services that compete with ours. We cannot assure you that the steps taken by us will prevent misappropriation of our trade secrets or technology or infringement of our intellectual property. In addition, the laws of some foreign countries where we operate do not protect our proprietary rights to as great an extent as the laws of the United States, and many foreign countries do not enforce these laws as diligently as government agencies and private parties in the United States.

Our policy is to enter into confidentiality and invention assignment agreements with our employees and consultants and enter into confidentiality agreements with the parties with whom we have strategic relationships and business alliances. No assurance can be given that these agreements will be effective in controlling access to our proprietary information and other intellectual property. Further, these agreements do not prevent our competitors from independently developing technologies that are substantially equivalent or superior to our solutions.

We may from time to time be subject to claims of prior use, opposition or similar proceedings with respect to applications for registrations of our intellectual property, including but not limited to our trademarks and patent applications. The process of seeking patent protection can be lengthy and expensive, and any of our pending or future patent or trademark applications, whether or not challenged, may not be issued with the scope of the claims we seek, if at all. We are unable to guarantee that patents or trademarks will issue from pending or future applications or that, if patents or trademarks issue, they will not be challenged, invalidated or circumvented, or that the rights granted under the patents will provide us with meaningful protection or any commercial advantage. We rely on our brand and trademarks to identify our solutions to our media partners and advertisers and to differentiate our solutions from those of our competitors. If we are unable to adequately protect our trademarks, third parties may use our brand names or trademarks similar to ours in a manner that may cause confusion to our users or confusion in the market, or dilute our brand names or trademarks, which could decrease the value of our brand.

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From time to time, we may discover that third parties are infringing, misappropriating or otherwise violating our intellectual property rights. However, policing unauthorized use of our intellectual property and misappropriation of our technology is difficult and we may therefore not always be aware of such unauthorized use or misappropriation. Despite our efforts to protect our intellectual property rights, unauthorized third parties may attempt to use, copy or otherwise obtain and market or distribute our intellectual property rights or technology or otherwise develop solutions with the same or similar functionality as our solutions. If competitors infringe, misappropriate or otherwise misuse our intellectual property rights and we are not adequately protected, or if such competitors are able to develop solutions with the same or similar functionality as ours without infringing our intellectual property, our competitive position and results of operations could be harmed and our legal costs could increase.

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We may be subject to intellectual property rights claims by third parties, which are costly to defend and could require us to pay significant damages and could limit our ability to use technology or intellectual property.

We operate in an industry with extensive intellectual property litigation. There is a risk that our business, platform, and services may infringe or be alleged to infringe the trademarks, copyrights, patents, and other intellectual property rights of third parties, including patents held by our competitors or by non-practicing entities. We may also face allegations that our employees have misappropriated or divulged the intellectual property of their former employers or other third parties. Regardless of whether claims that we are infringing patents or other intellectual property rights have any merit, the claims are time consuming, divert management attention and financial resources and are costly to evaluate and defend. Some of our competitors have substantially greater resources than we do and are able to sustain the cost of complex intellectual property litigation to a greater extent and for longer periods of time than we could. Results of these litigation matters are difficult to predict and may require us to stop offering some features, purchase licenses, which may not be available on favorable terms or at all, or modify our technology or our platform while we develop non-infringing substitutes, or incur significant settlement costs. Any of these events could adversely affect our business, results of operations, and financial condition.

Our platform relies on third-party open source software components. Failure to comply with the terms of the underlying open source software licenses could expose us to liabilities, and the combination of open source software with code that we develop could compromise the proprietary nature of our platform.

Our platform utilizes software licensed to us by third-party authors under “open source” licenses and we expect to continue to utilize open source software in the future. The use of open source software may entail greater risks than the use of third-party commercial software, as open source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code. To the extent that our platform depends upon the successful operation of the open source software we use, any undetected errors or defects in this open source software could prevent the deployment or impair the functionality of our platform, delay new solutions introductions, result in a failure of our platform, and injure our reputation. For example, undetected errors or defects in open source software could render it vulnerable to breaches or security attacks, and, in conjunction, make our systems more vulnerable to data breaches. Furthermore, some open source licenses contain requirements that we make available source code for modifications or derivative works we create based upon the type of open source software we use. If we combine our proprietary software with open source software in a specific manner, we could, under some open source licenses, be required to release the source code of our proprietary software to the public. This would allow our competitors to create similar solutions with lower development effort and time and ultimately put us at a competitive disadvantage.

Although we monitor our use of open source software to avoid subjecting our platform to conditions we do not intend, we cannot assure you that our processes for controlling our use of open source software in our platform will be effective. If we are held to have breached the terms of an open source software license, we could be required to seek licenses from third parties to continue operating using our solution on terms that are not economically feasible, to re-engineer our solution or the supporting computational infrastructure to discontinue use of code, or to make generally available, in source code form, portions of our proprietary code.

We are required to comply with international advertising regulations in connection with the distribution of advertising, including potential regulation or oversight of native advertising disclosure standards. Failure to comply could negatively impact us, our media partners and/or our advertisers, which could have an adverse effect on our business, results of operations, and financial condition.

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We are subject to complex and changing advertising regulations in many jurisdictions in which we operate, including regulatory and self-regulatory requirements to comply with native advertising regulations in connection with the advertising we distribute for our advertisers. For example, in the United States, the Federal Trade Commission requires that all online advertising meet certain principles, including the clear and conspicuous disclosure of advertisements. If we, or our advertisers, make mistakes in implementing this varied and evolving guidance, or our commitments with respect to these principles, we could be subject to negative publicity, government investigation, government or private litigation, or investigation by self-regulatory bodies or other accountability groups. Any such action against us could be costly and ~~time consuming~~time-consuming and may require us to change our business practices, cause us to divert management’s attention and our resources and be damaging to our reputation and our business. Moreover, additional or different disclosures may lead to a reduction in user engagement, which could have an adverse effect on our business, results of operations, and financial condition.

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Environmental, social and governance (“ESG”) risks could adversely affect the Company's reputation, business and performance and the trading price of its common stock.

Companies are facing increasing scrutiny from investors, customers, regulators and other stakeholders related to their ESG practices and disclosure. The nature, scope and complexity of matters that we must assess and report are expanding due to growing mandatory and voluntary reporting relating to the environment, climate change, diversity and inclusion, workplace conduct and human capital management. Significant expenditures and commitment of time by management, employees and consultants are involved in developing, implementing and overseeing policies, practices, additional disclosures and internal controls related to ESG risk and performance. An inability to implement such policies, practices, and internal controls and maintain compliance with laws and regulations, or a perception among stakeholders that our ESG disclosures and sustainability goals are insufficient, our goals are unattainable or are not an appropriate area of focus could harm our reputation and have an adverse impact on our business, financial condition or results of operations. Investors, investor advocacy groups and investment funds may focus on these practices, especially as they relate to the environment, climate change, diversity and inclusion, workplace conduct and human capital management. Failure to adapt to or comply with regulatory requirements, at the U.S. federal or state level and internationally, or investor or stakeholder expectations and standards could negatively impact our reputation, our ability to do business with certain customers, vendors, suppliers or other third parties, and our stock price. Increased ESG-related compliance costs could result in increases to our overall operational costs which could impact our profitability. Any of the foregoing could have an adverse impact on our business, financial condition or results of operations.

Risks Related to Taxation

Our tax liabilities may be greater than anticipated.

The U.S. and non-U.S. tax laws applicable to our business activities are subject to interpretation and are changing. We are subject to audit by the U.S. Internal Revenue Service and by taxing authorities of the state, local and foreign jurisdictions in which we operate. Our tax obligations are based in part on our corporate operating structure, including the manner in which we develop, value, use and hold our intellectual property, the jurisdictions in which we operate, how tax authorities assess revenue-based taxes such as sales and use taxes, the scope of our international operations, and the value we ascribe to our intercompany transactions. Taxing authorities may challenge, and have challenged, our tax positions and methodologies for valuing developed technology or intercompany arrangements, positions regarding the collection of sales and use taxes, and the jurisdictions in which we are subject to taxes, which could expose us to additional taxes. Any adverse outcomes of such challenges to our tax positions could result in additional taxes for prior periods, interest and penalties, as well as higher future taxes.

In addition, our future tax expense could increase as a result of changes in tax laws, regulations or accounting principles, or as a result of earning income in jurisdictions that have higher tax rates. For example, the European Commission has proposed, and various jurisdictions have enacted or are considering enacting laws that impose separate taxes on specified digital services, which may increase our tax obligations in such jurisdictions. Digital services or other similar taxes could, among other things, increase our tax expense, create significant administrative burdens for us, discourage potential customers from subscribing to our platform due to the incremental cost of any such sales or other related taxes, or otherwise have a negative effect on our financial condition and results of operations. In addition, the Organization for Economic Cooperation and Development is progressing on a Base Erosion and Profit Shifting Project that, if implemented, would change various aspects of the existing framework under which our tax obligations are determined in many of the countries in which we do business. More than 140 countries tentatively signed on to a framework that imposes a minimum tax rate of 15%, among other provisions, and the European Union has adopted a Council Directive which requires these provisions to be transposed into member states’ national laws.As this framework is subject to further negotiation and implementation by each member country, the timing and ultimate impact of any such changes on our tax obligations are uncertain.

Moreover, the determination of our provision for income taxes and other tax liabilities requires significant estimates and judgment by management, and the tax treatment of certain transactions is uncertain. ~~Given uncertainty with respect to the impact of the COVID-19 pandemic on our operations, the~~The income tax benefit/expense we record may vary significantly in future ~~periods.~~periods based on factors outside of our control, such as the uncertainty with respect to the current macroeconomic environment on our operations and our stock price. For example, in periods in which our stock price varies from the grant price of the share-based compensation vesting in that period, we will recognize excess tax benefits or shortfalls that will impact our effective tax rate.

Any changes, ambiguity, or uncertainty in taxing jurisdictions’ administrative interpretations, decisions, policies and positions, including the position of taxing authorities with respect to revenue generated by reference to certain digital services, could also materially impact our income tax liabilities. Although we believe that our estimates and judgments are reasonable, the ultimate outcome of any particular issue may differ from the amounts previously recorded in our financial statements and any such occurrence could adversely affect our business, results of operations, and financial condition.

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Future events may impact our deferred tax asset position including deferred tax assets related to our utilization of net operating losses (“NOLs,” each a “NOL”) and U.S. deferred federal income taxes on undistributed earnings of international affiliates that are considered to be reinvested indefinitely.

We evaluate our ability to utilize deferred tax assets and our need for valuation allowances based on available evidence. This process involves significant management judgment regarding assumptions that are subject to change from period to period based on changes in tax laws or variances between future projected operating performance and actual results. We are required to establish a valuation allowance for deferred tax assets if we determine, based on available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax assets will not be utilized. In making this determination, we evaluate all positive and negative evidence as of the end of each reporting period. Future adjustments (either increases or decreases), to a deferred tax asset valuation allowance are determined based upon changes in the expected realization of the net deferred tax assets. The utilization of our deferred tax assets ultimately depends on the existence of sufficient taxable income in carry-forward periods under the applicable tax law. Due to significant estimates used to establish a valuation allowance and the potential for changes in facts and circumstances, it is possible that we will be required to record adjustments to a valuation allowance in future reporting periods. Changes to a valuation allowance or the amount of deferred taxes could have a materially adverse effect on our business, financial condition and results of operations. Further, while we have no current intention to do so in the foreseeable future, should we change our assertion regarding the permanent reinvestment of the undistributed earnings of certain of our foreign subsidiaries, a deferred tax liability may need to be established.

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The ability to fully utilize our NOL and tax credit carryforwards to offset future taxable income may be limited. Under Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOL carryforwards to offset its post-change income may be limited. In general, an “ownership change” will occur if there is a cumulative change in our ownership by 5% or greater stockholders that exceeds 50% over a rolling three-year period. Similar rules may apply under state tax laws. We may experience ownership changes in the future as a result of future transactions in our stock. As a result, if we earn net taxable income, our ability to use our pre-change NOL carryforwards or other pre-change tax attributes to offset United States federal and state taxable income may be subject to limitations. Any such limitations on the ability to use our NOL carryforwards and other tax assets could adversely impact our business, financial condition, and operating results.

Risks Related to the Securities Markets and Ownership of Our Common Stock

The trading price of the shares of our common stock is likely to be volatile, and purchasers of our common stock could incur substantial losses.

Technology stocks historically have experienced high levels of volatility. The trading price of our common stock has fluctuated and may continue to do so. These fluctuations could cause you to incur substantial losses, including all of your investment in our common stock. Factors that could cause fluctuations in the trading price of our common stock include the following:

•significant volatility in the market price and trading volume of technology companies in general and of companies in the digital advertising industry in particular;

•announcements of new solutions or technologies, commercial relationships, acquisitions, or other events by us or our competitors;

•price and volume fluctuations in the overall stock market from time to time;

•changes in how advertisers perceive the benefits of our platform and future offerings;

•the public’s reaction to our press releases, other public announcements, and filings with the SEC;

•the trading of or conversion of our Convertible Notes;

•fluctuations in the trading volume of our shares or the size of our public float;

•sales of large blocks of our common stock;

•actual or anticipated changes or fluctuations in our results of operations;

•changes in actual or future expectations of investors or securities analysts;

•litigation involving us, our industry, or both;.

•governmental or regulatory actions or audits;

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•regulatory developments applicable to our business, including those related to privacy in the United States or globally;

•general economic conditions and trends;

•major catastrophic events in our domestic and foreign markets; and

•departures of key employees.

In addition, if the market for technology stocks, the stock of digital advertising companies or the stock market, in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, results of operations, or financial condition. The trading price of our common stock might also decline in reaction to events that affect other companies in the digital advertising industry even if these events do not directly affect us. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. If litigation is instituted against us, we could incur substantial costs and divert management’s attention and resources. In addition, repurchases pursuant to our share repurchase program could affect our stock price and increase its volatility. The existence of a share repurchase program could also cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our stock. There can be no assurance that any share repurchases will enhance stockholder value because the market price of our common stock may decline below the levels at which we repurchased shares of common stock. Although our share repurchase program is intended to enhance long-term stockholder value, short-term stock price fluctuations could reduce the program’s effectiveness. Furthermore, the program does not obligate the Company to repurchase any dollar amount or number of shares of common stock, and may be commenced, suspended or discontinued at any time and any suspension or discontinuation could cause the market price of our stock to decline.

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If securities or industry analysts do not publish research or publish unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock depends, to some extent, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us should downgrade our shares, change their opinion of our business prospects or publish inaccurate or unfavorable research about our business, our share price may decline. If one or more of these analysts who cover us ceases coverage of our company or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

~~We have broad discretion in the use of proceeds from our IPO and may invest or spend the proceeds in ways with which investors do not agree and in ways that may not yield a return.~~

We are using the net proceeds from our IPO for working capital and general corporate purposes, including research and development expenditures focused on product development and sales and marketing expenditures aimed at growing our business. We may also use the net proceeds to make acquisitions or investments in complementary companies or technologies. Consequently, our management has broad discretion over the specific use of these net proceeds and may use such proceeds in a way with which our investors disagree. The failure by our management to apply and invest these funds effectively may not yield a favorable return to our investors and may adversely affect our business, results of operations, and financial condition. Pending their use, we may invest the net proceeds from our IPO in a manner that does not produce income or that loses value. If we do not use the net IPO proceeds effectively, our business, results of operations, and financial condition could be adversely affected.

Sales of substantial amounts of our common stock in the public markets, or the perception that they may occur, could cause the market price of our common stock to decline.

The market price of our common stock could decline and may make it more difficult for you to sell your stock at a time and price that you deem appropriate, as a result of substantial sales of our common stock, particularly sales by our directors, executive officers and significant stockholders, a large number of shares of our common stock becoming available for sale or the perception in the market that holders of a large number of shares intend to sell their shares.

