Cover
Cover - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Mar. 14, 2022 | Jun. 30, 2021 | Dec. 31, 2020 | |
Entity Information [Line Items] | ||||
Document Type | 10-K | |||
Document Annual Report | true | |||
Document Period End Date | Dec. 31, 2021 | |||
Current Fiscal Year End Date | --12-31 | |||
Document Transition Report | false | |||
Entity Registrant Name | Digital Media Solutions, Inc. | |||
Entity Incorporation, State or Country Code | DE | |||
Entity File Number | 001-38393 | |||
Entity Tax Identification Number | 98-1399727 | |||
Entity Address, Address Line One | 4800 140th Avenue N. | |||
Entity Address, Address Line Two | Suite 101 | |||
Entity Address, City or Town | Clearwater | |||
Entity Address, State or Province | FL | |||
Entity Address, Postal Zip Code | 33762 | |||
City Area Code | 877 | |||
Local Phone Number | 236-8632 | |||
Entity Well-known Seasoned Issuer | No | |||
Entity Voluntary Filers | No | |||
Entity Current Reporting Status | Yes | |||
Entity Interactive Data Current | Yes | |||
Entity Filer Category | Accelerated Filer | |||
Entity Small Business | true | |||
Entity Emerging Growth Company | true | |||
Entity Ex Transition Period | false | |||
ICFR Auditor Attestation Flag | true | |||
Entity Shell Company | false | |||
Entity Public Float | $ 95.6 | |||
Class of Warrant or Right, Outstanding | 10,000,000 | 10,000,000 | ||
Entity Central Index Key | 0001725134 | |||
Document Fiscal Year Focus | 2021 | |||
Document Fiscal Period Focus | FY | |||
Amendment Flag | false | |||
Common Class A | ||||
Entity Information [Line Items] | ||||
Title of 12(b) Security | Class A Common Stock, $0.0001 par value per share | |||
Trading Symbol | DMS | |||
Security Exchange Name | NYSE | |||
Entity Common Stock, Shares Outstanding | 36,225,611 | 36,394,335 | ||
Common Class B | ||||
Entity Information [Line Items] | ||||
Entity Common Stock, Shares Outstanding | 25,699,464 | |||
Redeemable warrants to acquire Class A common stock | ||||
Entity Information [Line Items] | ||||
Title of 12(b) Security | Redeemable warrants to acquire Class A Common Stock | |||
Trading Symbol | DMS WS | |||
Security Exchange Name | NYSE | |||
Entity Common Stock, Shares Outstanding | 13,999,078 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Auditor Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | Tampa, Florida |
Auditor Firm ID | 42 |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 26,394 | $ 31,397 |
Accounts receivable, net of allowances of $4,930 and $3,121, respectively | 51,578 | 42,085 |
Prepaid and other current assets | 3,698 | 2,943 |
Income tax receivable | 2,078 | 474 |
Total current assets | 83,748 | 76,899 |
Property and equipment, net | 19,168 | 15,016 |
Goodwill | 76,558 | 44,904 |
Intangible assets, net | 66,228 | 46,447 |
Deferred tax assets | 0 | 18,948 |
Other assets | 889 | 206 |
Total assets | 246,591 | 202,420 |
Current liabilities: | ||
Accounts payable | 42,073 | 37,191 |
Accrued expenses and other current liabilities | 9,473 | 9,886 |
Current portion of long-term debt | 2,250 | 7,967 |
Income taxes payable | 103 | 1,413 |
Tax Receivable Agreement liability - current | 1,310 | 510 |
Contingent consideration payable - current | 7,370 | 0 |
Deferred acquisitions consideration payable - current | 4,785 | 0 |
Total current liabilities | 67,364 | 56,967 |
Long-term debt | 215,505 | 193,591 |
Tax Receivable Agreement liability - non-current | 0 | 15,760 |
Deferred tax liabilities | 4,786 | 7,024 |
Private Placement Warrant liabilities | 3,960 | 22,080 |
Contingent consideration payable - non-current | 1,069 | 0 |
Other non-current liabilities | 1,725 | 2,683 |
Total liabilities | 294,409 | 298,105 |
Commitments and Contingencies (Note 16) | ||
Stockholders' deficit: | ||
Preferred stock, $0.0001 par value, 100,000 shares authorized; none issued and outstanding at December 31, 2021 | 0 | 0 |
Additional paid-in capital | (25,239) | (48,027) |
Retained earnings | (944) | (3,146) |
Total stockholders' deficit | (26,177) | (51,167) |
Non-controlling interest | (21,641) | (44,518) |
Total deficit | (47,818) | (95,685) |
Total liabilities and deficit | 246,591 | 202,420 |
Common Class A | ||
Stockholders' deficit: | ||
Common stock | 3 | 3 |
Common Class B | ||
Stockholders' deficit: | ||
Common stock | 3 | 3 |
Class C common stock | ||
Stockholders' deficit: | ||
Common stock | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Net revenue | $ 427,935 | $ 332,856 |
Cost of revenue (exclusive of depreciation and amortization shown separately below) | 300,016 | 234,731 |
Salaries and related costs | 48,014 | 33,386 |
General and administrative expenses | 43,049 | 30,020 |
Depreciation and amortization | 25,401 | 17,954 |
Acquisition costs | 1,967 | 4,814 |
Change in fair value of contingent consideration liabilities | 1,106 | 0 |
Income from operations | 8,382 | 11,951 |
Interest expense | 14,166 | 13,740 |
Change in fair value of warrant liabilities | (18,115) | 8,840 |
Change in tax receivable agreement liabilities | (15,289) | 0 |
Debt extinguishment | 2,108 | 0 |
Loss on disposal of assets | 8 | 0 |
Net income (loss) before income taxes | 25,504 | (10,629) |
Income tax expense | 19,311 | 3,085 |
Net income (loss) | 6,193 | (13,714) |
Net income (loss) attributable to non-controlling interest | 3,991 | (5,018) |
Net loss attributable to Digital Media Solutions, Inc. | $ 2,202 | $ (8,696) |
Weighted-average shares outstanding - basic (in shares) | 35,249 | 32,335 |
Weighted-average shares outstanding - diluted (in shares) | 35,764 | 32,335 |
Earnings (loss) per share attributable to Digital Media Solutions, Inc.: | ||
Basic earnings (loss) per common shares (usd per share) | $ 0.06 | $ (0.23) |
Diluted earnings (loss) per common shares (usd per share) | $ 0.06 | $ (0.23) |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Aimtell, PushPros and Aramis | Crisp Results | Prism Data | Clairvest | SmarterChaos | Common Class A | Common Class B | Total Stockholders' Deficit | Total Stockholders' DeficitAimtell, PushPros and Aramis | Total Stockholders' DeficitCrisp Results | Total Stockholders' DeficitPrism Data | Total Stockholders' DeficitSmarterChaos | [2] | Common StockCommon Class A | Common StockCommon Class AAimtell, PushPros and Aramis | Common StockCommon Class ACrisp Results | Common StockCommon Class APrism Data | Common StockCommon Class ASmarterChaos | [2] | Common StockCommon Class B | Common StockCommon Class BPrism Data | Additional Paid-in Capital | Additional Paid-in CapitalAimtell, PushPros and Aramis | Additional Paid-in CapitalCrisp Results | Additional Paid-in CapitalPrism Data | Additional Paid-in CapitalSmarterChaos | [2] | Retained Earnings | Non- controlling Interest | Non- controlling InterestAimtell, PushPros and Aramis | Non- controlling InterestCrisp Results | Non- controlling InterestPrism Data | Non- controlling InterestClairvest | Non- controlling InterestSmarterChaos | [1] | Members' Deficit | ||
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 0 | |||||||||||||||||||||||||||||||||||||
Beginning balance at Dec. 31, 2019 | $ (106,258) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ (106,258) | |||||||||||||||||||||||||||||||
Net loss | (13,714) | (7,351) | (7,351) | (5,018) | (1,345) | ||||||||||||||||||||||||||||||||||
Shares issued in connection with acquisition | 3,000 | 1,861 | 1,861 | 1,139 | |||||||||||||||||||||||||||||||||||
Distributions | (162) | 8 | (170) | ||||||||||||||||||||||||||||||||||||
Stock issued during the period (in shares) | 32,294,000 | 25,857,000 | |||||||||||||||||||||||||||||||||||||
Stock issued during the period | 20,491 | (46,635) | $ 3 | $ 3 | (50,846) | 4,205 | (40,647) | 107,773 | |||||||||||||||||||||||||||||||
Stock-based compensation | $ 958 | 958 | 958 | ||||||||||||||||||||||||||||||||||||
Working capital adjustment related to Business Combination (in shares) | 99,000 | 142,000 | |||||||||||||||||||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 58,392,040 | 32,392,576 | 25,999,464 | 32,393,000 | 25,999,000 | ||||||||||||||||||||||||||||||||||
Ending balance at Dec. 31, 2020 | $ (95,685) | (51,167) | $ 3 | $ 3 | (48,027) | (3,146) | (44,518) | 0 | |||||||||||||||||||||||||||||||
Net loss | 6,193 | 2,202 | 2,202 | 3,991 | |||||||||||||||||||||||||||||||||||
Shares issued in connection with acquisition (in shares) | 1,293,000 | 1,595,000 | |||||||||||||||||||||||||||||||||||||
Shares issued in connection with acquisition | $ 14,889 | $ 19,823 | $ 8,688 | $ 11,567 | $ 8,688 | $ 11,567 | $ 6,201 | $ 8,256 | |||||||||||||||||||||||||||||||
Distributions | $ (179) | $ (17) | $ (2) | [1] | $ (179) | $ (17) | $ (2) | ||||||||||||||||||||||||||||||||
Stock issued during the period (in shares) | 1,000 | ||||||||||||||||||||||||||||||||||||||
Stock issued during the period | 17 | 17 | 17 | ||||||||||||||||||||||||||||||||||||
Stock-based compensation | 6,840 | 6,840 | 6,840 | ||||||||||||||||||||||||||||||||||||
Units/shares redeemed and issued to Class A Common Stock (in shares) | 300,000 | 154,000 | (300,000) | ||||||||||||||||||||||||||||||||||||
Units/shares redeemed and issued to Class A Common Stock | $ 192 | $ 392 | [2] | $ 192 | $ 392 | $ 192 | $ 392 | ||||||||||||||||||||||||||||||||
Directors and employee vested units issued (in shares) | 490,000 | ||||||||||||||||||||||||||||||||||||||
Correction of Business Combination Tax Receivable Agreement | (322) | (322) | (322) | ||||||||||||||||||||||||||||||||||||
Impact of transactions affecting non-controlling interest | [3] | 0 | (4,707) | (4,707) | 4,707 | ||||||||||||||||||||||||||||||||||
Other | [4] | $ 41 | 121 | 121 | (80) | ||||||||||||||||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 61,925,075 | 36,225,611 | 25,699,464 | 36,226,000 | 25,699,000 | ||||||||||||||||||||||||||||||||||
