UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DCD.C. 20549
FORM 10-Q
(Mark One)
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2021March 31, 2022
OR
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO For the transition period fromto
Commission File Number: 001-40015
Viant Technology Inc.
(Exact Namename of Registrantregistrant as Specifiedspecified in its Charter)charter)
Delaware | 85-3447553 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
2722 Michelson Drive, Suite 100 Irvine, CA | 92612 |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (949) 861-8888
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
Class A common stock, par value $0.001 per share |
| DSP |
| The Nasdaq Stock Market LLC (Nasdaq Global Select Market) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
| ☐ |
| Accelerated filer |
| ☐ |
|
|
|
| |||
Non-accelerated filer |
| ☒ |
| Smaller reporting company |
| ☐ |
|
|
|
|
|
|
|
Emerging growth company |
| ☒ |
|
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of August 11, 2021April 29, 2022 there were 12,819,56114,071,482 shares and 47,435,55947,082,260 shares of the registrant’s Class A and Class B common stock, respectively, $0.001 par value per share, outstanding.
Table of ContentsTABLE OF CONTENTS
|
| Page | |
PART I. |
| ||
Item 1. | 3 | ||
| A. | 3 | |
| B. | 4 | |
| C. | Condensed Consolidated Statements of Convertible Preferred Units and Equity | 5 |
| D. | 7 | |
| E. |
| 8 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| |
Item 3. |
| ||
Item 4. |
| ||
PART II. |
| ||
Item 1. |
| ||
Item 1A. |
| ||
Item 2. |
| ||
Item 3. |
| ||
Item 4. |
| ||
Item 5. |
| ||
Item 6. |
| ||
|
PART I—FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (unaudited).Statements.
VIANT TECHNOLOGY INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share/unitshare data)
(Unaudited)
|
| As of June 30, |
|
| As of December 31, |
|
| As of March 31, |
|
| As of December 31, |
| ||||
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
| $ | 252,271 |
|
| $ | 9,629 |
|
| $ | 247,936 |
|
| $ | 238,480 |
|
Accounts receivable, net of allowances |
|
| 63,747 |
|
|
| 89,767 |
|
|
| 79,897 |
|
|
| 110,739 |
|
Prepaid expenses and other current assets |
|
| 4,219 |
|
|
| 4,487 |
|
|
| 3,544 |
|
|
| 2,967 |
|
Total current assets |
|
| 320,237 |
|
|
| 103,883 |
|
|
| 331,377 |
|
|
| 352,186 |
|
Property, equipment, and software, net |
|
| 20,946 |
|
|
| 13,829 |
|
|
| 22,611 |
|
|
| 22,331 |
|
Operating lease assets |
|
| 20,345 |
|
|
| — |
| ||||||||
Intangible assets, net |
|
| 2,400 |
|
|
| 3,015 |
|
|
| 1,499 |
|
|
| 1,786 |
|
Goodwill |
|
| 12,422 |
|
|
| 12,422 |
|
|
| 12,422 |
|
|
| 12,422 |
|
Other assets |
|
| 373 |
|
|
| 371 |
|
|
| 397 |
|
|
| 406 |
|
Total assets |
| $ | 356,378 |
|
| $ | 133,520 |
|
| $ | 388,651 |
|
| $ | 389,131 |
|
Liabilities, convertible preferred units and stockholders' equity/members' equity |
|
|
|
|
|
|
|
| ||||||||
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
| ||||||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
| $ | 24,537 |
|
| $ | 29,763 |
|
| $ | 24,706 |
|
| $ | 32,877 |
|
Accrued liabilities |
|
| 19,440 |
|
|
| 24,677 |
|
|
| 37,670 |
|
|
| 34,086 |
|
Accrued compensation |
|
| 7,880 |
|
|
| 9,711 |
|
|
| 9,640 |
|
|
| 12,247 |
|
Current portion of long-term debt |
|
| — |
|
|
| 3,353 |
| ||||||||
Current portion of deferred revenue |
|
| 1,637 |
|
|
| 2,725 |
|
|
| 64 |
|
|
| 1,317 |
|
Accrued member tax distributions |
|
| 192 |
|
|
| 6,878 |
| ||||||||
Current portion of operating lease liabilities |
|
| 1,837 |
|
|
| — |
| ||||||||
Other current liabilities |
|
| 2,118 |
|
|
| 2,549 |
|
|
| 1,241 |
|
|
| 2,531 |
|
Total current liabilities |
|
| 55,804 |
|
|
| 79,656 |
|
|
| 75,158 |
|
|
| 83,058 |
|
Long-term debt |
|
| 17,500 |
|
|
| 20,182 |
|
|
| 17,500 |
|
|
| 17,500 |
|
Long-term portion of deferred revenue |
|
| 5,617 |
|
|
| 5,612 |
|
|
| — |
|
|
| 5,234 |
|
Long-term portion of operating lease liabilities |
|
| 19,668 |
|
|
| — |
| ||||||||
Other long-term liabilities |
|
| 405 |
|
|
| 453 |
|
|
| — |
|
|
| 765 |
|
Total liabilities |
|
| 79,326 |
|
|
| 105,903 |
|
|
| 112,326 |
|
|
| 106,557 |
|
Commitments and contingencies (Note 12) |
|
|
|
|
|
|
|
| ||||||||
Convertible preferred units |
|
|
|
|
|
|
|
| ||||||||
2019 convertible preferred units, no par value; NaN issued and outstanding as of June 30, 2021 and 600,000 units authorized, issued and outstanding as of December 31, 2020; liquidation preference $5,444 as of December 31, 2020 |
|
| — |
|
|
| 7,500 |
| ||||||||
Members' equity |
|
|
|
|
|
|
|
| ||||||||
Common units, no par value; NaN issued and outstanding as of June 30, 2021 and 400,000 units authorized, issued and outstanding as of December 31, 2020 |
|
| — |
|
|
| — |
| ||||||||
Commitments and contingencies (Note 13) |
|
|
|
|
|
|
|
| ||||||||
Stockholders’ equity |
|
|
|
|
|
|
|
| ||||||||
Preferred stock, $0.001 par value, 10,000,000 shares authorized, NaN issued and outstanding as of March 31, 2022 and December 31, 2021 |
|
| — |
|
|
| — |
| ||||||||
Class A common stock, $0.001 par value; 450,000,000 shares authorized; 14,071,482 and 13,920,868 shares issued and 14,071,482 and 13,704,638 shares outstanding as of March 31, 2022 and December 31, 2021, respectively |
|
| 14 |
|
|
| 14 |
| ||||||||
Class B common stock, $0.001 par value; 150,000,000 shares authorized; 47,082,260 and 47,107,130 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively |
|
| 47 |
|
|
| 47 |
| ||||||||
Additional paid-in capital |
|
| — |
|
|
| 92,187 |
|
|
| 85,926 |
|
|
| 82,888 |
|
Accumulated deficit |
|
| — |
|
|
| (72,070 | ) |
|
| (25,979 | ) |
|
| (20,139 | ) |
Stockholders’ equity |
|
|
|
|
|
|
|
| ||||||||
Preferred stock, $0.001 par value, 10,000,000 shares authorized, NaN issued and outstanding as of June 30, 2021 |
|
| — |
|
|
| — |
| ||||||||
Class A common stock, $0.001 par value; 450,000,000 shares authorized and 11,500,000 shares issued and outstanding as of June 30, 2021 |
|
| 12 |
|
|
| — |
| ||||||||
Class B common stock, $0.001 par value; 150,000,000 shares authorized and 47,435,559 shares issued and outstanding as of June 30, 2021 |
|
| 47 |
|
|
| — |
| ||||||||
Additional paid-in capital |
|
| 102,040 |
|
|
| — |
| ||||||||
Accumulated deficit |
|
| (6,759 | ) |
|
| — |
| ||||||||
Total stockholders' equity attributable to Viant Technology Inc./members' equity |
|
| 95,340 |
|
|
| 20,117 |
| ||||||||
Treasury stock, at cost; 0 and 216,230 shares as of March 31, 2022 and December 31, 2021, respectively |
|
| — |
|
|
| (2,648 | ) | ||||||||
Total stockholders’ equity attributable to Viant Technology Inc. |
|
| 60,008 |
|
|
| 60,162 |
| ||||||||
Noncontrolling interests |
|
| 181,712 |
|
|
| — |
|
|
| 216,317 |
|
|
| 222,412 |
|
Total equity |
|
| 277,052 |
|
|
| 20,117 |
|
|
| 276,325 |
|
|
| 282,574 |
|
Total liabilities, convertible preferred units and stockholders' equity/members' equity |
| $ | 356,378 |
|
| $ | 133,520 |
| ||||||||
Total liabilities and stockholders’ equity |
| $ | 388,651 |
|
| $ | 389,131 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
VIANT TECHNOLOGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share/unitshare data)
(Unaudited)
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
Revenue |
| $ | 50,411 |
|
| $ | 30,425 |
|
| $ | 90,555 |
|
| $ | 68,585 |
|
| $ | 42,629 |
|
| $ | 40,144 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Platform operations |
|
| 31,715 |
|
|
| 18,589 |
|
|
| 56,059 |
|
|
| 42,192 |
|
|
| 26,194 |
|
|
| 24,344 |
|
Sales and marketing |
|
| 20,553 |
|
|
| 5,742 |
|
|
| 34,738 |
|
|
| 12,872 |
|
|
| 13,756 |
|
|
| 14,185 |
|
Technology and development |
|
| 8,031 |
|
|
| 1,984 |
|
|
| 13,931 |
|
|
| 4,134 |
|
|
| 5,003 |
|
|
| 5,900 |
|
General and administrative |
|
| 14,075 |
|
|
| 3,891 |
|
|
| 24,495 |
|
|
| 8,547 |
|
|
| 11,083 |
|
|
| 10,420 |
|
Total operating expenses |
|
| 74,374 |
|
|
| 30,206 |
|
|
| 129,223 |
|
|
| 67,745 |
|
|
| 56,036 |
|
|
| 54,849 |
|
Income (loss) from operations |
|
| (23,963 | ) |
|
| 219 |
|
|
| (38,668 | ) |
|
| 840 |
| ||||||||
Loss from operations |
|
| (13,407 | ) |
|
| (14,705 | ) | ||||||||||||||||
Interest expense, net |
|
| 241 |
|
|
| 244 |
|
|
| 476 |
|
|
| 525 |
|
|
| 152 |
|
|
| 235 |
|
Other expense (income), net |
|
| 1 |
|
|
| 5 |
|
|
| (68 | ) |
|
| 16 |
|
|
| 4 |
|
|
| (70 | ) |
Gain on extinguishment of debt |
|
| (6,110 | ) |
|
| — |
|
|
| (6,110 | ) |
|
| — |
| ||||||||
Total other expense (income), net |
|
| (5,868 | ) |
|
| 249 |
|
|
| (5,702 | ) |
|
| 541 |
| ||||||||
Net income (loss) |
|
| (18,095 | ) |
|
| (30 | ) |
|
| (32,966 | ) |
|
| 299 |
| ||||||||
Total other expense, net |
|
| 156 |
|
|
| 165 |
| ||||||||||||||||
Net loss |
|
| (13,563 | ) |
|
| (14,870 | ) | ||||||||||||||||
Less: Net loss attributable to noncontrolling interests |
|
| (14,440 | ) |
|
| — |
|
|
| (26,206 | ) |
|
| — |
|
|
| (10,371 | ) |
|
| (11,766 | ) |
Net income (loss) attributable to Viant Technology Inc. |
| $ | (3,655 | ) |
| $ | (30 | ) |
| $ | (6,760 | ) |
| $ | 299 |
| ||||||||
Earnings (loss) per Class A common stock/unit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Net loss attributable to Viant Technology Inc. |
| $ | (3,192 | ) |
| $ | (3,104 | ) | ||||||||||||||||
Loss per share of Class A common stock: |
|
|
|
|
|
|
|
| ||||||||||||||||
Basic |
| $ | (0.32 | ) |
| $ | (0.08 | ) |
| $ | (0.59 | ) |
| $ | 0.30 |
|
| $ | (0.23 | ) |
| $ | (0.27 | ) |
Diluted |
| $ | (0.32 | ) |
| $ | (0.08 | ) |
| $ | (0.59 | ) |
| $ | 0.30 |
|
| $ | (0.23 | ) |
| $ | (0.27 | ) |
Weighted-average Class A common stock/units outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Weighted-average shares of Class A common stock outstanding: |
|
|
|
|
|
|
|
| ||||||||||||||||
Basic |
|
| 11,500 |
|
|
| 400 |
|
|
| 11,500 |
|
|
| 400 |
|
|
| 13,809 |
|
|
| 11,500 |
|
Diluted |
|
| 11,500 |
|
|
| 400 |
|
|
| 11,500 |
|
|
| 1,000 |
|
|
| 13,809 |
|
|
| 11,500 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
VIANT TECHNOLOGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED UNITS AND EQUITY
(In thousands)
(Unaudited)
|
| Convertible Preferred Units |
|
|
| Common Units |
|
| Class A Common Stock |
|
| Class B Common Stock |
|
| Additional Paid-In |
|
| Accumulated |
|
| Members' |
|
| Noncontrolling |
|
| Total |
| |||||||||||||||||||||||||
|
| Units |
|
| Amount |
|
|
| Units |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Equity |
|
| Interests |
|
| Equity |
| |||||||||||||
Balance as of December 31, 2020 |
|
| 600 |
|
| $ | 7,500 |
|
|
|
| 400 |
|
| $ | — |
|
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 20,117 |
|
| $ | — |
|
| $ | 20,117 |
|
Net income prior to Reorganization Transactions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 669 |
|
|
|
|
|
|
| 669 |
|
Effect of Reorganization Transactions |
|
| (600 | ) |
|
| (7,500 | ) |
|
|
| (400 | ) |
|
| — |
|
|
|
|
|
|
|
|
|
|
| 48,936 |
|
|
| 49 |
|
|
| 28,237 |
|
|
|
|
|
|
| (20,786 | ) |
|
|
|
|
|
| 7,500 |
|
Issuance of Class A common stock in initial public offering, net of underwriting and offering costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 11,500 |
|
|
| 12 |
|
|
| (1,500 | ) |
|
| (2 | ) |
|
| 228,175 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 228,185 |
|
Allocation of equity to noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (208,587 | ) |
|
|
|
|
|
|
|
|
|
| 208,587 |
|
|
| — |
|
Accrued member tax distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 75 |
|
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 19,756 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 19,756 |
|
Net loss subsequent to Reorganization Transactions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (3,104 | ) |
|
|
|
|
|
| (12,435 | ) |
|
| (15,539 | ) |
Balance as of March 31, 2021 |
|
| — |
|
| $ | — |
|
|
|
| — |
|
| $ | — |
|
|
| 11,500 |
|
| $ | 12 |
|
|
| 47,436 |
|
| $ | 47 |
|
| $ | 67,656 |
|
| $ | (3,104 | ) |
| $ | — |
|
| $ | 196,152 |
|
| $ | 260,763 |
|
Accrued member tax distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (192 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (192 | ) |
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 34,576 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 34,576 |
|
Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (3,655 | ) |
|
|
|
|
|
| (14,440 | ) |
|
| (18,095 | ) |
Balance as of June 30, 2021 |
|
| — |
|
| $ | — |
|
|
|
| — |
|
| $ | — |
|
|
| 11,500 |
|
| $ | 12 |
|
|
| 47,436 |
|
| $ | 47 |
|
| $ | 102,040 |
|
| $ | (6,759 | ) |
| $ | — |
|
| $ | 181,712 |
|
| $ | 277,052 |
|
|
| Class A Common Stock |
|
| Class B Common Stock |
|
| Additional Paid-In |
|
| Accumulated |
|
| Treasury Stock |
|
| Noncontrolling |
|
| Total |
| |||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Shares |
|
| Amount |
|
| Interests |
|
| Equity |
| ||||||||||
Balance as of December 31, 2021 |
|
| 13,921 |
|
| $ | 14 |
|
|
| 47,107 |
|
| $ | 47 |
|
| $ | 82,888 |
|
| $ | (20,139 | ) |
|
| (216 | ) |
| $ | (2,648 | ) |
| $ | 222,412 |
|
| $ | 282,574 |
|
Exchange of Class B common stock for Class A common stock |
|
| 25 |
|
|
| — |
|
|
| (25 | ) |
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
Issuance of common stock in connection with equity- based compensation plans |
|
| 126 |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| — |
|
Reissuance of treasury stock in connection with equity- based compensation plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (2,648 | ) |
|
| 216 |
|
|
| 2,648 |
|
|
|
|
|
|
| — |
|
Allocation of equity to noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (4,276 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 4,276 |
|
|
| — |
|
Accrued member tax distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (12 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (12 | ) |
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,326 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,326 |
|
Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (3,192 | ) |
|
|
|
|
|
|
|
|
|
| (10,371 | ) |
|
| (13,563 | ) |
Balance as of March 31, 2022 |
|
| 14,072 |
|
| $ | 14 |
|
|
| 47,082 |
|
| $ | 47 |
|
| $ | 85,926 |
|
| $ | (25,979 | ) |
|
| — |
|
| $ | — |
|
| $ | 216,317 |
|
| $ | 276,325 |
|
|
| Convertible Preferred Units |
|
|
| Common Units |
|
| Additional Paid-In |
|
| Accumulated |
|
| Total Members' |
| |||||||||||||
|
| Units |
|
| Amount |
|
|
| Units |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Equity |
| |||||||
Balance as of December 31, 2019 |
|
| 600 |
|
| $ | 7,500 |
|
|
|
| 400 |
|
| $ | — |
|
| $ | 92,187 |
|
| $ | (76,982 | ) |
| $ | 15,205 |
|
Accrued member tax distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (390 | ) |
|
| (390 | ) |
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 329 |
|
|
| 329 |
|
Balance as of March 31, 2020 |
|
| 600 |
|
| $ | 7,500 |
|
|
|
| 400 |
|
| $ | — |
|
| $ | 92,187 |
|
| $ | (77,043 | ) |
| $ | 15,144 |
|
Accrued member tax distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (356 | ) |
|
| (356 | ) |
Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (30 | ) |
|
| (30 | ) |
Balance as of June 30, 2020 |
|
| 600 |
|
| $ | 7,500 |
|
|
|
| 400 |
|
| $ | — |
|
| $ | 92,187 |
|
| $ | (77,429 | ) |
| $ | 14,758 |
|
|
| Convertible Preferred Units |
|
|
| Common Units |
|
| Class A Common Stock |
|
| Class B Common Stock |
|
| Additional Paid-In |
|
| Accumulated |
|
| Members' |
|
| Treasury Stock |
|
| Noncontrolling |
|
| Total |
| ||||||||||||||||||||||||||||||
|
| Units |
|
| Amount |
|
|
| Units |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Equity |
|
| Shares |
|
| Amount |
|
| Interests |
|
| Equity |
| |||||||||||||||
Balance as of December 31, 2020 |
|
| 600 |
|
| $ | 7,500 |
|
|
|
| 400 |
|
| $ | — |
|
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | 20,117 |
|
|
| — |
|
| $ | — |
|
| $ | — |
|
| $ | 20,117 |
|
Net income prior to Reorganization Transactions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 669 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 669 |
|
Effect of Reorganization Transactions |
|
| (600 | ) |
|
| (7,500 | ) |
|
|
| (400 | ) |
|
| — |
|
|
|
|
|
|
|
|
|
|
| 48,936 |
|
|
| 49 |
|
|
| 28,237 |
|
|
|
|
|
|
| (20,786 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| 7,500 |
|
Issuance of Class A common stock in initial public offering, net of underwriting and offering costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 11,500 |
|
|
| 12 |
|
|
| (1,500 | ) |
|
| (2 | ) |
|
| 228,175 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 228,185 |
|
Allocation of equity to noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (208,587 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 208,587 |
|
|
| — |
|
Accrued member tax distributions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 75 |
|
Stock-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 19,756 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 19,756 |
|
Net loss subsequent to Reorganization Transactions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (3,104 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (12,435 | ) |
|
| (15,539 | ) |
Balance as of March 31, 2021 |
|
| — |
|
| $ | — |
|
|
|
| — |
|
| $ | — |
|
|
| 11,500 |
|
| $ | 12 |
|
|
| 47,436 |
|
| $ | 47 |
|
|
| 67,656 |
|
| $ | (3,104 | ) |
| $ | — |
|
|
| — |
|
| $ | — |
|
| $ | 196,152 |
|
| $ | 260,763 |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
VIANT TECHNOLOGY INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
| Six Months Ended June 30, |
|
| Three Months Ended March 31, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
| $ | (32,966 | ) |
| $ | 299 |
| ||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
| ||||||||
Net loss |
| $ | (13,563 | ) |
| $ | (14,870 | ) | ||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
|
| ||||||||
Depreciation and amortization |
|
| 5,051 |
|
|
| 5,154 |
|
|
| 3,154 |
|
|
| 2,427 |
|
Stock-based compensation |
|
| 46,777 |
|
|
| — |
|
|
| 6,376 |
|
|
| 17,090 |
|
Recovery of doubtful accounts |
|
| (200 | ) |
|
| (140 | ) | ||||||||
Provision for (recovery of) doubtful accounts |
|
| 51 |
|
|
| (194 | ) | ||||||||
Loss on disposal of assets |
|
| 8 |
|
|
| — |
|
|
| — |
|
|
| 8 |
|
Gain on extinguishment of debt |
|
| (6,110 | ) |
|
| — |
| ||||||||
Amortization of operating lease assets |
|
| 654 |
|
|
| — |
| ||||||||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
| 26,220 |
|
|
| 16,307 |
|
|
| 30,790 |
|
|
| 31,708 |
|
Prepaid expenses and other assets |
|
| (1,753 | ) |
|
| (13 | ) |
|
| (568 | ) |
|
| (2,793 | ) |
Accounts payable |
|
| (5,126 | ) |
|
| 2,204 |
|
|
| (8,157 | ) |
|
| (3,416 | ) |
Accrued liabilities |
|
| (4,939 | ) |
|
| (9,122 | ) |
|
| 3,584 |
|
|
| (11,213 | ) |
Accrued compensation |
|
| (1,831 | ) |
|
| (1,012 | ) |
|
| (2,721 | ) |
|
| (2,055 | ) |
Deferred revenue |
|
| (1,082 | ) |
|
| (958 | ) |
|
| (6,486 | ) |
|
| (547 | ) |
Operating lease liabilities |
|
| (461 | ) |
|
| — |
| ||||||||
Other liabilities |
|
| (478 | ) |
|
| (1,176 | ) |
|
| (1,083 | ) |
|
| (1,382 | ) |
Net cash provided by operating activities |
|
| 23,571 |
|
|
| 11,543 |
|
|
| 11,570 |
|
|
| 14,763 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
| (266 | ) |
|
| (159 | ) |
|
| (373 | ) |
|
| (167 | ) |
Capitalized software development costs |
|
| (3,750 | ) |
|
| (3,678 | ) |
|
| (1,725 | ) |
|
| (1,893 | ) |
Net cash used in investing activities |
|
| (4,016 | ) |
|
| (3,837 | ) |
|
| (2,098 | ) |
|
| (2,060 | ) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from Paycheck Protection Program Loan |
|
| — |
|
|
| 6,035 |
| ||||||||
Proceeds from issuance of common stock, net of underwriting discounts |
|
| 232,500 |
|
|
| — |
|
|
| — |
|
|
| 232,500 |
|
Payment of member tax distributions |
|
| (6,805 | ) |
|
| — |
|
|
| (16 | ) |
|
| (6,805 | ) |
Payment of offering costs |
|
| (2,608 | ) |
|
| — |
|
|
| — |
|
|
| (1,442 | ) |
Net cash provided by financing activities |
|
| 223,087 |
|
|
| 6,035 |
| ||||||||
Net cash provided by (used in) financing activities |
|
| (16 | ) |
|
| 224,253 |
| ||||||||
Net increase in cash |
|
| 242,642 |
|
|
| 13,741 |
|
|
| 9,456 |
|
|
| 236,956 |
|
Cash at beginning of period |
|
| 9,629 |
|
|
| 4,815 |
|
|
| 238,480 |
|
|
| 9,629 |
|
Cash at end of period |
| $ | 252,271 |
|
| $ | 18,556 |
|
| $ | 247,936 |
|
| $ | 246,585 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest |
| $ | 360 |
|
| $ | 650 |
|
| $ | 104 |
|
| $ | 175 |
|
Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation included in capitalized software development costs |
|
| 7,556 |
|
|
| — |
|
|
| 950 |
|
|
| 2,666 |
|
Accrued member tax distributions |
|
| 192 |
|
|
| 2,445 |
| ||||||||
Capitalized assets financed by accounts payable and accrued liabilities |
|
| 215 |
|
|
| 97 |
|
|
| 464 |
|
|
| 1,167 |
|
Noncash gain on extinguishment of debt related to Paycheck Protection Program loan |
|
| 6,110 |
|
|
| — |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
VIANT TECHNOLOGY INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Page | ||
Note 1 | 8 | |
Note 2 | Basis of Presentation and Summary of Significant Accounting Policies | 9 |
Note 3 | 11 | |
Note 4 | 12 | |
Note 5 | 12 | |
Note 6 | 14 | |
Note 7 | 15 | |
Note 8 | 15 | |
Note 9 | 16 | |
Note 10 | 18 | |
Note 11 | 18 | |
Note 12 | 19 | |
Note 13 | 20 | |
Note 14 | 20 |
1. Nature of Operations
Viant Technology Inc. (the “Company,” “we,” “us,” “our” or “Viant”) was incorporated in the State of Delaware on October 9, 2020 for the purpose of facilitating an Initial Public Offering (“IPO”) and other related transactions. The Company operates a demand side platform (“DSP”), Adelphic, an enterprise software platform that is used by marketers and their advertising agencies to centralize the planning, buying and measurement of their advertising across channels, including desktop, mobile, connected TV, linear TV, in-game, streaming audio and digital billboards.