Our directors, executive officers and employees hold options and restricted stock units under our equity incentive plans, and the shares issuable upon the exercise of such options or vesting of such restricted stock units have been registered for public resale under the Securities Act. Accordingly, these shares will be able to be freely sold in the public market upon issuance subject to certain legal and contractual requirements.

A small number of significant beneficial owners of our common stock acting together have a significant influence over matters requiring stockholder approval, which could delay or prevent a change of control.

The largest beneficial owners of our common stock, an entity affiliated with Lightspeed Venture Partners, Viola Ventures III, L.P., entities affiliated with Gemini Israel Ventures, entities affiliated with Index Ventures, Gruner + Jahr GmbH, and Yaron Galai together beneficially owned an aggregate 41.7% of our outstanding common stock as of December 31, 2021. As a result, these stockholders, if they act together, could exercise significant infl~~uence over our operations and business strategy since they have sufficient voting power to control the outcome of matters requiring stockholder approval. These matters may include:~~

•~~the composition of our board of directors which has the authority to direct our business and to appoint and remove our officers;~~

•~~approving or rejecting a merger, consolidation or other business combination;~~

•~~raising future capital; and~~

•~~amending our certificate of incorporation which governs the rights attached to our common stock.~~

This concentration of ownership of our shares could delay or prevent proxy contests, mergers, tender offers, open-market purchase programs or other purchases of our common stock that might otherwise give you the opportunity to realize a premium over the then-prevailing market price of our common stock. This concentration of ownership may also adversely affect our share price.

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Failure to design, implement and maintain effective internal controls may adversely affect investor confidence in our company and, as a result, the value of our common stock.

The Sarbanes-Oxley Act requires, among other things, that we maintain proper and effective internal control over financial reporting. We are required to disclose, on a quarterly basis, material changes made in our internal control over financial reporting. We ~~will~~are now also be required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting as of the end of the first complete fiscal year after our IPO. This assessment ~~will need~~is required to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. However, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an “emerging growth company” as defined in the JOBS Act. At such time, our independent registered public accounting firm may issue a report that is adverse if it is not satisfied with the level at which our controls are documented, designed or operating.

~~As a newly public company, we have undertaken and~~

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We continue ~~to undertake a range of actions~~ to augment our internal control over financial ~~reporting. These include implementing new~~reporting and internal ~~controls and procedures and hiring additional accounting and financial reporting staff. We intend to continue to enhance our internal control over financial reporting following our IPO.~~controls. Any failure of our internal controls could result in a material misstatement in our financial statements. Furthermore, if we are unable to conclude that our internal control over financial reporting is effective at the time that we are required to make such assessment, we could lose investor confidence in the accuracy and completeness of our financial reports, which would cause the price of our common stock to decline, and we may be subject to investigation or sanctions by the SEC.

We are an emerging growth company subject to reduced disclosure requirements, and there is a risk that availing ourselves of such reduced disclosure requirements will make our common stock less attractive to investors.

We are an emerging growth company, and for as long as we continue to be an emerging growth company, we intend to take advantage of exemptions from various reporting requirements such as, but not limited to, not being required to obtain auditor attestation of our reporting on internal control over financial reporting, having reduced disclosure obligations about our executive compensation in our periodic reports and proxy statements, and not being required to hold advisory stockholder votes on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.

In addition, Section 107 of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period under the JOBS Act. Accordingly, our consolidated financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards.

We will remain an emerging growth company until the earliest of: the end of the fiscal year in which the market value of the shares of our outstanding capital stock held by non-affiliates is $700 million or more as of the end of the second quarter of that year, the end of the fiscal year in which we have total annual gross revenue of ~~$1.07~~$1.235 billion, the date on which we issue more than $1.0 billion in nonconvertible debt in a three-year period, or five years from the date of our IPO.

Our management team has limited experience managing a public company and we will incur significantly increased costs and devote substantial management time as a result of operating as a public company.

Most members of our management team have limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws, rules, and regulations that govern public companies. As a newly public company, we are subject to significant obligations relating to reporting, procedures and internal controls, and our management team may not successfully or efficiently manage such obligations. These obligations and scrutiny will require significant attention from our management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, results of operations, and financial condition. We expect that these requirements will increase our compliance costs. We have hired, and will need to hire, additional accounting, financial, and legal staff with appropriate public company experience and technical accounting knowledge and may need to establish an internal audit function. We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of these costs.

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As a public company, it is more expensive for us to maintain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to maintain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and qualified executive officers.

The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified board members.

As a ~~newly~~ public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended ~~or the Exchange Act,~~(the “Exchange Act”), the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the listing requirements of ~~the~~ Nasdaq and other applicable securities rules and regulations. Compliance with these rules and regulations ~~will increase~~has increased our legal and financial compliance costs, ~~make~~has made some activities more difficult, time-consuming or costly and ~~increase~~has increased demand on our systems and resources, and this will continue particularly after we are no longer an “emerging growth company.”

The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and results of operations. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could adversely affect our business, results of operations, and financial condition. We may need to hire more employees in the future or engage outside consultants to comply with these requirements, which will increase our costs and expenses. In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

We ~~intend~~have invested, and may need to further invest in, resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely affected. ~~However,~~

As a public company, it is also more expensive for ~~as long as we remain an “emerging growth company” as defined in the JOBS Act,~~us to maintain director and officer liability insurance, and we may ~~take advantage~~be required to accept reduced coverage or incur substantially higher costs to maintain coverage. These factors could also make it more difficult for us to attract and retain qualified members of ~~certain exemptions from various reporting requirements that are applicable~~our board of directors, particularly to ~~emerging growth companies as described above. We may take advantage of these reporting exemptions until we are no longer an emerging growth company.~~serve on our audit committee, and qualified executive officers.

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We do not intend to pay dividends on our common stock, so any returns will be limited to the value of our common stock.

We have never declared or paid cash dividends on our common stock and do not expect to pay any dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend on a number of factors, including our financial condition, results of operations, capital requirements, general business conditions and other factors that our board of directors may deem relevant. Our current credit facility imposes certain limitations on our ability to pay dividends and any new credit facility may contain certain similar restrictions. Until such time that we pay a dividend, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

We may need to raise additional funds to pursue our strategy, and we may be unable to raise capital when needed or on acceptable terms.

From time to time, we may seek additional equity or debt financing to fund our growth, develop new solutions or make acquisitions or other investments. Our business plans may change, general economic, financial or political conditions in our markets may change, or other circumstances may arise that have a material adverse effect on our cash flow and the anticipated cash needs of our business. Any of these events or circumstances could result in significant additional funding needs, requiring us to raise additional capital. We cannot predict the timing or amount of any such capital requirements at this time. If financing is not available on satisfactory terms, or at all, we may be unable to expand our business or to develop new business at the rate desired and our results of operations may suffer.

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Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our amended and restated certificate of incorporation and amended and restated bylaws may delay or prevent an acquisition of us or a change in our management. These provisions include:

•authorizing “blank check” preferred stock, which could be issued by the board without stockholder approval and may contain voting, liquidation, dividend and other rights superior to our common stock, which would increase the number of outstanding shares and could thwart a takeover attempt;

•a classified board of directors whose members can only be dismissed for cause;

•the prohibition on actions by written consent of our stockholders;

•the limitation on who may call a special meeting of stockholders;

•the establishment of advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon at stockholder meetings; and

•the requirement of at least 75% of the outstanding capital stock to amend any of the foregoing second through fifth provisions.

In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which limits the ability of stockholders owning in excess of 15% of our outstanding voting stock to merge or combine with us. Although we believe these provisions collectively provide for an opportunity to obtain greater value for stockholders by requiring potential acquirers to negotiate with our board of directors, they would apply even if an offer rejected by our board were considered beneficial by some stockholders. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.

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Item 1B. Unresolved Staff Comments

None.

Item 1C. Cybersecurity Risk Management and Strategy

We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. We utilize various risk management guides, as well as the protocols of certain certifications as described below to identify, assess, and manage cybersecurity risks relevant to our business through our risk management program. Our cybersecurity risk management program includes a cybersecurity incident response plan.

We use COBIT, or Control Objectives for Information Technologies, as a framework for risk management and manage various controls as required by ISO 27001, 27017 and 27032 standards. We maintain the following certifications: ISO 27001, ISO 27017 and ISO 27032, Cloud Security Alliance Star level 1 and PCI-DSS SAQ A-EP. Our on-premises data centers are SOC 2 certified.

In addition to our certifications, we (i) conduct routine employee training sessions and onboarding security training, including phishing simulations, to increase awareness of phishing and other cyber threats; (ii) require multi-factor authentication access methods for all employees into our network; (iii) operate general monitoring and service protections that are subject to continuous enhancements to detect and mitigate various threats, including performing ongoing manual and automatic vulnerability assessment tests; and (iv) manage an ongoing cyber risk-management framework to assess internal technological changes, as well as external systems and services as part of supply chain risk.

In an effort to detect vulnerabilities or cyber breaches that we have not yet discovered, we regularly run an exhaustive security testing framework, including scanning all internal and external assets for vulnerabilities, utilizing multiple third-party security testing teams every year, and maintaining a bug bounty program.

Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.

Our cybersecurity risk management program includes:

•Ongoing risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment;

•a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents;

•the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls;

•cybersecurity awareness training of our employees, incident response personnel, and senior management;

•a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents;

•a third-party risk management process for service providers, suppliers, and vendors.

We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.

Cybersecurity Governance

Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks. The Audit Committee oversees management’s implementation of our cybersecurity risk management program.

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The Audit Committee receives quarterly reports from management regarding our cybersecurity risks. In addition, management updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as certain other incidents that have lesser impact potential.

The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from management on our cyber risk management program, including education sessions regarding cybersecurity topics from our Chief Information Officer (CIO) and Chief Information Security Officer (CISO), internal security staff or external experts.

Our Risk Committee, which includes our CEO and other members of management, meets quarterly as part of the Company’s enterprise risk management program, with cybersecurity being the most significant area of review and reporting.

Our security team, including our Governance Risk and Compliance lead (GRC), CISO & CIO, is responsible for assessing and managing our risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our CISO has 25 years experience as a technology leader, with extensive experience within the cybersecurity ecosystem and risk management. He has been certified as a CISO by the Israeli Technion Institute. Our CIO has 15 years experience as a technology leader with extensive cybersecurity experience. He is also CRISC (Certified in Risk and Information Systems Control) certified. Our security team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.

Item 2. Properties

Our corporate headquarters are located in New York, NY, U.S., where we occupy office space consisting of approximately ~~22,300~~23,000 square feet pursuant to a lease agreement executed in July 2021 and expiring in October 2027. ~~As of March 2022, we are finalizing construction of our new office space in New York, NY.~~

Since 2007, we have maintained a presence in Netanya, Israel, which is overseen by one of our founders, where we occupy space consisting of approximately ~~44,000~~47,000 square feet under a lease that expires in ~~2023.~~2026. In January 2023, we also entered into a new lease in Ljubljana, Slovenia, which is approximately 16,000 square feet and expires in 2032. We use ~~this facility~~these facilities primarily for technology and development, and, to a lesser extent, for general administration and sales and marketing. We maintain a regional office in London, England for general administration and sales and marketing. We also have sales and operations offices in a number of locations around the world, ~~including Amsterdam, Brussels, Chicago,~~including Cologne, ~~Ljubljana,~~Germany; Gurugram, India; Madrid, Spain; Milan, ~~Mumbai,~~Italy; Munich, Germany; Paris, France; São Paolo, Brazil; Singapore; Sydney, Australia; Timişoara, Romania; and Tokyo, ~~and Zurich.~~Japan.

We believe that our current facilities are adequate to meet our needs ~~for~~for the immediate future, and that, should it be needed, suitable additional space will be available to accommodate any expansion of our operations.

Item 3. Legal Proceedings

Information with respect to this item may be found in Note 711 in the accompanying notes to the audited consolidated financial statements included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Report, under “Legal Proceedings and other Matters,” which is incorporated herein by reference.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock began trading on The NASDAQ Stock Market LLC (“Nasdaq”) on July 23, 2021 under the symbol “OB.” Prior to July 23, 2021, there was no established public trading market for our common stock.

Holders of Record

As of February ~~28, 2022,~~29, 2024, there were ~~approximate~~alpproximately 142 holders ~~y 238 holders~~ of record of our common stock. The actual number of the Company’s stockholders is greater than this number of record holders, which does not include stockholders who are the beneficial owners of shares that are held of record by brokers and other ~~nominees.~~nominee holders.

Dividend Policy

We have never declared or paid cash dividends on our common stock. We currently intend to invest our available funds and any future earnings in the operation of our business, as well as share repurchases, and do not anticipate paying any dividends on our common stock in the foreseeable future. Any future determination to declare dividends will be made at the discretion of our ~~board~~Board of ~~directors~~Directors (“Board”) and will depend on our financial condition, operating results, capital requirements, general business conditions, and other factors that our board may deem relevant.

~~Unregistered Sales of Equity Securities~~

~~(a) Recent Sales of Unregistered Equity Securities~~

~~None.~~

~~(b) Use of Proceeds~~

On July 27, 2021, we sold 8,000,000 shares of our common stock in connection with our IPO, at a public offering price of $20.00 per share for an aggregate offering price of $160.0 million. The proceeds from the sale were $145.1 million, after deducting underwriting discounts and commissions and offering expenses payable by us. The offer and sale of all of the shares in our IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-~~257525), which was declared effective by the SEC on July 22, 2021.~~

As of March 1, 2022, a portion of the net proceeds from our IPO have been used for working capital and general corporate purposes, and in January 2022, $37.3 million was used to fund the first installment of the purchase price to acquire video intelligence AG.

~~There has been no material change in the planned use of proceeds from our IPO as described in our Prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act.~~

Purchases of Equity Securities by the Issuer

On ~~February 28,~~December 14, 2022, our Board ~~of Directors~~ approved a ~~stock~~share repurchase program ~~under which we are authorized~~authorizing us to ~~purchase~~repurchase up to $30 million of our common stock, ~~par value $0.001 per share,~~ with no requirement to purchase any minimum number of shares. The manner, timing, and actual number of shares repurchased under the program will depend on a variety of factors, including price, general business and market conditions, and other investment opportunities. Shares may be repurchased through privately negotiated transactions or open market purchases, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange ~~Act.~~Act of 1934, as amended (the “Exchange Act”). The repurchase program may be commenced, suspended, or terminated at any time at our discretion without prior notice.

In addition, we may from time to time withhold shares in connection with tax obligations related to vesting of restricted stock units in accordance with the terms of our equity incentive plans and the underlying award agreements.

The below table sets forth the repurchases of our common stock for the three months ended December 31, ~~2021:~~2023:

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Period
(a) Total number of shares (or units) purchased (1)
(b) Average price paid per share (or unit) (c) Total number of shares (or units) purchased as part of publicly announced plans or programs (d) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
October 2021 — $— — —
November 2021 — $— — —
December 2021 976,733 $13.82 — —
TOTAL 976,733 $13.82 — —


Period	(a) Total number of shares (or units) purchased (1)	(b) Average price paid per share (or unit) (2)	(c) Total number of shares purchased as part of publicly announced plans or programs	(d) Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands)(2)
October 2023	458,348	$4.71	440,000	$15,421
November 2023	338,377	$3.86	336,600	$14,128
December 2023	423,786	$4.14	408,689	$12,436
TOTAL	1,220,511	$4.28	1,185,289

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(1) Total number of shares purchased ~~represents~~includes shares repurchased under our $30 million share repurchase program, as well as shares withheld to ~~cover~~satisfy employee tax withholding obligations arising in connection with the vesting and settlement of restricted stock units under ~~the Company’s~~our 2007 Omnibus Securities and Incentive Plan and our 2021 Long-Term Incentive Plan.