Ending balance at Dec. 31, 2021 | $ (47,818) | $ (26,177) | $ 3 | $ 3 | $ (25,239) | $ (944) | $ (21,641) | $ 0 | |||||||||||||||||||||||||||||||
[1] | Represents tax distribution to former owners of SmarterChaos. | ||||||||||||||||||||||||||||||||||||||
[2] | On June 30, 2021, the sellers of SmarterChaos redeemed approximately one-half of their non-controlling interest held through DMSH Units in exchange for Class A Common Stock in DMS Inc. The non-controlling interest held by the Sellers of SmarterChaos did not include related Class B Common Stock to be retired upon redemption. | ||||||||||||||||||||||||||||||||||||||
[3] | The carrying amount of non-controlling interest was adjusted primarily to reflect the change in ownership interest caused by additional controlling shares contributed as a result of the Crisp acquisition and non-controlling redemptions by Prism and the Sellers of SmarterChaos. | ||||||||||||||||||||||||||||||||||||||
[4] | Includes costs associated with the issuance of equity shares, other distribution costs, and other tax adjustments associated with the Tax Receivable Agreement |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | ||
Net income (loss) | $ 6,193 | $ (13,714) |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Provision for bad debt | 4,798 | 3,039 |
Depreciation and amortization | 25,401 | 17,954 |
Loss from sales of assets | 0 | 411 |
Loss on disposal of assets | 8 | 0 |
Lease restructuring charges | 542 | 4,203 |
Debt extinguishment | 2,108 | 0 |
Stock-based compensation, net of amounts capitalized | 6,393 | 958 |
Payment of contingent consideration | 0 | (1,000) |
Amortization of debt issuance costs | 1,379 | 936 |
Deferred income tax provision, net | 16,459 | (479) |
Other | 0 | 400 |
Change in fair value of contingent consideration | 1,106 | 0 |
Change in fair value of warrant liabilities | (18,115) | 8,840 |
Change in tax receivable agreement liabilities | (16,402) | 1,138 |
Change in income tax receivable and payable | (727) | 0 |
Change in accounts receivable | (8,369) | (14,409) |
Change in prepaid expenses and other current assets | (419) | (630) |
Change in accounts payable and accrued expenses | (612) | 8,742 |
Change in other liabilities | (956) | 622 |
Net cash provided by operating activities | 18,787 | 17,011 |
Cash flows from investing activities | ||
Additions to property and equipment | (9,114) | (10,372) |
Acquisition of businesses, net of cash acquired | (25,129) | (2,799) |
Other | 0 | 10 |
Net cash used in investing activities | (34,243) | (13,161) |
Cash flows from financing activities | ||
Proceeds from Business Combination | 0 | 29,278 |
Proceeds from issuance of long-term debt | 220,840 | 2,253 |
Payments of long-term debt and notes payable | (200,977) | (5,641) |
Proceeds from borrowings on revolving credit facilities | 11,000 | 10,000 |
Payments of borrowings on revolving credit facilities | (15,000) | (11,000) |
Payment of debt issuance costs | (3,565) | (189) |
Tax withholding on share based awards | (994) | 0 |
Payment of equity issuance | (493) | 0 |
Payment of early termination | (188) | 0 |
Proceeds from warrants exercised | 11 | 0 |
Distribution to members | (196) | 0 |
Other | 15 | (162) |
Net cash provided by financing activities | 10,453 | 24,539 |
Net change in cash | (5,003) | 28,389 |
Cash, beginning of period | 31,397 | 3,008 |
Cash, end of period | 26,394 | 31,397 |
Supplemental Disclosure of Cash Flow Information | ||
Interest | 12,926 | 13,255 |
Income taxes | 4,442 | 3,940 |
Contingent and deferred acquisition consideration | 11,903 | 0 |
Stock-based compensation capitalized in property and equipment | 447 | 0 |
Capital expenditures included in accounts payable | 410 | 325 |
Issuance of equity for Aimtell/PushPros/Aramis, Crisp Results and SmarterChaos | $ 35 | $ 3,000 |
CONSOLIDATED CONDENSED BALANC_2
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) $ in Thousands | Dec. 31, 2021USD ($)$ / sharesshares |
Allowance for credit loss | $ | $ 4,930 |
Preferred stock par value (usd per share) | $ / shares | $ 0.0001 |
Preferred stock, authorized (in shares) | 100,000,000 |
Preferred stock issued (in shares) | 0 |
Preferred stock outstanding (in shares) | 0 |
Common stock par value (usd per share) | $ / shares | $ 0.0001 |
Common stock authorized (in shares) | 600,000,000 |
Common stock outstanding (in shares) | 61,925,075 |
Common Class A | |
Common stock par value (usd per share) | $ / shares | $ 0.0001 |
Common stock authorized (in shares) | 500,000,000 |
Common stock issued (in shares) | 36,226,000 |
Common stock outstanding (in shares) | 36,225,611 |
Common Class B | |
Common stock par value (usd per share) | $ / shares | $ 0.0001 |
Common stock authorized (in shares) | 60,000,000 |
Common stock issued (in shares) | 25,699,000 |
Common stock outstanding (in shares) | 25,699,464 |
Class C common stock | |
Common stock par value (usd per share) | $ / shares | $ 0.0001 |
Common stock authorized (in shares) | 40,000,000 |
Common stock issued (in shares) | 0 |
Common stock outstanding (in shares) | 0 |
BUSINESS, BASIS OF PRESENTATION
BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Digital Media Solutions, Inc. (“DMS Inc.”) is a digital performance marketing company offering a diversified lead and software delivery platform that drives high value and high intent leads to its customers. As used in this Annual Report, the “Company” refers to DMS Inc. and its consolidated subsidiaries, (including its wholly-owned subsidiary, CEP V DMS US Blocker Company, a Delaware corporation (“Blocker”)). The Company is headquartered in Clearwater, Florida. The Company primarily operates and derives most of its revenues in the United States. Leo Holdings Corp. (“Leo”), a special purpose acquisition company, was incorporated on November 29, 2017 as a Cayman Islands exempted company for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination involving the Company and one or more businesses. On July 15, 2020, Leo consummated a transaction structured similar to a reverse recapitalization (the “Business Combination”) and domesticated as a corporation incorporated in the state of Delaware. At the closing of the Business Combination (the “Closing”), Leo acquired the equity in Blocker and a portion of the equity of Digital Media Solutions Holding, LLC (“DMSH”), Blocker became the sole managing member of DMSH, and Leo was renamed Digital Media Solutions, Inc. As the Business Combination was structured as a reverse recapitalization, the historical operations of DMSH are deemed to be those of the Company. Thus, the financial statements included in this Annual Report reflect (i) the historical operating results of DMSH prior to the Business Combination; (ii) the combined results of the Company following the Business Combination; (iii) the assets and liabilities of Leo at historical cost; and (iv) the Company’s equity and earnings (loss) per share for all periods presented. Refer to Note 2. Business Combination for additional discussion related to the transaction. The Company operates as a performance marketing engine for companies across numerous industries, including consumer finance (mortgage), education (split between non-profit and for-profit), automotive (aftermarket auto warranty, auto insurance), insurance (health, homeowners), home services (home security), brand performance (consumer products), gig, health and wellness, and career (job pursuit). Through its agency business, DMS provides access and control over the advertising spend of clients, and also offers marketing automation software as a service (SaaS) to clients. The Company has organized its operations into three reportable segments. The Brand Direct reportable segment consists of services delivered against an advertiser’s brand, while the Marketplace reportable segment is made up of services delivered directly against the DMS brand. In the Other reportable segment, services offered by DMS include SaaS and digital media services that are managed on behalf of the customer (i.e., managed services). Correction of Tax Receivable Agreement Liability as of Business Combination date Through the completion of the 2020 tax return during the third quarter of 2021, we identified an error recorded upon the Business Combination that resulted in a decrease in the deferred tax asset of $2.1 million, a decrease in the Tax Receivable Agreement liability of $1.8 million and a decrease in Additional paid-in capital of $0.3 million, as compared to the amounts recorded in the consolidated balance sheet as of December 31, 2020. As the effect of the correction to these accounts was not material to the prior period financial statements, we elected to correct the balance in the current year, with the offset to Additional paid-in capital , which was consistent with the method to record the Deferred tax assets and Tax Receivable Agreement liability on the date of the Business Combination. There was no impact to continuing operations, net income, or related per-share amounts for each impacted period. Basis of Presentation These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the SEC. Principles of Consolidation The Company consists of DMS Inc. and its wholly-owned subsidiary, Blocker. Pursuant to the Business Combination, DMS Inc. acquired, directly and through its acquisition of the equity of Blocker, approximately 58.4% of the membership interest in DMSH, while the Sellers (as defined in Note 2. Business Combination) retained approximately 41.6% of the membership interest in DMSH (“non-controlling interests”). The Company consolidates the assets, liabilities and operating results of DMSH and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The results of operations attributable to the non-controlling interests are included in the Company’s consolidated statements of operations, and the non-controlling interests are reported as a separate component of equity. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported as separate financial statement line items in the consolidated financial statements. Actual results could differ from those estimates. Management regularly makes estimates and assumptions that are inherent in the preparation of the consolidated financial statements including, but not limited to, the fair value of private placement warrants, the allowance for doubtful accounts, stock-based compensation, fair value of intangibles acquired in business combinations, loss contingencies, contingent consideration liabilities, asset impairments, and deferred taxes and amounts associated with the Tax Receivable Agreement. Revenue recognition The Company derives revenue primarily from fees earned through the delivery of qualified clicks, leads, inquiries, calls, applications, customers and, to a lesser extent, display advertisements, or impressions. The Company recognizes revenue when the Company transfers promised goods or services to clients in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company recognizes revenue pursuant to the five-step framework contained in ASC 606, Revenue from Contracts with Customers : (i) identify the contract with a client; (ii) identify the performance obligations in the contract, including whether they are distinct in the context of the contract; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligations. As part of determining whether a contract exists, probability of collection is assessed on a client-by-client basis at the outset of the contract. If it is determined from the outset of an arrangement that the client does not have the ability or intention to pay, the Company will conclude that a contract does not exist and will continuously reassess its evaluation until the Company is able to conclude that a contract does exist. Generally, the Company’s contracts specify the period of time as one month, but in some instances the term may be longer. However, for most of the Company’s contracts with clients, either party can terminate the contract at any time without penalty. Consequently, enforceable rights and obligations only exist on a day-to-day basis, resulting in individual daily contracts during the specified term of the contract or until one party terminates the contract prior to the end of the specified term. The Company has assessed the services promised in its contracts with clients and has identified one performance obligation, which is a series of distinct services. Depending on the client’s needs, these services consist of a specified number or an unlimited number of clicks, leads, calls, applications, customers, etc. (hereafter collectively referred to as “marketing results”) to be delivered over a period of time. The Company satisfies these performance obligations over time as the services are provided. The Company does not promise to provide any other significant goods or services to its clients. Transaction price is measured based on the consideration that the Company expects to receive from a contract with a client. The Company’s contracts with clients contain variable consideration as the price for an individual marketing result varies on a day-to-day basis depending on the market-driven amount a client has committed to pay. However, because the Company ensures the stated period of its contracts does not generally span multiple reporting periods, the contractual amount within a period is based on the number of marketing results delivered within the period. Therefore, the transaction price for any given period is fixed and no estimation of variable consideration is required. If a marketing result delivered to a client does not meet the contractual requirements associated with that marketing result, the Company’s contracts allow for clients to return a marketing result generally within 5-10 days of having received the marketing result. Such returns are factored into the amount billed to the client on a monthly basis and consequently result in a reduction to revenue in the same month the marketing result is delivered. No warranties are offered to the Company’s clients. The Company does not allocate transaction price as the Company has only one performance obligation and its contracts do not generally span multiple periods. Taxes collected from clients and remitted to governmental authorities are not included in revenue. The Company elected to use the practical expedient which allows the Company to record sales commissions as expense as incurred when the amortization period would have been one year or less. The Company bills clients monthly in arrears for the marketing results delivered during the preceding month. The Company’s standard payment terms are 30-60 days. Consequently, the Company does not have significant financing components in its arrangements. Separately from the agreements the Company has with clients, the Company has agreements with Internet search companies, third-party publishers and strategic partners that we engage with to generate targeted marketing results for its clients. The Company receives a fee from its clients and separately pays a fee to the Internet search companies, third-party publishers and strategic partners. Other than certain of its managed services arrangements, the Company is the principal in the transaction. For the transactions where the Company is the principal, the fees paid by its clients are recognized as revenue and the fees paid to its Internet search companies, third-party publishers and strategic partners are included in cost of revenue. Customer acquisition The Company’s performance obligation for Customer acquisition contracts is to deliver an unspecified number of potential customers or leads (i.e., number of clicks, emails, calls and applications) to the customer in real-time, on a daily basis as the leads are generated, based on predefined qualifying characteristics specified by our customer. The contracts generally have a one-month term and the Company has an enforceable right to payment for all leads delivered to the customer. The Company’s customers simultaneously receive and consume the benefits provided, as the Company satisfies its performance obligations. The Company recognizes revenue as the performance obligations are satisfied over time. When there is a delay between the period in which revenue is recognized and when a customer invoice is issued, revenue is recognized and the corresponding amounts are recorded as unbilled revenue (i.e., contract assets) within Accounts receivable, net on the consolidated balance sheets. In line with industry practice, the Company applies the constraint on variable consideration and records revenue based on internally tracked conversions (leads delivered), net of the amount tracked and subsequently confirmed by customers. A significant portion of the unbilled estimated revenue balance is finalized and invoiced to customers within sixty days following the period of service. Any remaining estimates are finalized and invoiced as billing totals are reconciled with the customer. Historical estimates related to unbilled revenue have not been materially different from actual revenue billed. Managed services The Company’s performance obligation for Managed service contracts is to provide continuous service of managing the customer’s media spend for the purpose of generating leads through a third-party supplier of leads, as requested by our customer. Each month of service is distinct, and any variable consideration is allocated to a distinct month. Therefore, revenue is recognized as the performance obligation is satisfied each month and there is no estimation of revenue required at each reporting period for managed services contracts. The Company enters into agreements with internet search companies, third-party publishers and/or strategic partners to generate customer acquisition services for their Managed service customers. The Company receives a fee from its customers and separately pays a fee to the internet search companies, third-party publishers and/or strategic partners. The third-party supplier is primarily responsible for the performance and deliverable to the customer, and the Company solely arranges for the third-party supplier to provide services to the customer. Therefore, in certain cases, the Company acts as the agent and the net fees earned by the Company are recorded as revenue, with no associated costs of revenue attributable to the Company. Software services The Company’s performance obligation for Software services contracts is to provide the customer with continuous, daily access to the Company’s proprietary software. Service provided each month is distinct, and any variable consideration is allocated to a distinct month. Therefore, revenue is recognized as the performance obligations are satisfied each month and there is no estimation of revenue required at each reporting period for Software services contracts. Cost of revenue Cost of revenue primarily includes media and related costs, which consist of the cost to acquire traffic through the purchase of impressions, clicks or actions from publishers or third-party intermediaries, such as advertising exchanges, and technology costs that enable media acquisition. These media costs are used primarily to drive user traffic to the Company’s and its clients’ media properties. Cost of revenue additionally consists of indirect costs such as data verification, hosting and fulfillment costs. Cost of revenue is presented exclusive of depreciation and amortization expenses, as well as salaries and related costs. Cash and cash equivalents The Company considers highly liquid securities and other