On February 9, 2021, the Securities and Exchange Commission (“SEC”) declared effective the Company’s Form S-1 was declared effective by the SEC related to the IPO of its Class A common stock. The closing date of the IPO was February 12, 2021, and in connection with the closing and the corporate reorganization (the “Reorganization Transactions”), the following actions were taken:
| • | The Company amended and restated its certificate of incorporation, under which the Company is authorized to issue up to 450,000,000 shares of Class A common stock, up to 150,000,000 shares of Class B common stock, and up to 10,000,000 shares of preferred stock; |
| • | The limited liability company agreement of Viant Technology LLC was amended and restated (as amended and restated, the “Viant Technology LLC Agreement”) to, among other things, provide for Class A units and Class B units and appoint the Company as the sole managing member of Viant Technology LLC; |
| • | The Viant Technology LLC Agreement |
| • | The Company issued and sold 10,000,000 shares of its Class A common stock to the underwriters at an |
| • | The Company used the net proceeds of $232.5 million to acquire 10,000,000 newly issued Class A units of Viant Technology LLC at a per-unit price equal to the per-share price paid by the underwriters for shares of our Class A common stock; |
| • | The underwriters exercised their option to purchase 1,500,000 additional shares of Class A common stock from the selling stockholders. The Company did not receive any proceeds from the sale of shares by the selling stockholders. Pursuant to such exercise, the selling stockholders exchanged the corresponding number of Class B units for the shares of Class A |
common stock, the corresponding number of shares of Class B common stock were automatically retired, and 1,500,000 Class A units were issued to the Company; |
| • | The Class B stockholders and Class A stockholders initially had 80.5% and 19.5%, respectively, of the combined voting power of the Company’s common stock. The Class A common stock outstanding |
| • | The Company entered into a Registration Rights Agreement with the Class B stockholders to provide for certain rights and restrictions after the IPO; and |
| • |
|
Immediately following the closing of the IPO, Viant Technology LLC is the predecessor of the Company for financial reporting purposes. The Company is a holding company, and its sole material asset is its equity interest in Viant Technology LLC. As the sole managing member of Viant Technology LLC, the Company operates and controls all of the business and affairs of Viant Technology LLC. The Reorganization Transactions are accounted for as a reorganization of entities under common control. As a result, the condensed consolidated financial statements of the Company recognize the assets and liabilities received in the Reorganization Transactions at their historical carrying amounts, as reflected in the historical consolidated financial statements of Viant Technology LLC. The Company will consolidateconsolidates Viant Technology LLC onin its condensed consolidated financial statements and recordrecords a noncontrolling interest related to the Class B units held by the Class B stockholders on its condensed consolidated balance sheetsheets and statementstatements of operations.
2. Basis of Presentation and Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information which are unaudited and include the operations of the Company, Viant Technology LLC and its wholly owned subsidiaries. Viant Technology LLC is considered a variable interest entity or VIE.(“VIE”). The Company is the primary beneficiary and sole managing member of Viant Technology LLC and has decision making authority that significantly affects the economic performance of the entity. As a result, the Company consolidates Viant Technology LLC. All intercompany balances and transactions have been eliminated in consolidation.
Viant Technology LLC has been determined to be the predecessor for accounting purposes and, accordingly, the condensed consolidated financial statements for periods prior to the IPO and the related organizational transactionsReorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. Amounts for the period from January 1, 20202021 through February 11, 2021 presented in the condensed consolidated financial statements and notes to condensed consolidated financial statements herein represent the historical operations of Viant Technology LLC. The amounts as of June 30, 2021March 31, 2022 and for the period fromoperations since February 12, 2021 reflect the consolidated operations of the Company.
Management believes that the accompanying condensed consolidated financial statements reflect allthe adjustments necessary for the fair statement of its condensed consolidated balance sheet as of June 30, 2021,March 31, 2022, and results of operations for the three and six months ended June 30, 2021 and 2020, and cash flows for the sixthree months ended June 30, 2021March 31, 2022 and 2020.2021. The condensed consolidated balance sheet as of December 31, 20202021 was derived from the audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been omitted. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in its Annual Report on Form 10-K for the year ended December 31, 2020.2021.
The condensed consolidated results of operations for the three and six months ended June 30, 2021March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2021,2022, or for any other future annual or interim period.
Certain reclassifications have been made within the condensed consolidated financial statements for the prior period to conform with current presentation.
Use of Estimates
The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities
at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. On an on-going basis, management evaluates its estimates, primarily those related to revenue recognition, operating lease assets and liabilities, stock-based compensation, income taxes, allowances for doubtful accounts, the useful lives of capitalized software development costs and other property, equipment and software and assumptions used in the impairment analyses of long-lived assets and goodwill,deferredrevenue andaccruedliabilities.goodwill. These estimates are based on historical data and experience, as well as various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amount of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
As of June 30, 2021,March 31, 2022, the impact of the COVID-19 pandemic on our business continues to evolve. As a result, many of our estimates and assumptions consider macro-economic factors in the market, which require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our estimates may change materially in future periods.
Fair Value of Financial Instruments
Financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities and debt. The carrying amounts of the Company’s current financial assets and current financial liabilities are considered to be representative of their respective fair values because of the short-term nature of those instruments.
Stock-Based Compensation
Stock-based compensation relates to equity awards granted under the Company’s 2021 LTIP, which is measured and recognized in the condensed consolidated financial statements based on the fair value of the equity awards granted. Since inception of the 2021 LTIP, the Company has only granted restricted stock units (“RSUs”) and nonqualified stock options. The fair value of RSUs is calculated using the closing market price of the Company’s common stock on the date of grant. The fair value of non-qualified stock options is estimated using the Black Scholes option pricing model. The Black Scholes option pricing model is impacted by the fair value of the Company’s common stock, as well as changes in certain assumptions, including but not limited to, the expected common stock price volatility over the term of the nonqualified stock options, the expected term of the nonqualified stock options, the risk-free interest rate, and the expected dividend yield.
A portion of RSUs granted as of June 30, 2021 to certain employees and board members, pursuant to the 2021 LTIP, will vest upon expiration of the 180 day IPO lock-up period and the remainder of RSUs and nonqualified stock options will vest through the applicable vesting dates, subject to continued employment for employee grants. RSUs awarded to board members will vest quarterly and annually through the applicable vesting dates.
Comprehensive Income (Loss)Loss
For the periods presented, net income (loss)loss is equal to comprehensive income (loss).
Noncontrolling Interests
The noncontrolling interests represent the economic interests of Viant Technology LLC held by Class B common stockholders. Income or loss is attributed to the noncontrolling interests based on the weighted average LLC interests outstanding during the period. The noncontrolling interests’ ownership percentage can fluctuate over time as the Class B common stockholders elect to exchange their shares of Class B common stock for Class A common stock.
Earnings (Loss)Per Share
Basicearnings(loss)pershareiscalculatedby dividingthe earnings (loss)attributableto Class A common stockholdersby the number of weighted-average shares of Class A commonstock outstanding. The Company’s RSUs, nonqualified stock options and shares of Class B common stock do not share in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings (loss) per share of RSUs, nonqualified stock options and Class B common stock under the two-class method has not been presented.
Dilutedearnings(loss)pershare adjuststhebasicearnings(loss)per share calculation forthepotentialdilutiveimpactof commonshares such as equity awardsusingthetreasury-stockmethod.Dilutedearnings(loss)pershare considerstheimpactof potentially dilutivesecuritiesexceptin periodsin which thereisa lossbecausetheinclusionof thepotentialcommonshares would have an anti-dilutiveeffect. Shares of our Class B common stock, RSUs, and nonqualified stock options are considered potentially dilutive shares of Class A common stock; however, related amounts have been excluded from the computation of diluted earnings (loss) per share of Class A common stock because the effect would have been anti-dilutive under the if-converted method.
Earnings (Loss) Per Unit
Basic earnings (loss) per unit is calculated by dividing the earnings (loss) attributable to common unitholders by the number of weighted-average common units outstanding. The Company applies the two-class method to allocate earnings between common and convertible preferred units.
Diluted earnings (loss) per unit adjusts the basic earnings (loss) per unit attributable to common unitholders and the weighted-average number of units of common units outstanding for the potential dilutive impact of common units, using the treasury-stock method, and convertible preferred units using the if-converted method. Diluted earnings (loss) per unit considers the impact of
potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common units would have an anti-dilutive effect.loss.
Accounts Receivable, Net of Allowances
The following table presents changes in the allowance for doubtful accounts for the three and six months ended June 30, 2021:March 31, 2022:
|
| (in thousands) |
| |
Balance as of December 31, 2020 |
| $ | 335 |
|
Recovery of doubtful accounts |
|
| (194 | ) |
Write-offs, net of recoveries |
|
| (126 | ) |
Balance as of March 31, 2021 |
| $ | 15 |
|
Recovery of doubtful accounts |
|
| (6 | ) |
Write-offs, net of recoveries |
|
| (1 | ) |
Balance as of June 30, 2021 |
| $ | 8 |
|
|
| (in thousands) |
| |
Balance as of December 31, 2021 |
| $ | 54 |
|
Provision for doubtful accounts |
|
| 51 |
|
Write-offs, net of recoveries |
|
| (1 | ) |
Balance as of March 31, 2022 |
| $ | 104 |
|
DeferredOfferingCosts
Deferredofferingcostsconsistedprimarilyof accounting,legal,and othercostsrelatedto our IPO. As of December 31, 2020, the Company capitalized $2.2 million of deferredofferingcostswithinprepaidexpensesand other currentassets in the condensed consolidated balance sheet. Upon consummationof theIPO which occurred in February 2021, totaldeferredofferingcosts of $4.3 million were reclassifiedas additional paid-in capital within stockholders’equity and recordedagainsttheproceedsfromtheoffering.
Concentration of Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash and accounts receivable. The Company maintains its cash with financial institutions and its cash levels exceed the Federal Deposit Insurance Corporation’s(FDIC) federally insured limits. Accounts receivable include amounts due from customers with principal operations primarily in the United States.
As of June 30, 2021, 0 individual customers accounted for 10% of consolidated accounts receivable. As of DecemberMarch 31, 2020, 1 individual customer accounted for 13.7% of consolidated accounts receivable. For the three months ended June 30, 2021,2022, 0 individual customers accounted for more than 10% of consolidated revenue. For the three months ended June 30, 2020,accounts receivable. As of December 31, 2021, 2 individual customers accounted 13.8%for 13.2% and 12.8%12.3% of consolidated revenue, respectively. Foraccounts receivable.
The following table provides the three months ended June 30, 2021, 2Company’s concentrations of risk with respect to individual customers as a percentage of the Company’s total revenues:
|
| Three Months Ended March 31, |
| |||
Individual Customer |
| 2022 |
| 2021 |
| |
A |
| * |
|
| 17.2 | % |
B |
| * |
|
| 11.1 | % |
* Less than 10% of total revenues.
The following table provides the Company’s concentrations of credit risk with respect to advertising agency holding companies accounted for 14.7% and 10.0%as a percentage of consolidated revenue, respectively. For the three months ended June 30, 2020, 2 advertising agency holding companies accounted for 16.4% and 16.2% of consolidated revenue, respectively. For the six months ended June 30, 2021, 1 individual customer accounted for 11.3% of consolidated revenue. For the six months ended June 30, 2020, 0 individual customers accounted for more than 10% of consolidated revenue. For the six months ended June 30, 2021, 1 advertising agency holding company accounted for 14.2% of consolidated revenue. For the six months ended June 30, 2020, 2 advertising agency holding companies accounted for 14.9% and 12.3% of consolidated revenue, respectively. Company’s total revenues:
|
| Three Months Ended March 31, |
| |||
Advertising Agency Holding Company |
| 2022 |
| 2021 |
| |
A |
| * |
|
| 13.5 | % |
* Less than 10% of total revenues. |
As of June 30, 2021, 1individualMarch 31, 2022, 1 individual supplier accounted for 16.4%17.1% of consolidated accounts payable and accrued liabilities. As of December 31, 2020, 3 suppliers2021, 1 individual supplier accounted for 15.5%, 11.5%, and 10.9%16.8% of consolidated accounts payable and accrued liabilities, respectively.
IncomeTaxes
The Company is the managing member of Viant Technology LLC and, as a result, consolidates the financial results of Viant Technology LLC in the unaudited condensed consolidated financial statements. Viant Technology LLC is a pass-through entity for U.S. federal and most applicable state and local income tax purposes following a corporate reorganization effected in connection with our initial public offering. As an entity classified as a partnership for tax purposes, Viant Technology LLC is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Viant Technology LLC is passed through to, and included in the taxable income or loss of its members, including us. The Company is taxed as a corporation and pays corporate federal, state and local taxes with respect to income allocated from Viant Technology LLC, based on Viant Technology Inc.'s 19.5% economic interest in Viant Technology LLC.
The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities (“DTAs” and “DTLs”) for the expected future tax consequences of events that have been included in the financialliabilities.
statements. Under this method, we determine DTAs and DTLs on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on DTAs and DTLs is recognized in income in the period that includes the enactment date. We recognize DTAs to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations. If we determine that we would be able to realize our DTAs in the future in excess of their net recorded amount, we would make an adjustment to the DTA valuation allowance, which would reduce the provision for income taxes.Operating Leases
The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.See Note 5—Leases.
Tax Receivable Agreement
The Company expects to obtain an increase in its share of tax basis in the net assets of Viant Technology LLC when Class B units are exchanged by the holders of Class B units for shares of Class A common stock of the Company and upon other qualifying transactions. Each change in outstanding shares of Class A common stock of the Company results in a corresponding increase or decrease in the Company's ownership of Class A units of Viant Technology LLC. The Company intends to treat any exchanges of Class B units as direct purchases of LLC interests for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that Viant Technology Inc. would otherwise pay in the future to various taxing authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.
In connection with the IPO, the Company entered into a Tax Receivable Agreement (“TRA”) with Viant Technology LLC and the holders of Class B units of Viant Technology LLC (the “Members”). In the event that such parties exchange any or all of their Class B units for Class A common stock, the TRA requires the Company to make payments to such holders for 85% of the tax benefits realized, or in some cases deemed to be realized, by the Company by such exchange as a result of (i) increases in the Company’s tax basis of its ownership interest in the net assets of Viant Technology LLC resulting from any redemptions or exchanges of noncontrolling interest, (ii) tax basis increases attributable to payments made under the TRA, and (iii) deductions attributable to imputed interest pursuant to the TRA (the “TRA Payments”). The annual tax benefits are computed by calculating the income taxes due, including such tax benefits, and the income taxes due without such benefits. The Company expects to benefit from the remaining 15% of any tax benefits that it may actually realize. The TRA Payments are not conditioned upon any continued ownership interest in Viant Technology LLC or the Company. To the extent that the Company is unable to timely make payments under the TRA for any reason, such payments generally will be deferred and will accrue interest until paid.
The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the amount and timing of the taxable income the Company generates each year and the tax rate then applicable. The Company calculates the liability under the TRA using a TRA model, which includes an assumption related to the fair market value of assets. The payment obligations under the TRA are obligations of Viant Technology Inc. and not of Viant Technology LLC. Payments are generally due under the TRA within a specified period of time following the filing of the Company’s tax return for the taxable year with respect to which the payment obligation arises, although interest on such payments will begin to accrue at a rate of the Secured Overnight Financing Rate plus 500 basis points from the due date (without extensions) of such tax return.
The TRA provides that if (i) certain mergers, asset sales, other forms of business combinations, or other changes of control were to occur, (ii) there is a material breach of any material obligations under the TRA; or (iii) the Company elects an early termination of the TRA, then the TRA will terminate and the Company's obligations, or the Company's successor’s obligations, under the TRA will accelerate and become due and payable, based on certain assumptions, including an assumption that the Company would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the TRA and that any Class B units that have not been exchanged are deemed exchanged for the fair market value of the Company's Class A common stock at the time of termination.
RecentRecently Issued Accounting Pronouncements
On April 5, 2012, the Jumpstart Our Business Startups Act (the “JOBS Act”) was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an “emerging growth
company,” the Company may, under Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”), delay adoption of new or revised accounting standards applicable to public companies until such standards would otherwise apply to private companies. An “emerging growth company” is one with less than $1.07 billion in annual sales, has less than $700 million in market value of its shares of common stock held by non-affiliates and issues less than $1 billion of non-convertible debt over a three year period. The Company may take advantage of this extended transition period until the first to occur of the date that it (i) is no longer an “emerging growth company” or (ii) affirmatively and irrevocably opts out of this extended transition period.
The Company has elected to take advantage of the benefits of this extended transition period. Until the date that the Company is no longer an “emerging growth company” or affirmatively and irrevocably opts out of the exemption provided by Securities Act Section 7(a)(2)(B), upon issuance of a new or revised accounting standard that applies to its condensed consolidated financial statements and that has a different effective date for public and private companies, the Company will disclose the date on which it will adopt the recently issued accounting standard.
In FebruaryJune 2016, theFinancial Accounting Standards Board (“FASB”) issued AccountingStandardsUpdate (“ASU”) No. 2016-02, Leases(Topic 842), which requiresan entityto recognizeright-of-useassetsand leaseliabilitieson itsbalancesheetand disclosekey informationaboutleasingarrangements.The guidanceoffersspecificaccountingguidancefora lessee,lessor,and saleand leasebacktransactions.Lesseesand lessorsarerequiredto disclosequalitativeand quantitativeinformationaboutleasingarrangementsto enablea userof thefinancialstatementsto assessthe amount,timingand uncertaintyof cashflowsarisingfromleases.Leaseswillbe classifiedas eitherfinanceor operating,with theclassificationaffectingthepatternof expenserecognitionin theincomestatement.In March 2019, theFASBissuedASUNo. 2019-01 which madefurthertargetedimprovementsincludingclarification regardingthedeterminationof fairvalueof leaseassetsand liabilitiesand statementof cashflowsand presentationguidance.In June 2020, FASBissuedASU2020-05, which extendedtheeffectivedateof this guidancefornon-publicentitiesto fiscalyearsbeginningafterDecember15, 2021. As a part of the Company’s election under the JOBS Act, the guidance is effective for theCompany’sannualreportingperiodbeginningafterDecember15, 2021 and interim reporting periods within the annual period beginning after December 15, 2022. The Company iscurrentlyassessing theimpactthisguidancewillhave on the condensed consolidatedfinancialstatements.
In June 2016, theFASBissuedASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326). ASU 2016-13 revises the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses on financial instruments, including, but not limited to, available for sale debt securities and accounts receivable. The guidance is effective for the Company’s annual reporting period beginning after December 15, 2022 and interim reporting periods within that annual reporting period. The Company does not expect the adoption of this ASU to have a material impact on the condensed consolidated financial statements.
In October 2020, the FASB issued ASU No. 2020-10, Codification Improvements,, which updates various codification topics by clarifying disclosure requirements to align with the SEC's regulations. The guidance is effective for the Company’s annual reporting period beginning after December 15, 2021 and interim reporting periods within the annual period beginning after December 15, 2022. The Company is currently assessing the impact this guidance will have on the condensed consolidated financial statements.
Recently AdoptedAccounting Pronouncements
In February2016, theFASBissuedASU No. 2016-02, Leases, which requiresan entityto recognizeoperating leaseassetsand leaseliabilitieson itsbalancesheetand disclosekey informationaboutleasingarrangements. We adopted this standard at the beginning of the fiscal year ended December 31, 2022 (“fiscal 2022”). See Note 5—Leases for additional information.
In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). The purpose of ASU 2021-04 is to clarify and reduce diversity in, which clarifies an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modificationmodifications or exchange.exchanges. The ASU requires issuers to account for the modifications or exchanges of freestanding equity-classified written call options that remain equity classified after the modification or exchange based on the economic substance of the modification or exchange. In accordance with ASU 2021-04, an issuer determines the accounting for the modification or exchange based onand whether the transaction was done to issue equity, to issue or modify debt, or for other reasons. The guidance is effective for the Company’s annual reporting period beginning after December 15, 2021 and interim reporting periods within that annual reporting period. The Company is currently assessing the impactWe adopted this guidance will have on the condensed consolidated financial statements.