(2)The average price paid per share under the share repurchase program includes commissions, but excludes the 1% excise tax accrued on our share repurchases as a result of the Inflation Reduction Act of 2022. Commission costs associated with share repurchases and excise taxes do not reduce the remaining authorized amount under our repurchase programs.

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Stock Performance Graph

The following graph compares the cumulative total stockholder return on an initial investment of $100 in our common stock between July 23, 2021 (our initial trading day) and December 31, ~~2021,~~2023, with the comparative cumulative total return of an investment of such amount onin (i) the NASDAQ Composite Index (IXIC), (ii) the NASDAQ Internet Index, and (iii) the Russell 2000 Index (RUT) over the same period. We have not paid any cash dividends. Therefore, the total return calculation for us is solely based on the change in the price of our common stock, whereas the data for the comparative indices assumes reinvestment of dividends. The graph assumes the closing market price on July 23, 2021 of $20.00 per ~~shares~~share as the initial value of our common stock. The returns shown below are based on historical results and are not necessarily indicative of, nor intended to forecast, potential future stock price performance. The graph is not deemed “filed” with the SEC and shall not be deemed incorporated by reference into any of our prior or future filings made with the SEC.

Item 6. [Reserved]

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our audited annual consolidated financial statements and the related notes and other financial information included elsewhere in this Annual Report on Form 10-K (this “Report”). In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, beliefs, and expectations, and involve risks and ~~uncertainties.~~uncertainties that could cause actual results, events, or circumstances to differ materially from those projected in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Report, particularly under Item 1A, “Risk Factors” and “Note About Forward-Looking Statements.”

The purpose of this Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is to provide the readers of our financial statements with narrative information from our management, which is necessary to understand our business, financial condition, and results of operations. The MD&A should be read in conjunction with our audited consolidated financial statements and notes thereto, as well as our Annual Report on Form 10-K for the year ended December 31, 2022, which includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2021 in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In addition to the audited consolidated financial statements prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”), we use certain non-GAAP financial measures throughout this discussion to provide investors with supplemental metrics used by our management for financial and operational decision making. These measures are supplemental and are not an alternative to our financial statements prepared in accordance with U.S. GAAP. See “Non-GAAP Reconciliations” in this Report for the definitions and limitations of these measures, and reconciliations to the most comparable U.S. GAAP financial measures.

Business Overview

Outbrain Inc.~~, together~~ (together with our subsidiaries, ~~(“Outbrain”,~~“Outbrain,” the ~~“Company”, “we”,~~“Company,” “we,” “our” or “us”) was incorporated in August 2006 in Delaware. The Company is headquartered in New York, New York ~~and has wholly owned~~with various wholly-owned subsidiaries, including in Israel, Europe ~~Asia, Brazil~~ and ~~Australia.~~Asia.

Outbrain is a leading ~~recommendation~~technology platform ~~powering~~that drives business results by connecting media owners and advertisers with engaged audiences to drive business outcomes, reaching over a billion unique consumers around the ~~open web.~~world. Outbrain’s artificial intelligence (“AI”) prediction engine powers a two-sided platform for advertisers and media owners that delivers concrete business outcomes. Our ~~technology provides personalization, engagement and monetization solutions to~~platform enables thousands of digital media properties, including many of the world’s most prestigious publishers. Through powering discovery feeds on the open web, Outbrain helps over a billion unique users on a monthly basis discover content, offers, servicesowners to provide tailored experiences to their audiences, delivering audience engagement and ~~products they might be interested in.~~monetization. For tens of thousands of advertisers, ~~around the world, Outbrain helps attract new customers~~from enterprise brands to performance marketers, our platform optimizes audience attention and ~~grow their businesses, driving measurable results and~~engagement to deliver greater return on ~~investment.~~investment at each step of the marketing funnel. See Item 1 “Business” in this Report for more information regarding our business, industry, product offerings and growth strategies.

~~Over~~Outbrain operates a two-sided marketplace, which means we usually have exclusive control over all aspects of the ~~past decade, consumers have become increasingly accustomed~~consumer experience, allowing us to ~~seeing highly curated digital content~~quickly test and ~~ads that align with their unique interests. Similar to the way in which social~~deploy new formats for our advertisers and media and search have simplified discovery by synthesizing billions of consumer data points to offer personalized feeds, we provide media partners with a platform that encompasses data at scale as well as prediction and recommendation capabilities, helping media partners deliver a discovery feed~~personalized to their users, based on context and each user’s interests and preferences.~~

Over the past decade, consumers have become increasingly accustomed to seeing highly curated digital content and ads that align with their unique interests. Similar to the way in which social media and search have simplified discovery by synthesizing billions of consumer data points to offer personalized feeds, we provide media partners with a platform that encompasses data at scale as well as prediction and recommendation capabilities, helping them deliver a discovery feed personalized to their users, based on context and each user’s unique interests and preferences. Our platform is built for user engagement and, as a mobile-first company, is designed to be highly effective on mobile devices. our technology is deployed on the mobile apps and websites of most of our media partners, generating 68% of our revenue in 2021.

owners. Since inception, we have been guided by the same core principles pertaining to our three constituents: consumers, media partners, ~~users,~~ and advertisers.

•Consumers. Our platform is centered on predicting consumer attention and engagement. We believe that by focusing our algorithm on optimizing toward these consumer-centric factors, we are able to cultivate user behavior patterns that compound over time, delivering greater effectiveness and efficiency for our advertisers, superior long-term monetization for our media partners, as well as increased value for Outbrain.

•Media Partners. We are committed to supporting the long-term success of our media partners. ~~Consistent with this philosophy, we focus on establishing a true win-win partnership.~~ We strive to develop ~~trusted, transparent,~~ multi-year contracts with media partners, ~~which are typically exclusive~~ with ~~us.~~the objective of delivering long-term revenue and deeper audience engagement. Our media partners include both traditional publishers and companies in new and rapidly evolving categories, such as mobile device ~~manufacturers and web browsers.~~manufacturers.

~~Users.~~• We believe that by focusing on improving the user experience we are able to cultivate user behavior patterns that compound engagement over time, delivering superior long-term monetization for ourselves and for our media partners.

Advertisers. We ~~strive~~offer unique advertising solutions across the marketing funnel and provide a single access point to ~~grow our advertising~~not only reach, but drive real business ~~by increasing overall user~~outcomes from consumers across the Open Internet. We provide advertisers from enterprise brands to performance marketers with solutions to optimize consumer attention and engagement, ~~rather than price per engagement. Our emphasis on user engagement helps us improve advertisers’~~to deliver accountable business results and greater return on ad spend (“ROAS”) thus unlocking more advertising spend and attracting more advertisers. In turn this enables us to better match ads to users and further grow user engagement and overall monetization.investment.

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Through our direct, usually exclusive code-on-page integrations with media ~~partners,~~owners, we have become one of the largest online advertising platforms on the ~~open web.~~Open Internet. In ~~2021,~~2023, we provided personalized ~~feeds and~~ ads to over 1a billion monthly unique ~~users,~~consumers, delivering on average over 1012 billion ~~recommendations to~~experiences promoting content, services, and products per day, with ~~over 24,000~~tens of thousands of advertisers directly using our platform.

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The following is a summary of our performance for the ~~periods presented:~~years ended December 31, 2023 and 2022:

•Our revenue ~~grew to $1,015.6~~was $935.8 million in ~~2021, from $767.1~~2023, compared to $992.1 million in ~~2020,~~2022. Revenue for 2023 included net favorable foreign currency effects of approximately $5.0 million, and ~~$687.3~~decreased $61.3 million, ~~in 2019.~~or 6.2% on a constant currency basis.

•Our gross profit was ~~$240.3~~$184.8 million and our gross margin was ~~23.7%~~19.7% in ~~2021,~~2023, compared to gross profit of ~~$165.1~~$192.7 million and gross margin of ~~21.5%~~19.4% in ~~2020, and gross profit of $141.8 million and gross margin of 20.6% in 2019.~~2022.

•Our Ex-TAC Gross ~~Profit(1)~~ ~~increased to $272.1~~Profit(1) was $227.4 million in ~~2021, from $194.3~~2023, compared to $234.8 million in ~~2020 and $170.3 million in 2019.~~2022.

•Our net income ~~increased to $11.0~~was $10.2 million, or ~~4.6%~~5.5% of gross profit in ~~2021,~~2023, compared to ~~$4.4 million, or 2.6% of gross profit in 2020, and a~~ net loss of ~~$20.5~~$24.6 million, or ~~(14.5)~~(12.8)% of gross profit in ~~2019.~~2022. Net income for ~~the 2021~~2023 included a ~~one-time tax benefit~~pre-tax gain of ~~$31.8~~approximately $22.6 million ~~due to a release~~recorded in 2023 in connection with the repurchase of ~~the valuation allowance on certain U.S. deferred tax assets. Net income for 2021 also included charges~~half of ~~$42.0 million (pre-tax) to recognize the unamortized discount and deferred financing costs on~~ our ~~senior subordinated secured notes that were exchanged for~~2.95% convertible notes ~~upon our IPO, as well as $16.5 million of one-time incremental cumulative stock-based compensation expense (pre-tax) for awards with an IPO performance condition.~~due in 2026.

•Our Adjusted EBITDA(1) ~~increased to $88.9~~was $28.5 million in ~~2021, from $41.1~~2023, compared to $26.3 million in ~~2020 and $19.3 million in 2019.~~2022. Adjusted EBITDA(1) was ~~32.7%, 21.2%~~12.5% and ~~11.3%~~11.2% of Ex-TAC Gross Profit(1) in ~~2021, 2020~~2023 and ~~2019,~~2022, respectively.

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(1)Ex-TAC Gross Profit, ~~and~~ Adjusted EBITDA and constant currency measures are non-GAAP financial measures. See “Non-GAAP Reconciliations” in this Report for ~~the~~ definitions and limitations of these measures, and reconciliations to the ~~most~~ comparable U.S. GAAP financial measures.

Recent Developments

~~Initial Public Offering~~Israel-Hamas War – October 2023

Many of our employees, including certain members of our management team and board of directors, operate from Israel. Accordingly, political, economic and military conditions in Israel and the surrounding region may directly affect our business and operations.

In October 2023, Hamas terrorists infiltrated Israel’s southern border from the Gaza strip and conducted a series of attacks on civilian and military targets. Hamas also launched extensive rocket attacks on the Israeli population and industrial centers located along Israel’s border with the Gaza strip and in other areas within the State of Israel. These attacks resulted in extensive deaths, injuries and the kidnapping of civilians and soldiers. In response, Israel’s security cabinet declared war against Hamas and a military campaign against this terrorist organization commenced in parallel to their continued rocket and terror attacks. In addition, since the commencement of these events, there have been continued hostilities along Israel’s northern border with Lebanon (with the Hezbollah terror organization). Furthermore, the Houthi movement, which controls parts of Yemen, launched several attacks on marine vessels traversing the Red Sea, which were thought either to be in route toward Israel or to be owned by Israeli persons. The Red Sea is a vital maritime route for international trade traveling to or from Israel, and in response to the Houthi movement’s attacks, coalition forces led by the United States and Great Britain have targeted sites in Yemen. It is possible that hostilities with Hezbollah in Lebanon will escalate, and that other terrorist organizations, including Palestinian military organizations in the West Bank as well as other hostile countries, such as Iran, will join the hostilities and these clashes may escalate in the future into a greater regional conflict.

The draft of Israeli military reservists, as well as the evacuation of Israeli citizens from areas near conflict zones have adversely affected our employees impacted by such actions. In addition, future government-imposed restrictions and precautions in response to such conflicts may negatively impact our employees, management and directors by interrupting their ability to effectively perform their roles and responsibilities. In addition, further hostilities involving Israel, the interruption or curtailment of trade between Israel and its trading partners, and/or the willingness to do business with companies with operations in Israel, could adversely affect our business, financial condition and results of operations and could make it more difficult for us to raise capital. The intensity and duration of Israel’s current war against Hamas and the other terror organizations is difficult to predict and we are continuing to monitor the situation and assessing its potential impact on our business.

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We cannot attribute the impact of the current trends in advertising demand to any particular factor, including the Israel-Hamas War, and cannot predict the impact if the war continues or escalates further. See Item 1A “Risk Factors” included in this Report for more information regarding certain risks associated with the Israel-Hamas conflict.

The Launch of our New Branding Platform

On ~~July 22, 2021,~~June 14, 2023, we announced the launch of Onyx by Outbrain™ (Onyx), a new branding platform designed to maximize consumer attention to deliver more effective branding and consideration campaigns. The Onyx product offering consists of an exclusive environment of in-article placements across a number of Outbrain’s premium media owner partners, featuring rich pre-roll video and high-impact formats designed to drive high attention.

Onyx is designed to meet enterprise brand requirements of viewability and brand safety, while delivering value beyond traditional ad views. With Onyx, we have applied Outbrain’s AI prediction engine to an entirely new business offering that will enable brands to reach their target audiences at viewable, premium, high-attention moments across the Open Internet. Onyx diversifies Outbrain’s business model by showcasing the ability to apply our ~~Form S-1 was declared effective~~unique prediction technology beyond performance advertising.

The Onyx environment is designed for brand needs, including third-party brand safety verification and consistently high viewability. Launched in partnership with industry leaders in brand safety and attention-based media measurement, Onyx aims to increase campaign effectiveness by predicting moments of attention and optimizing media spend toward them. Onyx is now available in the U.S. ~~Securities~~, UK, Japan, Germany, France, and ~~Exchange Commission (the “SEC”)~~Italy, with additional markets rolling out in the future. With the addition of Onyx, we greatly expanded our total addressable market with our ability to deliver on upper-funnel objectives.

Restructuring

On May 31, 2023, we announced a reduction in our global workforce of approximately 10% to adjust to the continued macroeconomic uncertainty, create additional operating efficiencies, and support our strategic growth and profitability objectives. During the second quarter of 2023, we recorded pre-tax charges of approximately $2.3 million in connection with ~~our IPO~~the workforce reduction, primarily related to employee severance and related benefit costs. These costs were in addition to $1.2 million of ~~our common stock~~severance and ~~our common stock began trading on Nasdaq on July 23, 2021. On July 27, 2021, we closed our IPO and issued 8,000,000 shares~~related costs related to other reorganization activities undertaken during 2023.

Partial Repurchase of ~~our common stock at an initial offering price of $20.00 per share, receiving aggregate net proceeds of $145.1 million, after deducting underwriting discounts, commissions and other offering costs.~~

In connection with the IPO, all of the shares of our convertible preferred stock outstanding automatically converted into an aggregate of 28,091,267 shares of the Company’s common stock, with all series converted on a one-to-one basis, with the exception of Series F, which was converted at 1.14-to-1, based on the terms of the Series F agreement and the IPO price. The total carrying value of convertible preferred stock of $162.4 million was reclassified to stockholders’ equity (deficit).

~~Reverse Stock Split~~

In connection with our IPO, our Board of Directors (the “Board”) and our stockholders approved a 1-for-1.70 reverse stock split of our common stock, which became effective on July 13, 2021. All share and per-share amounts for all periods presented in our audited consolidated financial statements and notes thereto have been adjusted retroactively to reflect the reverse stock split and adjustment of the conversion ratio of the convertible preferred stock.