investments purchased with an original or remaining maturity of three months or less at the date of the purchase to be cash equivalents. The Company’s cash is primarily held as cash deposits with no cash restrictions at retail and commercial banks. Accounts receivable, net Accounts receivables are recorded net of the allowance for doubtful accounts. Management determines the allowance for doubtful accounts based on factors including past write-offs, delinquency trends and current credit conditions. Accounts are written off when management determines that collection is unlikely. As of December 31, 2021 and 2020, the allowance for doubtful accounts was $4.9 million and $3.1 million, respectively, and bad debt expense was $4.8 million and $3.0 million for the years ended December 31, 2021 and 2020, respectively. Property and equipment, net Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Property and equipment consist of computer and office equipment, furniture and fixtures and leasehold improvements, which are depreciated on a straight-line basis over the estimated useful lives of the assets. Costs for websites and internal-use software are capitalized as Property and Equipment, net on the Consolidated Balance Sheets during the preliminary project and application stages. Any initial research and development costs incurred during the preliminary project stage or costs incurred for data conversion activities, training, maintenance, general and administrative or overhead costs are expensed as incurred. Qualified costs incurred during the operating stage of our websites and software applications relating to upgrades and enhancements are capitalized to the extent it is probable that they will result in added functionality, while costs that cannot be separated between maintenance of, and minor upgrades and enhancements to, websites and internal‑use software are expensed as incurred. Capitalized software development costs are amortized on a straight line basis over the estimated useful life or 3 years, whichever is shorter. Website and s oftware development costs that do not qualify for capitalization are expensed as incurred - through salaries and related costs for employees time or through cost of goods sold for 3rd party maintenance efforts, which are recorded in Salaries and related costs or in General and administrative expenses, respectively, within the consolidated statements of operations. The capitalization and ongoing assessment of recoverability of development costs require considerable judgment by management with respect to certain external factors, including estimated economic life. Management regularly assesses the carrying value of its long-lived assets to be held and used, including property and equipment and intangible assets, for impairment when events or changes in circumstances indicate that their carrying value may not be recoverable. If such events or circumstances are present, a loss is recognized to the extent the carrying value of the asset is in excess of estimated fair value. Goodwill and other intangible assets We account for our business combinations using the acquisition accounting method, which requires us to determine the fair value of net assets acquired and the related goodwill and other intangible assets. Determining the fair value of assets acquired and liabilities assumed requires management's judgment and involves the use of significant estimates, including projections of future cashflows, discount rates, asset lives and market multiples. We review goodwill as of December 31st each year and whenever events or significant changes in circumstances indicate that the carrying value may not be recoverable. We evaluate the recoverability of goodwill at a reporting unit level. We have 3 reporting units that were subject to the 2021 annual impairment testing. Our annual impairment review as of December 31, 2021 did not result in an impairment charge for any of our reporting units. The fair value of each reporting unit for 2021 was estimated using a combination of the income approach, which incorporates the use of the discounted cash flow method, and the market approach, which incorporates the use of earnings and revenue multiples based on market data. We review intangible assets with definite lives subject to amortization whenever events or circumstances indicate that a carrying amount of an asset may not be recoverable. Recoverability of these assets is determined by comparing the carrying value of these assets to the estimated undiscounted future cash flows expected to be generated by these asset groups. These asset groups are impaired when their carrying value exceeds their fair value. Impaired intangible assets with definite lives subject to amortization are written down to their fair value with a charge to expense in the period the impairment is identified. Intangible assets with definite lives are amortized on a straight-line basis with estimated useful lives generally between 1 and 9 years. Events or circumstances that might require impairment testing include the loss of a significant client, the identification of other impaired assets within a reporting unit, loss of key personnel, the disposition of a significant portion of a reporting unit, significant decline in stock price or a significant adverse change in business climate or regulations. Determining fair value requires the use of estimates and assumptions. Such estimates and assumptions include revenue growth rates, operating profit margins, royalty rates, weighted average costs of capital, terminal growth rates, future market share, the impact of new product development, and future market conditions, among others. The Company recognizes a goodwill impairment charge for the amount by which the carrying value of goodwill exceeds the reporting unit’s fair value. Intangible assets with definite lives are amortized based on the estimated consumption of the economic benefit over their estimated useful lives. For additional information on goodwill, see Note 6. Goodwill and Intangible Assets. Contingencies The Company is subject to legal, regulatory and other proceedings and claims that arise in the ordinary course of business. An estimated liability is recorded for those proceedings and claims when the loss from such proceedings and claims becomes probable and reasonably estimable. Outstanding claims are reviewed with internal and external counsel to assess the probability and the estimates of loss, including the possible range of an estimated loss. The risk of loss is reassessed each period and as new information becomes available, liabilities are adjusted as appropriate. The actual cost of resolving a claim may be substantially different from the amount of the liability recorded. Differences between the estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material adverse effect on the consolidated financial position but could possibly be material to the consolidated results of operations or cash flows for any one period. Acquisitions Under the acquisition method of accounting, the Company recognizes, separately from goodwill, the identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities are recorded as goodwill. The Company performs valuations of assets acquired and liabilities assumed and allocates the purchase price to its respective assets and liabilities. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates, and selection of comparable companies. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable. As a result, actual results may differ from these estimates. During the measurement period, the Company may record adjustments to acquired assets and assumed liabilities, with corresponding offsets to goodwill. Upon the conclusion of a measurement period, any subsequent adjustments are recorded to earnings. At the acquisition date, the Company measures the fair values of all assets acquired and liabilities assumed that arise from contractual contingencies. The Company also measures the fair values of all non-contractual contingencies if, as of the acquisitions date, it is more likely than not that the contingencies will give rise to assets or liabilities. Acquisition related costs not considered part of the considerations are expensed as incurred and recorded in Acquisition costs within the consolidated statement of operations. Contingent consideration The Company recognizes the fair value of any contingent consideration that is transferred to the seller in a business combination on the date at which control of the acquiree is obtained. Contingent consideration is classified as a liability or as equity on the basis of the definitions of an equity instrument and a financial liability. Since the Company’s contingent consideration can be paid in cash or DMS Class A Common Stock, at the election of the Company, the Company classifies its contingent consideration as a liability. Contingent consideration payments related to acquisitions are measured at fair value at each reporting period using Level 3 unobservable inputs. The Company’s estimates of fair value are based upon projected cash flows, estimated volatility and other inputs which are uncertain and involve significant judgments by management. Any changes in the fair value of these contingent consideration payments are included in income from operations in the consolidated statements of operations. Fair value measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. In most cases, the exit price and transaction (or entry) price will be the same at initial recognition. In the Company’s case, the fair value of financial instruments approximates fair value. The fair value hierarchy uses a framework which requires categorizing assets and liabilities into one of three levels based on the inputs used in valuing the asset or liability. • Level 1 inputs are unadjusted, quoted market prices in active markets for identical assets or liabilities. • Level 2 inputs are observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. • Level 3 inputs include unobservable inputs that are supported by little, infrequent or no market activity and reflect management’s own assumptions about inputs used in pricing the asset or liability. Level 1 provides the most reliable measure of fair value, while Level 3 generally requires significant management judgment. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Private Placement Warrants Liabilities The Company Private Placement Warrants are not redeemable by the Company so long as they are held by Sponsor or its permitted transferees. Sponsor, or its permitted transferees, has the option to exercise the Company Private Placement Warrants on a cashless basis. Except for the forgoing, the Company Private Placement Warrants have terms and provisions that are identical to those of the Company Public Warrants. If the Company Private Placement Warrants are held by holders other than Sponsor or its permitted transferees, the Company Private Placement Warrants will be redeemable by Company and exercisable by the holders on the same basis as the Company Public Warrants. See Note 11. Equity for description of the Public Warrants’ terms. Because the Company’s Private Placement Warrants contain provisions whereby the settlement amount varies depending upon the characteristics of the warrant holder, they meet the definition of a derivative under ASC 815, Derivatives and Hedging . The Private Placement Warrants are recorded as liabilities on the balance sheet at fair value, with subsequent changes in their respective fair values recognized in the consolidated statement of earnings (loss) at each reporting date. The Company estimates the Private Placement Warrants fair value using a Black-Scholes-Merton option pricing model using a combination of the historical share price volatility of the Company’s and other similar companies’ share prices and the implied volatility of the public warrants, market price and exercise price and the remaining life of the Private Placement Warrants. Advertising costs All advertising, promotional and marketing costs are expensed when incurred. Advertising, promotional and marketing costs for the years ended December 31, 2021 and 2020 were $11.3 million and $1.2 million, respectively, and were included in General and administrative expenses within the consolidated statements of operations. Stock-based compensation Stock-based compensation is measured using the grant-date fair value of the award of equity instruments, including stock options and restricted stock units (“RSUs”). The expense is recognized over the requisite service period and forfeitures are recognized as incurred. The fair value of options granted to employees is estimated on the grant date using the Black-Scholes-Merton option valuation model. This valuation model for stock-based compensation expense requires the Company to make assumptions and judgments about the variables used in the calculation, including the expected term (weighted-average period of time that the options granted are expected to be outstanding), the expected volatility in the fair market value of the Company’s common stock, a risk- free interest rate and expected dividends. The Company uses the simplified calculation of expected life as the contractual term for options of 10 years is longer than the Company has been publicly traded. The Company does not have enough historical perspective to estimate the volatility of its publicly traded shares in regards to the valuation of its stock options awarded to employees. The Company’s common stock began trading on April 20, 2018; no cash dividends have been declared since that time, and we do not anticipate paying cash dividends in the foreseeable future. Expected volatility is based on an average of the historical volatilities of the common stock of several entities with characteristics similar to those of the Company. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. The Company uses the straight-line method for expense attribution. During the year ended December 31, 2020, the Company began granting RSUs to its employees and directors. RSUs have a service-based vesting conditions, which must be satisfied in order for RSUs to vest. The service-based vesting condition for these awards is typically satisfied over three to four years, depending on the award, with a cliff vesting period on the anniversary of the award. The related stock-based compensation expense is recognized on a straight-line basis over the requisite service period. Income Taxes The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that the deferred tax assets will be realized. A valuation allowance will be recorded to reduce deferred tax assets to an amount that is anticipated to be realized on a more likely than not basis. Deferred tax assets and liabilities are calculated by applying existing tax laws and the rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the year of the enacted rate change. The Company accounts for uncertainty in income taxes using a recognition and measurement threshold for tax positions taken or expected to be taken in a tax return, which are subject to examination by federal and state taxing authorities. The tax benefit from an uncertain tax position is recognized when it is more likely than not that the position will be sustained upon examination by taxing authorities based on technical merits of the position. The amount of the tax benefit recognized is the largest amount of the benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The effective tax rate and the tax basis of assets and liabilities reflect management’s estimates of the ultimate outcome of various tax uncertainties. The Company |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATION | BUSINESS COMBINATION On July 15, 2020, DMSH consummated the business combination with Leo pursuant to the Business Combination Agreement (the “Business Combination Agreement”), by and among Leo, DMSH, Blocker, Prism Data, LLC, a Delaware limited liability company (“Prism”), CEP V-A DMS AIV Limited Partnership, a Delaware limited partnership (“Clairvest Direct Seller”) and related entities (the “Sellers”). In connection with the consummation of the Business Combination, the following occurred: • Leo was domesticated and continues as a Delaware corporation, changing its name to “Digital Media Solutions, Inc.” • The Company was organized into an umbrella partnership-C corporation (or “Up-C”) structure, in which substantially all of the assets and business of the Company are held by DMSH and continue to operate through the subsidiaries of DMSH, and the Company’s sole material assets are the equity interests of DMSH indirectly held by it. • DMS Inc. consummated the PIPE investment with certain qualified institutional buyers and accredited investors (the “PIPE Investors”), pursuant to which the PIPE Investors collectively subscribed for 10,424,282 shares of Class A Common Stock for an aggregate purchase price of $100.0 million. • DMS Inc. purchased all of the issued and outstanding common stock of Blocker and a portion of the units of DMSH held by Prism and Clairvest Direct Seller. Those DMSH membership interests were then immediately contributed to the capital of Blocker in exchange for aggregate consideration to the Sellers of $57.3 million in cash, 25,857,070 shares of Class B common stock, 2.0 million warrants to purchase Class A Common Stock, and 17,937,954 shares of Class C Common Stock. Refer to Note 11. Equity for a description of the Company’s Common Stock. • The Sellers amended and restated the limited liability company agreement of DMSH (the “Amended Partnership Agreement”), to, among other things: (i) recapitalize DMSH such that, as of immediately following the consummation of the Business Combination, Prism and Clairvest Direct Seller collectively own 25,857,070 of DMSH Units and Blocker owns 32,293,793 of DMSH Units; and (ii) provide Clairvest Direct Seller and Prism the right to redeem their DMSH Units for cash or, at the Company’s option, the Company may acquire the DMSH Units in exchange for cash or shares of Class A Common Stock, subject to certain restrictions set forth therein. • DMS Inc. issued 2.0 million Private Placement Warrants in exchange for previously held warrants in Leo, and an additional approximate 10.0 million Public Warrants were issued in exchange for the warrants offered and sold by Leo in its initial public offering. Refer to Notes 10. Fair Value Measurements and 11. Equity for a description of the Company’s Private Placement and Public Warrants, respectively. • DMS Inc. obtained $30.0 million in cash for working capital needs and $10.0 million to pay down outstanding indebtedness under the Monroe Capital Management Advisors (as administrative agent and lender) (the “Monroe Facility”) . • The Sellers exercised their right to convert the shares of Class C Common Stock into shares of Class A Common Stock, on a one-for-one basis, in accordance with the new Certificate of Incorporation (the “Conversion”). • Prism and Clairvest Direct Seller continue to retain a significant continuing equity interest in the Company, representing 44% of the economic interests in DMSH and 44% of the voting interest in DMS Inc. (“non-controlling interest”). • On October 22, 2020, as required by the post-closing working capital adjustment provisions of the Business Combination Agreement, (i) the Company issued (a) 98,783 total additional shares of Class A Common Stock to the Blocker Sellers and (b) 142,394 total additional shares of Class B Common Stock to Prism and Clairvest Direct