Recent AdoptedAccounting Pronouncements
In September2018, theFASBissuedASUNo. 2018-15, Intangibles—Goodwilland Other—Internal-UseSoftware(Subtopic350-40):Customer’sAccountingforImplementationCosts Incurredin a Cloud ComputingArrangementThat Isa ServiceContract(aconsensusof theFASBEmergingIssuesTask Force), which alignstherequirementsforcapitalizingimplementationcostsincurredin a hostingarrangementthatisa servicecontractwith therequirementsforcapitalizingimplementationcostsincurredto developor obtain internal-usesoftware.Earlyadoptionispermittedand can be appliedprospectivelyto allimplementationcosts incurredafterthedateof adoptionor retrospectively.This guidanceiseffectivefortheCompany’s annualreporting periodbeginningafter
December15, 2020. The Company adoptedthisASU prospectively on January1, 2021, and the adoptionof thisASUdid not have a materialimpacton the condensedconsolidatedfinancialstatements.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for the Company’s annual reporting period beginning after December 15, 2020. The Company adopted ASU 2019-12standard prospectively on January 1, 2021, and the2022. The adoption of this ASU did not have a materialan impact on the condensed consolidated financial statements.
3. Revenue
The disaggregation of revenue was as follows:
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
|
| (in thousands) |
|
| (in thousands) |
|
| (in thousands) |
| |||||||||||||||
Over-time revenue |
| $ | 1,105 |
|
| $ | 1,071 |
|
| $ | 2,209 |
|
| $ | 2,343 |
|
| $ | 137 |
|
| $ | 1,105 |
|
Point-in-time revenue |
|
| 49,306 |
|
|
| 29,354 |
|
|
| 88,346 |
|
|
| 66,242 |
|
|
| 42,492 |
|
|
| 39,039 |
|
Total revenue |
| $ | 50,411 |
|
| $ | 30,425 |
|
| $ | 90,555 |
|
| $ | 68,585 |
|
| $ | 42,629 |
|
| $ | 40,144 |
|
Remaining
Revenue for unsatisfied performanceobligationsforcontractswith an originalexpecteddurationof greaterthanone yearamountedto $7.3 million and $9.2 millionas of June 30, 2021 and December31, 2020,respectively,which primarily relateto deferredrevenueand analytic services.As of June 30, 2021 and December31, 2020,$1.6million and $3.6 million, respectively,isexpectedto be recognizedwithinone year,with theremainingamountsexpectedto be recognized thereafter.
Duringin the six months ended June 30, 2021, we recognized future was $0.1 million as of March 31, 2022 and $6.6 million as of December 31, 2021. The decrease was primarily due to an agreement modification whereby the Company agreed to a $1.1 6.2million cash settlement with one of its customers in exchange for the full, final and immediate termination of certain deferred revenue liabilities. See Note 14—Subsequent Events for additional details. The remaining decrease was due to the recognition of revenue related to amounts that were included in the deferred revenue balance as of December 31, 2020.2021. The revenuerecognizedfromthecontractliabilitiesconsistedof theCompany satisfyingperformance obligationsduringthenormalcourseof business.Deferred
Remaining deferred revenuethatisanticipatedto be recognizedduringthe succeeding12-monthperiodisrecordedin the currentportionof deferredrevenueand theremainingamountis recordedas non-currentportionof deferredrevenuewithinthe condensedconsolidatedbalancesheets.
4. Property, Equipment and Software, Net
Major classes of property, equipment and software were as follows:
|
| As of June 30, |
|
| As of December 31, |
|
| As of March 31, |
|
| As of December 31, |
| ||||
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||
|
| (in thousands) |
|
| (in thousands) |
| ||||||||||
Capitalized software development costs |
| $ | 54,933 |
|
| $ | 43,627 |
|
| $ | 64,278 |
|
| $ | 61,490 |
|
Computer equipment |
|
| 1,794 |
|
|
| 1,575 |
|
|
| 984 |
|
|
| 1,823 |
|
Purchased software |
|
| 32 |
|
|
| 32 |
|
|
| 32 |
|
|
| 32 |
|
Furniture, fixtures and office equipment |
|
| 1,097 |
|
|
| 1,087 |
|
|
| 1,216 |
|
|
| 1,159 |
|
Leasehold improvements |
|
| 2,125 |
|
|
| 2,115 |
|
|
| 2,452 |
|
|
| 2,178 |
|
Total property, equipment and software |
|
| 59,981 |
|
|
| 48,436 |
|
|
| 68,962 |
|
|
| 66,682 |
|
Less: Accumulated depreciation |
|
| (39,035 | ) |
|
| (34,607 | ) |
|
| (46,351 | ) |
|
| (44,351 | ) |
Total property, equipment and software, net |
| $ | 20,946 |
|
| $ | 13,829 |
|
| $ | 22,611 |
|
| $ | 22,331 |
|
Depreciation recorded in the condensed consolidated statements of operations was as follows:
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
|
| (in thousands) |
|
| (in thousands) |
| ||||||||||
Platform operations |
| $ | 1,766 |
|
| $ | 1,678 |
|
| $ | 3,344 |
|
| $ | 3,440 |
|
Sales and marketing |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Technology and development |
|
| 383 |
|
|
| 402 |
|
|
| 763 |
|
|
| 803 |
|
General and administrative |
|
| 168 |
|
|
| 153 |
|
|
| 330 |
|
|
| 297 |
|
Total |
| $ | 2,317 |
|
| $ | 2,233 |
|
| $ | 4,437 |
|
| $ | 4,540 |
|
|
| Three Months Ended March 31, |
| |||||
|
| 2022 |
|
| 2021 |
| ||
|
| (in thousands) |
| |||||
Platform operations |
| $ | 2,136 |
|
| $ | 1,578 |
|
Sales and marketing |
|
| — |
|
|
| — |
|
Technology and development |
|
| 595 |
|
|
| 381 |
|
General and administrative |
|
| 136 |
|
|
| 161 |
|
Total |
| $ | 2,867 |
|
| $ | 2,120 |
|
For each of the three months ended June 30,March 31, 2022 and 2021, and 2020, total interest cost incurred was $0.2 million and $0.3 million, respectively. For the six months ended June 30, 2021 and 2020, total interest cost incurred was $0.5 0.2million and $0.6 million, respectively. million. Interest costs capitalized during the three and six months ended June 30,March 31, 2022 and 2021 and 2020 were de minimis.
5. Leases
At the beginning of fiscal 2022, the Company adopted new lease accounting guidance issued by the FASB. The most significant change requires lessees to record the present value of operating lease payments as operating leaseassetsand leaseliabilitieson itsbalancesheetand disclosekey informationaboutleasingarrangements.
We adopted the new guidance using the modified retrospective method at the beginning of fiscal 2022. As such, the condensed consolidated balance sheets for prior periods are not comparable to our fiscal 2022 periods.The Company adopted the new guidance by applying the package of practical expedients permitted under the transition guidance, which allowed the Company to carry forward its original assessment of whether:
• | our existing arrangements are or contain leases; |
• | our existing arrangements are operating or finance leases; and |
• | to capitalize initial direct costs. |
The adoption of the new guidance resulted in the recognition of operating lease assets of approximately $21.0 million and operating lease liabilities of approximately $22.0 million, which were measured by the present value of the remaining minimum lease payments. In accordance with the guidance, the Company elected the practical expedient to exclude from the measurement of the operating lease assets and lease liabilities leases with a remaining term less than one year (“Short-term leases”). The Company also elected the practical expedient that allows lessees the option to account for lease and non-lease components together as a single component for all real estate classes of underlying assets. At adoption, in the condensed consolidated balance sheet, we also reclassified deferred rent of approximately $1.0 million for operating leases at the end of the fiscal year ended December 31, 2021 from other current liabilities (current portion) and other long-term liabilities (non-current portion) to current portion of operating lease liabilities and long-term portion of operating lease liabilities, respectively. The impact on the Company’s condensed consolidated statements of income and cash flows was not material.
The present value of the lease payments was calculated using the Company’s incremental borrowing rate applicable to the lease, which is determined by estimating what it would cost the Company to borrow a collateralized amount equal to the total lease payments over the lease term based on the contractual terms of the lease and the location of the leased asset.
Lessee Arrangements
The Company has operating leases for its office space, which have remaining lease terms of up to nine years. The Company does not have finance leases. The Company did not enter into any leases during the three months ended March 31, 2022.
We determine whether an arrangement is a lease at the contract inception date. Our leases may require us to make fixed rental payments or variable lease payments, which are based on a variety of factors including property values, tax and utility rates, property services fees, and other factors. Since these costs are variable in nature, they are excluded from the measurement of the reported operating lease assets and liabilities and are expensed as incurred.The Company records rent expense for operating leases, some of which have escalating rent payments, on a straight-line basis over the lease term.
Some of our leases include renewal options to extend the leases for up to five years and/or termination options to terminate the leases within one year. If it is reasonably certain that a renewal or termination option will be exercised, the exercise of the option is considered in calculating the term of the lease. As of March 31, 2022, our operating leases had a weighted-average remaining lease term of approximately eight years and a weighted-average incremental borrowing rate of 2.9%.
As of March 31, 2022, the Company had entered into an operating lease with total estimated future lease payments of $3.6 million that had not yet commenced and therefore is not included in the measurement of the operating right-of-use asset and operating lease liability on the condensed consolidated balance sheet. The Company expects the lease to commence in fiscal 2022.
Cash paid for amounts included in the operating lease liabilities was $0.6 million for the three months ended March 31, 2022.
The components of lease expense were as follows (in thousands):
|
| Three Months Ended March 31, |
| |
|
| 2022 |
| |
Operating lease cost |
| $ | 812 |
|
Short-term lease cost |
|
| 343 |
|
Variable lease cost |
|
| 97 |
|
Total lease cost |
| $ | 1,252 |
|
Rent expenseon operatingleases was $1.0 million for the three months ended March 31, 2021.
Future minimum lease payments as of March 31, 2022 were as follows:
|
| As of March 31, 2022 |
| |
Year |
| (in thousands) |
| |
Remainder of 2022 |
| $ | 1,650 |
|
2023 |
|
| 3,715 |
|
2024 |
|
| 3,060 |
|
2025 |
|
| 2,991 |
|
2026 |
|
| 2,974 |
|
Thereafter |
|
| 13,739 |
|
Total undiscounted future lease payments |
|
| 28,129 |
|
Less: Commitments for leases not yet commenced |
|
| 3,593 |
|
Less: Imputed interest |
|
| 3,031 |
|
Present value of operating lease liabilities |
|
| 21,505 |
|
Less: Operating lease liabilities, current |
|
| 1,837 |
|
Operating lease liabilities, noncurrent |
| $ | 19,668 |
|
Disclosures related to periods prior to the adoption of ASC 842
Future minimum payments under the Company’s non-cancelable operating leases, which are primarily related to office space leases, as of December 31, 2021 are as follows:
Year Ending December 31, |
| (in thousands) |
| |
2022 |
| $ | 3,039 |
|
2023 |
|
| 3,953 |
|
2024 |
|
| 3,060 |
|
2025 |
|
| 2,991 |
|
2026 |
|
| 2,974 |
|
Thereafter |
|
| 13,739 |
|
Total minimum payments |
| $ | 29,756 |
|
6. Intangible Assets, Net
The balances of intangibles assets and accumulated amortization are as follows:
|
| As of June 30, 2021 |
|
| As of March 31, 2022 |
| ||||||||||||||||||||||||||
|
| Remaining Weighted Average Useful Life |
|
| Gross Amount |
|
| Accumulated Amortization |
|
| Net Carrying Amount |
|
| Remaining Weighted Average Useful Life |
|
| Gross Amount |
|
| Accumulated Amortization |
|
| Net Carrying Amount |
| ||||||||
|
| (in years) |
|
| (in thousands) |
|
| (in years) |
|
| (in thousands) |
| ||||||||||||||||||||
Developed technology |
|
| 1.6 |
|
| $ | 4,927 |
|
| $ | (3,819 | ) |
| $ | 1,108 |
|
|
| 0.8 |
|
| $ | 4,927 |
|
| $ | (4,344 | ) |
| $ | 583 |
|
Customer relationships |
|
| 2.6 |
|
|
| 2,300 |
|
|
| (1,451 | ) |
|
| 849 |
|
|
| 1.8 |
|
|
| 2,300 |
|
|
| (1,698 | ) |
|
| 602 |
|
Trademarks/tradenames |
|
| 4.0 |
|
|
| 1,400 |
|
|
| (957 | ) |
|
| 443 |
|
|
| 3.9 |
|
|
| 1,400 |
|
|
| (1,086 | ) |
|
| 314 |
|
Total |
|
|
|
|
| $ | 8,627 |
|
| $ | (6,227 | ) |
| $ | 2,400 |
|
|
|
|
|
| $ | 8,627 |
|
| $ | (7,128 | ) |
| $ | 1,499 |
|
|
| As of December 31, 2020 |
|
| As of December 31, 2021 |
| ||||||||||||||||||||||||||
|
| Remaining Weighted Average Useful Life |
|
| Gross Amount |
|
| Accumulated Amortization |
|
| Net Carrying Amount |
|
| Remaining Weighted Average Useful Life |
|
| Gross Amount |
|
| Accumulated Amortization |
|
| Net Carrying Amount |
| ||||||||
|
| (in years) |
|
| (in thousands) |
|
| (in years) |
|
| (in thousands) |
| ||||||||||||||||||||
Developed technology |
|
| 2.1 |
|
| $ | 4,927 |
|
| $ | (3,469 | ) |
| $ | 1,458 |
|
|
| 1.1 |
|
| $ | 4,927 |
|
| $ | (4,169 | ) |
| $ | 758 |
|
Customer relationships |
|
| 3.1 |
|
|
| 2,300 |
|
|
| (1,287 | ) |
|
| 1,013 |
|
|
| 2.1 |
|
|
| 2,300 |
|
|
| (1,615 | ) |
|
| 685 |
|
Trademarks/tradenames |
|
| 4.2 |
|
|
| 1,400 |
|
|
| (856 | ) |
|
| 544 |
|
|
| 4.0 |
|
|
| 1,400 |
|
|
| (1,057 | ) |
|
| 343 |
|
Total |
|
|
|
|
| $ | 8,627 |
|
| $ | (5,612 | ) |
| $ | 3,015 |
|
|
|
|
|
| $ | 8,627 |
|
| $ | (6,841 | ) |
| $ | 1,786 |
|
Amortization recorded in the condensed consolidated statements of operations was as follows:
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
|
| (in thousands) |
|
| (in thousands) |
|
| (in thousands) |
| |||||||||||||||
Platform operations |
| $ | 175 |
|
| $ | 175 |
|
| $ | 350 |
|
| $ | 350 |
|
| $ | 175 |
|
| $ | 175 |
|
Sales and marketing |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Technology and development |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
General and administrative |
|
| 132 |
|
|
| 132 |
|
|
| 264 |
|
|
| 264 |
|
|
| 112 |
|
|
| 132 |
|
Total |
| $ | 307 |
|
| $ | 307 |
|
| $ | 614 |
|
| $ | 614 |
|
| $ | 287 |
|
| $ | 307 |
|
Estimated future amortization of intangible assets as of June 30, 2021March 31, 2022 is as follows:
|
| As of June 30, 2021 |
| |
Year |
| (in thousands) |
| |
Remainder of 2021 |
| $ | 615 |
|
2022 |
|
| 1,119 |
|
2023 |
|
| 467 |
|
2024 |
|
| 107 |
|
2025 |
|
| 80 |
|
Thereafter |
|
| 12 |
|
Total |
| $ | 2,400 |
|
|
| As of March 31, 2022 |
| |
Year |
| (in thousands) |
| |
Remainder of 2022 |
| $ | 832 |
|
2023 |
|
| 467 |
|
2024 |
|
| 107 |
|
2025 |
|
| 80 |
|
2026 |
|
| 13 |
|
Thereafter |
|
| — |
|
Total |
| $ | 1,499 |
|
6.7. Accrued Liabilities
The Company’s accrued liabilities consisted of the following:
|
| As of June 30, |
|
| As of December 31, |
|
| As of March 31, |
|
| As of December 31, |
| ||||
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||
|
| (in thousands) |
|
| (in thousands) |
| ||||||||||
Accrued traffic acquisition costs |
| $ | 17,276 |
|
| $ | 22,667 |
|
| $ | 27,765 |
|
| $ | 30,942 |
|
Accrued customer payable (Note 14) |
|
| 6,163 |
|
|
| — |
| ||||||||
Other accrued liabilities |
|
| 2,164 |
|
|
| 2,010 |
|
|
| 3,742 |
|
|
| 3,144 |
|
Total accrued liabilities |
| $ | 19,440 |
|
| $ | 24,677 |
|
| $ | 37,670 |
|
| $ | 34,086 |
|
7. Long-Term Debt and8. Revolving Credit Facility
The Company’sdebtand revolvingcreditfacilitiesconsistedof thefollowing:
|
| As of June 30, |
|
| As of December 31, |
| ||
|
| 2021 |
|
| 2020 |
| ||
|
| (in thousands) |
| |||||
Revolving credit facility |
| $ | 17,500 |
|
| $ | 17,500 |
|
Paycheck Protection Program Loan |
|
| — |
|
|
| 6,035 |
|
Total debt |
|
| 17,500 |
|
|
| 23,535 |
|
Less: Current portion of long-term debt |
|
| — |
|
|
| (3,353 | ) |
Total long-term debt |
| $ | 17,500 |
|
| $ | 20,182 |
|
As of December 31, 2020,thecurrentportionof long-termdebtrelatedto thePaycheck Protection Program (“PPP”) Loan. The carryingvalueof the revolving credit facility as of June 30, 2021 and December31, 2020approximated itsfairvalue as the interest rate is variable and approximates prevailing market interest rates for similar debt arrangements. The carryingvalueof the PPP Loan as of December31, 2020approximated itsfairvalue which was estimated using quoted marketprices,based onestimatedincrementalborrowingratesfor similartypesof borrowingarrangements.
PPP Loan
On April 14, 2020, the Company received the proceeds from a loan in the amount of approximately $6.0 million (the “PPP Loan”) from PNC Bank, as lender, pursuant to the PPP of the Coronavirus Aid, Relief, and Economic Security Act. The Company accounted for the PPP Loan as a financial liability in accordance with ASC Topic 470, Debt. Accordingly, the PPP Loan was recognized within long-term debt and current portion of long-term debt in the Company’s consolidated balance sheet and the related accrued interest was included within accrued liabilities in the Company’s consolidated balance sheet as of December 31, 2020. In June 2021, the Company received notice of forgiveness of the PPP Loan in whole, including all accrued unpaid interest. The Company recorded the forgiveness of approximately $6.0 million of principal and $0.1 million of accrued interest, which is included in gain on extinguishment of debt on the condensed consolidated statements of operations for the three and six months ended June 30, 2021.
Revolving Credit Facility
On October 31, 2019, we entered into an asset-based revolving credit and security agreement with PNC Bank (the “Loan Agreement”). The Loan Agreement provides a senior secured revolving credit facility of up to $40.0 million with a maturity date of October 31, 2024. The Loan Agreement is collateralized by security interests in substantially all of our assets.
Advances under the Loan Agreement bear interest through maturity at a variable rate based upon our selection of either a Domestic Rate or a LIBOR Rate, plus an applicable margin (“Domestic Rate Loans” and “LIBOR Rate Loans”). The Domestic Rate is defined as a fluctuating interest rate equal to the greater of (1) the base commercial lending rate of PNC Bank, (2) the overnight federal funds rate plus 0.50% and (3) the Daily LIBOR Rate plus 1.00%. The effective weighted average interest rate for the three and six months ended June 30, 2021March 31, 2022 was 3.61%1.90%. The applicablemarginas ofMarch 31, 2022 wasequalto 0.75% forDomestic Rate Loans and 3.64%, respectively.1.75% forLIBORRate Loans. The applicable margin commencing January 1,that commenced October 15, 2021 is between 1.50%0.75% to 2.25%1.25% for Domestic Rate Loans and between 3.50%1.75% and 4.25%2.25% for LIBOR Rate Loans based on maintaining certain undrawn availability ratios. The facility fee for undrawn amounts under the Loan Agreement is 0.375% per annum. We will also be required to pay customary letter of credit fees, as necessary.
The Loan Agreement contains customary conditions to borrowings, events of default and covenants, including covenants that restrict our ability to sell assets, make changes to the nature of the business, engage in mergers or acquisitions, incur, assume or permit to exist additional indebtedness and guarantees, create or permit to exist liens, pay dividends, issue equity instruments, make distributions or redeem or repurchase capital stock or make other investments, and engage in transactions with affiliates. The Loan Agreement also requires that we maintain compliance with a minimum Fixed Charge Coverage Ratio (as defined in the Loan Agreement) of 1.40 to 1.00 at any time undrawn availability under the Loan Agreement is less than 25%. As of June 30, 2021,March 31, 2022, we are in compliance with all covenants.
8.The carryingvalueof the revolving credit facility as of March 31, 2022 and December31, 2021 was $17.5 million recorded in long-term debt and approximated itsfairvalue as the interest rate is variable and approximates prevailing market interest rates for similar debt arrangements. The fair value of debt was estimated using primarily level 2 inputs including quoted market prices or discounted cash flow analyses, based on estimated incremental borrowing rates for similar types of borrowing arrangements.
On April14, 2020, theCompany receivedproceedsfromthePaycheck Protection Program Loan (the “PPPLoan”) in theamountof approximately$6.0 millionfromPNCBank, as lender,pursuantto thePaycheck Protection Programof theCARESAct. The PPPLoan, which isevidencedby a notedatedApril11, 2020, bearsinterestatan annualrateof 1.0% and matureson April11, 2022. No interestor principalisdue duringthefirstfifteenmonthsafterApril11, 2020, althoughinterestwillcontinueto accrueoverthisfifteen-monthdeferralperiod.The PPPLoan maybe prepaid withoutpenalty,attheoptionof theCompany, atany timepriorto maturity.The promissorynoteevidencingthe PPPLoan containscustomaryeventsof defaultrelatingto, amongotherthings,paymentdefaults,breachof representationsand warranties,or otherprovisionsof thepromissorynote.The occurrenceof an eventof default maytriggertheimmediaterepaymentof allamountsoutstanding,collectionof allamountsowing fromthe Company, and/orfilingsuitand obtaininga judgmentagainsttheCompany.
ProceedsfromloansgrantedundertheCARESAct areto be used forpayroll,coststo continue employeegroup healthcarebenefits,rent,utilitiesand certainotherqualifiedcosts(collectively,“qualifying expenses”).The Company has used thePPPLoan proceedsforqualifyingexpenses.In June 2021, the Company received notice of forgiveness of the PPP Loan in whole, including all accrued unpaid interest.
9. Stock-Based Compensation
In connection with the IPO, which occurred on February 12, 2021, the Phantom Unit Plan was replaced by the 2021 LTIP. On February 12, 2021, 6.2 million RSUsRestricted Stock Units (“RSUs”) were granted under the Company’s 2021 LTIP. The Company is authorized to grant RSUs, incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, and performance stock awards under its 2021 LTIP. As of June 30, 2021,March 31, 2022, the Company has currently only granted RSUs and nonqualified stock options. Under the Company’s 2021 LTIP, 5.64.0 million shares remained available for grant as of June 30, 2021.March 31, 2022.