Convertible Senior Notes

On ~~July 1, 2021,~~April 14, 2023, we ~~completed the sale of $200.0~~repurchased $118.0 million aggregate principal amount of ~~senior subordinated secured~~our 2.95% convertible notes due ~~July 1,~~ 2026 ~~(the “Notes”~~(“Convertible Notes”)~~, in~~ out of the initially issued principal balance of $236.0 millionvia a ~~private placement to institutional investors affiliated~~privately negotiated repurchase agreement with ~~and funds managed by The~~ Baupost Group Securities, L.L.C., ~~pursuant~~the sole holder of the Convertible Notes, for approximately $96.2 million in cash, including accrued interest, representing a discount of approximately 19% to the principal amount of the repurchased Convertible Notes. As a ~~Senior Subordinated Secured Note Purchase Agreement dated July 1, 2021 (the “Note Purchase Agreement”). On July 27, 2021,~~result, we recorded a pre-tax gain of approximately $22.6 million in our audited consolidated statement of operations for the year ended December 31, 2023. In connection with our partial repurchase of Convertible Notes, we redeemed some of our available-for-sale marketable securities prior to their maturities for net proceeds of $78.9 million. Following the closing of ~~our IPO~~the repurchase, the repurchased Convertible Notes were cancelled by the Trustee, and ~~pursuant~~$118.0 million principal amount of the Convertible Notes out of the initially issued principal balance of $236.0 million remains outstanding as of December 31, 2023, and continues to be subject to the terms of the ~~Note Purchase Agreement, we exchanged $200.0 million aggregate principal amount~~indenture dated as of ~~the Notes due~~ July ~~1, 2026 for $236.0 million aggregate principal amount of 2.95% Convertible Senior Notes due 2026 (the “Convertible Notes”~~27, 2021 (“Indenture”), pursuant to ~~an indenture, dated July 27, 2021, between the Company and The Bank of New York Mellon, as trustee.~~ ~~The Convertible Notes will mature on July 27, 2026, unless earlier converted, redeemed or repurchased. See “Liquidity and Capital Resources” for additional information.~~which they were issued.

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~~Acquisitions~~Acquisition

On ~~November 19, 2021,~~January 5, 2022, we ~~entered into a definitive agreement, by and among Outbrain and~~completed the ~~shareholders~~ acquisition of all of the outstanding shares of video intelligence AG (“vi”), a Swiss-based contextual video technology company for digital media ~~owners, for the acquisition of all of the outstanding shares of vi for a~~owners. The purchase price of approximately ~~$55 million. The acquisition~~$54.2 million was ~~completed on January 5, 2022. The purchase price was~~ ~~paid in the form~~comprised of cash and Outbrain common stock, with the first installment of $37.3 million in cash and the equity portion paid at closing, and the substantial majority of the remaining cash balance payable in the third quarter of 2022. The equity portion of the purchase price is subject to a post-closing adjustment based on market price355,786 shares of our ~~stock to be determined one year from closing, at which time any required adjustment is to be paid in cash. Aggregate consideration for the~~common stock. This acquisition ~~of vi will not exceed approximately $55 million in total. The purpose of the acquisition was to expand~~expanded our video product offerings to include in-stream high-quality video content, delivering a better user experience and more value to ~~its~~our advertisers. This acquisition ~~will be~~was accounted for as a business combination and the results of the acquired entity ~~will be included in our results of operations beginning as of the acquisition date in 2022.~~

On April 1, 2019, we completed the acquisition of all the outstanding shares of Ligatus, a German-based native advertising company, pursuant to a share purchase agreement with Gruner + Jahr GmbH. The acquisition date fair value of the consideration transferred was approximately $40.1 million, which consisted of 3,603,179 shares of our common stock. The acquisition was accounted for as a business combination and the results of operations of the acquired entity have been included in our results of operations ~~as of the acquisition date.~~beginning on January 5, 2022.

As part of our growth strategy, we plan to continue to evaluate strategic acquisition or investment opportunities ~~to add incremental growth with compounding benefits~~that would enhance our technology or market presence and deliver more value to our ~~business, to further expand our offerings, add key technology and/or reach new markets.~~partners and advertisers.

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~~COVID-19~~

~~In March 2020, the World Health Organization declared the spread of the COVID-19 disease~~Macroeconomic Environment

General worldwide economic conditions have recently experienced significant instability, as ~~a global pandemic. The COVID-19 pandemic resulted in a global slowdown of economic activity causing a decrease in demand for a broad variety of goods~~well as volatility and services, including those provided by certain advertisers using our platform. Many of our advertisers reduced their advertising spending, which had a negative impact on our revenue during the first half of 2020. As the world quickly shifted to online activities and advertisers gradually shifted their spending toward digital advertising, our revenue trends improved meaningfully and returned to growth beginningdisruption in the ~~second half of 2020. Although~~financial markets, resulting from factors including the ~~advertising market and our business have generally recovered from the economic~~ effects of the wars between Russia-Ukraine and Israel-Hamas, the COVID-19 pandemic, bank closures, and general economic uncertainty. The current macroeconomic environment, with variables such as inflation, increased interest rates, bank disruptions, recessionary concerns, bankruptcies, currency exchange rate fluctuations, global supply chain disruptions, and labor ~~shortages and stoppages, and cost inflation~~market volatility, has negatively impacted ~~certain categories of advertisers, such as the automotive advertisers,~~our advertisers. Accordingly, these conditions have adversely impacted our business and could, if they continue or worsen, adversely impact us in the future, including if our advertisers were to reduce or ~~cut~~further reduce their advertising spending as a result of any of these factors. We continue to monitor our operations, and the operations of those in our ecosystem (including media partners, advertisers, and agencies)~~, as well as government recommendations.~~. These conditions make it difficult for us, our media partners, advertisers, and agencies to accurately forecast and plan future business activities and could cause a further reduction or delay in overall advertising demand and spending or impact our advertisers’ ability to pay, which would negatively impact our business, financial condition, and results of operations.

Factors Affecting Our Business

Retention and Growth of Relationships with Media Partners

We rely on relationships with our media partners for a significant portion of our advertising inventory and ~~for~~ our corresponding ability to ~~increase revenue through expanding their use of our platform.~~drive advertising revenue. To further strengthen these relationships, we continuously invest in our technology and product functionality to drive user engagement and monetization by (i) improving our ~~algorithms;~~algorithms, referred to as our AI prediction engine; (ii) effectively managing ~~our~~ supply and demand; ~~and~~ (iii) expanding the adoption of our enhanced products by media ~~partners.~~partners; and (iv) expanding our demand capabilities to new formats and business lines such as Onyx.

Our relationships with media partners are typically long-term, exclusive, and strategic in nature. Our top 20 media partners, based on our ~~2021~~2023 revenue, have been using our platform for an average of ~~over~~ seven years, despite their typical contract length being two to ~~three~~four years. Net revenue retention is an important indicator of media partner satisfaction, the value of our platform, as well as our ability to grow revenue from existing relationships.

We calculate media partner net revenue retention at the end of each quarter by starting with revenue generated on media partners’ properties during the same period in the prior year, “Prior Period Retention Revenue.” We then calculate the revenue generated on these same media partners’ properties in the current period, “Current Period Retention Revenue.” Current Period Retention Revenue reflects any expansions within the media partner relationships, such as any additional placements or properties on which we extend our recommendations, as well as contraction or attrition. Our media partner net revenue retention in a quarter equals the Current Period Retention Revenue divided by the Prior Period Retention Revenue. To calculate media partner net revenue retention for year-to-date and annual periods, we sum the quarterly Current Period Retention

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Revenue and divide it by the sum of the quarterly Prior Period Retention Revenue. These amounts exclude certain revenue adjustments and revenue recognized on a net basis. Our media partner net revenue retention was ~~126%~~86% for the ~~year~~years ended December 31, ~~2021, 104% for the year ended December 31, 2020~~2023 and ~~95% for the year ended December 31, 2019 (104% excluding one media partner that we chose not~~2022, reflecting lower yields mainly due to ~~renew in 2019).~~

~~Our growth also depends~~weaker demand on our ~~ability~~platform, primarily as a result of the unfavorable macroeconomic conditions and the related impact on advertising spend.

Exploring new media partnerships, especially those that provide us with access to ~~secure~~ new ~~partnerships with media partners.~~audiences and data sets, also contributes to our growth. New media partners are defined as those relationships in which revenue was not generated in the prior period, except for limited instances where residual revenue was generated on a media partner’s properties. In such instances, the residual revenue would be excluded from net revenue retention above. Revenue generated on new media partners’ properties contributed approximately 7%8% to revenue growth for the year ended December 31, ~~2021, 7%~~2023 and 12% for the year ended December 31, ~~2020 and 10% for the year ended December 31, 2019.~~2022.

User Engagement with Relevant Media and Advertising Content

~~We believe that~~Driving attention and engagement is athe key pillar of ~~the overall value that~~ our platform ~~provides to users,~~that drives value for consumers, media partners, and advertisers. Our ~~algorithms enable effective~~AI prediction algorithm manages this dynamic, matching consumers with editorial and advertiser experiences that will deliver attention and engagement ~~of users by facilitating~~across the ~~discovery of content, products and services that they find most interesting, as well as connecting them to personalized ads that are relevant to them.~~Open Internet. We believe that the user experience has a profound impact on ~~long-term~~long term user behavior patterns and thus “compounds” over time, improving our ~~long-term~~long term monetization prospects. This principle guides our behavior, and as a result, we do not focus on the price of ads, nor on maximizing such prices, as ~~may be the case with some of our competitors. Given this view, we do not focus on cost-per-click or cost-per-impression as~~ key performance indicators for the business. ~~Consequently, we have a differentiated approach~~We strive to ~~monetization as we optimize our algorithms~~compound consumer attention and engagement, continually enhancing value for ~~the overall user experience rather than just for the price of each individual user engagement.~~both advertisers and media owners.

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Growth in ~~user~~attention and engagement is driven by several factors, including enhancements to our ~~recommendation engine,~~AI prediction technology, growth in the breadth and depth of our data assets, the ~~increase in~~ size and quality of our content and advertising index, user engagement, new media partners, and expansion on existing ~~media partner properties where our recommendations can be served and the adoption of our platform by new~~ media partners. As we grow ~~user~~attention and engagement, we are able to collect more data ~~enabling us to further enhance~~and continually improve our ~~algorithms,~~prediction engine — which ~~in turn helps us make smarter recommendations~~drives better results for our advertiser and ~~further grow user engagement, providing our platform and our business with a powerful~~media owner partners. This growth ~~flywheel. We measure the impact of this growth flywheel on our business~~“flywheel” can be measured by ~~reviewing the~~ growth of ~~Click Through Rate~~the consumer data points we drive, such as click-through-rate (“CTR”) ~~for ads on our platform.~~. CTR improvements increase the number of clicks on our platform. We believe that we have a significant opportunity to further grow ~~user~~consumer engagement, and thus our business, as today CTR for ads on our platform is less than 1% of ~~recommendations~~ads served. With the launch of Onyx, we have expanded the measurable consumer data points that fuel our prediction engine, expanding our ability to drive concrete business outcomes at each step of the marketing funnel.

Advertiser Retention and Growth

~~We focus on serving ads~~Our engine serves the ad experiences that are ~~more engaging~~predicted to deliver high attention or engagement, rather than on ~~the~~ price of the ads. We believe this approach leads to better return-on-ad-spend (“ROAS”) for advertisers, whether they are focused on driving a performance outcome, or a branding outcome. Our growth is partially driven by retaining and expanding the amount of spend by advertisers on our platform, as well as by acquiring new advertisers. ~~Improving our platform’s functionality and features increases~~Our recent launch of Onyx by Outbrain™ expands Outbrain’s total addressable market to now include top of the ~~attractiveness of~~funnel marketing dollars while also attracting more diverse, premium demand.

We continually invest in enhancements to our platform that allow advertisers to ~~existing~~drive concrete business outcomes and ~~new advertisers while also growing~~ROAS. In particular, we are expanding our ~~share~~usage of ~~their advertising budgets. We continuously invest~~AI to automate manual tasks in ~~enhancing our technological capabilities~~campaign set up and optimization, and to ~~deliver better ROAS~~enhance advertiser creative and ~~transparency on ad spend, and market these attributes to grow our advertiser base and share of wallet.~~landing page performance.

Prices paid by advertisers on our platform fluctuate period to period for a variety of reasons, including supply and demand ~~competition~~balance, macroeconomic conditions, and seasonality. ~~While in 2019 and 2020 average prices on an annual basis were down relative to prior year, we~~We have ~~noted an upward~~experienced a downward trend resulting in ~~a higher~~lower average ~~price~~prices in ~~2021,~~2023 and 2022, compared to ~~2019 and 2020 levels.~~normal levels, reflecting unfavorable macroeconomic conditions impacting our industry. Movements in average prices do not necessarily correlate to our revenue or Ex-TAC Gross Profit trends. In order to grow our revenue and Ex-TAC Gross Profit and maximize value for our advertisers and media partners, our focus as a business is on driving ~~user engagement~~business outcomes and ROAS for advertisers, not on optimizing for price.

For the year ended December 31, ~~2021, over 24,000~~2023, tens of thousands of unique advertisers were active on our ~~platform. In~~owned and operated platform, in addition ~~we continue~~ to ~~grow~~the thousands of advertisers who access Outbrain and Onyx environments through our programmatic ~~partnerships, enabling us to grow our advertiser base efficiently.~~partnerships.

Expansion Into New Environments, New ~~Content~~ Experiences and New Ad Formats

The accelerating pace of technological innovation has rapidly changed consumer habits. The available mediums and ~~adoption, combined~~formats for consumers to engage with ~~continuously evolving user~~media has greatly expanded over the last several years. As this evolution in media consumption and consumer behavior ~~and content consumption habits, presents multiple opportunities for growth. The emergence of~~continues, we are focused on utilizing our AI prediction technology to bring curated, relevant consumer experiences to these new devices, ~~platforms~~experiences and environments in which users spend time consuming content is one area of expansion for us. Similarly, the formats in which content can or will be consumed continue to evolve, as well as user-friendly and impactful ad formats that can be delivered in or alongside that content. formats.

Fundamentally, we plan to continue ~~making~~to make our platform available for media partners on all types of devices and platforms and ~~all formats~~evolve our business to apply our technology to the most popular methods of media ~~that carry their content.~~

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consumption, which now include unique video, high-impact display, and other new media experiences.

Examples of new environments in which content consumption is expected to grow include ~~connected TVs, screens for autonomous vehicles and public transport,~~ pre-installed applications on ~~new smartphones, smartphone native~~Smartphones, Smartphone content feeds, gaming applications, and push ~~notifications~~notifications. Additionally, we believe there is a strong opportunity to develop better personalization solutions for the visual and ~~email newsletters.~~video consumption of news media across the Open Internet.

Through our acquisition of vi in the first quarter of 2022, we expanded our video product offerings to new formats and environments, including pre-roll video formats. With the introduction of Onyx by Outbrain™, we have expanded our investment in applying our AI prediction to these new video and high-impact formats, delivering a curated consumer experience that drives attention for enterprise brands. We ~~are developing solutions that allow media partners, service providers and manufacturers~~plan to ~~provide better curated, personalized and more engaging content feeds and recommendations~~continue to evaluate strategic acquisition or investment opportunities as part of our growth strategy in ~~these environments.~~the future.

The development and deployment of new ad formats allow us to better serve ~~users,~~consumers, media partners and, ultimately, advertisers who seek to target and engage ~~users~~consumers at scale; we believe this continues to open and grow new types of advertiser demand, while ensuring relevance as the environments in which we operate diversify.

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Investment in Our Technology and Infrastructure

Innovation is a core tenet of our Company and our industry. We plan to continue our investments in our people and our technology in order to retain and enhance our ~~leadership~~competitive position. For example, improvements to our ~~algorithms~~AI prediction engine help us deliver more relevant ads, driving higher user engagement, thereby improving ROAS for advertisers and increasing monetization for ourour media partners. ~~In addition,~~

We strongly believe in the transformative power of AI in shaping the future of sustainable media, and have been utilizing AI technology for years to empower both media owners and advertisers in their businesses. We leverage AI in a manner designed to enable media owners to increase their revenues and connect with audiences on their own platforms within the Open Internet. We use machine learning to predict consumer interest and propensity to convert. We make around 1 billion such predictions every second. Our technology has developed into a robust AI machine learning system and is largely homegrown by our Research and Development team. One of the strongest long-term levers in our business is the continuous improvement of our algorithms and the data sets our algorithms learn from. Our direct integrations across our media partners’ properties provide us with a large volume of proprietary first-party data, including context, user interest and behavioral signals. The more data points we have, the better our CTR predictions and yield potential can be.