Seller. • In conjunction with the Business Combination, DMS Inc. and Blocker also entered into the Tax Receivable Agreement with the Sellers. Pursuant to the Tax Receivable Agreement, DMS Inc. is required to pay the Sellers (i) 85% of the amount of savings, if any, in U.S. federal, state and local income tax that DMS Inc. and Blocker actually realize as a result of (A) certain existing tax attributes of Blocker acquired in the Business Combination, and (B) increases in Blocker’s allocable share of the tax basis of the assets of DMS and certain other tax benefits related to the payment of the cash consideration pursuant to the Business Combination Agreement and any redemptions or exchanges of DMS Units for cash or Class A Common Stock after the Business Combination and (ii) 100% of certain refunds of pre-Closing taxes of DMSH and Blocker received during a taxable year beginning within two (2) years after the Closing. All such payments to the Sellers are the obligation of DMS Inc., and not that of DMSH. As a result of the Business Combination, the Company recorded an initial deferred tax asset and income tax receivable of $20.1 million and $199 thousand, respectively, with the offset as a long-term Tax Receivable Agreement liability of $16.3 million and Additional Paid-in Capital of $4.0 million in the consolidated balance sheet. Through the completion of the 2020 tax return during the interim period ended September 30, 2021, we identified an error recorded upon the Business Combination that resulted in a decrease in the deferred tax asset of $2.1 million, a decrease in the Tax Receivable Agreement liability of $1.8 million and a decrease in Additional Paid-In Capital of $0.3 million, as compared to the amounts recorded in the consolidated balance sheet as of December 31, 2020 and interim periods in the current fiscal year. As the effect of the correction to these accounts was not material to the prior period financial statements, we elected to correct the balance as of September 30, 2021, with the offset to Additional Paid-In Capital, which was consistent with the method to record the Deferred Tax Asset and Tax Receivable Agreement liability on the date of the Business Combination. There was no impact to continuing operations, net income, or related per-share amounts for each period. As of December 31, 2021, the Company recorded a full valuation allowance on our DTA related to the Tax Receivable Agreement along with the entire DTA inventory as of December 31, 2020, as these assets are not more likely than not to be realized based on the positive and negative evidence that we considered. See Note 14. Income taxes for further details. In conjunction with the Business Combination, we incurred approximately $2.4 million of transaction expenses related to incentive bonuses and other acquisition related expenses, which were recorded as Acquisitions Costs in the consolidated statements of operations during the year ended December 31, 2020. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE The Company derives revenue primarily through the delivery of various types of services, including: customer acquisition, managed services and software as a service (“SaaS”). The Company recognizes revenue when the promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. The Company has elected the practical expedient to not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which revenue is recognized in the amount to which the Company has the right to invoice for services performed. The Company has organized its operations into three reportable segments: Brand-Direct, Marketplace and Other. The Brand Direct reportable segment consists of services delivered against our customer’s brand, while the Marketplace reportable segment includes services delivered directly against the DMS brand. In the Other reportable segment, services offered by the Company include software services and digital media services that are managed on behalf of the customer. Corporate and other represents other business activities and includes eliminating entries. Management uses these segments to evaluate the performance of its businesses and to assess its financial results and forecasts. Disaggregation of Revenue The following tables presents the disaggregation of revenue by reportable segment and type of service (in thousands): Year Ended December 31, 2021 Brand Direct Marketplace Other Intercompany eliminations Total Net revenue: Customer acquisition $ 244,942 $ 224,158 $ — $ (59,650) $ 409,450 Managed services 8,845 — 6,471 — 15,316 Software services — — 3,169 — 3,169 Total Net revenue $ 253,787 $ 224,158 $ 9,640 $ (59,650) $ 427,935 Year Ended December 31, 2020 Brand Marketplace Other Intercompany eliminations Total Net revenue: Customer acquisition 179,682 155,999 — (30,051) 305,630 Managed services 17,869 — 6,139 — 24,008 Software services — — 3,218 — 3,218 Total Net revenue $ 197,551 $ 155,999 $ 9,357 $ (30,051) $ 332,856 Contract balances The Company’s contract liabilities result from payments received from clients in advance of revenue recognition as they precede the Company’s satisfaction of the associated performance obligation. If a customer pays consideration before the Company’s performance obligations are satisfied, such amounts are classified as deferred revenue on the consolidated balance sheets. As of December 31, 2021 and 2020, the balance of deferred revenue was $1.8 million and $1.7 million, respectively, and recorded “Accrued expenses and other current liabilities” on the audited consolidated balance sheets. We expect the majority of the deferred revenue balance at December 31, 2021 to be recognized as revenue during the following quarter. When there is a delay between the completion of our performance obligations and when a customer is invoiced, revenue is recognized and recorded as unbilled revenue (i.e. contract assets) within Accounts receivable, net on the consolidated balance sheets. As of December 31, 2021 and 2020, unbilled revenue included in accounts receivable was $2.9 million and $1.8 million, respectively. In line with industry practice, the Company applies the constraint on variable consideration and records revenue based on internally tracked conversions (leads delivered), net of the amount tracked and subsequently confirmed by customers. Substantially all amounts included within the unbilled revenue balance are invoiced to customers within the month directly following the period of service. |
REPORTABLE SEGMENTS
REPORTABLE SEGMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
REPORTABLE SEGMENTS | REPORTABLE SEGMENTS The Company’s operating segments are determined based on the financial information reviewed by its chief operating decision maker (“CODM”), and the basis upon which management makes resource allocation decisions and assesses the performance of the Company’s segments. The Company evaluates the operating performance of its segments based on financial measures such as net revenue, cost of revenue, and gross profit. Given the nature of the digital marketing solutions business, the amount of assets does not provide meaningful insight into the operating performance of the Company. As a result, the amount of the Company’s assets is not subject to segment allocation and total assets is not included within the disclosure of the Company’s segment financial information. The following tables are a reconciliation of the operations of our segments to income from operations (in thousands): Years Ended December 31, 2021 2020 Net revenue $ 427,935 $ 332,856 Brand Direct 253,787 197,551 Marketplace 224,158 155,999 Other 9,640 9,357 Intercompany eliminations (59,650) (30,051) Cost of revenue 300,016 234,731 Brand Direct 192,479 151,526 Marketplace 163,637 109,921 Other 3,550 3,335 Intercompany eliminations (59,650) (30,051) Gross profit $ 127,919 $ 98,125 Brand Direct 61,308 46,025 Marketplace 60,521 46,078 Other 6,090 6,022 Salaries and related costs 48,014 33,386 General and administrative expenses 43,049 30,020 Depreciation and amortization 25,401 17,954 Acquisition costs 1,967 4,814 Contingent consideration changes in fair value of acquisition 1,106 — Income from operations $ 8,382 $ 11,951 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT The following table presents major classifications of property and equipment and the related useful lives (in thousands, except useful lives): December 31, Useful Lives 2021 2020 Computers and office equipment 3 years $ 2,467 $ 1,684 Furniture and fixtures 5 years 437 305 Leasehold improvements 7 years 385 320 Software development costs 3 years 28,272 18,913 Total 31,561 21,222 Less: Accumulated depreciation and amortization (12,393) (6,206) Property and equipment, net $ 19,168 $ 15,016 Depreciation and amortization expense for property and equipment for the years ended December 31, 2021 and 2020 was $6.2 million and $3.7 million, respectively, included in our consolidated statements of operations. As of December 31, 2021 and 2020, the unamortized balance of capitalized software development costs was $16.7 million and $14.0 million, respectively. Amortization of capitalized software development costs for the years ended December 31, 2021 and 2020 was $5.5 million and $3.0 million, respectively, included in depreciation and amortization of our consolidated statements of operations. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS Goodwill Changes in the carrying value of goodwill, by reporting segment, were as follows (in thousands): Brand Direct Marketplace Other Total Balance, December 31, 2019 $ 8,616 $ 32,660 $ 550 $ 41,826 Additions (Note 8) — — 3,078 3,078 Balance, December 31, 2020 8,616 32,660 3,628 44,904 Additions (Note 8) 9,760 21,894 — 31,654 Balance, December 31, 2021 $ 18,376 $ 54,554 $ 3,628 $ 76,558 The carrying amount of goodwill for all reporting units had no accumulated impairments as of December 31, 2021 and December 31, 2020. Intangible assets, net Finite-lived intangible assets, net consisted of the following (in thousands): December 31, 2021 December 31, 2020 Amortization Gross Accumulated Net Gross Accumulated Net Technology 3 to 5 $ 51,946 $ (29,929) $ 22,017 $ 48,008 $ (21,454) $ 26,554 Customer relationships 2 to 9 49,273 (13,076) 36,197 21,794 (6,749) 15,045 Brand 1 to 7 12,109 (4,575) 7,534 4,295 (961) 3,334 Non-competition agreements 3 1,898 (1,418) 480 2,105 (591) 1,514 Total $ 115,226 $ (48,998) $ 66,228 $ 76,202 $ (29,755) $ 46,447 Amortization expense for finite-lived intangible assets is recorded on a straight-line basis. Amortization expense related to finite-lived intangible assets was $19.1 million and 14.2 million for the year ended December 31, 2021 and 2020, respectively. Amortization expense relating to intangible assets subject to amortization for each of the next five years and thereafter is estimated to be as follows (in thousands): 2022 2023 2024 2025 2026 and Thereafter Amortization expense $ 19,398 $ 16,366 $ 13,792 $ 6,564 $ 10,108 Impairment analysis For the year ended December 31, 2021, the fair value of the Company's goodwill exceeded the carrying value of the reporting units, and there were no other events or changes in circumstances to indicate that goodwill or intangible assets were impaired. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The following table presents the components of outstanding debt (in thousands): December 31, 2021 December 31, 2020 Term loan $ 223,875 $ 190,541 Revolving credit facility — 4,000 Delayed draw term loan — 8,236 Notes payable — 1,074 Total debt 223,875 203,851 Less: Unamortized debt issuance costs (1) (6,120) (2,293) Debt, net 217,755 201,558 Less: Current portion of long-term debt (2,250) (7,967) Long-term debt $ 215,505 $ 193,591 __________ (1) Includes net debt issuance discount and other costs. On May 25, 2021, Digital Media Solutions, LLC (“DMS LLC”), as borrower, and DMSH, each of which is a subsidiary of DMS, entered into a five-year $275 million senior secured credit facility (the “Credit Facility”), with a syndicate of lenders (“Lenders”), arranged by Truist Bank and Fifth Third Bank, as joint lead arrangers, and Truist Bank, as administrative agent. The Credit Facility is guaranteed by, and secured by substantially all of the assets of, DMS LLC, DMSH LLC and their material subsidiaries, subject to customary exceptions. Pursuant to the Credit Facility, the Lenders provided DMS LLC with senior secured term loans consisting of a senior secured term loan with an aggregate principal amount of $225 million (the “Term Loan”) and a $50 million senior secured revolving credit facility (the “Revolving Facility”). The Term Loan, which was issued at an original issue discount of 1.80% or $4.2 million, will be subject to payment of 1.0% of the original aggregate principal amount per annum paid quarterly, with a bullet payment at maturity. The Term Loan will mature, and the revolving credit commitments under the Revolving Facility will terminate, on May 25, 2026, when any outstanding balances will become due. Borrowings under the Revolving Facility bear interest, at our option, at either (i) adjusted LIBOR plus 4.25% or (ii) a base rate (which is equal to the highest of (a) Administrative Agent’s prime rate, (b) the federal funds rate, as in effect from time to time, plus 0.50%, (c) one-month LIBOR plus 1.00%, and (d) 1.75% (the “Base Rate”)), plus 3.25%. The Term Loan bears interest at our option, at either (i) adjusted LIBOR plus 5.00% or (ii) the Base Rate plus 4.00%. Under the Revolving Facility, DMS LLC will pay a 0.50% per annum commitment fee in arrears on the undrawn portion of the revolving commitments. For the year ended December 31, 2021, the effective interest rate was 6.29%. Since May 25, 2021 our interest rate is based on LIBOR plus 5%. The initial $4.2 million debt discount and $3.5 million debt issuance cost related to the Term Loan and Revolving Facility will be amortized over the term of the loan consistent with the effective interest method. As of December 31, 2021, the Term Loan debt discount and debt issuance cost classified as debt had a remaining unamortized balance of $3.7 million and $2.4 million, respectively. The $0.8 million unamortized debt issuance cost associated with the undrawn Revolving Facility is classified and amortized as a long-term asset. Upon the closing of the Credit Facility, the credit agreement dated as of July 3, 2018, by and among DMS LLC, DMSH, each of their subsidiaries party thereto, various financial institutions party thereto and Monroe Capital Management Advisors, LLC, as administrative agent and lead arranger, and all outstanding amounts thereunder that was previously outstanding with an aggregate principal amount of $210 million was extinguished, and the $15 million revolving credit facility was closed. The Company recognized a loss on debt extinguishment of $2.1 million during the year ended December 31, 2021, which primarily included accelerated amortization of deferred financing costs, legal fees and early termination fee. The loss recognized is presented as “Debt Extinguishment” in the consolidated statement of operations. Debt Maturity Schedule The scheduled maturities of our total debt are estimated as follows at December 31, 2021: (in thousands) 2022 $ 2,250 2023 2,250 2024 2,250 2025 2,250 2026 and thereafter 214,875 Total debt $ 223,875 |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Crisp Results On April 1, 2021, the Company completed a transaction to purchase the assets of Crisp Marketing, LLC (“Crisp Results” or “Crisp”). Crisp Results is a digital performance advertising company that connects consumers with brands within the insurance sector, with primary focus on the Medicare insurance industry. Crisp Results is known for providing predictable, reliable, flexible and scalable customer acquisition solutions, supporting large brands with a process that combines data, design, technology and innovation. The Company paid consideration of $40.0 million upon closing of the transaction, consisting of $20.0 million cash and 1.6 million Class A Common Stock valued at $20.0 million. The transaction also includes up to $10.0 million in contingent consideration to be earned over the 12 months following the acquisition, subject to the achievement of certain milestones, and a $5.0 million deferred payment, to be paid 18 months after the acquisition date. During the measurement period (which is the period required to obtain all necessary information that existed at the acquisition date, or to conclude that such information is unavailable, not to exceed one year), additional assets or liabilities may be recognized, or there could be changes to the amounts of assets or liabilities previously recognized on a preliminary basis, if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of these assets or liabilities as of that date. Determining the fair value of assets acquired and liabilities assumed requires management's judgment and involves the use of significant estimates, including projections of future cash inflows and outflows, discount rates, asset lives and market multiples. As the result of the completed valuation of the assets acquired (including intangibles) and liabilities assumed, as well as the contingent consideration liabilities, as of the acquisition dates, the following adjustments were recorded related to further analysis of the forecast (for example, items that occurring in the pre-acquisition period that should have been factored into the forecast as of the acquisition date) and refinements to the significant assumptions in the valuation models used to value the intangibles and contingent consideration liabilities. As a result, we have made adjustment to the initial and subsequent fair value of our intangible asset, goodwill, contingent consideration and working capital. The impact of these adjustments are as follows (in thousands): Crisp Results Original Acquisition Date Fair Value Revised Acquisition Date Fair Value Fair Value Mark-to-Market changes Fair Value as of December 31, 2021 Goodwill $ 17,370 $ 21,894 $ — $ 21,894 Intangible Assets: Technology $ — $ — $ — $ — Customer relationships $ 26,000 $ 19,600 $ — $ 19,600 Brand $ 5,100 $ 7,400 $ — $ 7,400 Non-competition agreements $ — $ — $ — $ — Contingent Consideration $ 4,763 $ 5,186 $ 2,184 $ 7,370 Working Capital $ 1,018 $ 1,018 $ — $ 1,018 As of April 1, 2021, the acquisition date, the fair value of the contingent consideration earnout was recorded at $4.8 million, and the deferred consideration was $4.6 million. Subsequently, after the acquisition date, the initial fair value of the contingent consideration was revised to $5.2 million. As of December 31, 2021, the revised contingent consideration earnout value increased $2.2 million to a total of $7.4 million, and the present value of the deferred consideration increased $0.2 million to a total of $4.8 million. The contingent consideration and deferred payment can be paid in cash or DMS Class A Common Stock at the election of the Company. In conjunction with this acquisition, we incurred approximately $0.8 million of legal and other acquisition-related expenses, which were recorded as Acquisition costs in the consolidated operations during the year ended December 31, 2021. Additionally, we incurred $0.2 million of equity issuance costs, offsetting the $20 million 1.6 million share issuance in the equity for Crisp Results. The Company primarily used an Income Approach, specifically a Discounted Cash Flow (“DCF”) analysis, which represents Level 3 fair value measurements, to assess the components of its purchase