Stock-Based Compensation
Stock-based compensation recorded in the condensed consolidated statements of operations was as follows:
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
|
| (in thousands) |
|
| (in thousands) |
|
| (in thousands) |
| |||||||||||||||
Platform operations |
| $ | 5,540 |
|
| $ | — |
|
| $ | 8,701 |
|
| $ | — |
|
| $ | 1,086 |
|
| $ | 3,161 |
|
Sales and marketing |
|
| 11,914 |
|
|
| — |
|
|
| 18,727 |
|
|
| — |
|
|
| 2,179 |
|
|
| 6,813 |
|
Technology and development |
|
| 5,029 |
|
|
| — |
|
|
| 7,968 |
|
|
| — |
|
|
| 1,169 |
|
|
| 2,939 |
|
General and administrative |
|
| 7,203 |
|
|
| — |
|
|
| 11,381 |
|
|
| — |
|
|
| 1,942 |
|
|
| 4,177 |
|
Total |
| $ | 29,686 |
|
| $ | — |
|
| $ | 46,777 |
|
| $ | — |
|
| $ | 6,376 |
|
| $ | 17,090 |
|
RSUs
The following summarizes RSU activity:
|
| Number of Shares |
|
|
|
|
|
| Number of Shares (in thousands) |
|
| Weighted-Average Grant-Date Fair Value |
| |||
|
| (in thousands) |
|
| Weighted-Average Grant-Date Fair Value |
| ||||||||||
RSUs outstanding as of December 31, 2020 |
|
| — |
|
| $ | — |
| ||||||||
RSUs outstanding as of December 31, 2021 |
|
| 3,033 |
|
| $ | 24.29 |
| ||||||||
Granted |
|
| 6,208 |
|
|
| 25.00 |
|
|
| 2,284 |
|
|
| 6.16 |
|
Vested |
|
| — |
|
|
| — |
|
|
| (342 | ) |
|
| 25.02 |
|
Canceled/forfeited |
|
| (26 | ) |
|
| 25.00 |
|
|
| (117 | ) |
|
| 23.92 |
|
RSUs outstanding as of March 31, 2021 |
|
| 6,182 |
|
|
| 25.00 |
| ||||||||
Granted |
|
| 66 |
|
|
| 26.10 |
| ||||||||
Vested |
|
| — |
|
|
| — |
| ||||||||
Canceled/forfeited |
|
| (64 | ) |
|
| 25.01 |
| ||||||||
RSUs outstanding as of June 30, 2021 |
|
| 6,184 |
|
| $ | 25.01 |
| ||||||||
RSUs outstanding as of March 31, 2022 |
|
| 4,858 |
|
|
| 15.72 |
|
As of June 30, 2021,March 31, 2022, the Company had unrecognized stock-based compensation relating to RSUs of approximately $100.4$67.6 million, which is expected to be recognized over a weighted-average period of 2.42.9 years.
Nonqualified Stock Options
The following summarizes nonqualified stock option activity:
|
| Number of Options |
|
| Weighted-Average Exercise Price |
|
| Weighted-Average Remaining Contractual Term |
|
| Aggregate Intrinsic Value |
|
| Number of Options (in thousands) |
|
| Weighted-Average Exercise Price |
|
| Weighted-Average Remaining Contractual Term (in years) |
|
| Aggregate Intrinsic Value (in thousands) |
| ||||||||
|
| (in thousands) |
|
|
|
|
|
| (in years) |
|
| (in thousands) |
| |||||||||||||||||||
Options outstanding as of December 31, 2020 |
|
| — |
|
| $ | — |
|
|
|
|
|
|
|
|
| ||||||||||||||||
Options outstanding as of December 31, 2021 |
|
| 220 |
|
| $ | 15.88 |
|
|
| 9.7 |
|
| $ | 20 |
| ||||||||||||||||
Granted |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
| 3,565 |
|
|
| 6.09 |
|
|
|
|
|
|
|
|
|
Exercised |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
Canceled |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
| (14 | ) |
|
| 12.02 |
|
|
|
|
|
|
|
|
|
Expired |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
Options outstanding as of March 31, 2021 |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
| ||||||||||||||||
Granted |
|
| 67 |
|
|
| 26.09 |
|
|
|
|
|
|
|
|
| ||||||||||||||||
Exercised |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
| ||||||||||||||||
Canceled |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
| ||||||||||||||||
Expired |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
| ||||||||||||||||
Options outstanding as of June 30, 2021 |
|
| 67 |
|
| $ | 26.09 |
|
|
| 9.9 |
|
| $ | 250 |
| ||||||||||||||||
Options outstanding as of March 31, 2022 |
|
| 3,771 |
|
|
| 6.64 |
|
|
| 9.9 |
|
|
| 1,891 |
| ||||||||||||||||
Vested and exercisable |
|
| 11 |
|
|
| 25.86 |
|
|
| 9.2 |
|
|
| — |
|
The weighted-average grant-date fair value of the nonqualified stock options granted during the three and six months ended June 30, 2021March 31, 2022 was $13.04. As of June 30, 2021, there were 0 nonqualified stock options vested or exercisable.$3.43. The Company had unrecognized stock-based compensation relating to unvested nonqualified stock options of approximately $0.810.3 million, which is expected to be recognized over a weighted-average period of 3.73.9 years, as of June 30, 2021.March 31, 2022.
The following table presents the assumptions used in the Black-Scholes model to determine the fair value of nonqualified stock options for the three and six months ended June 30, 2021.March 31, 2022. Black-Scholes assumptions have not been disclosed for any other periods presented as there were no nonqualified stock options granted in those periods.
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| ||
|
| 2021 |
|
| 2021 |
| ||
Risk free interest rate |
|
| 1.2 | % |
|
| 1.2 | % |
Expected volatility |
|
| 61.1 | % |
|
| 61.1 | % |
Expected term (in years) |
|
| 5.9 |
|
|
| 5.9 |
|
Expected dividend yield |
|
| 0.0 | % |
|
| 0.0 | % |
Three Months Ended March 31, | ||||
2022 | ||||
Risk free interest rate | 1.4 | % | ||
Expected volatility | 61.5 | % | ||
Expected term (in years) | 5.9 | |||
Expected dividend yield | 0.0 | % |
Risk-Free Interest Rate. The Company bases the risk-free interest rate assumption for equity awards on the rates for U.S. Treasury securities with maturities similar to those of the expected term of the award being valued.
Expected Volatility. Due to the limited trading history of the Company’s common stock, the expected volatility assumption is based on volatilities of a peer group of similar companies whose share prices are publicly available. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of the Company’s own stock price becomes available.
Expected Term. Given the insufficient historical data relating to nonqualified stock option exercises, the expected term assumption is based on expected terms of a peer group of similar companies whose expected terms are publicly available. The Company will continue to apply this process until a sufficient amount of historical information regarding the Company’s nonqualified stock option exercises becomes available.
Expected Dividend Yield. The Company’s expected dividend yield assumption is 0 as it has never paid dividends and has no present intention to do so in the future.
Issuance of Shares
Upon vesting of shares under the LTIP, we will issue treasury stock. If treasury stock is not available, Class A common stock will be issued.
9.10. Income Taxes and Tax Receivable Agreement
The provision for income taxes differs from the amount of income tax computed by applying the applicable U.S. statutory federal income tax rate of 21% to income before provision of income taxes due to Viant Technology LLC’s pass-through structure for U.S. income tax purposes, pass-through permanent differences related to forgiveness of the PPP Loan and the valuation allowance against the deferred tax asset. The Company did not recognize an income tax expense/(benefit) on its share of pre-tax book income (loss), exclusive of the noncontrolling interest of 80.5%77.0% due to the full valuation allowance against its deferred tax assets, resulting in an effective tax rate (“ETR”) of 0.0% for each of the sixthree months ended June 30,March 31, 2022 and 2021.
As of June 30, 2021,March 31, 2022, management determined based on applicable accounting standards and the weight of all available evidence, it was not more likely than not (“MLTN”) that the Company will generate sufficient taxable income to realize our deferred tax assets including the difference in our tax basis in excess of the financial reporting value for our investment in Viant Technology LLC. Consequently, we have established a full valuation allowance against our deferred tax assets as of June 30, 2021.March 31, 2022. In the event that management subsequently determines that it is MLTN that we will realize our deferred tax assets in the future over the recorded amount, a decrease to the valuation allowance will be made, which will reduce the provision for income taxes.
The Company has concluded based on applicable accounting standards and the weight of all available evidence, that it was MLTN that its deferred tax assets subject to the TRATax Receivable Agreement (“TRA”) would not be realized as of June 30, 2021.March 31, 2022. Therefore, the Company has not recorded a liability related to the remaining tax savings it may realize from utilization of such deferred tax assets after concluding it was not probable that such TRA liability would be paid based on its estimates of future taxable income. As of June 30, 2021,the March 31, 2022, the total unrecorded TRA liability is approximately $9.1$10.3 million. If utilization of the deferred tax assets subject to the TRA becomes MLTN in the future, the Company will record a liability related to the TRA, to the extent probable at that time, which will be recognized as an expense within its condensed consolidated statements of operations.
10. Earnings (Loss)
11. Loss Per Share/Unit
Prior to the Reorganization Transactions that occurred on February 12, 2021, the Viant Technology LLC membership structure included certain convertible preferred units and common units. As a result of the Reorganization Transactions, Class B units of Viant Technology LLC are exchangeable in the future for Class A common stock of the Company. As the conversion of Viant Technology LLC preferred and common units to Class B units was not done in a proportionate manner with respect to the rights and economic interests of the former Viant Technology LLC unit holders compared to those of the new Class B unit/shareholders in Viant Technology LLC and Viant Technology Inc, we do not believe it is appropriate to retrospectively adjust these units. Accordingly, the earnings per unit calculation presented for the three and six months ended June 30, 2020 reflects units of the membership structure prior to the Reorganization Transactions.Share
For the three and six months ended June 30,March 31, 2022 and 2021, basic net loss per share has been calculated by dividing net loss attributable to Class A common stockholders, for the period subsequent to the Reorganization Transactions, by the weighted averageweighted-average number of shares of Class A common stock outstanding for the same period. Shares of Class A common stock are weighted for the portion of the period in which the shares were outstanding. Diluted net loss per share has been calculated in a manner consistent with that of basic net loss per share while considering all potentially dilutive shares of Class A common stock outstanding during the period.
For the three and six months ended June 30, 2020, basic earnings (loss) per unit represents net income (loss) divided by the weighted-average number of units outstanding. Diluted net income (loss) per share has been computed in a manner consistent with that of basic net loss per share while considering all shares of potentially dilutive common units that were outstanding during the period, inclusive of the convertible preferred units using the if-converted method and the incentive common units using the treasury stock method, if dilutive. For the three and six months ended June 30, 2020, there were no potential dilutive units related to incentive common units as they were all issued as of the beginning of the year.
The undistributed earnings for the three and six months ended June 30, 2020 have been allocated based on the participation rights of the convertible preferred and common units as if the earnings for the period have been distributed. As the participation in distributed and undistributed earnings is identical for both classes, the distributed and undistributed earnings are allocated on a proportionate basis.
The following table presents the calculation of basic and diluted net earnings (loss)loss per share/unitshare for the three and six months ended June 30, 2021, the period following the Reorganization Transactions,March 31, 2022 and for the three and six months ended June 30, 2020. See Note 2 for additional information related to basic and diluted net loss per share/unit.2021.
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
|
| (in thousands, except per share/unit data) |
|
| (in thousands, except per share/unit data) |
| ||||||||||
Numerator |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
| $ | (18,095 | ) |
| $ | (30 | ) |
| $ | (32,966 | ) |
| $ | 299 |
|
Less: Net loss attributable to noncontrolling interests |
|
| (14,440 | ) |
|
| — |
|
|
| (26,206 | ) |
|
| — |
|
Less: Undistributed earnings attributable to participating securities |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (179 | ) |
Net income (loss) attributable to Viant Technology Inc./common unitholders |
| $ | (3,655 | ) |
| $ | (30 | ) |
| $ | (6,760 | ) |
| $ | 120 |
|
Denominator |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares of Class A common stock/units outstanding—basic |
|
| 11,500 |
|
|
| 400 |
|
|
| 11,500 |
|
|
| 400 |
|
Convertible preferred units |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 600 |
|
Weighted-average shares of Class A common stock/units outstanding—diluted |
|
| 11,500 |
|
|
| 400 |
|
|
| 11,500 |
|
|
| 1,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share of Class A common stock/unit—basic |
| $ | (0.32 | ) |
| $ | (0.08 | ) |
| $ | (0.59 | ) |
| $ | 0.30 |
|
Earnings (loss) per share of Class A common stock/unit—diluted |
| $ | (0.32 | ) |
| $ | (0.08 | ) |
| $ | (0.59 | ) |
| $ | 0.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anti-dilutive shares/units excluded from earnings (loss) per share of Class A common stock/unit—diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible preferred units |
|
| — |
|
|
| 600 |
|
|
| — |
|
|
| — |
|
Restricted stock units |
|
| 6,184 |
|
|
| — |
|
|
| 6,184 |
|
|
| — |
|
Non-qualified stock options |
|
| 67 |
|
|
| — |
|
|
| 67 |
|
|
| — |
|
Shares of Class B common stock |
|
| 47,436 |
|
|
| — |
|
|
| 47,436 |
|
|
| — |
|
Total shares excluded from earnings (loss) per share of Class A common stock/unit—diluted |
|
| 53,687 |
|
|
| 600 |
|
|
| 53,687 |
|
|
| — |
|
|
| Three Months Ended March 31, |
| |||||
|
| 2022 |
|
| 2021 |
| ||
|
| (in thousands, except per share data) |
| |||||
Numerator |
|
|
|
|
|
|
|
|
Net loss |
| $ | (13,563 | ) |
| $ | (14,870 | ) |
Less: Net loss attributable to noncontrolling interests |
|
| (10,371 | ) |
|
| (11,766 | ) |
Net loss attributable to Viant Technology Inc. |
| $ | (3,192 | ) |
| $ | (3,104 | ) |
Denominator |
|
|
|
|
|
|
|
|
Weighted-average shares of Class A common stock outstanding—basic and diluted |
|
| 13,809 |
|
|
| 11,500 |
|
|
|
|
|
|
|
|
|
|
Loss per share of Class A common stock—basic |
| $ | (0.23 | ) |
| $ | (0.27 | ) |
Loss per share of Class A common stock—diluted |
| $ | (0.23 | ) |
| $ | (0.27 | ) |
|
|
|
|
|
|
|
|
|
Anti-dilutive shares excluded from loss per share of Class A common stock—diluted: |
|
|
|
|
|
|
|
|
Restricted stock units |
|
| 4,858 |
|
|
| 6,196 |
|
Nonqualified stock options |
|
| 3,771 |
|
|
| — |
|
Shares of Class B common stock |
|
| 47,082 |
|
|
| 47,436 |
|
Total shares excluded from loss per share of Class A common stock—diluted |
|
| 55,711 |
|
|
| 53,632 |
|
11.12. Noncontrolling Interests
We are the sole managing member of Viant Technology LLC and, as a result, consolidate the financial results of Viant Technology LLC. We report noncontrolling interests representing the economic interests in Viant Technology LLC held by the other members of Viant Technology LLC. The Viant Technology LLC Agreement classifies the interests acquired by the Company as Class A units, reclassified the interests held by the continuing members of Viant Technology LLC as Class B units and permits the continuing members of Viant Technology LLC to exchange Class B units for shares of Class A common stock on a 1-for-one basis or, at the election of Viant Technology Inc., for cash at the current fair value on the date of the exchange. Changes in the Company’s ownership interest in Viant Technology LLC while retaining control of Viant Technology LLC will be accounted for as equity transactions. As such, future redemptions or direct exchanges of Class B units in Viant Technology LLC by the other members and future issuances of Class A common stock under the LTIP will result in a change in ownership, reducewhere the amount recorded asCompany will rebalance the noncontrolling interest, and increase additional paid-in capital.offset by a change in additional-paid-in-capital.
The following table summarizes the ownership of Viant Technology LLC:
|
| As of June 30, 2021 |
|
| As of March 31, 2022 |
|
| As of December 31, 2021 |
| |||||||||||||||
Owner |
| Units Owned |
|
| Ownership Percentage |
|
| Units Owned |
|
| Ownership Percentage |
|
| Units Owned |
|
| Ownership Percentage |
| ||||||
Viant Technology Inc. |
|
| 11,500,000 |
|
|
| 19.5 | % |
|
| 14,071,482 |
|
|
| 23.0 | % |
|
| 13,704,638 |
|
|
| 22.5 | % |
Noncontrolling interests |
|
| 47,435,559 |
|
|
| 80.5 | % |
|
| 47,082,260 |
|
|
| 77.0 | % |
|
| 47,107,130 |
|
|
| 77.5 | % |
Total |
|
| 58,935,559 |
|
|
| 100.0 | % |
|
| 61,153,742 |
|
|
| 100.0 | % |
|
| 60,811,768 |
|
|
| 100.0 | % |
12. Commitments
During the three months ended March 31, 2022, noncontrolling interests exchanged 24,870 Class B units of Viant Technology, LLC for 24,870 shares of the Company’s Class A common stock, which also resulted in the cancellation of 24,870 shares of the Company’s Class B common stock that was previously held by noncontrolling interests with no additional consideration provided.and Contingencies
Lease Commitments
The Company conducts its operationsfollowing table presents the effect of changes in 10 office spaces around the United States that are under operating leases that expire overCompany’s ownership interest in Viant Technology LLC on the next ten years. Rent expenseon operatingleaseswas $1.0 million and $1.0 millionCompany’s equity for the period indicated. The effect of changes has not been presented for the three months ended June 30,March 31, 2021 and 2020, respectively, and $2.0 million and $2.1 million foras there were no changes in ownership interest from the six months ended June 30, 2021 and 2020, respectively. The current portiondate of deferred rent of $0.2 million and $0.4 million as of June 30, 2021 and Decemberthe IPO through March 31, 2020, respectively, is included in other current liabilities. The non-current portion of deferred rent of $0.4 million and $0.5 million as of June 30, 2021 and December 31, 2020, respectively, is included in other long-term liabilities.
FutureminimumpaymentsundertheCompany’snon-cancelable operating leases, which are primarily related to office leases,as of June 30, 2021 areas follows:2021.
|
| As of June 30, 2021 |
| |
Year |
| (in thousands) |
| |
Remainder of 2021 |
| $ | 1,735 |
|
2022 |
|
| 2,190 |
|
2023 |
|
| 1,156 |
|
2024 |
|
| 273 |
|
2025 and thereafter |
|
| 217 |
|
Total minimum payments |
| $ | 5,571 |
|
|
| Three Months Ended March 31, 2022 |
| |
|
| (in thousands) |
| |
Net loss attributable to Viant Technology Inc. |
| $ | (3,192 | ) |
Transfers to noncontrolling interests: |
|
|
|
|
Decrease in the additional-paid-in-capital of Viant Technology Inc. as a result in ownership changes in Viant Technology LLC |
|
| (4,276 | ) |
Net decrease in equity of Viant Technology Inc. due to equity interest transactions with noncontrolling interests |
| $ | (7,468 | ) |
13. Commitmentsand Contingencies
As of March 31, 2022, the Company had non-cancelable operating lease commitments for office space that have been recorded as operating lease liabilities. Refer to Note 5—Leases for additional information regarding lease commitments.
Legal Matters
From time to time, the Company is subject to various legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business. Although the outcome of the various legal proceedings and claims cannot be predicted with certainty, management does not believe that any of these proceedings or other claims will have a material effect on the Company’s business, financial condition, results of operations or cash flows.
Guarantees and Indemnities
The Company has made no significant contractual guarantees for the benefit of third parties. However, in the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by the Company or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with directors and certain officers and employees that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. The Company is not aware of indemnification claims that could have a material effect on the Company’s condensed consolidated financial statements. Accordingly, 0 amounts for any obligation have been recorded as of June 30, 2021.March 31, 2022.
13.14. Subsequent Events
On August 5, 2021, the Board of Directors approvedApril 6, 2022, the Company to purchase Class A common stock at fair value upon vesting of RSUs to satisfy minimum statutory tax obligations paid byexecuted a modification agreement with a customer whereby the Company on behalfagreed to pay the sum of plan participants.
On August 9, 2021, 2.1$6.2 million RSUs vested upon expiration ofto the IPO lockup period. In connection with the minimum tax withholding paid on behalf of employeescustomer in exchange for the vested RSUs,full, final and immediate termination of certain deferred revenue liabilities. Subsequent to the termination, the Company paid $13.7 million forhas no outstanding performance obligations to this customer. As a result, the repurchase of 0.8 million Class A common shares at an average fair value price of $17.73.
related deferred revenue balance was reclassified to accrued liabilities on the Company’s condensed consolidated balance sheet. The Company expects this customer to continue as a customer in the future utilizing the Company’s standard contract practices.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations of Viant Technology Inc. and its subsidiaries (“Viant,” “we,” “us,” “our” or the “Company”) should be read in conjunction with, and is qualified in its entirety by reference to, our unaudited condensed consolidated financial statements and the related notes thereto and other financial information appearing elsewhere in this Quarterly Report on Form 10-Qand our audited consolidated financial statements and notes thereto and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the Securities and Exchange Commission (“SEC”) on March 10, 2022.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.amended (the “Exchange Act”). Forward-looking statements generally relate to future events or our future financial or operating performance and may include statements concerning, among other things, our business strategy (including anticipated trends and developments in, and management plans for, our business and the markets in which we operate), financial results, the impact of the ongoing COVID-19 pandemic on our business, operations, and the markets and communities in which we, our clients, and partners operate, results of operations, revenues, operating expenses, and capital expenditures, sales and marketing initiatives and competition.
In some cases, you can identify forward-looking statements because they containby words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,“intend,” “target,“consider,” “projects,“expect,” “contemplates,“plan,” “believes,“anticipate,” “estimates,“believe,” “predicts,“estimate,” “suggests,” “potential”“predict” or “continue” or the negative or plural of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Theseexpressions. All statements other than statements of historical fact are forward-looking statements, which speak only as of the date they are made, are not guarantees of future performance; they reflectperformance. All of our current views with respect to future events and are based on assumptions andforward-looking statements are subject to known and unknowna number of risks, uncertainties and other factors, including but not limited to our ability to add new customers, our ability to realize the expected benefits of an industry shift away from cookie-based consumer tracking, the ongoing impact of the COVID-19 pandemic, the development of the market for programmatic advertising, our access to advertising inventory and people-based data, and changes in the technology industry. This is not a complete list of factors or events that maycould cause our actual results performance or achievements to be materially differentdiffer from our expectations or results projected or impliedand we cannot predict all of them. All written and oral forward-looking statements attributable to us are qualified in their entirety by forward-looking statements.