Our Smartlogic product dynamically adjusts both the arrangement and the formats of content delivered to a user, depending on the user’s preferences and our media partner’s key performance indicators (“KPIs”), designed to provide a tailored and engaging feed experience. We continue to invest in media partner and advertiser focused tools, technology, and products as well as privacy-centric solutions. For example, Keystone by Outbrain™ enables a more holistic management of overall revenue for media owners increasingly focused on revenue diversification.

We believe that our proprietary micro-services, API-based cloud infrastructure provides us with a strategic competitive advantage, as we are able to deploy code ~~an average~~hundreds of ~~300~~ times per day and grow in a scalable and highly cost-effective manner. As we develop and deploy solutions for enhanced integration of our technologies in new environments, with new content and ad formats, we anticipate activity through our platform to grow. We anticipate that the investment in our technology, infrastructure and solutions will contribute to our long-term growth.

Industry Dynamics

Our business depends on the overall demand for digital advertising, ~~and~~ on the continuous success of our current and prospective media ~~partners.~~partners, and on general market conditions. Digital advertising is a rapidly ~~evolving and~~ growing industry, with growth that has outpaced the growth of the ~~broader~~broad advertising ~~industry, and it has been more resilient to economic downturns compared to the advertising industry in general.~~industry. Content consumption ~~is increasingly shifting~~continues to shift online, requiring media owners to adapt in order to successfully attract, engage and monetize their ~~users. Given the large and growing~~consumers. The soaring volume of online content, ~~being generated online,~~amplified by the latest generative AI innovations, has made content curation tools ~~are increasingly becoming a necessity~~even more essential for ~~users~~consumers and media owners alike. ~~Advertisers~~

AI is revolutionizing content creation, distribution, and personalization; automating tasks like video editing, image recognition, and language translation. AI-powered systems are also improving content delivery, helping media platforms suggest relevant movies, shows, articles, and advertisements to consumers. This is especially important at a time when advertisers increasingly ~~rely on~~anticipate measurable results from their digital advertising ~~platforms that deliver highly targeted ads~~investments. Our experience in this space enables us to more nimbly capitalize on the opportunities for media owners and ~~measurable performance.~~ advertisers to leverage AI and automation to engage consumers and optimize their business goals.

Regulators across most developed markets are increasingly focused on enacting and enforcing user privacy rules as well as exerting tighter oversight ofon the major ~~‘walled garden’~~“walled garden” platforms. Industry participants have recently been, and likely will continue to be, impacted by changes implemented by platform leaders, such as Apple’s change to its Identifier for Advertisers policy and Google’s evolving roadmap pertaining to the use of third-party cookies within its Chrome web browser. See Item 1A, “Risk ~~Factors”~~Factors'' in this Report for additional information regarding changing industry dynamics with respect to industry participants and the regulatory environment. Given our focus on ~~innovation,~~context and engagement, the depth and length of our media partner relationships, and our scale, we believe that we are well positioned in the long-term to address and potentially benefit from many of these industry dynamics. Additionally, we are confident that our strength in delivering engagement and clear outcomes for advertisers, built on our proprietary AI prediction engine, aligns well with the ongoing market shift towards increased accountability and expectations of ROAS from digital advertising spend.

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Seasonality

The global advertising industry experiences seasonal trends that affect most participants in the digital advertising ecosystem. Our revenue generally fluctuates from quarter to quarter as a result of a variety of factors, including seasonality, as many advertisers allocate the largest portion of their budgets to the fourth quarter of the calendar year to coincide with increased holiday purchasing, as well as the timing of advertising budget cycles. Historically, the fourth quarter of the year has reflected the highest levels of advertiser spending, and the first quarter generally has reflected the lowest level of advertiser spending.

In addition, expenditures by advertisers tend to be cyclical and discretionary in nature, reflecting changes in brand advertising strategy, budgeting constraints, and buying patterns, and a variety of other factors, many of which are outside of our control. The quarterly rate of increase in our traffic acquisition costs is generally commensurate with the quarterly rate of increase in our revenue. However, traffic acquisition costs have, at times, grown at a faster or slower rate than revenue, primarily due to the mix of the revenue generated or contracted terms with media partners. We generally expect these seasonal trends to continue, though historical seasonality may not be predictive of future results given the potential for changes in advertising buying ~~patterns.~~patterns and macroeconomic conditions. These trends will affect our operating results and we expect our revenue to continue to fluctuate based on seasonal factors that affect the advertising industry as a whole.

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Definitions of Financial and Performance Measures

Revenue

We generate revenue from advertisers through ads that we deliver across a variety of media partner properties. We charge advertisers for clicks on and, to a lesser extent, impressions of their ads, depending on how they choose to contract with us. We recognize revenue in the period in which the click or impression occurs.

The amount of revenue that we generate depends on the level of demand from advertisers to promote their content to users across our media partners’ properties. We generate higher revenue at times of high demand, which is also impacted by seasonal factors. For any given marketing campaign, the advertiser has the ability to adjust its price in real time and set a maximum ~~daily~~ spend. This allows advertisers to adjust the estimated ad spend attributable to the particular campaign. Due to the measurable performance that our advertisers achieve with us, a ~~significant~~ portion of our advertisers increase their level of spend with us ~~on an unlimited basis,~~over time as long as their ROAS objectives are met.

Our agreements with advertisers provide them with considerable flexibility to modify their overall budget, price (cost-per-click or cost-per-impression), and the ads they wish to deliver on our platform.

Traffic Acquisition Costs

We define traffic acquisition costs (“TAC”) as amounts owed to media partners for their share of the revenue we generated on their properties. We incur traffic acquisition costs in the period in which the revenue is recognized. Traffic acquisition costs are based on the media partners’ revenue share or, in some circumstances, based on a guaranteed minimum rate of payment from us in exchange for guaranteed placement of our ads on specified portions of the media partner’s digital properties. These guaranteed rates are typically provided per thousand qualified page views, whereas our minimum monthly payment to the media partner may fluctuate based on how many qualified page views the media partner generates, subject to a maximum guarantee. As such, traffic acquisition costs may not correlate with fluctuations in revenue, and our rates may remain fixed even with a decrease in revenue. Traffic acquisition costs also include amounts payable to programmatic supply partners.

Other Cost of Revenue

Other cost of revenue consists of costs related to the management of our data centers, hosting fees, data connectivity costs and depreciation and amortization. Other cost of revenue also includes the amortization of capitalized software that is developed or obtained for internal use associated with our revenue-generating technologies.

Operating Expenses

Our operating expenses consist of research and development, sales and marketing and general and administrative expenses. The largest component of our operating expenses is personnel costs. Personnel costs consist of wages, benefits, bonuses, stock-based compensation and, with respect to sales and marketing expenses, sales commissions.

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Research and Development. Research and development expenses are related to the development and enhancement of our platform and consist primarily of personnel and the related overhead costs, amortization of capitalized software for non-revenue generating infrastructure and facilities costs.

Sales and Marketing. Sales and marketing expenses consist primarily of personnel and the related overhead costs for personnel engaged in marketing, advertising, client services, and promotional activities. These expenses also include advertising and promotional spend on media, conferences, and other events to market our services, and facilities costs.

General and Administrative. General and administrative expenses consist primarily of personnel and the related overhead costs, professional fees, facilities costs, insurance, and certain taxes other than income taxes. General and administrative personnel costs include, among others, our executive, finance, human resources, information technology and legal functions. Our professional service fees consist primarily of accounting, audit, tax, legal, information technology and other consulting costs, including our implementation of ~~the~~and compliance with Sarbanes-Oxley Act requirements.

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Other Income (Expense), Net

Other income (expense), net is comprised of ~~charges related to exchange of senior notes upon IPO,~~gain (loss) on convertible debt, interest expense and interest income and other income (expense)~~, net.~~.

~~Charges related to exchange~~Gain on convertible debt. In 2023, we repurchased $118.0 million of ~~senior notes upon IPO.Charges for the year ended December 31, 2021 include~~our outstanding Convertible Notes at a ~~one-time charge~~discount of ~~$42.0 million related to accelerated amortization~~approximately 19% of the ~~unamortized discount and deferred issuance costs on the $200.0 million aggregate~~ principal amount and recorded a pre-tax gain of ~~senior subordinated secured notes issued on July 1, 2021 and exchanged to Convertible Notes upon our IPO.~~$22.6 million.

Interest Expense. Interest expense consists of interest expense on ~~our 2.95%~~the Convertible ~~Senior~~ Notes, ~~due 2026 (the “Convertible Notes”),~~ our revolving credit facility and capital leases. Interest expense may increase if we incur any borrowings ~~periodically~~ under our revolving credit facility or if we enter into new debt facilities or capital leasing arrangements.

Interest Income and Other Income (Expense), ~~Net.~~net. Interest income and other income (expense), net primarily consists of interest earned on our cash, ~~and~~ cash equivalents and ~~money market funds, as well as~~investments in marketable securities, discount amortization on our investments in marketable securities, and foreign currency exchange gains and losses. Foreign currency exchange gains and losses, both realized and unrealized, relate to transactions and monetary asset and liability balances denominated in currencies other than the functional ~~currencies.~~currencies, including mark-to-market adjustments on undesignated foreign exchange forward contracts. Foreign currency gains and losses may continue to fluctuate in the future due to changes in foreign currency exchange rates.

~~(Benefit)~~ Provision for Income Taxes

~~(Benefit) provision~~Provision for income taxes consists of federal and state income taxes in the United States ~~(U.S.)~~ and income taxes in certain foreign jurisdictions, as well as deferred income taxes and changes in valuation allowance, reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Realization of our deferred tax assets depends on the generation of future taxable income. In considering the need for a valuation allowance, we consider our historical and future projected taxable income, as well as other objectively verifiable evidence, including our realization of tax attributes, assessment of tax credits and utilization of net operating loss carryforwards.

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Results of Operations

We have one operating segment, which is also our reportable segment. The following tables set forth our results of operations for the periods presented:


				Year Ended December 31,
				2021			2020			2019
		(in thousands)
			Year Ended December 31,																				Year Ended December 31,
			2023															2023						2022
	(In thousands)																		(In thousands)
Consolidated Statements of Operations:	Consolidated Statements of Operations:
Revenue	Revenue			$	1,015,630		$	767,142		$	687,333
Revenue
Revenue															$	935,818				$	992,082
Cost of revenue:	Cost of revenue:
Traffic acquisition costs
Traffic acquisition costs
Traffic acquisition costs	Traffic acquisition costs			743,579			572,802			517,000				708,449				757,321
Other cost of revenue	Other cost of revenue			31,791			29,278			28,548			Other cost of revenue		42,571					42,108
Total cost of revenue	Total cost of revenue			775,370			602,080			545,548			Total cost of revenue		751,020					799,429
Gross profit	Gross profit			240,260			165,062			141,785			Gross profit		184,798					192,653
Operating expenses:	Operating expenses:
Research and development	Research and development			39,169			28,961			26,391
Research and development
Research and development															36,402					40,320
Sales and marketing	Sales and marketing			95,786			77,570			78,941			Sales and marketing		98,370					108,816
General and administrative	General and administrative			70,749			48,354			51,038			General and administrative		58,665					57,065
Total operating expenses	Total operating expenses			205,704			154,885			156,370			Total operating expenses		193,437					206,201
Income (loss) from operations				34,556			10,177			(14,585)
Loss from operations													Loss from operations		(8,639)					(13,548)
Other income (expense), net:	Other income (expense), net:
Charges related to exchange of senior notes upon IPO				(42,049)			—			—
Gain on convertible debt
Gain on convertible debt
Gain on convertible debt															22,594					—
Interest expense	Interest expense			(3,964)			(832)			(601)			Interest expense		(5,393)					(7,625)
Interest income and other income (expense), net	Interest income and other income (expense), net			(3,078)			(1,695)			152			Interest income and other income (expense), net		7,793					2,600
Total other expense, net				(49,091)			(2,527)			(449)
(Loss) income before provision for income taxes				(14,535)			7,650			(15,034)
(Benefit) provision for income taxes				(25,530)			3,293			5,480
Total other income (expense), net													Total other income (expense), net		24,994					(5,025)
Income (loss) before provision (benefit) for income taxes													Income (loss) before provision (benefit) for income taxes		16,355					(18,573)
Provision for income taxes													Provision for income taxes		6,113					6,008
Net income (loss)	Net income (loss)			$	10,995		$	4,357		$	(20,514)		Net income (loss)		$	10,242				$	(24,581)
Other Financial Data:	Other Financial Data:
Research and development as % of revenue	Research and development as % of revenue			3.9		%	3.8		%	3.8		%
Research and development as % of revenue
Research and development as % of revenue															3.9		%			4.1		%
Sales and marketing as % of revenue	Sales and marketing as % of revenue			9.4		%	10.1		%	11.5		%	Sales and marketing as % of revenue		10.5		%			11.0		%
General and administrative as % of revenue	General and administrative as % of revenue			7.0		%	6.3		%	7.4		%	General and administrative as % of revenue		6.3		%			5.8		%
Non-GAAP Financial Data: (1)
Ex-TAC Gross Profit				$	272,051		$	194,340		$	170,333
Adjusted EBITDA				$	88,884		$	41,145		$	19,275

Ex-TAC Gross Profit (1)
Ex-TAC Gross Profit (1)
Ex-TAC Gross Profit (1)															$	227,369				$	234,761
Adjusted EBITDA (1)													Adjusted EBITDA (1)		$	28,455				$	26,274

______________________

(1)Ex-TAC Gross Profit and Adjusted EBITDA are non-GAAP financial measures. See “Non-GAAP Reconciliations” in this Report for the definitions and limitations of these measures, and reconciliations to the most comparable U.S. GAAP financial measures.

Year Ended December 31, ~~2021~~2023 Compared to Year Ended December 31, ~~2020~~2022

Revenue

Revenue ~~increased~~decreased by ~~$248.5~~$56.3 million, or ~~32.4%~~5.7%, to ~~$1,015.6~~$935.8 million in ~~2021~~2023 from ~~$767.1~~$992.1 million in ~~2020.~~2022. Revenue grew approximately 25.8%, or $198.5 million, from net revenue retention on existing media partners primarily due to increased monetization from higher demand on our platform and our growth in the click-through-rate, and approximately 7.0%, or $53.8 million, from new media partners. Revenue in 2021 also benefited fromfor 2023 included net favorable foreign currency effects of approximately ~~$6.7 million.~~$5.0 million, and decreased $61.3 million, or 6.2%, on a constant currency basis, compared to the prior year period. Our reported revenue decreased approximately $140.1 million due to net revenue retention of 86% on existing media partners, as we have experienced lower yields mainly due to weaker demand on our platform, reflecting the current macroeconomic conditions and the related impact on advertising spend. This decrease was partially offset by growth of approximately 8%, or $80.1 million, from new media partners.

See “Non-GAAP Reconciliations” for information regarding the constant currency measures provided in this discussion and below to supplement our reported results.

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Cost of Revenue and Gross Profit

Traffic acquisition costs ~~increased $170.8~~decreased $48.9 million, or ~~29.8%~~6.5%, to ~~$743.6~~$708.4 million in ~~2021,~~2023, compared to ~~$572.8~~$757.3 million in the prior year ~~period, including~~period. Traffic acquisition costs included net unfavorable foreign currency effects of approximately ~~$7.3 million. Traffic~~$3.9 million, and decreased $52.8 million, or 7.0%, on a constant currency basis, compared to the prior year period. The decrease in traffic acquisition costs ~~grew less than revenue~~was primarily due to ~~favorable~~lower revenue ~~mix from higher margin media partners~~ and improved performance ~~on media owners with guarantee arrangements.~~from certain deals, partially offset by a net unfavorable change in revenue mix. As a percentage of revenue, traffic acquisition costs decreased to ~~73.2%~~75.7% in ~~2021,~~2023, from ~~74.7%~~76.3% in ~~2020.~~2022.