We discuss many of these risksthe cautionary statements disclosed under “Part I. Item 1A. Risk Factors,” appearing in our Annual Report on Form 10-K for the year ended December 31, 2020 in greater detail under the heading “Risk Factors” and in other filings we make2021, as such disclosures may be amended, supplemented or superseded from time to time by other reports filed with the Securities and Exchange Commission,Commission. Except as required by law, we do not intend to update or SEC. Also, theserevise any forward-looking statements represent our estimates and assumptions only as a result of the date of this Quarterly Report on Form 10-Q, which are inherently subject to change and involve risks and uncertainties. Unless required by federal securities laws, we assume no obligation to update any of these forward-looking statements,new information, future events or to update the reasons actual results could differ materially from those anticipated, to reflect circumstances or events that occur after the statements are made. Given these uncertainties, investors should not place undue reliance on these forward-looking statements.otherwise.
Investors should read this Quarterly Report on Form 10-Q and the documents that we reference in this report and have filed with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2020, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
References to “Notes” are notes included in our unaudited condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.
Overview
We are an advertising software company. Our software enables the programmatic purchase of advertising, which is the electronification of the advertising buying process. Programmatic advertising is rapidly taking market share from traditional ad sales channels, which require more staffing, offer less transparency and involve higher costs to buyers.
Our DSP,demand side platform (“DSP”), Adelphic, is an enterprise software platform that is used by marketers and their advertising agencies to centralize the planning, buying and measurement of their advertising media across most channels. Through our technology, a marketer can easily buy ads on desktop, mobile, connected TV, linear TV, streaming audio and digital billboards.
We serve marketers and their advertising agencies by enabling them to plan, buy and measure programmatic campaigns. We provide an easy-to-use self-service programmatic platform that delivers transparency and control. Our platform offers customers unique visibility across a variety of advertising channels with the ability to create customized audience segments leveraging our people-based and strategic partner data to reach target audiences at scale. Our people-based approach is in contrast to the inefficient approach of cookie-based tracking. People-based data enables marketers to use first-party data for both the targeting and measurement of their ad campaigns in a manner that we believe is more accurate than utilizing a cookie-based approach.
We make our software platform available through different pricing options to tailortailored to multiple clientcustomer types and customer needs. These options consist of a percentage of spend option, a monthly subscription pricing option and a fixed CPM pricing option. CPM“CPM” refers to a payment option in which customers pay a price for every 1,000 impressions an ad receives. Customerscan enterintomasterserviceagreementswith us thatenablethemto use our platformon a self-servicebasisto executetheiradvertisingcampaigns.We generaterevenuewhen the ourplatform isused on a self-servicebasisby charginga platformfeethatiseithera percentageof spend or a flatmonthly subscriptionfee,as wellas feesforadditionalfeaturessuch as dataand advancedreporting.We alsoofferour customerstheabilityto use our servicesto aidthemin datamanagement,mediaexecutionand advanced reporting.When customersutilizeour services,we generaterevenueby charginga (1)separateservicefeethat representsa percentageof spend in additionto theplatformfee;(2)a flatmonthlyfeecoveringservicesin connectionwith datamanagementand advancedreporting;or (3)a fixedCPM thatis inclusive of media, other direct costs and services. We believe that offering a multitude of pricing options provides our customers greater flexibility and access to our platform.
inclusiveof media,other directcostsand services.We believethatofferinga multitudeof pricing optionsprovidesour customersgreater flexibilityand accessto our platform.Some of our pricingoptionsarerelativelynew to themarketand arenot yetmaterialto our businessfroma financialperspective.
Our financial results for the three months ended March 31, 2022 and 2021, respectively, include:
| • | Revenue of |
| • | Gross profit of |
| • | Contribution |
| • | Net loss of |
| • | Non-GAAP net income (loss)* of |
| • | Adjusted |
*Contribution ex-TAC, previously referred to as Revenue ex-TAC in our Annual Report on Form 10-K for the year ended December 31, 2020 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, Adjusted EBITDA, non-GAAP net income (loss), and non-GAAP earnings (loss) per shareadjusted EBITDA are non-GAAP financial measures. For a detailed discussion of our key operating and financial performance metricsmeasures and a reconciliation of contribution ex-TAC, Adjusted EBITDA, non-GAAP net income (loss), and non-GAAP earnings (loss) per shareadjusted EBITDA to the most directly comparable financial measures calculated in accordance with GAAP,generally accepted accounting principlesintheUnitedStatesofAmerica (“GAAP”), see “—Key Operating and Financial Performance Metrics—Measures—Use of Non-GAAP Financial Measures.”
Factors Affecting Our Performance
COVID-19
In March 2020, the World Health Organization characterized COVID-19 a pandemic and the President of the United States declared the COVID-19 outbreak a national emergency. COVID-19 has spread across the globe and has impacted economic activity worldwide.
The ultimate impact of COVID-19 on the Company’s results of operations, financial condition and cash flows is dependent on future developments, including the duration of the pandemic and the related length of its impact on the global economy, which are uncertain and cannot be predicted at this time. See “Risk Factors”—The effects of the ongoing COVID-19 pandemic and other sustained adverse market events have had, and could in the future have, an adverse impact on our business, operating results and financial condition” in our Annual Report on Form 10-K for the year ended December 31, 2020 for further discussion of the potential impacts of the COVID-19 pandemic on our business.
Attract, Retain and Grow our Customer Base
Our recent growth has been driven by expanding the useusage of our platform by our existing customers as well as adding new customers. We believe that our customers value our solutions as our average contribution ex-TAC per Active Customernumber of active customers for the twelve months ended June 30, 2021March 31, 2022 was $438,000, an increase of $19,000, or 4.5%, compared to the twelve months ended December 31, 2020 and an increase of $49,000, or 12.6%, compared to twelve months ended June 30, 2020. The number of Active Customers for the twelve months ended June 30, 2021 was 288,327, increasing by 2461 active customers, or 9.1%22.9%, from the twelve months ended DecemberMarch 31, 2020 compared to the twelve months ended June 30, 2021 and increased by 28 customers, or 10.8%, from the twelve months ended June 30, 2020 to the twelve months ended June 30, 2021. We review changes in the usefurther evaluate our customer’s usage of our platform as represented by changes in aggregate spendand assess our market penetration and scale based on the percentage change in advertiser spend. We define advertiser spend as the total amount billed to our customers for activity on our platform as a metricinclusive of customer engagement. Platformthe costs of advertising media, third-party data and other add-on features and our platform fee we charge clients. Advertiser spend increased by 58.4% duringfor the three months ended June 30, 2021 compared toMarch 31, 2022 increased 43.7% from the three months ended June 30, 2020March 31, 2021. The percentage change in advertiser spend is a key measure used by our management and 31.8% duringour board of directors to evaluate the six months ended June 30, 2021 compareddemand for our products and to assess whether we are increasing market share. Our management uses this key metric to develop short- and long-term operational plans and make strategic decisions regarding future enhancements to our software. We believe advertiser spend across our platform is a useful metric for investors because it allows investors to evaluate our operational performance in the six months ended June 30, 2020.same manner as our management and board of directors. For a detailed discussion of our key operating metricsmeasures including the definition of Active Customers,active customers, see “—“—Key Operating and Financial Performance Metrics—Measures—Use of Non-GAAP Financial Measures.”
We continueto add functionalityto our platform softwareto encourageour customersto increasetheirusage of our platform.We believemanyadvertisersarein theearlystagesof movinga greaterpercentageof their advertisingbudgetsto programmaticchannels.By providingsolutionsfortheplanning,buying and measuringof theirmediaspend acrosschannels,we believethatwe arewellpositionedto capturetheincreasein programmaticbudgets.Further,we intendto continueto grow our sales and marketingeffortsto increaseawarenessof our DSP, Adelphic, platform and highlighttheadvantagesof our people-basedframeworkas cookie-basedoptionsbecome increasinglylimited.As a result,futurerevenuegrowth dependsupon our abilityto retainour existingcustomers and increasetheir use usageof our platformas wellas add new customers.
Investment in Growth
We believethattheadvertisingmarketisin theearlystagesof a secular shift towards towardprogrammatic advertising.We planto investforlong-termgrowth. We anticipatethatour operatingexpenseswillincrease significantlyin theforeseeablefutureas we investin platformoperations, and technologyand developmentto enhanceour productcapabilitiesincludingidentityresolutionand theintegrationof new advertisingchannels, and in salesand marketingto acquirenew customersand increaseour customers’ useusage of our platform.We believethattheseinvestmentswillcontributeto our long-termgrowth, althoughtheymayhave a negativeimpact on our profitabilityin thenear-term.
COVID-19
The worldwide spread of the COVID-19 pandemic has resulted, and may continue to result, in a global slowdown of economic activity, which may decrease demand for a broad variety of goods and services, including those provided by our clients, while also disrupting supply channels, sales channels and advertising and marketing activities for an unknown period of time until the COVID-19 pandemic is contained, or economic activity normalizes. With the current uncertainty in economic activity, the impact on our revenue and our results of operations is likely to continue, the size and duration of which we are currently unable to accurately predict. The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on a variety of factors, including the duration and spread of the COVID-19 pandemic and its impact on our clients, partners, industry, and employees, all of which are uncertain at this time and cannot be accurately predicted. The ultimate impact of the ongoing COVID-19 pandemic on our results of operations, financial condition and cash flows is dependent on future developments, including the duration of the pandemic, emerging variant strains of the virus with varying degrees of vaccine resistance, and the related length of its impact on the global economy, which are uncertain and cannot be predicted at this time.
Growth of the Digital Advertising Market and Macroeconomics Factors
We expect to continue to benefit from overall adoption of programmatic advertising by marketers and their agencies. Any material change in the growth rate of digital advertising or the rate of adoption of programmatic advertising, including expansion of new programmatic channels, could affect our performance. Recent years have shown that advertising spend is closely tied to advertisers’ financial performance, and a downturn, either generally or in one or more of the industries in which our customers operate, could adversely impact the digital advertising market and our operating results.
Seasonality
In the advertising industry, companiescommonlyexperienceseasonalfluctuationsin revenue. For example, revenue, asmanymarketersallocatethelargestportionof theirbudgetsto thefourthquarterof thecalendaryearin orderto coincidewith increasedholidaypurchasing.Historically,thefourthquarterhas reflectedour highestlevelof advertisingactivityfortheyear.We generallyexpectthesubsequentfirstquarterto reflectlower activitylevels,but thistrendmaybe maskeddue to thecontinuedgrowth of our business.In addition,historical seasonalitymaynot be predictiveof futureresultsgiventhepotentialforchangesin advertisingbuying patterns and consumeractivitydue to theCOVID-19. Periods that experience an increase in COVID-19 pandemic. We expectcases and resulting governmentally-imposed restrictions could cause our revenue to decrease. Politicaladvertisingcouldalsocauseour revenueto increaseduringelectioncyclesand decreaseduringotherperiods,makingitdifficultto predictour revenue,cashflow, and operatingresults,allof which couldfallbelow our expectations. We expectour revenueto continueto fluctuatebasedon seasonalfactorsthataffecttheadvertisingindustryas a whole.
Results of Operations
The following tables set forthpresent our condensed consolidated results of operations, our condensed consolidated results of operations as a percentage of revenue, and the impact of stock-based compensation, depreciation and amortization on each operating expense line item for the three and six months ended June 30, 2021March 31, 2022 and 2020:2021:
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
|
| (in thousands) |
|
| (in thousands) |
|
| (in thousands) |
| |||||||||||||||
Consolidated Statements of Operations Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
| $ | 50,411 |
|
| $ | 30,425 |
|
| $ | 90,555 |
|
| $ | 68,585 |
|
| $ | 42,629 |
|
| $ | 40,144 |
|
Operating expenses(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Platform operations |
|
| 31,715 |
|
|
| 18,589 |
|
|
| 56,059 |
|
|
| 42,192 |
|
|
| 26,194 |
|
|
| 24,344 |
|
Sales and marketing |
|
| 20,553 |
|
|
| 5,742 |
|
|
| 34,738 |
|
|
| 12,872 |
|
|
| 13,756 |
|
|
| 14,185 |
|
Technology and development |
|
| 8,031 |
|
|
| 1,984 |
|
|
| 13,931 |
|
|
| 4,134 |
|
|
| 5,003 |
|
|
| 5,900 |
|
General and administrative |
|
| 14,075 |
|
|
| 3,891 |
|
|
| 24,495 |
|
|
| 8,547 |
|
|
| 11,083 |
|
|
| 10,420 |
|
Total operating expenses |
|
| 74,374 |
|
|
| 30,206 |
|
|
| 129,223 |
|
|
| 67,745 |
|
|
| 56,036 |
|
|
| 54,849 |
|
Income (loss) from operations |
|
| (23,963 | ) |
|
| 219 |
|
|
| (38,668 | ) |
|
| 840 |
| ||||||||
Total other expense (income), net |
|
| (5,868 | ) |
|
| 249 |
|
|
| (5,702 | ) |
|
| 541 |
| ||||||||
Net income (loss) |
|
| (18,095 | ) |
|
| (30 | ) |
|
| (32,966 | ) |
|
| 299 |
| ||||||||
Loss from operations |
|
| (13,407 | ) |
|
| (14,705 | ) | ||||||||||||||||
Total other expense, net |
|
| 156 |
|
|
| 165 |
| ||||||||||||||||
Net loss |
|
| (13,563 | ) |
|
| (14,870 | ) | ||||||||||||||||
Less: Net loss attributable to noncontrolling interests |
|
| (14,440 | ) |
|
| — |
|
|
| (26,206 | ) |
|
| — |
|
|
| (10,371 | ) |
|
| (11,766 | ) |
Net income (loss) attributable to Viant Technology Inc. |
| $ | (3,655 | ) |
| $ | (30 | ) |
| $ | (6,760 | ) |
| $ | 299 |
| ||||||||
Net loss attributable to Viant Technology Inc. |
| $ | (3,192 | ) |
| $ | (3,104 | ) |
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
|
| (% of revenue*) |
|
| (% of revenue*) |
|
| (% of revenue*) |
| |||||||||||||||
Consolidated Statements of Operations Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
| 100 | % |
|
| 100 | % |
|
| 100 | % |
|
| 100 | % |
|
| 100 | % |
|
| 100 | % |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Platform operations |
|
| 63 | % |
|
| 61 | % |
|
| 62 | % |
|
| 62 | % |
|
| 61 | % |
|
| 61 | % |
Sales and marketing |
|
| 41 | % |
|
| 19 | % |
|
| 38 | % |
|
| 19 | % |
|
| 32 | % |
|
| 35 | % |
Technology and development |
|
| 16 | % |
|
| 7 | % |
|
| 15 | % |
|
| 6 | % |
|
| 12 | % |
|
| 15 | % |
General and administrative |
|
| 28 | % |
|
| 13 | % |
|
| 27 | % |
|
| 12 | % |
|
| 26 | % |
|
| 26 | % |
Total operating expenses |
|
| 148 | % |
|
| 99 | % |
|
| 143 | % |
|
| 99 | % |
|
| 131 | % |
|
| 137 | % |
Income (loss) from operations |
|
| (48 | )% |
|
| 1 | % |
|
| (43 | )% |
|
| 1 | % | ||||||||
Total other expense (income), net |
|
| (12 | )% |
|
| 1 | % |
|
| (6 | )% |
|
| 1 | % | ||||||||
Net income (loss) |
|
| (36 | )% |
|
| 0 | % |
|
| (36 | )% |
|
| 0 | % | ||||||||
Loss from operations |
|
| (31 | )% |
|
| (37 | )% | ||||||||||||||||
Total other expense, net |
|
| 0 | % |
|
| 0 | % | ||||||||||||||||
Net loss |
|
| (32 | )% |
|
| (37 | )% | ||||||||||||||||
Less: Net loss attributable to noncontrolling interests |
|
| (29 | )% |
|
| — |
|
|
| (29 | )% |
|
| — |
|
|
| (24 | )% |
|
| (29 | )% |
Net income (loss) attributable to Viant Technology Inc. |
|
| (7 | )% |
|
| (0 | )% |
|
| (7 | )% |
|
| 0 | % | ||||||||
Net loss attributable to Viant Technology Inc. |
|
| (7 | )% |
|
| (8 | )% |
| * | Percentages may not sum due to rounding |
| (1) | Stock-basedcompensation, depreciation,and amortization included |
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
|
| (in thousands) |
|
| (in thousands) |
|
| (in thousands) |
| |||||||||||||||
Stock-based compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Stock-Based Compensation: |
|
|
|
|
|
|
|
| ||||||||||||||||
Platform operations |
| $ | 5,540 |
|
| $ | — |
|
| $ | 8,701 |
|
| $ | — |
|
| $ | 1,086 |
|
| $ | 3,161 |
|
Sales and marketing |
|
| 11,914 |
|
|
| — |
|
|
| 18,727 |
|
|
| — |
|
|
| 2,179 |
|
|
| 6,813 |
|
Technology and development |
|
| 5,029 |
|
|
| — |
|
|
| 7,968 |
|
|
| — |
|
|
| 1,169 |
|
|
| 2,939 |
|
General and administrative |
|
| 7,203 |
|
|
| — |
|
|
| 11,381 |
|
|
| — |
|
|
| 1,942 |
|
|
| 4,177 |
|
Total stock-based compensation |
| $ | 29,686 |
|
| $ | — |
|
| $ | 46,777 |
|
| $ | — |
|
| $ | 6,376 |
|
| $ | 17,090 |
|
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
|
| (in thousands) |
|
| (in thousands) |
|
| (in thousands) |
| |||||||||||||||
Depreciation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Platform operations |
| $ | 1,766 |
|
| $ | 1,678 |
|
| $ | 3,344 |
|
| $ | 3,440 |
|
| $ | 2,136 |
|
| $ | 1,578 |
|
Sales and marketing |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Technology and development |
|
| 383 |
|
|
| 402 |
|
|
| 763 |
|
|
| 803 |
|
|
| 595 |
|
|
| 381 |
|
General and administrative |
|
| 168 |
|
|
| 153 |
|
|
| 330 |
|
|
| 297 |
|
|
| 136 |
|
|
| 161 |
|
Total depreciation |
| $ | 2,317 |
|
| $ | 2,233 |
|
| $ | 4,437 |
|
| $ | 4,540 |
|
| $ | 2,867 |
|
| $ | 2,120 |
|
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
|
| (in thousands) |
|
| (in thousands) |
|
| (in thousands) |
| |||||||||||||||
Amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Platform operations |
| $ | 175 |
|
| $ | 175 |
|
| $ | 350 |
|
| $ | 350 |
|
| $ | 175 |
|
| $ | 175 |
|
Sales and marketing |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Technology and development |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
General and administrative |
|
| 132 |
|
|
| 132 |
|
|
| 264 |
|
|
| 264 |
|
|
| 112 |
|
|
| 132 |
|
Total amortization |
| $ | 307 |
|
| $ | 307 |
|
| $ | 614 |
|
| $ | 614 |
|
| $ | 287 |
|
| $ | 307 |
|
Comparison of the Three Months Ended June30,March 31, 2022 and 2021 and 2020
Revenue
|
| Three Months Ended June 30, |
|
| Change |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| $ |
|
| % |
| ||||
|
| (in thousands, except for percentages) |
| |||||||||||||
Revenue |
| $ | 50,411 |
|
| $ | 30,425 |
|
| $ | 19,986 |
|
|
| 66 | % |
|
| Three Months Ended March 31, |
|
| Change |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| $ |
|
| % |
| ||||
|
| (in thousands, except for percentages) |
| |||||||||||||
Revenue |
| $ | 42,629 |
|
| $ | 40,144 |
|
| $ | 2,485 |
|
|
| 6 | % |
Revenue increased by $20.0$2.5 million, or 66%6%, during the three months ended June 30, 2021March 31, 2022 compared to the three months ended June 30, 2020.March 31, 2021. Our revenue growth was due to a 14% increase in revenue from the prior year period from certain marketers in customer verticals other than automotive. This increase in revenue was offset by the impact of certain marketers in the automotive customer vertical decreasing or pausing their advertising spend due to the ongoing adverse effects of the COVID-19 pandemic, which created supply shortages for their businesses, resulting in revenue decreasing across this customer vertical by approximately 65% from the prior year period. Despite the ongoing adversenegative impacts of the COVID-19 pandemic, we have continued to experience increased customer usage of our platform, particularly in the percentage of spend pricing option, and continuing demand for our people-based advertising products and services. Platform spend increasedservices, as evidenced by 58.4%an increase in our active customers to 327 for the twelve months ended March 31, 2022 compared to 266 for the twelve months ended March 31, 2021. Additionally, approximately 91% of our revenue for the three months ended March 31, 2022 came from customers that had been customers in the comparative period.three months ended March 31, 2021.
Operating Expenses
Platform Operations
|
| Three Months Ended June 30, |
|
| Change |
|
| Three Months Ended March 31, |
|
| Change |
| ||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| $ |
|
| % |
|
| 2022 |
|
| 2021 |
|
| $ |
|
| % |
| ||||||||
|
| (in thousands, except for percentages) |
|
| (in thousands, except for percentages) |
| ||||||||||||||||||||||||||
Traffic acquisition costs |
| $ | 18,212 |
|
| $ | 10,380 |
|
| $ | 7,832 |
|
|
| 75 | % |
| $ | 15,085 |
|
| $ | 13,403 |
|
| $ | 1,682 |
|
|
| 13 | % |
Other platform operations |
|
| 13,503 |
|
|
| 8,209 |
|
|
| 5,294 |
|
|
| 64 | % |
|
| 11,109 |
|
|
| 10,941 |
|
|
| 168 |
|
|
| 2 | % |
Total platform operations |
| $ | 31,715 |
|
| $ | 18,589 |
|
| $ | 13,126 |
|
|
| 71 | % |
| $ | 26,194 |
|
| $ | 24,344 |
|
| $ | 1,850 |
|
|
| 8 | % |
Platform operations as a percentage of revenue |
|
| 63 | % |
|
| 61 | % |
|
|
|
|
|
|
|
|
|
| 61 | % |
|
| 61 | % |
|
|
|
|
|
|
|
|
Platform operations expense increased by $13.1$1.9 million, or 71%8%, during the three months ended June 30, 2021March 31, 2022 compared to the three months ended June 30, 2020. This is comprised of a $7.8 million increase in trafficMarch 31, 2021. Traffic acquisition costs (“TAC”), which is are amounts incurred and payable to suppliers for the cost of advertising media, third-party data and other add-on features. The change in platform operations expense for the first quarter of 2022 wasprimarilydriven by a $1.7 millionincreasein TAC, a variable function of revenue, associated with our fixed CPM pricing option andas well as an increase of $5.3 million in other platform operations expense. The increase in other platform operations is primarilyexpense driven by a $5.5$1.6 million increase in stock-based compensation relatedcloud costs and third party services due to our 2021 LTIPthe continued implementation of cloud infrastructure and a $0.1$0.6 million increase in depreciation, partially offset by a decrease of $0.3$2.1 million in cloud costsstock-based compensation related to our LTIP.We recognized a decrease in stock-based compensation in the first quarter of 2022 compared to the first quarter of 2021, which was due to continued efforts to increase cloud infrastructure efficiencies.the RSUs that were granted in connection with the IPO, a portion of which have become fully vested during the previous year.
Sales and Marketing
|
| Three Months Ended June 30, |
|
| Change |
|
| Three Months Ended March 31, |
|
| Change |
| ||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| $ |
|
| % |
|
| 2022 |
|
| 2021 |
|
| $ |
|
| % |
| ||||||||
|
| (in thousands, except for percentages) |
|
| (in thousands, except for percentages) |
| ||||||||||||||||||||||||||
Sales and marketing |
| $ | 20,553 |
|
| $ | 5,742 |
|
| $ | 14,811 |
|
|
| 258 | % |
| $ | 13,756 |
|
| $ | 14,185 |
|
| $ | (429 | ) |
|
| (3 | )% |
Percentage of revenue |
|
| 41 | % |
|
| 19 | % |
|
|
|
|
|
|
|
|
|
| 32 | % |
|
| 35 | % |
|
|
|
|
|
|
|
|
Sales and marketing expense increaseddecreased by $14.8$0.4 million, or 258%3%, during the three months ended June 30, 2021March 31, 2022 compared to the three months ended June 30, 2020. The increase in sales and marketing expenseMarch 31, 2021. This decrease was primarily due to a $11.9$4.6 million increasedecrease in stock-based compensation, related to our 2021 LTIP,partially offset by a $2.5$3.0 million increase in personnel costs, and overheadwhich was allocated to sales and marketing as a result of the departments’ increased headcount increasing, a $0.5 million increase in advertising expense and becoming a larger percentage of total headcount, a $0.2$0.4 million increase in travel and entertainment a $0.1 increase in software licenses and subscriptions, and a $0.1 increase in advertising.expenses.
Technology and Development
|
| Three Months Ended June 30, |
|
| Change |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| $ |
|
| % |
| ||||
|
| (in thousands, except for percentages) |
| |||||||||||||
Technology and development |
| $ | 8,031 |
|
| $ | 1,984 |
|
| $ | 6,047 |
|
|
| 305 | % |
Percentage of revenue |
|
| 16 | % |
|
| 7 | % |
|
|
|
|
|
|
|
|
|
| Three Months Ended March 31, |
|
| Change |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| $ |
|
| % |
| ||||
|
| (in thousands, except for percentages) |
| |||||||||||||
Technology and development |
| $ | 5,003 |
|
| $ | 5,900 |
|
| $ | (897 | ) |
|
| (15 | )% |
Percentage of revenue |
|
| 12 | % |
|
| 15 | % |
|
|
|
|
|
|
|
|
Technology and development expense increaseddecreased by $6.0$0.9 million, or 305%15%, during the three months ended June 30, 2021March 31, 2022 compared to the three months ended June 30, 2020. The increase in technology and development expenseMarch 31, 2021. This decrease was primarily attributable to a $5.0$1.8 million increasedecrease in stock-based compensation, related to our 2021 LTIP and a $1.0which was partially offset by an increase of $0.4 million increase in personnel and overhead cost allocationcosts as a result of an increase in headcount to support our continued investment in developed technology.
General and Administrative
|
| Three Months Ended June 30, |
|
| Change |
|
| Three Months Ended March 31, |
|
| Change |
| ||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| $ |
|
| % |
|
| 2022 |
|
| 2021 |
|
| $ |
|
| % |
| ||||||||
|
| (in thousands, except for percentages) |
|
| (in thousands, except for percentages) |
| ||||||||||||||||||||||||||
General and administrative |
| $ | 14,075 |
|
| $ | 3,891 |
|
| $ | 10,184 |
|
|
| 262 | % |
| $ | 11,083 |
|
| $ | 10,420 |
|
| $ | 663 |
|
|
| 6 | % |
Percentage of revenue |
|
| 28 | % |
|
| 13 | % |
|
|
|
|
|
|
|
|
|
| 26 | % |
|
| 26 | % |
|
|
|
|
|
|
|
|
General and administrative expense increased by $10.2$0.7 million, or 262%6%, during the three months ended June 30, 2021March 31, 2022 compared to the three months ended June 30, 2020. TheMarch 31, 2021. This increase in general and administrative expense was primarily attributable to a $7.2 million increase in stock-based compensation related to our 2021 LTIP, a $1.4 million increase in insurance and legal expenses associated with being a publicly traded company, a $1.1 million increase in personnel costs due to the increase in headcount, a $1.0 million increase in insurance, legal, and consulting expenses associated with general corporate and compliance matters and a $0.5 million increase in recruiting expenses, partially offset by a $0.2 decrease of $2.2 million in professional fees due to prior year expense relating to preparation for the IPO.stock-based compensation.
Total Other Expense, (Income), Net
|
| Three Months Ended June 30, |
|
| Change |
|
| Three Months Ended March 31, |
|
| Change |
| ||||||||||||||||||||
|
| 2021 |
|
| 2020 |
|
| $ |
|
| % |
|
| 2022 |
|
| 2021 |
|
| $ |
|
| % |
| ||||||||
|
| (in thousands, except for percentages) |
|
| (in thousands, except for percentages) |
| ||||||||||||||||||||||||||
Total other expense (income), net |
| $ | (5,868 | ) |
| $ | 249 |
|
| $ | (6,117 | ) |
|
| (2457 | %) | ||||||||||||||||
Total other expense, net |
| $ | 156 |
|
| $ | 165 |
|
| $ | (9 | ) |
|
| (5 | )% | ||||||||||||||||
Percentage of revenue |
|
| (12 | %) |
|
| 1 | % |
|
|
|
|
|
|
|
|
|
| 0 | % |
|
| 0 | % |
|
|
|
|
|
|
|
|
TotalThere was no significant change in the total other expense, (income), netdecreased by $6.1 million, or 2,457%, during the three months ended June 30, 2021March 31, 2022 compared to the three months ended June 30, 2020. The decrease in total other expense (income), net was primarily due to a $6.1 million gain on debt extinguishment as a result of the forgiveness of the Company’s PPP Loan and related accrued interest. For additional information regarding forgiveness of the Company’s PPP Loan, see Note 7—Long-Term Debt and Revolving CreditFacility to our condensed consolidated financial statements.
Comparison of the Six Months EndedJune30, 2021 and 2020
Revenue
|
| Six Months Ended June 30, |
|
| Change |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| $ |
|
| % |
| ||||
|
| (in thousands, except for percentages) |
| |||||||||||||
Revenue |
| $ | 90,555 |
|
| $ | 68,585 |
|
| $ | 21,970 |
|
|
| 32 | % |
Revenue increased by $22.0 million, or 32%, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020. Despite ongoing adverse impacts of the COVID-19 pandemic, we have continued to experience increased customer
usage of our platform, particularly in the percentage of spend pricing option, and continuing demand for our people-based advertising products and services. Platform spend increased by 31.8% in the comparative period.
Platform Operations
|
| Six Months Ended June 30, |
|
| Change |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| $ |
|
| % |
| ||||
|
| (in thousands, except for percentages) |
| |||||||||||||
Traffic acquisition costs |
| $ | 31,615 |
|
| $ | 25,199 |
|
| $ | 6,416 |
|
|
| 25 | % |
Other platform operations |
|
| 24,444 |
|
|
| 16,993 |
|
|
| 7,451 |
|
|
| 44 | % |
Total platform operations |
| $ | 56,059 |
|
| $ | 42,192 |
|
| $ | 13,867 |
|
|
| 33 | % |
Platform operations as a percentage of revenue |
|
| 62 | % |
|
| 62 | % |
|
|
|
|
|
|
|
|
Platform operations expense increased by $13.9 million, or 33%, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020. The increase in platform operations is primarily driven by a $8.7 million increase in stock-based compensation related to our 2021 LTIP and a $6.4 million increase in TAC, which is a variable function of revenue associated with our fixed CPM pricing option, partially offset by a decrease of $0.9 million in cloud costs due to continued efforts to increase cloud infrastructure efficiencies and a decrease of $0.1 million in depreciation.
Sales and Marketing
|
| Six Months Ended June 30, |
|
| Change |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| $ |
|
| % |
| ||||
|
| (in thousands, except for percentages) |
| |||||||||||||
Sales and marketing |
| $ | 34,738 |
|
| $ | 12,872 |
|
| $ | 21,866 |
|
|
| 170 | % |
Percentage of revenue |
|
| 38 | % |
|
| 19 | % |
|
|
|
|
|
|
|
|
Sales and marketing expense increased by $21.9 million, or 170%, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020. The increase in sales and marketing expense was primarily due to a $18.7 million increase in stock-based compensation related to our 2021 LTIP, a $2.9 million increase personnel costs and in the amount of overhead allocated to sales and marketing as a result of the departments’ headcount increasing and becoming a larger percentage of total headcount, a $0.3 increase in advertising and a $0.1 increase in software licenses and subscriptions, partially offset by a $0.2 million decrease in travel and entertainment as a result of the COVID-19 pandemic.
Technology and Development
|
| Six Months Ended June 30, |
|
| Change |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| $ |
|
| % |
| ||||
|
| (in thousands, except for percentages) |
| |||||||||||||
Technology and development |
| $ | 13,931 |
|
| $ | 4,134 |
|
| $ | 9,797 |
|
|
| 237 | % |
Percentage of revenue |
|
| 15 | % |
|
| 6 | % |
|
|
|
|
|
|
|
|
Technology and development expense increased by $9.8 million, or 237%, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020. The increase in technology and development expense was primarily attributable to a $8.0 million increase in stock-based compensation related to our 2021 LTIP and an $1.8 million increase in personnel costs as a result of an increase in headcount to support our continued investment in developed technology.
General and Administrative
|
| Six Months Ended June 30, |
|
| Change |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| $ |
|
| % |
| ||||
|
| (in thousands, except for percentages) |
| |||||||||||||
General and administrative |
| $ | 24,495 |
|
| $ | 8,547 |
|
| $ | 15,948 |
|
|
| 187 | % |
Percentage of revenue |
|
| 27 | % |
|
| 12 | % |
|
|
|
|
|
|
|
|
General and administrative expense increased by $15.9 million, or 187%, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020. The increase in general and administrative expense was primarily attributable to a $11.4 million increase in stock-based compensation related to our 2021 LTIP, a $2.0 million increase in insurance and accounting expenses associated with the IPO, a $1.6 million increase in personnel costs due to the increase in headcount, a $0.8 million increase in recruiting expenses and a $0.2 million increase in software and subscription license expenses, partially offset by a $0.2 decrease in travel and entertainment due to the COVID-19 pandemic.
Total Other Expense (Income), Net
|
| Six Months Ended June 30, |
|
| Change |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| $ |
|
| % |
| ||||
|
| (in thousands, except for percentages) |
| |||||||||||||
Total other expense (income), net |
| $ | (5,702 | ) |
| $ | 541 |
|
| $ | (6,243 | ) |
|
| (1154 | %) |
Percentage of revenue |
|
| (6 | %) |
|
| 1 | % |
|
|
|
|
|
|
|
|
Total other expense (income), net increased by $6.2 million, or 1,154%, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020. The increase in total other expense (income), net was primarily due to a $6.1 million gain on debt extinguishment as a result of the forgiveness of Company’s PPP Loan and related accrued interest. For additional information regarding forgiveness of the Company’s PPP Loan, see Note 7—Long-Term Debt and Revolving CreditFacility to our condensed consolidated financial statements.March 31, 2021.
Key Operating and Financial Performance MetricsMeasures
Use of Non-GAAP Financial Measures
We monitor the key operating andcertain non-GAAP financial performance metrics set forth belowmeasures to help us evaluate growth trends, establish budgets, measure the effectiveness of our sales and marketing efforts and assess our operational efficiencies. This Quarterly Report includes financialWe believe these measures definedenhance an overall understanding of our performance and investors’ ability to review our business from the same perspective as management and facilitate comparisons of this period’s results with prior periods on a consistent basis by excluding items that management does not believe are indicative of our ongoing operating performance. These non-GAAP financial measures by the SEC. These non-GAAP measures include contribution ex-TAC, Adjustedadjusted EBITDA, adjusted EBITDA as a percentage of contribution ex-TAC, non-GAAP net income (loss), and non-GAAP earnings (loss) per share of Class A common stock—basic and diluted, average contribution ex-TAC per active customer and non-GAAP operating expenses, each of which are discussed immediately following the table below, along with the operational performance measure Active Customers. Theseof active customers. Reconciliations of these non-GAAP financial measures are notto the most directly comparable financial measures calculated and presented in accordance with GAAP.
|
| Three Months Ended June 30, |
|
|
|
|
|
| Six Months Ended June 30, |
|
|
|
|
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| Change (%) |
|
| 2021 |
|
| 2020 |
|
| Change (%) |
| ||||||
|
| (in thousands, except for percentages, per share data and number of customers) |
|
|
|
|
|
| (in thousands, except for percentages, per share data and number of customers) |
|
|
|
|
| ||||||||||
Operating and Financial Performance Metrics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution ex-TAC |
| $ | 32,199 |
|
| $ | 20,045 |
|
|
| 61 | % |
| $ | 58,940 |
|
| $ | 43,386 |
|
|
| 36 | % |
Adjusted EBITDA |
| $ | 8,346 |
|
| $ | 2,754 |
|
|
| 203 | % |
| $ | 13,228 |
|
| $ | 5,978 |
|
|
| 121 | % |
Adjusted EBITDA as a percentage of contribution ex-TAC |
|
| 26 | % |
|
| 14 | % |
|
|
|
|
|
| 22 | % |
|
| 14 | % |
|
|
|
|
Non-GAAP net income (loss) (1) |
| $ | 5,231 |
|
| $ | (30 | ) |
| N/M |
|
| $ | 7,385 |
|
| $ | 299 |
|
|
| 2370 | % | |
Non-GAAP earnings (loss) per share—basic(2) |
| $ | 0.07 |
|
| N/A |
|
| N/A |
|
| $ | 0.09 |
|
| N/A |
|
| N/A |
| ||||
Non-GAAP earnings (loss) per share—diluted(2) |
| $ | 0.06 |
|
| N/A |
|
| N/A |
|
| $ | 0.08 |
|
| N/A |
|
| N/A |
| ||||
Number of Active Customers(3) |
|
| 288 |
|
|
| 260 |
|
|
| 11 | % |
|
| 288 |
|
|
| 260 |
|
|
| 11 | % |
Average contribution ex-TAC per Active Customer(3) |
| $ | 438 |
|
| $ | 389 |
|
|
| 13 | % |
| $ | 438 |
|
| $ | 389 |
|
|
| 13 | % |
(1)Management believes that the change in non-GAAP net income (loss) for the three months ended June 30, 2021, compared to the same periodGAAP are provided in the prior year, isfinancial tables presented below. There are limitations in using non-GAAP financial measures which are not meaningfulprepared in accordance with GAAP, as the change is comparingthey may be different from non-GAAP financial measures used by other companies and may exclude certain items that may have a period of net income to a period of net loss.material impact upon
(2)Non-GAAP earnings (loss) per share wasour reported financial results. The presentation of this additional information is not adjustedmeant to be considered in isolation or as a substitute for the prior comparative periods presented. For discussion on why prior periods were not adjusted, see “—Non-GAAP Earnings (loss) per Share.”directly comparable financial measures prepared in accordance with GAAP.
(3)We define an Active Customer as a customer that had total aggregate contribution ex-TAC of at least $5,000 through our platform during the previous twelve months. We define average contribution ex-TAC per Active Customer as contribution ex-TAC for the trailing twelve month period presented divided by Active Customers. For a detailed discussion of average contribution ex-TAC per Active Customer and Active Customers, see “—Number of Active Customers and Average Contribution ex-TAC per Active Customer.”
|
| Three Months Ended March 31, |
|
|
|
|
| |||||
|
| 2022 |
|
| 2021 |
|
| Change (%) |
| |||
|
| (in thousands, except for percentages, per share data and number of customers) |
|
|
|
|
| |||||
Operating and Financial Performance Measures |
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
| $ | 16,435 |
|
| $ | 15,800 |
|
|
| 4 | % |
Contribution ex-TAC |
| $ | 27,544 |
|
| $ | 26,741 |
|
|
| 3 | % |
Net loss |
| $ | (13,563 | ) |
| $ | (14,870 | ) |
|
| 9 | % |
Adjusted EBITDA |
| $ | (3,881 | ) |
| $ | 4,882 |
|
|
| (179 | )% |
Net loss as a percentage of gross profit |
|
| (83 | )% |
|
| (94 | )% |
|
| 12 | % |
Adjusted EBITDA as a percentage of contribution ex-TAC |
|
| (14 | )% |
|
| 18 | % |
|
| (178 | )% |
Non-GAAP net income (loss) |
| $ | (6,771 | ) |
| $ | 2,154 |
|
|
| (414 | )% |
Total operating expenses |
| $ | 56,036 |
|
| $ | 54,849 |
|
|
| 2 | % |
Non-GAAP operating expenses |
| $ | 31,425 |
|
| $ | 21,859 |
|
|
| 44 | % |
Loss per share—basic |
| $ | (0.23 | ) |
| $ | (0.27 | ) |
|
| 15 | % |
Loss per share—diluted |
| $ | (0.23 | ) |
| $ | (0.27 | ) |
|
| 15 | % |
Non-GAAP earnings (loss) per share—basic |
| $ | (0.09 | ) |
| $ | 0.02 |
|
|
| (550 | )% |
Non-GAAP earnings (loss) per share—diluted |
| $ | (0.09 | ) |
| $ | 0.02 |
|
|
| (550 | )% |
Active customers |
|
| 327 |
|
|
| 266 |
|
|
| 23 | % |
Average gross profit per active customer |
| $ | 291 |
|
| $ | 294 |
|
|
| (1 | )% |
Average contribution ex-TAC per active customer |
| $ | 435 |
|
| $ | 428 |
|
|
| 2 | % |
Contribution ex-TAC
Contribution ex-TAC previously referred to as Revenue ex-TAC in our Annual Report on Form 10-K for the year ended December 31, 2020 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, is a non-GAAP financial measure. Gross profit is the most comparable GAAP measurement, which is calculated as revenue less platform operations.operations expense. In calculating contribution ex-TAC, we add back other platform operations expense to gross profit. Contribution ex-TAC is a key profitability measure used by our management and board of directors to understand and evaluate our operating performance and trends, develop short-andshort- and long-term operational plans and make strategic decisions regarding the allocation of capital. In particular, we believe that contribution ex-TAC can provide a measure of period-to-period comparisons for all pricing options within our business. Accordingly, we believe that this measure provides information to investors and the market in understanding and evaluating our operating results in the same manner as our management and board of directors.
Our use of contribution ex-TAC has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. A potential limitation of this non-GAAP financial measure is that other companies, including companies in our industry that have similar business arrangements, may define contribution ex-TAC differently, which may make comparisons difficult. Because of these and other limitations, you should consider our non-GAAP financial measures only as supplemental to other GAAP-based financial performance measures, including revenue, gross profit, net income (loss) and cash flows. For a reconciliationof contributionex-TAC to themostdirectlycomparablefinancialmeasurecalculatedin accordancewith GAAP,see“—Average contribution ex-TAC per activecustomer.”
Activecustomers
We definean activecustomeras a customerthathad total aggregatecontribution ex-TAC of atleast$5,000 throughour platformduringtheprevioustwelvemonths. For purposesof thisdefinition,a customerthatoperatesunderany of our pricing options thatequalsor exceedsthe aforementionedcontribution ex-TAC thresholdisconsideredan activecustomer. Activecustomersis an operational metric calculated using contribution ex-TAC, a non-GAAP financial measure. For a reconciliationof contributionex-TAC to themostdirectlycomparablefinancialmeasurecalculatedin accordancewith GAAP,see“—Average contribution ex-TAC per activecustomer.”
Average contribution ex-TAC per activecustomer
We defineaveragecontribution ex-TAC peractivecustomeras contribution ex-TAC forthetrailing12-monthperiodpresenteddividedby activecustomers. Average gross profit peractivecustomeris the most comparable GAAP measurement, which we define as gross profit forthetrailing12-monthperiodpresenteddividedby activecustomers. We believethatthe totalnumber of activecustomersand averagecontribution ex-TAC peractivecustomeraremeasuresof our abilityto increaseprofitabilityand theeffectivenessof our salesforce,althoughwe expectthesemeasuresto fluctuatebased on theseasonalityin our business.Customersthatgeneratedlessthan$5,000 in contribution ex-TAC in thetrailing 12-monthperiodwere not materialin theaggregatein any period.
The following table presents the calculation of gross profit, andthe reconciliation of gross profit to contribution ex-TAC, average gross profit per active customer and average contribution ex-TAC per active customer for the three and six months ended June 30, 2021March 31, 2022 and 2020:2021:
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
|
| (in thousands) |
|
| (in thousands) |
|
| (in thousands) |
| |||||||||||||||
Revenue |
| $ | 50,411 |
|
| $ | 30,425 |
|
| $ | 90,555 |
|
| $ | 68,585 |
|
| $ | 42,629 |
|
| $ | 40,144 |
|
Less: Platform operations |
|
| (31,715 | ) |
|
| (18,589 | ) |
|
| (56,059 | ) |
|
| (42,192 | ) |
|
| (26,194 | ) |
|
| (24,344 | ) |
Gross profit |
|
| 18,696 |
|
|
| 11,836 |
|
|
| 34,496 |
|
|
| 26,393 |
|
|
| 16,435 |
|
|
| 15,800 |
|
Add back: Other platform operations |
|
| 13,503 |
|
|
| 8,209 |
|
|
| 24,444 |
|
|
| 16,993 |
|
|
| 11,109 |
|
|
| 10,941 |
|
Contribution ex-TAC |
| $ | 32,199 |
|
| $ | 20,045 |
|
| $ | 58,940 |
|
| $ | 43,386 |
|
| $ | 27,544 |
|
| $ | 26,741 |
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Active customers |
|
| 327 |
|
|
| 266 |
| ||||||||||||||||
Average gross profit per active customer |
| $ | 291 |
|
| $ | 294 |
| ||||||||||||||||
Average contribution ex-TAC per active customer |
| $ | 435 |
|
| $ | 428 |
|
Adjusted EBITDA
Adjusted EBITDA and adjusted EBITDA as a percentage of contribution ex-TAC
Adjusted EBITDA isanon-GAAPfinancialmeasuredefinedbyusasnetincome(loss),themost comparableGAAPmeasurement,beforeinterestexpense, net, income tax expense (benefit), depreciation,amortization, stock-basedcompensation and certain other items that are not related to our core operations, such as restructuring charges, transaction expenses and the extinguishment of debt.
Net income (loss) is the most comparable GAAP measurement. AdjustedEBITDAand AdjustedEBITDAas a percentage of contribution ex-TAC is a non-GAAP financial measure we calculate by dividing adjusted EBITDA by contribution ex-TAC for the period or periods presented.
Adjusted EBITDA and adjusted EBITDA as a percentage of contribution ex-TAC arekey measuresused by our managementand board of directorsto understandand evaluateour coreoperatingperformanceand trends,to prepareand approveour annualbudgetand to developshort-and short- and long-termoperationalplans.In particular,we believethat theexclusionof theamountseliminatedin calculatingAdjusted adjusted EBITDAcan providea measurefor period-to-periodcomparisonsof our business.AdjustedEBITDAas a percentageof our non-GAAPmetric, measure, contribution ex-TAC, isused by our managementand board of directorsto evaluateAdjusted adjusted EBITDArelativeto our profitabilityaftercoststhataredirectlyvariableto revenues,which comprisetrafficacquisitioncosts. TAC. Accordingly,we believethatAdjusted adjusted EBITDAand Adjustedadjusted EBITDAas a percentageof contribution ex-TAC provideinformationto investorsand themarketin understandingand evaluatingour operatingresultsin thesamemanneras our managementand board of directors.