Other cost of revenue increased ~~$2.5~~$0.5 million, or ~~8.6%~~1.1%, to ~~$31.8~~$42.6 million in ~~2021,~~2023, compared to ~~$29.3~~$42.1 million in the prior year period, primarily due to higher hosting fees due to continued platform improvements, including increased ~~revenue and increased~~data processing capacity, partially offset by lower depreciation expense on server equipment. As a percentage of revenue, other cost of revenue ~~decreased 70~~increased 30 basis points to ~~3.1%~~4.5% in ~~2021~~2023 from ~~3.8%~~4.2% in ~~2020.~~2022.

Gross profit ~~increased $75.2~~decreased $7.9 million, or ~~45.6%~~4.1%, to ~~$240.3~~$184.8 million in ~~2021,~~2023, compared to ~~$165.1~~$192.7 million in ~~2020,~~2022, which was ~~primarily~~ attributable to the ~~increase~~decrease in revenue ~~partially offset by~~exceeding the ~~corresponding increase~~decrease in the cost of revenue, as previously described. Gross profit for 2023 included net favorable foreign currency effects of approximately $1.0 million, and decreased $8.9 million, or 4.6%, on a constant currency basis, compared to the prior year period.

Ex-TAC Gross Profit

Our Ex-TAC Gross Profit ~~increased $77.8~~decreased $7.4 million, or ~~40.0%~~3.1%, to ~~$272.1~~$227.4 million in ~~2021,~~2023, from ~~$194.3~~$234.8 million in ~~2020, including~~2022. Ex-TAC Gross Profit for 2023 included net ~~unfavorable~~favorable foreign currency effects of approximately ~~$0.6 million.~~$1.1 million, and decreased $8.5 million, or 3.6%, on a constant currency basis, compared to the prior year period. The ~~increase~~decrease in Ex-TAC Gross Profit was primarily driven by ~~our~~lower revenue ~~growth as well as favorable~~and a net unfavorable change in revenue mix, ~~from higher margin media partners and~~partially offset by improved performance ~~on media owners with guarantee arrangements.~~from certain deals. See “Non-GAAP Reconciliations” for the related definition and reconciliations to our gross profit.

Operating Expenses

Operating expenses ~~increased~~decreased by ~~$50.8~~$12.8 million, or ~~32.8%~~6.2%, to ~~$205.7~~$193.4 million in ~~2021,~~2023, from ~~$154.9~~$206.2 million in ~~2020.~~2022. Operating expenses for ~~2021~~2023 included net favorable foreign currency effects of approximately ~~$16.5~~$4.9 million, ~~of one-time incremental cumulative stock-based compensation expense for awards with~~and decreased $7.9 million, or 3.8%, on a ~~performance condition that was met upon~~constant currency basis, compared to the Company’s IPO, and regulatory matter costs of $6.4 million. Operating expenses for 2020 included terminated merger expenses of $11.2 million, offset in part by a $2.3 million reversal of a tax-contingency recorded in 2019.prior year period. The ~~remaining $36.8 million increase~~reported decrease in operating expenses was primarily attributable to ~~higher~~lower personnel-related costs of ~~$25.0~~$14.1 million ~~primarily reflecting higher~~(net of $2.9 million of increased severance and related costs), largely due to lower headcount from cost reduction initiatives and ~~incentive-based compensation, as well as increased~~favorable foreign currency effects, lower professional fees of ~~$4.3~~$2.9 million largely attributable to Sarbanes-Oxley Act implementation costs in the prior year period, and ~~marketing costs~~lower expense of ~~$3.8 million. Operating expenses included net unfavorable foreign currency effects of approximately $4.6 million.~~$2.2 million related to fully amortized intangible assets from a prior acquisition. These declines were partially offset by a $4.7 million increase in the provision for credit losses and a $2.6 million increase in regulatory fees largely due to a partial insurance recovery in the prior year period.

The components of operating expenses are discussed below:

•Research and development expenses — ~~increased $10.2~~decreased $3.9 million, primarily ~~attributable~~due to ~~increased~~lower personnel-related costs to invest in the growth of our platform, including $1.2 million of one-time incremental cumulative stock-based compensation expense related to awards with a performance condition that was satisfied upon our IPO.costs.

•Sales and marketing expenses — ~~increased $18.2~~decreased $10.5 million, primarily due to ~~higher~~a $7.0 million decrease in personnel-related costs (net of $14.3 million, including $4.2 million of one-time incremental cumulative stock-based compensation expense for awards with a performance condition that was satisfied upon our IPO, as well as higher marketingincreased severance and related costs of ~~$3.6 million.~~$1.9 million), lower expense of $2.2 million related to fully amortized intangible assets, and lower marketing costs.

•General and administrative expenses — increased ~~$22.4~~$1.6 million, primarily due to a $4.7 million increase in the provision for credit losses and a $2.6 million increase in regulatory fees, largely due to ~~higher personnel-related~~a partial insurance recovery in the prior year period. These increases were partially offset by lower personnel related costs of ~~$18.3~~$3.2 million ~~including $11.1 million of one-time incremental cumulative stock-based compensation expense for awards with a performance condition that was satisfied upon our IPO,~~ and ~~higher~~lower professional fees of ~~$10.5~~$2.9 million, ~~which included regulatory matter~~largely attributable to the Sarbanes-Oxley implementation costs ~~of $6.4 million~~ in 2021. Operating expenses for 2020 included terminated merger expenses of $11.2 million, partially offset by a $2.3 million reversal of a tax-contingency recorded in 2019 with a corresponding charge to income tax expense in 2020.the prior year period.

Operating expenses as a percentage of revenue ~~increased~~decreased slightly to ~~20.3%~~20.7% in ~~2021~~2023 from ~~20.2%~~20.8% in ~~2020~~. 2022, primarily due to the favorable impact of our cost-saving measures, including our global workforce reduction executed in the first half of 2023 to adjust to the continued macroeconomic uncertainty, offset in part by higher severance and benefit costs and provision for credit losses recorded in 2023. We expect our operating expenses ~~on an absolute basis, excluding one-time costs,~~ to increase ~~over the next twelve months due to higher personnel-related costs (including stock-based compensation)~~modestly in 2024 from 2023, as we invest in key strategic initiatives to support ~~the growth of~~innovation in our business and the current and expected continued competitive labor market conditions, as well as due to an increase in other sales and marketing costs and increased expenses assuming a transition from a fully remote to a hybrid environment over the course of the year. In addition, our overall general and administrative expenses are expected to increase indrive future ~~periods due to incremental costs~~ ~~associated with being a public company.~~growth.

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Total Other ~~Expense,~~Income (Expense), Net

Total other ~~expense,~~income (expense), net, increased $30.0 million to ~~$49.1~~income of $25.0 million in ~~2021,~~2023, compared to ~~$2.5~~net expense of $5.0 million in ~~2020,~~2022, primarily ~~due to $42.0~~driven by the pre-tax gain of approximately $22.6 million ~~of one-time charges~~ recorded in ~~2021 to recognize~~2023 in connection with the ~~unamortized discount and deferred issuance costs on senior subordinated secured notes issued on July 1, 2021, upon~~partial repurchase of our ~~IPO and convertible senior notes issuance (see Note 6 to the accompanying audited consolidated financial statements for additional information).~~Convertible Notes. The increase in total other ~~expense,~~income (expense), net was also attributable to ~~$3.1~~incremental investment income of $4.4 million recorded in connection with our investment program initiated in July 2022, a favorable change of $3.0 million in mark-to-market adjustments on undesignated foreign exchange forward contracts used to manage our foreign currency exchange risk on net cash flows from our non-U.S. dollar denominated operations, and reduced interest expense onof $2.2 million largely due to our ~~convertible senior notes in 2021, as well as the absence~~repurchase of half of the ~~$1.1 million gain on sale~~outstanding Convertible Notes in April 2023. These increases were partially offset by higher losses resulting from remeasurement of ~~an asset recorded~~transactions denominated in ~~2020.~~currencies other than the functional currencies.

~~(Benefit)~~ Provision for Income Taxes

~~Benefit from~~Provision for income taxes was ~~$25.5~~$6.1 million in ~~2021,~~2023, compared to ~~provision for income taxes of $3.3~~$6.0 million in ~~2020, primarily attributable to the release of the valuation allowance on certain deferred tax assets in the U.S.~~2022. Our effective tax rate was ~~175.6%~~37.4% in ~~2021,~~2023, compared to ~~43.0%~~(32.3)% in ~~2020. Our 2021~~2022, primarily due to a higher pre-tax income in 2023 (which included a pre-tax gain of approximately $22.6 million on the partial repurchase of our Convertible Notes), as compared to a pre-tax loss in the prior period, and incremental tax expense related to the profitability of non-U.S. jurisdictions, partially offset by a deduction related to foreign-derived intangible income in 2023.

A provision enacted as part of the 2017 Tax Cuts & Jobs Act requires companies to capitalize certain research and experimental expenditures for tax purposes in tax years beginning after December 31, 2021. As a result, as of December 31, 2023, the Company’s U.S. federal net operating losses have been fully utilized, with the exception of those subject to the annual limitation provided for in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), which resulted in higher cash taxes and lower effective tax rate ~~was unfavorably impacted by the~~ ~~$31.8 million~~ release of valuation allowance in the U.S. (See Note 11 to the accompanying audited consolidated financial statements for additional information.) Our 2020 effective tax rate was unfavorably impacted by approximately 16.5 percentage points due to ~~certain non-recurring prior year taxes in~~ a ~~foreign tax jurisdiction.~~deduction related to foreign-derived intangible income.

Our future effective tax rate may be affected by the geographic mix of earnings in countries with different statutory rates. Additionally, our future effective tax rate may be affected by our ongoing assessment of the need for a valuation allowance on our deferred tax assets or liabilities, or changes in tax laws, regulations, or accounting principles, tax planning initiatives, as well as certain discrete items.

Net Income (Loss)

As a result of the foregoing, we recorded net income ~~increased $6.6 million, to $11.0~~of $10.2 million in ~~2021, from $4.4~~2023, as compared to net loss of $24.6 million in ~~2020.~~2022. As previously discussed, net income for ~~2021~~2023 included a ~~one-time tax benefit~~$22.6 million pre-tax gain in connection with our partial repurchase of $31.8 million due to a release of the valuation allowance on certain deferred tax assets. Net income for 2021 also included charges of $42.0 million (pre-tax) to recognize the unamortized discount and deferred financing costs on our senior subordinated secured notes that were exchanged for convertible notes upon our IPO, as well as $16.5 million of one-time incremental cumulative stock-based compensation expense (pre-tax) for awards with an IPO performance condition.Convertible Notes.

Adjusted EBITDA

Our Adjusted EBITDA increased ~~$47.7~~$2.2 million to ~~$88.9~~$28.5 million in ~~2021~~2023 from ~~$41.1~~$26.3 million in ~~2020, which was~~2022, primarily ~~attributable~~due to ~~the increase in~~lower operating expenses, partially offset by lower Ex-TAC Gross Profit, ~~partially offset by the corresponding increase in operating expenses~~ as ~~we continue to invest in our business.~~previously described. Our Adjusted EBITDA for 2023 included net favorable foreign currency effects of approximately $5.9 million. See “Non-GAAP Reconciliations” for the related definitions of Adjusted EBITDA and reconciliations to our net income.

~~Year Ended December 31, 2020 Compared to Year Ended December 31, 2019~~

~~Revenue~~

Revenue increased by $79.8 million, or 11.6%, to $767.1 million in 2020 from $687.3 million in 2019. Approximately 7%, or $52 million, of the increase in revenue was from new media partners and approximately 4%, or $27 million, was from net revenue retention on existing media partners as we continue to expand business with them. The COVID-19 pandemic negatively impacted our revenue trends in the first half of 2020. Revenue for the year ended December 31, 2020 benefited from net favorable foreign currency effects of $6.3 million.

~~Cost of Revenue and Gross Profit~~

Traffic acquisition costs increased $55.8 million, or 10.8%, in 2020 compared to 2019 including net unfavorable foreign currency effects of $5.3 million, and were generally commensurate with the increase in revenue. As a percentage of revenue, traffic acquisition costs decreased approximately 50 basis points to 74.7% in 2020, compared to 75.2% in 2019.

Other cost of revenue increased $0.7 million, or 2.6%, in 2020 compared to 2019, which was primarily attributable to an increase in services that fluctuate with the growth of ad traffic, largely offset by the favorable impact of cost savings initiatives and efficiency projects. As a percentage of revenue, other cost of revenue decreased 40 basis points to 3.8% in 2020, compared to 4.2% in 2019.

~~Table of Contents~~

Gross profit increased $23.3 million, or 16.4%, to $165.1 million in 2020 compared to $141.8 million in 2019, which was primarily attributable to the increase in revenue, partially offset by the corresponding increase in cost of revenue, as previously described.

~~Ex-TAC Gross Profit~~

Our Ex-TAC Gross Profit increased 14.1% to $194.3 million in 2020, from $170.3 million in 2019, primarily due to revenue growth. See “Non-GAAP Reconciliations” for the related definition and reconciliations to our gross profit.

~~Operating Expenses~~

Operating expenses decreased by $1.5 million, or 0.9%, to $154.9 million in 2020 from $156.4 million in 2019. The decrease in operating expenses was mainly attributable to $6.5 million of reduced expenses in connection with the COVID-19 pandemic, including travel and entertainment, facilities, and marketing event expenses, as well as a favorable change of $4.2 million relating to a reversal of a tax-contingency recorded in 2019, as further discussed below. These declines were largely offset by an increase of approximately $9.0 million in personnel-related costs in 2020.

~~The components of operating expenses are discussed below:~~

•~~Research and development expenses—increased $2.6 million, primarily due to higher personnel costs, to invest in the growth of our platform.~~

•~~Sales and marketing expenses~~—decreased $1.4 million, primarily reflecting a decrease of $5.0 million due to reduced expenses in connection with the COVID-19 pandemic, partially offset by an increase of $3.4 million in personnel costs primarily related to higher incentive-based compensation.

•~~General and administrative expenses~~—decreased $2.7 million, which included a favorable change of $4.2 million relating to a reversal of a tax-contingency recorded in 2019 and a corresponding charge to income tax expense in 2020, as well as a $3.0 million reduction in expenses in connection with the COVID-19 pandemic and other travel and entertainment expenses. These decreases were partially offset by increased personnel costs of $3.6 million primarily attributable to increased incentive-based compensation costs and $0.6 million of increased acquisition-related costs.

~~Operating expenses as a percentage of revenue declined by 2.6%, from 22.8% in 2019 to 20.2% in 2020.~~

~~Total Other Expense, Net~~

Total other expense, net, increased $2.1 million, to $2.5 million in 2020 from $0.4 million in 2019, primarily due to higher foreign currency losses of $3.5 million resulting from transactions denominated in currencies other than the functional currencies, partially offset by a $1.1 million gain on sale of an asset.

~~Provision for Income Taxes~~

Provision for income taxes decreased by $2.2 million to $3.3 million in 2020 from $5.5 million in 2019. This decrease was primarily attributable to the valuation allowance against one of our foreign subsidiaries’ net operating losses, which was recorded in 2019 and released in 2020 due to the increase in taxable income, as well as higher uncertain tax positions in 2019. Our effective tax rate was 43.0% in 2020, compared to (36.5)% in 2019 due to a loss from operations for that year. Our 2020 effective tax rate was unfavorably impacted by approximately 16.5 percentage points due to certain non-recurring prior year taxes in a foreign tax jurisdiction.

~~Net Income (Loss)~~

~~As a result of the foregoing, net income (loss) increased $24.9 million, to net income of $4.4 million in 2020, from a net loss of $20.5 million in 2019.~~

~~Adjusted EBITDA~~

Our Adjusted EBITDA increased $21.8 million, or 113%, to $41.1 million in 2020 from $19.3 million in 2019, which was primarily attributable to the increase in revenue, partially offset by the corresponding increase in cost of revenue, as previously described. See “Non-GAAP Reconciliations” for the related definitions and reconciliations to our net income.