Our use of Adjustedadjusted EBITDAand Adjustedadjusted EBITDAas a percentageof contribution ex-TAC has limitations as an analyticaltool,and you shouldnot considerthesemeasuresin isolationor as a substituteforanalysisof our financialresultsas reportedunderGAAP.Some of thesepotentiallimitationsinclude:
| • | other companies, including companies in our industry that have similar business arrangements, may report |
| • | although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and |
| • |
|
Becauseof theseand otherlimitations,you shouldconsiderour non-GAAP financial measuresonly as supplementalto otherGAAP-based financialperformancemeasures,includingrevenue,netincome(loss)and cashflows.
The followingtablepresents the areconciliationof net income (loss) lossto Adjusted adjustedEBITDAforthe three and six months ended June 30, 2021March 31, 2022 and 2020.2021:
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
|
| (in thousands) |
|
| (in thousands) |
|
| (in thousands) |
| |||||||||||||||
Net income (loss) |
| $ | (18,095 | ) |
| $ | (30 | ) |
| $ | (32,966 | ) |
| $ | 299 |
| ||||||||
Net loss |
| $ | (13,563 | ) |
| $ | (14,870 | ) | ||||||||||||||||
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
| 241 |
|
|
| 244 |
|
|
| 476 |
|
|
| 525 |
|
|
| 152 |
|
|
| 235 |
|
Depreciation and amortization |
|
| 2,624 |
|
|
| 2,540 |
|
|
| 5,051 |
|
|
| 5,154 |
|
|
| 3,154 |
|
|
| 2,427 |
|
Stock-based compensation |
|
| 29,686 |
|
|
| — |
|
|
| 46,777 |
|
|
| — |
|
|
| 6,376 |
|
|
| 17,090 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gain on extinguishment of debt |
|
| (6,110 | ) |
|
| — |
|
|
| (6,110 | ) |
|
| — |
| ||||||||
Adjusted EBITDA |
| $ | 8,346 |
|
| $ | 2,754 |
|
| $ | 13,228 |
|
| $ | 5,978 |
|
| $ | (3,881 | ) |
| $ | 4,882 |
|
The following table presents the reconciliationcalculation of net income (loss)loss as a percentage of gross profit to Adjustedand the calculation of adjusted EBITDA as a percentage of contribution ex-TAC for the three and six months ended June 30, 2021March 31, 2022 and 2020:2021:
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
|
| Three Months Ended March 31, |
| |||||||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||||
|
| (in thousands, except for percentages) |
|
| (in thousands, except for percentages) |
|
| (in thousands, except for percentages) |
| |||||||||||||||
Gross profit |
| $ | 18,696 |
|
| $ | 11,836 |
|
| $ | 34,496 |
|
| $ | 26,393 |
|
| $ | 16,435 |
|
| $ | 15,800 |
|
Net income (loss) |
| $ | (18,095 | ) |
| $ | (30 | ) |
| $ | (32,966 | ) |
| $ | 299 |
| ||||||||
Net income (loss) as a percentage of gross profit(1) |
| N/M |
|
|
| (0 | )% |
| N/M |
|
|
| 1 | % | ||||||||||
Net loss |
| $ | (13,563 | ) |
| $ | (14,870 | ) | ||||||||||||||||
Net loss as a percentage of gross profit |
|
| (83 | )% |
|
| (94 | )% | ||||||||||||||||
Contribution ex-TAC |
| $ | 32,199 |
|
| $ | 20,045 |
|
| $ | 58,940 |
|
| $ | 43,386 |
|
| $ | 27,544 |
|
| $ | 26,741 |
|
Adjusted EBITDA |
| $ | 8,346 |
|
| $ | 2,754 |
|
| $ | 13,228 |
|
| $ | 5,978 |
|
| $ | (3,881 | ) |
| $ | 4,882 |
|
Adjusted EBITDA as a percentage of contribution ex-TAC |
|
| 26 | % |
|
| 14 | % |
|
| 22 | % |
|
| 14 | % |
|
| (14 | )% |
|
| 18 | % |
(1) | For a reconciliationof contributionex-TAC to themostdirectlycomparablefinancialmeasurecalculatedin accordancewith GAAP,see“—Average contribution ex-TAC per activecustomer.” |
(1)Management believes thatNon-GAAP net loss as a percentage of gross profit for the current period presented is not comparable to the prior year period presented due to the impact of stock-based compensation recognized in the current period.
(2)For a reconciliation of contribution ex-TAC to the most directly comparable financial measure calculated in accordance with GAAP, see “—Contribution ex-TAC.”
(3)For a reconciliation of Adjusted EBITDA to the most directly comparable financial measure calculated in accordance with GAAP, see “—Adjusted EBITDA.”
Non-GAAP Net Income (Loss)income (loss)
Non-GAAP net income (loss) is a non-GAAP financial measure defined by us as net income (loss), the most comparable GAAP measurement, adjusted to eliminate the impact of stock-based compensation and certain other items that are not related to our core operations, such as restructuring charges, transaction expenses and the extinguishment of debt. Net income (loss) is the most comparable GAAP measurement. Non-GAAP net income (loss) is a key
measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of stock-based compensation, gain on debt extinguishment, and certain other items that are not related to our core operations provides measures for period-to-period comparisons of our business and provides additional insight into our core controllable costs. Accordingly, we believe that non-GAAP net income (loss) provides information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.
Our use of non-GAAP net income (loss) has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. A potential limitation of this non-GAAP financial measure is that other companies, including companies in our industry that have similar business arrangements, may define non-GAAP net income (loss) differently, which may make comparisons difficult. Because of these and other limitations, you should consider our non-GAAP financial measures only as supplemental to other GAAP-based financial performance measures, including revenue, gross profit, net income (loss) and cash flows.
The following table presents thea reconciliation of net income (loss)loss to non-GAAP net income (loss) for the three and six months ended June 30, 2021 and 2020:periods presented:
|
| Three Months Ended June 30, |
|
| Six Months Ended June 30, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
|
| (in thousands) |
|
| (in thousands) |
| ||||||||||
Net income (loss) |
| $ | (18,095 | ) |
| $ | (30 | ) |
| $ | (32,966 | ) |
| $ | 299 |
|
Add back: Stock-based compensation |
|
| 29,686 |
|
|
| — |
|
|
| 46,777 |
|
|
| — |
|
Less: Gain on extinguishment of debt |
|
| (6,110 | ) |
|
| — |
|
|
| (6,110 | ) |
|
| — |
|
Less: Income tax effect related to Viant Technology Inc.'s share of adjustments |
|
| (250 | ) |
|
| — |
|
|
| (316 | ) |
|
| — |
|
Non-GAAP net income (loss) |
| $ | 5,231 |
|
| $ | (30 | ) |
| $ | 7,385 |
|
| $ | 299 |
|
|
| Three Months Ended March 31, |
| |||||
|
| 2022 |
|
| 2021 |
| ||
|
| (in thousands) |
| |||||
Net loss |
| $ | (13,563 | ) |
| $ | (14,870 | ) |
Add back: Stock-based compensation |
|
| 6,376 |
|
|
| 17,090 |
|
Income tax benefit (expense) related to Viant Technology Inc.’s share of adjustments(1) |
|
| 416 |
|
|
| (66 | ) |
Non-GAAP net income (loss) |
| $ | (6,771 | ) |
| $ | 2,154 |
|
(1) | The estimated income tax effect of our share of non-GAAP reconciling items are calculated using an assumed blended tax rate of 24%, which represents our expected corporate tax rate, excluding discrete and non-recurring tax items. |
Non-GAAP Earningsearnings (loss) per Shareshare of Class A common stock—basic and diluted
Non-GAAP earnings (loss) per share of Class A common stock—basic and diluted is a non-GAAP financial measure defined by us as earnings (loss) per share the most comparable GAAP measurement,of Class A common stock—basic and diluted, adjusted to eliminate the impact of stock-based compensation and certain other items that are not related to our core operations, such as restructuring charges, transaction expenses and the extinguishment of debt. Earnings (loss) per share of Class A common stock—basic and diluted is the most comparable GAAP measurement. Non-GAAP earnings (loss) per share of Class A common stock—basic and diluted is a key measure used by our management and board of directors to evaluate operating performance, generate future operating plans and make strategic decisions regarding the allocation of capital. In particular, we believe that the elimination of stock-based compensation, gain on extinguishment of debt and certain other items that are not related to our core operations provides measures for period-to-period comparisons of our business and provides additional insight into our core controllable costs. Accordingly, we believe that non-GAAP earnings (loss) per share of Class A common stock—basic and diluted provides information to investors and the market generally in understanding and evaluating our results of operations in the same manner as our management and board of directors.
Our use of Non-GAAPearnings(loss)pershare of Class A common stock—basic and diluted has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these potential limitations include:
| • | other companies, including companies in our industry that have similar business arrangements, may report non-GAAPearnings(loss)pershare of Class A common stock—basic and diluted or similarly titled measures, but calculate them differently, which reduces their usefulness as comparative measures; and |
| • | although the stock-based compensation related to the |
|
|
Because of these and other limitations, you should consider our non-GAAP measures only as supplemental to other GAAP-based financial performance measures, including earnings (loss) per share of share.Class A common stock—basic and diluted.
Basic non-GAAP earnings(loss)pershare of Class A common stock—basic and diluted is calculated by dividing the non-GAAP net income (loss) attributable to Class A common stockholders by the number of weighted-average shares of Class A common stock outstanding. Shares of our Class B common stock do not share in the earnings or losses of the Company and are therefore not participating securities. As such, separate
presentation of basic and diluted non-GAAP earnings (loss) per share of Class B common stock under the two-class method has not been presented.
Diluted non-GAAP earnings(loss)pershare of Class A common stock—basic and diluted adjusts the basic non-GAAP earnings (loss)per share calculation for the potential dilutive impact of common shares such as equity awards using the treasury-stock method and Class B common stock using the if-converted method. Diluted earnings (loss) per share considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect. Shares of our Class B common stock, RSUsrestricted stock units (“RSUs”) and nonqualified stock options are considered potentially dilutive shares of Class A common stock. For the three and six months ended June 30, 2021,March 31, 2022, Class B common stock and nonqualified stock options amounts have been excluded from the computation of diluted earnings (loss) per share of Class A common stock because the effect would have been anti-dilutive under the if-converted and treasury stock method, respectively.
The following table presents the reconciliation of earnings (loss) per share of shareClass A common stock—basic and diluted to non-GAAPearnings(loss)pershare of Class A common stock—basic and diluted for the three and six months ended June 30,March 31, 2022 and 2021. Earnings(loss)per share was not adjustedforany otherperiodspresented as there was no stock-based compensation or gain on debt extinguishment in those periods.
|
| Three Months Ended |
|
| Three Months Ended |
| ||||||||||||||||||
|
| March 31, 2022 |
|
| March 31, 2021 |
| ||||||||||||||||||
|
| Earnings |
|
|
|
|
|
| Non-GAAP |
|
| Earnings |
|
|
|
|
|
| Non-GAAP |
| ||||
|
| (Loss) per |
|
|
|
|
|
| Earnings (Loss) |
|
| (Loss) per |
|
|
|
|
|
| Earnings (Loss) |
| ||||
|
| Share |
|
| Adjustments |
|
| per Share |
|
| Share |
|
| Adjustments |
|
| per Share |
| ||||||
|
| (in thousands, except per share data) |
| |||||||||||||||||||||
Numerator |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
| $ | (13,563 | ) |
| $ | — |
|
| $ | (13,563 | ) |
| $ | (14,870 | ) |
| $ | — |
|
| $ | (14,870 | ) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back: Stock-based compensation |
|
| — |
|
|
| 6,376 |
|
|
| 6,376 |
|
|
| — |
|
|
| 17,090 |
|
|
| 17,090 |
|
Income tax benefit (expense) related to Viant Technology Inc.'s share of adjustments(1) |
|
| — |
|
|
| 416 |
|
|
| 416 |
|
|
| — |
|
|
| (66 | ) |
|
| (66 | ) |
Non-GAAP net income (loss) |
|
| (13,563 | ) |
|
| 6,792 |
|
|
| (6,771 | ) |
|
| (14,870 | ) |
|
| 17,024 |
|
|
| 2,154 |
|
Less: Net income (loss) attributable to noncontrolling interests(2) |
|
| (10,371 | ) |
|
| 4,887 |
|
|
| (5,484 | ) |
|
| (11,766 | ) |
|
| 13,714 |
|
|
| 1,948 |
|
Net income (loss) attributable to Viant Technology, Inc.—basic |
|
| (3,192 | ) |
|
| 1,905 |
|
|
| (1,287 | ) |
|
| (3,104 | ) |
|
| 3,310 |
|
|
| 206 |
|
Add back: Reallocation of net loss attributable to noncontrolling interest from the assumed exchange of RSUs for Class A common stock |
|
| — |
|
|
| (3 | ) |
|
| (3 | ) |
|
| — |
|
|
| 72 |
|
|
| 72 |
|
Income tax benefit (expense) from the assumed exchange of RSUs for Class A common stock(1) |
|
| — |
|
|
| 1 |
|
|
| 1 |
|
|
| — |
|
|
| (17 | ) |
|
| (17 | ) |
Net income (loss) attributable to Viant Technology, Inc.—diluted |
| $ | (3,192 | ) |
| $ | 1,903 |
|
| $ | (1,289 | ) |
| $ | (3,104 | ) |
| $ | 3,365 |
|
| $ | 261 |
|
Denominator |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares of Class A common stock outstanding—basic |
|
| 13,809 |
|
|
| — |
|
|
| 13,809 |
|
|
| 11,500 |
|
|
| — |
|
|
| 11,500 |
|
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RSUs |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 3,342 |
|
|
| 3,342 |
|
Nonqualified stock options |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Weighted-average shares of Class A common stock outstanding—diluted |
|
| 13,809 |
|
|
| — |
|
|
| 13,809 |
|
|
| 11,500 |
|
|
| 3,342 |
|
|
| 14,842 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share of Class A common stock—basic |
| $ | (0.23 | ) |
| $ | 0.14 |
|
| $ | (0.09 | ) |
| $ | (0.27 | ) |
| $ | 0.29 |
|
| $ | 0.02 |
|
Earnings (loss) per share of Class A common stock—diluted |
| $ | (0.23 | ) |
| $ | 0.14 |
|
| $ | (0.09 | ) |
| $ | (0.27 | ) |
| $ | 0.29 |
|
| $ | 0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anti-dilutive shares excluded from earnings (loss) per share of Class A common stock—diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RSUs |
|
|
|
|
|
|
|
|
|
| 4,858 |
|
|
|
|
|
|
|
|
|
|
| — |
|
Nonqualified stock options |
|
|
|
|
|
|
|
|
|
| 3,771 |
|
|
|
|
|
|
|
|
|
|
| — |
|
Shares of Class B common stock |
|
|
|
|
|
|
|
|
|
| 47,082 |
|
|
|
|
|
|
|
|
|
|
| 47,436 |
|
Total shares excluded from earnings (loss) per share of Class A common stock—diluted |
|
|
|
|
|
|
|
|
|
| 55,711 |
|
|
|
|
|
|
|
|
|
|
| 47,436 |
|
|
| Three Months Ended |
|
| Six Months Ended |
| ||||||||||||||||||
|
| June 30, 2021 |
|
| June 30, 2021 |
| ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| Non-GAAP |
|
|
|
|
|
|
|
|
|
| Non-GAAP |
| ||
|
| (Loss) per |
|
|
|
|
|
| Earnings |
|
| (Loss) per |
|
|
|
|
|
| Earnings |
| ||||
|
| Share |
|
| Adjustments |
|
| per Share |
|
| Share |
|
| Adjustments |
|
| per Share |
| ||||||
|
| (in thousands, except per share data) |
| |||||||||||||||||||||
Numerator |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
| $ | (18,095 | ) |
| $ | — |
|
| $ | (18,095 | ) |
| $ | (32,966 | ) |
| $ | — |
|
| $ | (32,966 | ) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back: Stock-based compensation |
|
| — |
|
|
| 29,686 |
|
|
| 29,686 |
|
|
| — |
|
|
| 46,777 |
|
|
| 46,777 |
|
Less: Gain on extinguishment of debt |
|
| — |
|
|
| (6,110 | ) |
|
| (6,110 | ) |
|
| — |
|
|
| (6,110 | ) |
|
| (6,110 | ) |
Less: Income tax effect related to Viant Technology Inc.'s share of adjustments (1) |
|
| — |
|
|
| (250 | ) |
|
| (250 | ) |
|
| — |
|
|
| (316 | ) |
|
| (316 | ) |
Non-GAAP net income (loss) |
|
| (18,095 | ) |
|
| 23,326 |
|
|
| 5,231 |
|
|
| (32,966 | ) |
|
| 40,351 |
|
|
| 7,385 |
|
Less: Net income (loss) attributable to noncontrolling interests (2) |
|
| (14,440 | ) |
|
| 18,899 |
|
|
| 4,459 |
|
|
| (26,206 | ) |
|
| 32,612 |
|
|
| 6,406 |
|
Net income (loss) attributable to Viant Technology, Inc.—basic |
|
| (3,655 | ) |
|
| 4,427 |
|
|
| 772 |
|
|
| (6,760 | ) |
|
| 7,739 |
|
|
| 979 |
|
Add back: Reallocation of net loss attributable to noncontrolling interest from the assumed exchange of RSUs for Class A common stock |
|
| — |
|
|
| 178 |
|
|
| 178 |
|
|
| — |
|
|
| 250 |
|
|
| 250 |
|
Less: Income tax effect from the assumed exchange of RSUs for Class A common stock(1) |
|
| — |
|
|
| (43 | ) |
|
| (43 | ) |
|
| — |
|
|
| (61 | ) |
|
| (61 | ) |
Net income (loss) attributable to Viant Technology, Inc.—diluted |
| $ | (3,655 | ) |
| $ | 4,562 |
|
| $ | 907 |
|
| $ | (6,760 | ) |
| $ | 7,928 |
|
| $ | 1,168 |
|
Denominator |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares of Class A common stock outstanding—basic |
|
| 11,500 |
|
|
| — |
|
|
| 11,500 |
|
|
| 11,500 |
|
|
| — |
|
|
| 11,500 |
|
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RSUs |
|
| — |
|
|
| 2,521 |
|
|
| 2,521 |
|
|
| — |
|
|
| 2,919 |
|
|
| 2,919 |
|
Weighted-average shares of Class A common stock outstanding—diluted |
|
| 11,500 |
|
|
| 2,521 |
|
|
| 14,021 |
|
|
| 11,500 |
|
|
| 2,919 |
|
|
| 14,419 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share of Class A common stock—basic |
| $ | (0.32 | ) |
| $ | 0.39 |
|
| $ | 0.07 |
|
| $ | (0.59 | ) |
| $ | 0.68 |
|
| $ | 0.09 |
|
Earnings (loss) per share of Class A common stock—diluted |
| $ | (0.32 | ) |
| $ | 0.38 |
|
| $ | 0.06 |
|
| $ | (0.59 | ) |
| $ | 0.67 |
|
| $ | 0.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anti-dilutive shares/units excluded from earnings (loss) per share of Class A common stock/unit—diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-qualified stock options |
|
|
|
|
|
|
|
|
|
| 67 |
|
|
|
|
|
|
|
|
|
|
| 67 |
|
Shares of Class B common stock |
|
|
|
|
|
|
|
|
|
| 47,436 |
|
|
|
|
|
|
|
|
|
|
| 47,436 |
|
Total shares excluded from earnings (loss) per share of Class A common stock/unit—diluted |
|
|
|
|
|
|
|
|
|
| 47,503 |
|
|
|
|
|
|
|
|
|
|
| 47,503 |
|
|
| The estimated income tax effect of |
| (2) | The adjustment to net income (loss) attributable to noncontrolling interests represents stock-based compensation |
Non-GAAP Operating Expenses
Management identified an immaterial calculation error in our basic and dilutedNon-GAAP operating expenses is a non-GAAP earnings (loss) per share forfinancial measure. Total operating expenses is the three months ended March 31, 2021. The correct basic and diluted non-GAAP earnings (loss) per share amounts are $0.02, for the three months ending March 31, 2021, rather than $0.01, the amounts previously reported in our Quarterly Report on Form 10-Q for the three months ended March 31, 2021.
most comparable GAAP measurement. Non-GAAP operating expenses is defined by us as total operating expenses plus other expense (income), net less
Numberdepreciation, amortization, stock-based compensation, TAC and certain other items that are not related to our core operations, such as restructuring charges, transaction expenses and the extinguishment of Active Customersdebt. Non-GAAP operating expenses is a key component in calculating adjusted EBITDA, which is one of the measures we use to provide our quarterly and Average Contribution ex-TAC per Active Customer
Numberannual business outlook to the investment community. Additionally, non-GAAP operating expenses is used by our management and board of Active Customersdirectors to understand and average contribution ex-TAC per Active Customer areevaluate our operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational metrics. We define an Active Customer as a customer that had total aggregate contribution ex-TAC of at least $5,000 through our platform during the previous twelve months. We define average contribution ex-TAC per Active Customer as contribution ex-TAC for the trailing twelve month period presented divided by Active Customers. For purposes of this definition, a customer that operates under any of our pricing options that equals or exceeds the aforementioned contribution ex-TAC threshold is considered an Active Customer.plans. We believe that the total numberelimination of Active Customersdepreciation, amortization, stock-based compensation, TAC and average contribution ex-TAC per Active Customer are important measurescertain other items not related to our core operations provides another measure for period-to-period comparisons of our abilitybusiness, provides additional insight into our discretionary costs and is a useful metric for investors because it allows them to increase revenueevaluate the Company’s operational performance in the same manner as our management and the effectivenessboard of directors.
Our use of non-GAAP operating expenses has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our sales force, although we expect these measures to fluctuate based on the seasonalityfinancial results as reported under GAAP. A potential limitation of this non-GAAP financial measure is that other companies, including companies in our business. Customersindustry that generated less than $5,000 in contribution ex-TAC inhave similar business arrangements, may define non-GAAP operating expenses differently, which may make comparisons difficult. Because of these and other limitations, you should consider our non-GAAP financial measures only as supplemental to other GAAP-based financial performance measures, including revenue, gross profit, net income (loss) and cash flows.