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Non-GAAP Reconciliations

Because we are a global company, the comparability of our operating results is affected by foreign exchange fluctuations. We calculate certain constant currency measures and foreign currency impacts by translating the current year’s reported amounts into comparable amounts using the prior year’s exchange rates. All constant currency financial information being presented is non-GAAP and should be used as a supplement to our reported operating results. We believe that this information is helpful to our management and investors to assess our operating performance on a comparable basis. However, these measures are not intended to replace amounts presented in accordance with U.S. GAAP and may be different from similar measures calculated by other companies.

We present Ex-TAC Gross Profit, Adjusted ~~EBITD~~A,EBITDA, Adjusted EBITDA as a percentage of Ex-TAC Gross Profit, and Free Cash Flow because they are key profitability measures used by our management and the Board to understand and evaluate our operating performance and trends, develop short-term and long-term operational plans, and make strategic decisions regarding the allocation of capital. Accordingly, we believe that these measures provide information to investors and the market in understanding and evaluating our operating results in the same manner as our management and the Board.

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These non-GAAP financial measures are defined and reconciled to the corresponding U.S. GAAP measures below. These non-GAAP financial measures are subject to significant limitations, including those identified below. In addition, other companies in our industry may define these measures differently, which may reduce their usefulness as comparative measures. As a result, this information should be considered as supplemental in nature and is not meant as a substitute for revenue, gross profit, net income (loss) or net cash provided by (used in) operating activities presented in accordance with U.S. GAAP.

Ex-TAC Gross Profit

Ex-TAC Gross Profit is a non-GAAP financial measure. Gross profit is the most comparable U.S. GAAP measure. In calculating Ex-TAC Gross Profit, we add back other cost of revenue to gross profit. Ex-TAC Gross Profit may fluctuate in the future due to various factors, including, but not limited to, seasonality and changes in the number of media partners and advertisers, advertiser demand or user engagements.

There are limitations on the use of Ex-TAC Gross Profit in that traffic acquisition cost is a significant component of our total cost of revenue but not the only component and, by definition, Ex-TAC Gross Profit presented for any period will be higher than gross profit for that period. A potential limitation of this non-GAAP financial measure is that other companies, including companies in our industry which have a similar business, may define Ex-TAC Gross Profit differently, which may make comparisons difficult. As a result, this information should be considered as supplemental in nature and is not meant as a substitute for revenue or gross profit presented in accordance with U.S. GAAP.

The following table presents the reconciliation of Ex-TAC Gross Profit to gross profit, the most directly comparable U.S. GAAP measure, for the periods presented:
Year Ended December 31,
2021 2020 2019
(in thousands)
Revenue $ 1,015,630 $ 767,142 $ 687,333
Traffic acquisition costs (743,579) (572,802) (517,000)
Other cost of revenue (31,791) (29,278) (28,548)
Gross profit 240,260 165,062 141,785
Other cost of revenue 31,791 29,278 28,548
Ex-TAC Gross Profit $ 272,051 $ 194,340 $ 170,333


		Year Ended December 31,
		2023		2022
	(In thousands)
Revenue		$	935,818	$	992,082
Traffic acquisition costs		(708,449)		(757,321)
Other cost of revenue		(42,571)		(42,108)
Gross profit		184,798		192,653
Other cost of revenue		42,571		42,108
Ex-TAC Gross Profit		$	227,369	$	234,761

Adjusted EBITDA

We define Adjusted EBITDA as net income (loss) before ~~charges~~gain related to ~~the exchange of senior notes upon IPO;~~convertible debt; interest expense; interest income and other (expense) income, ~~(expense),~~ net; ~~(benefit)~~ provision for income taxes; depreciation and amortization; stock-based compensation, and other income or expenses that we do not consider indicative of our core operating performance, including, but not limited to merger and acquisition costs, certain public company implementation related costs, regulatory matter costs, and ~~a tax contingency.~~severance costs related to our cost saving initiatives. We present Adjusted EBITDA as a supplemental performance measure because we believe it facilitates operating performance comparisons from period to period.

We believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and the Board. However, ~~Adjusted EBITDA is a non-GAAP financial measure and how we calculate~~our calculation of Adjusted EBITDA is not necessarily comparable to non-GAAP information of other companies. Adjusted EBITDA should be considered as a supplemental measure and should not be considered in isolation or as a substitute orfor any measures of our financial performance that are calculated and reported in accordance with U.S. GAAP.

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The following table presents the reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable U.S. GAAP measure, for the periods presented:

Year Ended December 31,
2021 2020 2019
(in thousands)
Net income (loss) $ 10,995 $ 4,357 $ (20,514)
Interest expense and other income (expense), net 7,042 2,527 449
Charges related to exchange of senior notes upon IPO 42,049 — —
(Benefit) provision for income taxes (25,530) 3,293 5,480
Depreciation and amortization 19,470 18,509 16,744
Stock-based compensation 26,307 3,588 3,876
Regulatory matter costs 6,361 — —
Merger and acquisition costs(1)
2,190 11,168 10,527
Tax contingency(2)
— (2,297) 2,713
Adjusted EBITDA $ 88,884 $ 41,145 $ 19,275
Adjusted EBITDA as % of Ex-TAC Gross Profit 32.7 % 21.2 % 11.3 %


		Year Ended December 31,
		2023			2022
	(In thousands)
Net income (loss)		$	10,242		$	(24,581)
Interest expense		5,393			7,625
Interest income and other income (expense), net		(7,793)			(2,600)
Gain related to convertible debt		(22,594)			—
Provision for income taxes		6,113			6,008
Depreciation and amortization		20,702			26,919
Stock-based compensation		12,141			11,660
Regulatory matter costs, net of insurance proceeds		742			(1,875)
Merger and acquisition costs, public company implementation costs(1)		—			2,515
Severance costs		3,509			603
Adjusted EBITDA		$	28,455		$	26,274

Net income (loss) as % of gross profit		5.5		%	(12.8)		%
Adjusted EBITDA as % of Ex-TAC Gross Profit		12.5		%	11.2		%

_________________________

(1)Primarily includes costs related to our ~~terminated merger with Taboola.com Ltd., costs related to our~~ acquisition of vi in January 2022, ~~and Ligatus in April 2019, and~~ costs related to our initial public offering and ~~SOX implementation.~~

~~(2)Reflects a reversal of a tax contingency recorded within operating expenses in 2019 and a corresponding charge to income tax expense in 2020, net of foreign exchange impact.~~public company implementation costs.

Free Cash Flow

Free cash flow is defined as cash flow provided by operating activities, less capital expenditures and capitalized software development costs. Free cash flow is a supplementary measure used by our management and the Board to evaluate our ability to generate cash and we believe it allows for a more complete analysis of our available cash flows. Free cash flow should be considered as a supplemental measure and should not be considered in isolation or as a substitute for any measures of our financial performance that are calculated and reported in accordance with U.S. GAAP.

The following table presents the reconciliation of free cash flow to net cash provided by operating activities.


		Year Ended December 31,
		2021		2020		2019
		(in thousands)
	Year Ended December 31,								Year Ended December 31,
	2023							2023		2022
	(In thousands)								(In thousands)
Net cash provided by operating activities	Net cash provided by operating activities	$	56,762	$	52,986	$	16,740
Purchases of property and equipment	Purchases of property and equipment	(9,743)		(1,511)		(2,452)
Capitalized software development costs	Capitalized software development costs	(10,311)		(8,990)		(7,935)
Free cash flow	Free cash flow	$	36,708	$	42,485	$	6,353


Delaware			20-5391629
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)


111 West 19th Street
New York,	NY	10011
(646)	~~859-8594~~867-0149
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)


Large accelerated filer	☐	Accelerated filer	☐☒
Non-accelerated filer	☒☐	Smaller reporting company	☐☒
		Emerging growth company	☒


		Page
PART I

Item 1.	Business	45
Item 1A.	Risk Factors	20
Item 1B.	Unresolved Staff Comments	43
Item 1C.	Cybersecurity Risk Management and Strategy	43
Item 2.	Properties	4344
Item 3.	Legal Proceedings	4344
Item 4.	Mine Safety Disclosures	4344

PART II

Item 5.	Market for ~~Registrant's~~ Registrant ’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	4445
Item 6.	[~~Reserved~~]Reserved]	4546
Item 7.	~~Management's~~Management ’s Discussion and Analysis of Financial Condition and Results of Operations	4647
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	6665
Item 8.	Financial Statements and Supplementary Data	6766
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	100
Item 9A.	Controls and Procedures	100
Item 9B.	Other Information	~~100~~101
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	~~100~~101

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	~~101~~102
Item 11.	Executive Compensation	~~101~~102
Item 12.	Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters	~~101~~102
Item 13.	Certain Relationships and Related Transactions, and Director Independence	~~101~~102
Item 14.	Principal Accountant Fees and Services	~~101~~102

PART IV

Item 15.	~~Exhibits~~Exhibit and Financial Statement Schedules	~~102~~103
Item 16.	Form 10-K Summary	~~104~~105
Signatures		~~105~~106


	December 31, 2023
	(In thousands)
Cash and cash equivalents (1)	$	70,889
Short-term investments	94,313
Long-term investments	65,767
Revolving Credit Facility (2)	75,000
Total	$	305,969


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


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


	Payments Due by Period
	Total		2022		2023-2024		2025-2026		2027
	(in thousands)
Long-term debt	$	236,000	$	—	$	—	$	236,000	$	—
Interest	34,810		6,962		13,924		13,924		—
Operating lease obligations(1)	15,068		4,214		5,896		4,029		929
Capital lease obligations(2)	5,327		3,329		1,998		—		—
Other commitments(3)	41,371		24,810		11,545		5,016		—
Total(4)	$	332,576	$	39,315	$	33,363	$	258,969	$	929


	Payments Due by Period
	Total		2024		2025-2026		2027-2028		Thereafter
	(In thousands)
Long-term debt (1)	$	118,000	$	—	$	118,000	$	—	$	—
Interest (1)	10,443		3,481		6,962		—		—
Operating lease obligations (2)	15,126		4,481		6,722		2,859		1,064
Finance lease obligations (3)	256		256		—		—		—
Other commitments(4)	50,239		31,396		18,627		216		—
Total (5)	$	194,064	$	39,614	$	150,311	$	3,075	$	1,064


	Year Ended December 31, 2021			Year Ended December31, 2020
Expected term (in years)	6.03			6.02
Risk-free interest rate	1.29		%	0.52		%
Expected volatility	43		%	44		%
Dividend rate	0		%	0		%
Fair value of common stock	$	5.95		$	4.61


			Pages
Report of Independent ~~Auditors’ Report~~ Registered Public Accounting Firm~~(KPMG~~ (KPMG LLP, New York, NY, Audit Firm ID: 185)			6867
Consolidated Balance Sheets			68
Consolidated Statements of Operations			69
Consolidated Statements of ~~Operations~~Comprehensive Income (Loss)			70
Consolidated Statements of ~~Comprehensive Income (Loss)~~			71
~~Consolidated Statements of Convertible Preferred Stock and~~ Stockholders’ Equity (Deficit)			7271
Consolidated Statements of Cash Flows			7372
Notes to Consolidated Financial Statements			7574


		December 31, 2021		December 31, 2020
ASSETS
CURRENT ASSETS:
	December 31, 2023						December 31, 2023	December 31, 2022
ASSETS:
Current assets:
Current assets:
Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	455,397	$	93,641
Cash and cash equivalents
Cash and cash equivalents
Short-term investments in marketable securities
Accounts receivable, net of allowances	Accounts receivable, net of allowances	192,814		165,449
Prepaid expenses and other current assets	Prepaid expenses and other current assets	27,873		18,326
Total current assets	Total current assets	676,084		277,416
Non-current assets:
Long-term investments in marketable securities
Long-term investments in marketable securities
Long-term investments in marketable securities
Property, equipment and capitalized software, net	Property, equipment and capitalized software, net	28,008		24,756
Operating lease right-of-use assets, net
Intangible assets, net	Intangible assets, net	5,719		9,812
Goodwill	Goodwill	32,881		32,881
Deferred tax assets	Deferred tax assets	32,867		2,802
Other assets	Other assets	20,331		8,819
TOTAL ASSETS	TOTAL ASSETS	$	795,890	$	356,486

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
LIABILITIES AND STOCKHOLDERS’ EQUITY:
LIABILITIES AND STOCKHOLDERS’ EQUITY:
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current liabilities:
Current liabilities:
Current liabilities:
Accounts payable
Accounts payable
Accounts payable	Accounts payable	$	160,790	$	118,491
Accrued compensation and benefits	Accrued compensation and benefits	23,331		23,000
Accrued and other current liabilities	Accrued and other current liabilities	99,590		109,747
Deferred revenue	Deferred revenue	4,784		5,512
Total current liabilities	Total current liabilities	288,495		256,750
Non-current liabilities:
Long-term debt	Long-term debt	236,000		—
Long-term debt
Long-term debt
Operating lease liabilities, non-current
Other liabilities	Other liabilities	14,620		17,105
TOTAL LIABILITIES	TOTAL LIABILITIES	$	539,115	$	273,855

Commitments and Contingencies (Note 7)		0		0
Convertible preferred stock, par value of $0.001 per share, 100,000,000 shares authorized and no shares issued and outstanding as of December 31, 2021, and 27,766,563 shares authorized and 27,652,449 shares of Series A, B, C, D, E, F, G and H issued and outstanding as of December 31, 2020.		—		162,444
STOCKHOLDERS’ DEFICIT:
Common stock, par value of $0.001 per share−1,000,000,000 shares authorized, 58,015,075 shares issued and 56,701,394 shares outstanding as of December 31, 2021; 65,183,785 shares authorized, 17,439,488 share issued and 17,158,802 shares outstanding as of December 31, 2020.		58		17
Commitments and Contingencies (Note 11)						Commitments and Contingencies (Note 11)
STOCKHOLDERS’ EQUITY:
Common stock, par value of $0.001 per share − one billion shares authorized, 61,567,520 shares issued and 49,726,518 shares outstanding as of December 31, 2023; one billion shares authorized, 60,175,020 share issued and 52,226,745 shares outstanding as of December 31, 2022.
Common stock, par value of $0.001 per share − one billion shares authorized, 61,567,520 shares issued and 49,726,518 shares outstanding as of December 31, 2023; one billion shares authorized, 60,175,020 share issued and 52,226,745 shares outstanding as of December 31, 2022.
Common stock, par value of $0.001 per share − one billion shares authorized, 61,567,520 shares issued and 49,726,518 shares outstanding as of December 31, 2023; one billion shares authorized, 60,175,020 share issued and 52,226,745 shares outstanding as of December 31, 2022.
Preferred stock, par value of $0.001 per share − 100,000,000 shares authorized, none issued and outstanding as of December 31, 2023 and December 31, 2022
Additional paid-in capital	Additional paid-in capital	434,945		95,055
Treasury stock, at cost, 1,313,681 shares as of December 31, 2021 and 280,686 shares as of December 31, 2020		(16,504)		(2,350)
Treasury stock, at cost − 11,841,002 shares as of December 31, 2023 and 7,948,275 shares as of December 31, 2022
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(4,474)		(4,290)
Accumulated deficit	Accumulated deficit	(157,250)		(168,245)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)		256,775		(79,813)
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)		$	795,890	$	356,486
TOTAL STOCKHOLDERS’ EQUITY
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY


	Convertible Preferred Stock			Common Stock			Additional Paid-In Capital		Treasury Stock			Accumulated Other Comprehensive (Loss) Income		Accumulated Deficit		Total Stockholders’ Equity (Deficit)
	Shares	Amount		Shares	Amount				Shares	Amount
Balance – January 1, 2021	27,652,449	$	162,444	17,439,488	$	17	$	95,055	(280,686)	$	(2,350)	$	(4,290)	$	(168,245)	$	(79,813)
Conversion of convertible preferred stock to common stock	(27,652,449)	(162,444)		28,091,267	28		162,416		—	—		—		—		162,444
Issuance of common stock from initial public offering	—	—		8,000,000	8		145,097		—	—		—		—		145,105
Exercise of employee stock options, net of shares withheld for taxes	—	—		1,970,110	2		5,937		(56,262)	(666)		—		—		5,273
Vesting of restricted stock units, net of shares withheld for taxes	—	—		2,514,210	3		(3)		(976,733)	(13,488)		—		—		(13,488)
Stock-based compensation	—	—		—	—		26,443		—	—		—		—		26,443
Other comprehensive loss	—	—		—	—		—		—	—		(184)		—		(184)
Net income	—	—		—	—		—		—	—		—		10,995		10,995
Balance – December 31, 2021	—	$	—	58,015,075	$	58	$	434,945	(1,313,681)	$	(16,504)	$	(4,474)	$	(157,250)	$	256,775
Exercise of employee stock options, warrants and restricted stock awards, net of shares withheld for taxes	—	—		827,319	1		4,154		(95,138)	(1,425)		—		—		2,730
Vesting of restricted stock units, net of shares withheld for taxes	—	—		976,840	1		(1)		(150,327)	(1,047)		—		—		(1,047)
Acquisition consideration	—	—		355,786	—		4,190		—	—		—		—		4,190
Shares repurchased under the share repurchase program	—	—		—	—		—		(6,389,129)	(30,192)		—		—		(30,192)
Stock-based compensation	—	—		—	—		12,543		—	—		—		—		12,543
Other comprehensive loss	—	—		—	—		—		—	—		(5,439)		—		(5,439)
Net loss	—	—		—	—		—		—	—		—		(24,581)		(24,581)
Other	—	—		—	—		—		—	—		—		2,807		2,807
Balance – December 31, 2022	—	$	—	60,175,020	$	60	$	455,831	(7,948,275)	$	(49,168)	$	(9,913)	$	(179,024)	$	217,786
Vesting of restricted stock units, net of shares withheld for taxes	—	—		1,392,500	2		(2)		(163,265)	(752)		—		—		(752)
Shares repurchased under the share repurchase program	—	—		—	—		—		(3,729,462)	(17,769)		—		—		(17,769)
Stock-based compensation	—	—		—	—		12,696		—	—		—		—		12,696
Other comprehensive income	—	—		—	—		—		—	—		861		—		861
Net income	—	—		—	—		—		—	—		—		10,242		10,242
Balance – December 31, 2023	—	$	—	61,567,520	$	62	$	468,525	(11,841,002)	$	(67,689)	$	(9,052)	$	(168,782)	$	223,064


	Convertible Preferred Stock			Common Stock			Additional Paid In Capital		Treasury Stock			Accumulated Other Comprehensive (Loss) Income		Accumulated (Deficit) Income		Total Stockholders’ (Deficit) Income
	Shares	Amount		Shares	Amount				Shares	Amount
Balance–January 1,2019	27,627,166	$	162,164	12,703,334	$	12	$	47,075	(247,863)	$	(2,019)	$	(5,507)	$	(152,088)	$	(112,527)
Issuance of Series H convertible preferred stock for a business combination	20,617	228		—	—		—		—	—		—		—		—
Issuance of Series H convertible preferred stock for an asset acquisition	4,666	52		—	—		—		—	—		—		—		—
Exercise of employee stock options, net of shares withheld for taxes	—	—		258,000	—		994		(5,054)	(51)		—		—		943
Vesting of restricted stock units	—	—		272,719	1		—		—	—		—		—		1
Issuance of common stock upon acquisition	—	—		3,603,179	4		38,329		—	—		—		—		38,333
Stock-based compensation	—	—		—	—		4,118		—	—		—		—		4,118
Other comprehensive loss	—	—		—	—		—		—	—		(16)		—		(16)
Net loss	—	—		—	—		—		—	—		—		(20,514)		(20,514)
Balance–December 31, 2019	27,652,449	$	162,444	16,837,232	$	17	$	90,516	(252,917)	$	(2,070)	$	(5,523)	$	(172,602)	$	(89,662)
Exercise of employee stock options, net of shares withheld for taxes	—	—		305,934	—		674		(27,769)	(280)		—		—		394
Vesting of restricted stock units	—	—		296,322	—		—		—	—		—		—		—
Stock-based compensation	—	—		—	—		3,865		—	—		—		—		3,865
Other comprehensive income	—	—		—	—		—		—	—		1,233		—		1,233
Net income	—	—		—	—		—		—	—		—		4,357		4,357
Balance–December 31, 2020	27,652,449	$	162,444	17,439,488	$	17	$	95,055	(280,686)	$	(2,350)	$	(4,290)	$	(168,245)	$	(79,813)
Conversion of convertible preferred stock to common stock	(27,652,449)	(162,444)		28,091,267	28		162,416		—	—						162,444
Issuance of common stock from initial public offering	—	—		8,000,000	8		145,097		—	—		—		—		145,105
Exercise of employee stock options, net of shares withheld for taxes	—	—		1,970,110	2		5,937		(56,262)	(666)		—		—		5,273
Vesting of restricted stock units, net of shares withheld for taxes	—	—		2,514,210	3		(3)		(976,733)	(13,488)		—		—		(13,488)
Stock-based compensation	—	—		—	—		26,443		—	—		—		—		26,443
Other comprehensive loss	—	—		—	—		—		—	—		(184)		—		(184)
Net income	—	—		—	—		—		—	—		—		10,995		10,995
Balance–December 31, 2021	—	$	—	58,015,075	$	58	$	434,945	(1,313,681)	$	(16,504)	$	(4,474)	$	(157,250)	$	256,775


		December 31, 2023
(In thousands)	Fair Value Level	Amortized cost (1)		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Cash Equivalents		Short-term investments		Long-term investments
Money market funds	1	$	15,355	$	—	$	—	$	15,355	$	15,355	$	—	$	—
U.S. Treasuries	2	14,977		1		(29)		14,949		3,497		11,452		—
U.S. government bonds	2	39,048		40		(114)		38,974		—		20,762		18,212
Commercial paper	2	9,422		11		(3)		9,430		—		9,430		—
U.S. Corporate bonds	2	100,146		275		(197)		100,224		—		52,669		47,555
Total cash equivalents and investments		$	178,948	$	327	$	(343)	$	178,932	$	18,852	$	94,313	$	65,767


	December 31, 2023
	Weighted Average Amortization Period	Gross Value		Accumulated Amortization		Net Carrying Value
	(In thousands)
Developed technology	8.0 years	$	18,410	$	(10,900)	$	7,510
Customer relationships	5.0 years	5,972		(5,530)		442
Publisher relationships	8.0 years	18,973		(10,863)		8,110
Trade names	8.8 years	5,326		(1,779)		3,547
Content Provider Relationships	5.0 years	284		(113)		171
Other	15.8 years	898		(282)		616
Total intangible assets, net		$	49,863	$	(29,467)	$	20,396


	December 31, 2023
	(In thousands)
Within 1 year	$	113,165
After 1 year through 2 years	65,767
Total fair value	$	178,932


	December 31, 2023
	Less than 12 Months				12 Months or More				Total
(In thousands)	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
U.S. Treasuries	$	1,279	$	—	$	4,711	$	(29)	$	5,990	$	(29)
U.S. government bonds	6,798		(9)		16,964		(105)		23,762		(114)
Commercial paper	3,649		(3)		—		—		3,649		(3)
U.S. Corporate bonds	40,031		(119)		18,840		(78)		58,871		(197)
Total	$	51,757	$	(131)	$	40,515	$	(212)	$	92,272	$	(343)


Year Ending December 31,	Amount
	(In thousands)
2024	$	3,469
2025	3,469
2026	3,469
2027	3,117
2028	3,062
Thereafter	3,810
Total	$	20,396


	December 31,
	2023		2022
	(In thousands)
Accounts receivable	$	199,714	$	186,770
Allowance for credit losses	(10,380)		(5,512)
Accounts receivable, net of allowance for credit losses	$	189,334	$	181,258


		December 31, 2021
		Level I		Level II		Level III		Total
		(In thousands)
	December 31, 2023											December 31, 2023
	Level I									Level I	Level II	Level III	Total
	(In thousands)											(In thousands)
Financial Assets:	Financial Assets:
Cash equivalents and investments (1)
Cash equivalents and investments (1)
Cash equivalents and investments (1)
Restricted time deposit ~~(1)~~(2)	Restricted time deposit ~~(1)~~(2)	$	—	$	195	$	—	$	195
Severance pay fund deposits ~~(1)~~(2)	Severance pay fund deposits ~~(1)~~(2)	—		6,086		—		6,086
Foreign currency forward contract ~~(2)~~(3)	Foreign currency forward contract ~~(2)~~(3)	—		741		—		741
Total financial assets	Total financial assets	$	—	$	7,022	$	—	$	7,022
Financial Liabilities:
Foreign currency forward contract (4)
Foreign currency forward contract (4)
Foreign currency forward contract (4)
Total financial liabilities


	December 31, 2021				December 31, 2020
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
			(In thousands)
Convertible Notes	$	236,000	$	234,348	$	—	$	—


	Consolidated Balance Sheet Location	December 31, 2023		December 31, 2022
		(In thousands)
Lease assets
Operating leases	Operating lease right-of-use assets, net	$	12,145	$	11,065
Finance leases	Property, equipment and capitalized software, net	226		1,858
Total lease assets		$	12,371	$	12,923

Lease liabilities
Current liabilities:
Operating leases	Accrued and other current liabilities	$	3,684	$	3,236
Finance leases	Accrued and other current liabilities	254		1,758

Non-current liabilities:
Operating leases	Operating lease liabilities, non-current	9,217		8,445
Finance leases	Other liabilities	—		254
Total lease liabilities		$	13,155	$	13,693


		Twelve Months Ended December 31,
	Consolidated Statements of Operations Location	2023		2022
		(In thousands)
Operating lease cost
Fixed lease costs	Cost of revenue and operating expenses	$	4,453	$	4,309
Variable lease costs	Operating Expenses	207		136
Short-term lease costs	Cost of revenue and operating expenses	578		564
Finance lease cost:
Depreciation	Cost of revenue	1,632		2,962
Interest	Interest expense	83		259
Total lease cost		$	6,953	$	8,230


Year	Operating Leases		Finance Leases
	(In thousands)
2024	$	4,481	$	256
2025	4,012		—
2026	2,710		—
2027	2,104		—
2028	755		—
Thereafter	1,064		—
Total minimum payments required	$	15,126	$	256
Less: imputed interest	(2,225)		(2)
Total present value of lease liabilities	$	12,901	$	254


	December 31, 2021
	Amortization Period	Gross Value		Accumulated Amortization		Net Carrying Value
	(In thousands)
Developed technology	36-48 months	$	8,425	$	(8,425)	$	—
Customer relationships	48 months	5,345		(4,050)		1,295
Publisher relationships	48 months	8,403		(5,777)		2,626
Trade names	8 years	1,665		(572)		1,093
Other	14 years	876		(171)		705
Total intangible assets, net		$	24,714	$	(18,995)	$	5,719


	Year Ended December 31, 2023		Year Ended December 31, 2022
	(In thousands)
Cash paid for amounts included in measurement of lease liabilities:
Operating cash outflows from operating leases	$	4,297	$	4,246
Cash flows from finance leases	$	1,830	$	3,190
New operating lease assets obtained in exchange for new lease obligations	$	5,061	$	1,247


Year Ending December 31:	Operating Leases		Capital Leases
	(In thousands)
2022	$	4,214	$	3,329
2023	3,128		1,741
2024	2,768		257
2025	2,630		—
2026	1,399		—
Thereafter	929		—
Total minimum payments required	$	15,068	$	5,327


	December 31, 2020
Convertible Preferred Stock:	Shares Authorized	Shares Issued and Outstanding	Net Carrying Value		Liquidation Price Per Share		Aggregate Liquidation Preference
	(In thousands, except share data)
Series A	4,156,416	4,156,417	$	5,053	$	1.22842	$	5,106
Series B	8,568,094	8,568,095	11,717		1.40055		12,000
Series C	3,810,263	3,810,264	12,330		2.88694		11,000
Series D	3,373,545	3,373,545	35,035		10.43919		35,217
Series E	635,410	635,409	6,054		9.44265		6,000
Series F	3,143,191	3,128,258	35,606		22.8055		71,342
Series G	3,333,042	3,254,243	48,612		15.00131		48,818
Series H	746,602	726,218	8,037		15.00131		10,894
Total convertible preferred stock	27,766,563	27,652,449	$	162,444			$	200,377


	Stock Options
	Number of Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value of Outstanding Options (In thousands)
Outstanding—December 31, 2020	5,475,481	$	6.36
Granted	37,624	$	13.87
Exercised	(1,725,491)	$	3.29
Forfeited	(304,714)	$	4.66
Outstanding - December 31, 2021	3,482,900	$	8.11	4.87	$	20,513
Exercisable—December 31, 2021	2,648,522	$	7.19	3.58	$	18,032


	RSUs
	Number of Shares	Weighted- Average Grant Date Fair Value
Outstanding—December 31, 2020	3,924,500	$	9.35
Granted	601,079	$	13.53
Vested	(2,514,210)	$	9.00
Forfeited	(163,227)	$	10.50
Outstanding—December 31, 2021	1,848,142	$	11.51


	Warrants Outstanding
	Number of Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value of Outstanding Warrants (in thousands)

Outstanding—December 31, 2020	621,089	$	4.81	3.89	$	1,858
Warrants exercised	(244,619)	0.57
Outstanding and exercisable—December 31, 2021	376,470	$	7.57	3.37	$	2,420


	Foreign Currency Translation Loss		Unrealized (Loss) Gain on Investments in Marketable Securities(1)		Total Accumulated Other Comprehensive Loss
Balance–January 1, 2021	$	(4,290)	$	—	$	(4,290)
Other comprehensive income, net of tax	(184)		—		(184)
Balance–December 31, 2021	(4,474)		—		(4,474)
Other comprehensive loss, net of tax	(3,870)		(1,569)		(5,439)
Balance–December 31, 2022	(8,344)		(1,569)		(9,913)
Other comprehensive (loss) income before reclassifications, net of tax	(695)		1,136		441
Realized losses reclassified to earnings, net of tax	—		420		420
Other comprehensive (loss) income, net of tax	$	(695)	$	1,556	$	861
Balance–December 31, 2023	$	(9,039)	$	(13)	$	(9,052)


	Year Ended December 31,
	2021
Grant date fair value	$5.95
Expected term (in years)	6.03
Risk-free interest rate	1.29	%
Expected volatility	43	%
Dividend rate	0	%


	RSUs
	Number of Shares	Weighted-Average Grant Date Fair Value
Outstanding—December 31, 2022	2,785,510	$	9.87
Granted	2,583,691	$	4.81
Vested	(1,392,500)	$	8.63
Forfeited	(469,618)	$	8.27
Outstanding—December 31, 2023	3,507,083	$	6.85


(a) (1) Financial Statements			Page
Report of Independent Registered Public Accounting Firm			6867
Consolidated Balance Sheets			68
Consolidated Statements of Operations			69
Consolidated Statements of ~~Operations~~Comprehensive Income (Loss)			70
Consolidated ~~Statements~~Statement of ~~Comprehensive Income (Loss)~~			71
~~Consolidated Statements of Convertible Preferred Stock and Stockholders’~~Stockholders' Equity (Deficit)			7271
Consolidated Statements of Cash Flows			7372
Notes to Consolidated Financial Statements			7574
(a) (2) Financial Statement Schedules
None.
(a) (3) Exhibits
See the Exhibit Index of this Annual Report on Form 10-K