The following table presents a reconciliation of total operating expenses to non-GAAP operating expenses for the trailing twelve month period were not material in the aggregate in any period.periods presented:
|
| Three Months Ended March 31, |
| |||||
|
| 2022 |
|
| 2021 |
| ||
|
| (in thousands) |
| |||||
Operating expenses: |
|
|
|
|
|
|
|
|
Platform operations |
| $ | 26,194 |
|
| $ | 24,344 |
|
Sales and marketing |
|
| 13,756 |
|
|
| 14,185 |
|
Technology and development |
|
| 5,003 |
|
|
| 5,900 |
|
General and administrative |
|
| 11,083 |
|
|
| 10,420 |
|
Total operating expenses |
|
| 56,036 |
|
|
| 54,849 |
|
Add: |
|
|
|
|
|
|
|
|
Other expense (income), net |
|
| 4 |
|
|
| (70 | ) |
Less: |
|
|
|
|
|
|
|
|
Traffic acquisition costs |
|
| (15,085 | ) |
|
| (13,403 | ) |
Stock-based compensation |
|
| (6,376 | ) |
|
| (17,090 | ) |
Depreciation and amortization |
|
| (3,154 | ) |
|
| (2,427 | ) |
Non-GAAP operating expenses |
| $ | 31,425 |
|
| $ | 21,859 |
|
Liquidity and Capital Resources
As of June 30, 2021,March 31, 2022, we had cashof $252.3$247.9 millionand working capital,consistingof currentassets lesscurrentliabilities,of $256.2 million, compared to cashof $238.5 millionand working capital consisting of current assets less current liabilities,$269.1 million as of $264.4 million. We believeDecember 31, 2021.
Our primary sources of cash are revenues derived from theprogrammaticpurchaseof advertisingon our platform and our existing cash balances, although we have, and may in the future, address our liquidity needs by utilizing our borrowing capacity under our Loan Agreement with PNC Bank or raising additional funds by issuing equity. Our primary sources of cash have not changed materially since our Annual Report on Form 10-K for the year ended December 31, 2021.
Our primary uses of cash are capitalexpendituresto developour softwarein supportof enhancingour technologyplatform; purchasesof propertyand equipmentin supportof our expandingheadcountas a resultof our growth; the payment of debt obligations used to financeour operations,capitalexpenditures,platformdevelopmentand rapidgrowth; and future minimumpaymentsunderournon-cancelable operating leases. Our primary uses of cash have not changed materially since our Annual Report on Form 10-K for the year ended December 31, 2021. We intend to continue investing in critical areas of our business in 2022 to further accelerate demand for our product and growth across platform.
We assess our liquidity in terms of our ability to generate cash sufficient to fund our short- and long-term cash requirements. As such, we project our anticipated cash requirements as well as cash flows generated from operating activities to meet those needs. We believeour existingcash,cash flow from operations, revenues derived from theprogrammaticpurchaseof advertisingon our platform,and the undrawn availabilityunderour revolving credit facilitywillbe sufficientto meetour cashrequirementsoverthenext12 months. We believe we will meet longer-term expected future cash requirements and obligations through a combination of existingcash,cashflow
fromoperations, the undrawn availabilityunderour credit facilityand issuances of equity securities or debt offerings. Our ability to fund longer-term operating needs will depend on our ability to generate positive cash flows through programmatic advertising purchases on our platform, our ability to access the capital markets, and other factors, including those discussed under the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021.
As of March 31, 2022, our material cash requirements from known contractual obligations consisted of future minimumpaymentsunderournon-cancelable operating leases, which we estimate will be sufficientapproximately $1.7 million for the remainder of 2022, $3.7 million in 2023, $3.1 million in 2024, $3.0 million in 2025 and $3.0 million in 2026. These material cash requirements from known contractual obligations have not changed materially since our Annual Report on Form 10-K for the year ended December 31, 2021.
We did not have any off-balance sheetarrangementsas of March 31, 2022 otherthan the indemnificationagreementsdescribedin Note 13 to meet our working capital requirements for at least the next 12 months.condensed consolidatedfinancialstatements included elsewhere in this Quarterly Report on Form 10-Q.
The Company isWe are a holdingcompanywith no operationsof its ourown and isare dependenton distributionsfromViant TechnologyLLC,includingpaymentsundertheTax Receivable Agreement (the “Tax Receivable Agreement”) we entered into with Viant Technology LLC, including payments under the Tax Receivable Agreement, to pay its taxes and other expenses. The Loan Agreement, as defined below, imposes, and any future credit facilities may impose, limitations on the abilitycontinuing members of Viant Technology LLC and the TRA Representative (as defined in the Tax Receivable Agreement) on February 9, 2021,to pay ourtaxesand satisfy any current or future cash requirements. Our Loan Agreement with PNC Bank imposes,and any futurecreditfacilitiesmayimpose,limitationson ourability and the Companyabilityof Viant TechnologyLLC to pay dividendsto third parties.
For additional information regarding ourRevolvingCreditFacility
Our Loan Agreement with PNC Bank provides us with access to a $40.0 million senior secured revolving credit facility seethrough October 31, 2024 and iscollateralizedby security interestsin substantiallyallof our assets. As of each of the balance sheet dates March 31, 2022 and December 31, 2021, there were $17.5 million of outstanding borrowings and $22.5 of undrawn availability under the Loan Agreement.
Our Loan Agreement contains customary conditions to borrowings, events of default and covenants, and also contains a financial covenant requiring us not to exceed a maximum leverage ratio. As of March 31, 2022, we were in compliance with this covenant, and we do not believe this covenant or any other provision in the Loan Agreement will impact our credit or cash in the next 12 months or restrict our ability to execute on our business plan beyond 12 months.
For further discussion of our Loan Agreement with PNC Bank, refer to Note 7—Long-Term Debt and Revolving Credit Facility8 to our condensed consolidated financial statements.statements included elsewhere in this Quarterly Report on Form 10-Q.
Cash Flows
The following table summarizes our cash flows for the sixthree months ended June 30, 2021March 31, 2022 and 2020:2021:
|
| Six Months Ended June 30, |
|
| Three Months Ended March 31, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2022 |
|
| 2021 |
| ||||
|
| (in thousands) |
|
| (in thousands) |
| ||||||||||
Consolidated Statements of Cash Flows Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided by operating activities |
| $ | 23,571 |
|
| $ | 11,543 |
|
| $ | 11,570 |
|
| $ | 14,763 |
|
Cash flows used in investing activities |
|
| (4,016 | ) |
|
| (3,837 | ) |
|
| (2,098 | ) |
|
| (2,060 | ) |
Cash flows provided by financing activities |
|
| 223,087 |
|
|
| 6,035 |
| ||||||||
Cash flows provided by (used in) financing activities |
|
| (16 | ) |
|
| 224,253 |
| ||||||||
Increase in cash |
| $ | 242,642 |
|
| $ | 13,741 |
|
| $ | 9,456 |
|
| $ | 236,956 |
|
Cash Flows Provided by Operating Activities
Our cashflowsfromoperatingactivities arehave been primarilyinfluencedby growth in our operations,increases or decreasesin collectionsfromour customersand relatedpaymentsto our suppliersof advertisingmediaand data.Cash flowsfromoperatingactivitieshave been affectedby changesin our working capital,particularly changesin accountsreceivable,accountspayableand accruedliabilities.The timingof cashreceiptsfrom customersand paymentsto supplierscan significantlyimpactour cashflowsfromoperatingactivities.We typicallypay suppliersin advanceof collectionsfromour customers.Our collectionand paymentcyclescan vary fromperiodto period.In addition,we expectseasonalityto impactcashflowsfromoperatingactivitieson a quarterlybasis.
Our cashflowsprovided byoperatingactivities for the three months ended March 31, 2022 was $11.6 million, a net decrease of $3.2 million, or 22%, from cashflowsprovided byoperatingactivities for the three months ended March 31, 2021 of $14.8 million. The change in cash flows from operating activities. We typically pay suppliers in advance of collections from our customers. Our collection and payment cycles can vary fromfor the period to period. In addition, we expect seasonality to impact cash flows from operating activities on a quarterly basis.were primarily due to:
• | a decrease of $13.6 million from net loss; |
• | an increase of $10.2 million due to noncash add back adjustments to net loss comprised of $6.4 million for stock-based compensation, $3.2 million for depreciation and amortization, provision of doubtful accounts of $0.1 million and $0.7 million of amortization of operating lease assets; |
• | an increase of $22.9 million from changes in working capital (excluding deferred revenue, other liabilities, and operating lease liabilities) including a net increase of $30.2 million in accounts receivable, prepaid assets and other assets primarily related to lower sales and timing of customer collections due to seasonal fluctuations, partially offset by a decrease of $7.2 million in accounts payable, accrued liabilities and accrued compensation primarily related to timing of payments; |
• | a decrease in deferred revenue of $6.5 million primarily related to the modification agreement with a customer whereby we agreed to pay a sum to the customer in exchange for the full, final and immediate termination of certain deferred revenue liabilities; |
• | a decrease in other liabilities of $1.1 million; and |
• | a decrease in operating lease liabilities of $0.5 million. |
During the sixthree months ended June 30,March 31, 2021, cash provided by operating activities of $23.6$14.8 million resulted primarily from a net loss of $33.0$14.9 million offset by noncash add back adjustments to net loss of $46.8$17.1 million for stock-based compensation, $5.1$2.4 million for depreciation and amortization, $0.2 million in recovery of doubtful accounts and an increase in net working capital (excluding deferred revenue and other liabilities) of $12.6$12.2 million, a decrease in deferred revenue of $1.1$0.5 million and a decrease in other liabilities of $0.5$1.4 million.
During the six months ended June 30, 2020, cash provided by operating activities of $11.5 million resulted primarily from net income of $0.3 million, noncash add back adjustments to net income of $5.2 million for depreciation and amortization and an increaseCash Flows Used in net working capital (excluding deferred revenue and other liabilities) of $8.4 million, offset by a decrease in deferred revenue of $1.0 million and a decrease in other liabilities of $1.2 million.
InvestingInvesting Activities
Our primaryinvestingactivitieshave consistedof capitalexpendituresto developour softwarein supportof enhancingour technologyplatformand purchasesof propertyand equipmentin supportof our expandingheadcountas a resultof our growth. We capitalizecertaincostsassociatedwith creatingand enhancinginternallydevelopedsoftwarerelatedto our technologyinfrastructurethatarerecordedwithin property,equipmentand software,net.These costsincludepersonneland relatedemployeebenefitexpensesfor employeeswho aredirectlyassociatedwith and who devotetimeto softwaredevelopmentprojects.Purchasesof propertyand equipmentand capitalizedsoftwaredevelopmentcostsmayvaryfromperiod-to-perioddue to the timingof theexpansionof our operations,theadditionof headcountand our softwaredevelopmentcycles.As a result of capitalization of stock-based compensation in future periods and the anticipated growth of our business, in future periods, we expectour capitalexpendituresand our investmentactivityto continueto increase.
Our cashflowsused in investingactivities for the three months ended March 31, 2022 was $2.1 million, a net increase of $38 thousand, or 2%, from cashflowsused in investingactivities for three months ended March 21, 2021 of $2.1 million. The change in cash flows for the three months ended March 31, 2022 were primarily due to:
• | $1.7 millionof investmentsin capitalizedsoftware to develop our software in support of enhancing our technology platform;and |
• | $0.4 millionof purchasesof propertyand equipment. |
During the sixthree months ended June 30,March 31, 2021, and 2020, cash used in investing activities of $4.0$2.1 million and $3.8 million, respectively, resulted primarily from investments in capitalized software development costs.costs of $1.9 million.
Cash Flows Provided by (used in) Financing Activities
Our financingactivities haveconsistedprimarilyof proceedsfromborrowingsand repaymentsof our debt, issuancesof our equityand paymentsof memberdistributions. Net cashprovidedby or used in financing activitieshas been and willbe used to financeour operations,capitalexpenditures,platformdevelopmentand rapidgrowth.
Our cashflowsused in financingactivities for the three months ended March 31, 2022 was $16 thousand, a net decrease of $224.3 million from cashflowsprovided by financingactivities for the three months ended March 31, 2021 of $224.3 million. The decrease in cash flows for the three months ended March 31, 2022 compared to the prior period in 2021 is a result of the $232.5 million of proceeds from issuancesour initial public offering (our “IPO”) that closed in February 2021, net of our equity in connection with our IPO,underwriting discounts, partially offset by payments of $2.6 million in offering costs associated with the issuances of equity and payments of member tax distributions. Net cash provided by or used in financing activities has been and will be used to finance our operations, capital expenditures, platform development and rapid growth..
During the sixthree months ended June 30,March 31, 2021, cash provided by financing activities of $223.1$224.3 million resulted primarily from $232.5 million of IPO proceeds, net of underwriting discounts and commissions, partially offset by payments of $2.6$1.4 million in related offering costs and $6.8 million in payments of member tax distributions.
During the six months ended June 30, 2020, cash provided by financing activities of $6.0 million resulted from proceeds through the Company’s PPP Loan.
Off-Balance Sheet Arrangements
We do not have any relationships with other entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. We did not have any other off-balance sheet arrangements as of June 30, 2021 other than operating leases and the indemnification agreements described in Note 12 to our condensed consolidated financial statements.
Contractual Obligations
Our principal commitments consist of our debt obligations and non-cancelable leases for our various office facilities. In certain cases, the terms of the lease agreements provide for rental payments on a graduated basis.
We have made no significant contractual guarantees for the benefit of third parties. However, in the ordinary course of business, we may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by us or from intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No demands have been made upon us to provide indemnification under such agreements and thus, there are no claims that we are aware of that could have a material effect on our condensed consolidated financial statements. Accordingly, no amounts for any obligation have been recorded as of June 30, 2021.
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.
An accountingpolicyisdeemedto be criticalifitrequiresan accountingestimateto be madeon assumptionsaboutmattersthatarehighlyuncertainatthetimetheestimateismade if different estimates reasonably couldand have been used,had or if changes in the
estimate that are reasonably possible could materiallylikely to have a material impact theon our financial statements.condition or results of operations. We believe that the assumptions and estimates associated with the evaluation of revenue recognition criteria, stock-based compensation, income taxes, allowances including the determination of revenue recognition net versus gross assessment in our revenue forarrangements, doubtfulthe accounts,assumptions theusefullivesof capitalizedsoftwaredevelopmentcostsand otherproperty,equipmentand software,assumptionsused in the impairmentvaluation analysesmodels of long-livedto determine assetsthe and goodwill,fair deferredvalue revenue,of common units accruedand stock-based liabilitiescompensation, and assumptionsinternal use used in thesoftware fairhave the valuationgreatest of equity-based paymentpotential arrangementsimpact have the greatest potential impact on our condensed consolidatedfinancialstatements.Therefore,we considertheseto be our criticalaccountingpoliciesand estimates.
There have been no significant changes in our critical accounting policies and estimates.
The preparationestimates during the three months ended March 31, 2022, as compared to the critical accounting policies and estimates disclosed in Part II, Item 7 “Management’s Discussion and Analysis of condensed consolidatedfinancialstatementsFinancial Condition and Results of Operations” included in conformitywith GAAPrequiresmanagementto makeestimatesand assumptionsthataffectthereportedamountsof assetsand liabilitiesand disclosuresof contingentassetsand liabilitiesatthedateofour Annual Report on Form 10-K for the condensedconsolidatedfinancialstatementsand thereportedamountsof revenueand expensesduringthereportingperiod.
For additional information regarding stock-based compensation, income taxes and tax receivable agreement, see Note 2—Basis of Presentation and Summary of Significant Accounting Policies to our condensed consolidated financial statements.year ended December 31, 2021.
Recently Issued Accounting Pronouncements
For information regarding recently issued accounting pronouncements, see Note 2—Basis of Presentation and Summary of Significant Accounting Policies to our condensed consolidated financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
See “Item 7A: QuantitativeDuring the three months ended March 31, 2022, there have been no material changes in our exposure to market risk. For a discussion of our exposure to market risk, see Part II, Item 7A “Quantitative and Qualitative Disclosures About Market Risk” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. During the six months ended June 30, 2021, there have been no material changes in our exposure to market risk.2021.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer (“CEO”) and chief financial officer, (“CFO”), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)Act), as of the end of the quarter ended June 30, 2021.period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our CEOchief executive officer and CFOchief financial officer have concluded that as of June 30, 2021,the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our CEOchief executive officer and CFO,chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rules 13a-15(d) and 15d-15(d) under the Exchange Act) during the quarter ended June 30, 2021period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Disclosure Controls and Procedures
Our management, including our CEOchief executive officer and CFO,chief financial officer, does not expect that our disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.
Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues within a company are detected. The inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we are involved in various legal proceedings arising fromin the normalordinary course of business activities.business. We are not currently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows, or financial condition. Defending any such proceedingproceedings is costly and can impose a significant burden on management and employees. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
Item 1A. Risk Factors.
Our business, reputation, results of operations and financial condition, as well as the price of our Class A common stock, can be affected by a number of factors, whether currently known or unknown, including those described in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2021. When any one or more of these risks materialize from time to time, our business, reputation, results of operations and financial condition, as well as the price of our Class A common stock, can be materially and adversely affected. There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020, except for changes to the risk factors below:2021.
We may not realize the expected benefits of an industry shift away from cookie-based consumer tracking as such shift may not occur as rapidly as we expect or may not be realized at all.
We expect to benefit as compared to others in our industry from marketers reducing their reliance on vendors and software platforms that utilize third-party cookies for tracking. However, we cannot assure you that the shift away from cookie-based consumer tracking will happen as rapidly as we expect or that such shift will occur at all. For example, in June 2021, Google announced that its previously announced timeline of blocking third-party cookies by 2022 would be delayed until 2023. Additionally, even if the shift away from cookie-based consumer tracking does occur, we may not be as successful in growing our business and increasing our revenue as we expect. For example, marketers may not shift their business away from our competitors if our competitors are successful in developing alternative products or services that are not significantly reliant on the cookie-based framework.
Our business or ability to operate our platform could be impacted by changes in the technology industry by established technology companies or government regulation. Such developments, including the restriction of “third-party cookies,” could cause instability in the advertising technology industry.
Digital advertising and in-app advertising are largely dependent on established technology companies and their operation of the most commonly used Internet browsers (Chrome, Firefox, Internet Explorer and Safari), devices and their operating systems (Android and iOS). These companies may change the operations or policies of their browsers, devices and operating systems in a manner that fundamentally changes our ability to operate our platform or collect data. Users of these browsers, devices or operating systems may also adjust their behaviors and use of technology in ways that change our ability to collect data. Digital advertising and in-app advertising are also dependent, in part, on internet protocols and the practices of internet service providers, including IP address allocation. Changes that these providers make to their practices, or adoption of new internet protocols, may materially limit or alter the availability of data. A limitation or alteration of the availability of data in any of these or other instances may have a material impact on the advertising technology industry, which could decrease advertising budgets and subsequently reduce our revenue and adversely affect our business, operating results and financial condition.
For example, browser providers have recently enacted changes restricting the use of third-party cookies in their browsers, which may cause instability in the digital advertising market. Execution of digital advertising relies to a significant extent on the use of cookies, pixels and other similar technology, including mobile device identifiers that are provided by mobile operating systems for advertising purposes, which we refer to collectively as cookies, to collect data about users and devices. Although our business is less reliant on cookies than some of our competitors because we do not need cookies for marketers and their advertising agencies to identify consumers with our identity resolution capabilities and identity graph, we do use third-party cookies. Third-party cookies are cookies owned and used by parties other than the owners of the website visited by the Internet user, in connection with our business for execution of obtaining information about consumers, and for delivering digital advertising. In January 2020, Google publicly stated it intends for Chrome to block third-party cookies at some point in the following 24 months. Google has also introduced ad blocking software in its Chrome web browser that will block certain ads based on quality standards established under a multi-stakeholder coalition. Additionally, the Safari browser currently blocks third-party cookies by default and has recently added controls that algorithmically block or limit some cookies. Other browsers have added similar controls. These actions will have significant impacts on the digital advertising and marketing ecosystems in which we operate, which could cause changes in advertising budget allocations and thereby could negatively impact our business. In addition, these browser providers may frequently delay or change their previously announced operations or policies. For example, in June 2021, Google announced that it would delay its timeline of blocking third-party cookies by 2022 until 2023.
For in-app advertising, data regarding interactions between users and devices are tracked mostly through stable, pseudonymous mobile device identifiers that are built into the device operating system with privacy controls that allow users to express a preference with respect to data collection for advertising, including to disable the identifier. These identifiers and privacy controls are defined by
the developers of the mobile platforms and could be changed by the mobile platforms in a way that may negatively impact our business. Privacy aspects of other channels for programmatic advertising, such as connected TVs or over-the-top video, are still developing. Technical or policy changes, including regulation or industry self-regulation, could harm our growth in those channels.
Digital advertising is also subject to government regulation which may impact our ability to collect and use data. As the collection and use of data for digital advertising has received ongoing media attention over the past several years, some government regulators, such as the FTC, and privacy advocates have raised significant concerns around observed data. There has been an array of ‘do-not-track’ efforts, suggestions and technologies introduced to address these concerns. However, the potential regulatory and self-regulatory landscape is inherently uncertain, and there is no consensus definition of tracking, nor agreement on what would be covered by ‘do-not-track’ functionality. There is activity by the major Internet browsers to default set on ‘do-not-track’ functionality, including by Safari and Firefox. It is not clear if other Internet browsers will follow.
Limitations on our or our customers’ ability to collect and use data for advertising, whether imposed by established technology companies or U.S. legislation, or otherwise, may impact the performance of our platform.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
None.
Use of Proceeds from our Initial Public Offering
On February 12, 2021, we completed our IPO, pursuant to which we issued and sold an aggregate of 11,500,000 shares of our Class A common stock (inclusive of 1,500,000 shares pursuant to the underwriters’ option to purchase additional shares) at the IPO price of $25.00 per share. The aggregate gross proceeds to the Company from our IPO were $250.0 million and the net proceeds were $232.5 million after deducting underwriting discounts and commissions of $17.5 million. The offer and sale of the shares of Class A common stock in the IPO were registered pursuant to registration statements on Form S-1 (File Nos. 333-252117 and 333-252907), which the SEC declaredbecame effective on February 9, 2021. No offering expenses were paid directly or indirectly to any of our directors or officers (or their associates) or persons owning 10% or more of any class of our equity securities or to any other affiliates. The underwriters for our IPO were BofA Securities, Inc., UBS Securities LLC, Canaccord Genuity LLC, JMP Securities LLC, Needham & Company, LLC and Raymond James & Associates, Inc.
There has been no material change in the intended use of proceeds from our IPO as described in our final prospectus, dated February 9, 2021 and filed with the SEC pursuant to Rule 424(b)(4) on February 10,11, 2021.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits.
The following is a list of exhibits filed as part of this Quarterly Report on Form 10-Q.
Exhibit Number |
| Description |
|
|
|
3.1 |
| |
|
|
|
3.2 |
| |
10.1+ | ||
10.2*+ | ||
|
|
|
31.1* |
| |
|
|
|
31.2* |
| |
|
|
|
32.1*† |
| |
|
|
|
32.2*† |
| |
|
|
|
101.INS |
| Inline XBRL Instance Document |
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document |
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
| Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 |
| Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Filed herewith. |
† | The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. |
+ | Indicates management contract or compensatory plan, contract or arrangement. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
| |
|
|
|
|
Date: |
| By: | /s/ Tim Vanderhook |
|
|
| Tim Vanderhook |
|
|
| Chief Executive Officer and Chairman (Principal Executive Officer) |
|
|
|
|
Date: |
| By: | /s/ Larry Madden |
|
|
| Larry Madden |
|
|
| Chief Financial Officer (Principal Financial and Accounting Officer) |
41
39