price allocation. The acquisition was accounted for as a business combination, whereby the excess of the fair value of the business over the fair value of identifiable net assets was allocated to goodwill. The results of operations of the acquired business have been included in the Company’s results of operations since the acquisition date of April 1, 2021. Under Accounting Standards Codification 805 (“ASC 805”), an acquirer must recognize any assets acquired and liabilities assumed at the acquisition date, measured at fair value as of that date. Assets meeting the identification criteria included tangible assets, such as real and personal property, and intangible assets. Identified intangible assets included the brand and customer relationships of the acquired business. Fair value of Crisp Results brand was determined using the Relief from Royalty Method, and the fair value of customer relationships was determined using the Multi Period Excess Earnings Method. The goodwill related to this transaction reflects the workforce and synergies expected from combining the operations of Crisp Results and is included in the Marketplace reportable segment. Goodwill is expected to be deductible for tax purposes. Intangible assets primarily consist of brand and customer relationships with an estimated useful life of seven years for brand and six years for customer relationships. Aimtell, PushPros and Aramis On February 1, 2021, the Company acquired Aimtell, Inc. (“Aimtell”), PushPros, Inc. (“PushPros”) and Aramis Interactive (“Aramis”). Aimtell and PushPros are leading providers of technology-enabled digital performance advertising solutions that connect consumers and advertisers within the home, auto, health and life insurance verticals. Aramis is a network of owned-and-operated websites that leverages the Aimtell and PushPros technologies and relationships. The company paid consideration of $20.0 million upon closing of the transaction, consisting of $5.0 million in cash and approximately 1.29 million shares of Class A Common Stock valued at $15.0 million. The transaction also includes up to $15.0 million in contingent consideration to be earned over the three years following the acquisition, subject to the achievement of certain milestones. The contingent consideration can be paid in cash or Class A Common Stock at the election of the Company. Determining the fair value of assets acquired and liabilities assumed requires management's judgment and involves the use of significant estimates, including projections of future cash inflows and outflows, discount rates, asset lives and market multiples. As the result of the completed valuation of the assets acquired (including intangibles) and liabilities assumed, as well as the contingent consideration liabilities, as of the acquisition dates, the following adjustments were recorded related to further analysis of the forecast (for example, items that occurring in the pre-acquisition period that should have been factored into the forecast as of the acquisition date) and refinements to the significant assumptions in the valuation models used to value the intangibles and contingent consideration liabilities. As a result, we have made adjustment to the initial and subsequent fair value of our intangible asset, goodwill, contingent consideration and working capital. The impact of these adjustments are as follows (in thousands): Aimtell, PushPros, and Aramis Original Acquisition Date Fair Value Revised Acquisition Date Fair Value Fair Value Mark-to-Market changes Fair Value as of December 31, 2021 Goodwill $ 4,853 $ 9,761 $ — $ 9,761 Intangible Assets: Technology $ 10,500 $ 3,900 $ — $ 3,900 Customer relationships $ 7,920 $ 7,690 $ — $ 7,690 Brand $ 226 $ 208 $ — $ 208 Non-competition agreements $ 117 $ 83 $ — $ 83 Contingent Consideration $ 4,925 $ 2,147 $ (1,078) $ 1,069 Working Capital $ 1,404 $ 944 $ — $ 944 As of February 1, 2021, the acquisition date, the fair value of the contingent consideration earnout was recorded at $4.9 million. Subsequently, after the acquisition date, the initial fair value of the contingent consideration earnout was revised to $2.1 million. As of December 31, 2021, the contingent consideration earnout fair value decreased $1.0 million to a total of $1.1 million. The contingent consideration can be paid in cash or DMS Class A Common Stock at the election of the Company. In conjunction with this acquisition, we incurred approximately $0.6 million of legal and other acquisition-related expenses, which were recorded as Acquisition costs in the audited consolidated statements of operations during the year ended December 31, 2021. The Company primarily used an Income Approach, specifically a Discounted Cash Flow (“DCF”) analysis, which represents Level 3 fair value measurements, to assess the components of its purchase price allocation. The acquisition was accounted for as a business combination, whereby the excess of the fair value of the business over the fair value of identifiable net assets was allocated to goodwill. The results of operations of the acquired businesses have been included in the Company’s results of operations since the acquisition date of February 1, 2021. Under Accounting Standards Codification 805 (ASC 805), an acquirer must recognize any assets acquired and liabilities assumed at the acquisition date, measured at fair value as of that date. Assets meeting the identification criteria included tangible assets, such as real and personal property, and intangible assets. Identified intangible assets included the brand, technology and customer relationships of the acquired business. Fair value of Aimtell, PushPros technology was determined using the Multi Period Excess Earnings Method; fair value of Aramis customer relationships was determined using the Multi Period Excess Earnings Method; and fair value of Aimtell, PushPros cusotmer relationships was determined using the excess earnings method with distributor inputs.. The goodwill related to this transaction reflects the workforce and synergies expected from combining the operations of Aimtell, Aramis and PushPros and is included in the Brand Direct reportable segment. Goodwill is expected to be deductible for Aramis and PushPros for tax purposes. Intangible assets primarily consist of technology and customer relationships with an estimated useful life of four years for technology, and four SmarterChaos and She is Media On July 16, 2020, the Company acquired SmarterChaos.com, LLC, a premier digital marketing and online performance management marketer, along with She Is Media, a female-centric performance ad network (collectively, “SmarterChaos”), for cash and equity of DMSH totaling approximately $5.8 million, net of cash, which was subject to a working capital adjustment that was finalized December 31, 2020. DMSH issued the SmarterChaos sellers approximately 307,000 DMSH Units, which were convertible to Class A Common Stock, with an aggregate total value of $3.0 million based on the Company’s Class A Common Stock price on July 15, 2020. The SmarterChaos sellers also became parties to the Amended Partnership Agreement. In conjunction with this acquisition, during the third quarter of 2020, we incurred approximately $0.4 million of legal and other acquisition-related expenses, which were recorded as Acquisition costs in the audited consolidated statements of operations. On June 30, 2021, SmarterChaos sellers elected to redeem 154,000 DMSH units. We elected to exchange those for shares of Class A Common Stock, with an aggregate capital contribution to DMSH of approximately $3.0 million. The Company primarily used an Income Approach, specifically a Discounted Cash Flow (“DCF”) analysis, which represents Level 3 fair value measurements, to assess the components of its purchase price allocation. The acquisition was accounted for as a business combination, whereby the excess of the fair value of the business over the fair value of identifiable net assets was allocated to goodwill. The results of operations of the acquired businesses have been included in the Company’s results of operations since the acquisition date of July 16, 2020. Under Accounting Standards Codification 805 (ASC 805), an acquirer must recognize any assets acquired and liabilities assumed at the acquisition date, measured at fair value as of that date. Assets meeting the identification criteria included tangible assets, such as real and personal property, and intangible assets. Identified intangible assets included the brand and customer relationships of the acquired business. The fair value of the brand was determined by applying an Income Approach, specifically the Relief from Royalty Method. The fair value of the acquired customer relationships was determined by applying an Income Approach, specifically the Multi Period Excess Earnings Method. The goodwill related to this transaction reflects the workforce and synergies expected from combining the operations of SmarterChaos and is included in the Other reportable segment. Goodwill is expected to be deductible for tax purposes. Intangible assets primarily consist of brand and customer relationships with an estimated useful life of one five Net assets and liabilities acquired from the 2020 and 2021 acquisitions consist of the following (in thousands): Expected Useful Life SmarterChaos Aimtell, PushPros and Aramis Crisp Results 2020 2021 2021 Goodwill $ 3,078 $ 9,761 $ 21,894 Technology 4 — 3,900 — Customer relationships 4 to 6 2,500 7,690 19,600 Accounts receivable 576 3,100 2,610 Brand 1 to 7 277 208 7,400 Non-competitive agreements 3 — 83 — Property and equipment 3 to 5 28 250 220 Accounts payable (1,156) (2,887) (1,593) Other assets acquired and liabilities assumed, net (1) 496 740 1 Net assets and liabilities acquired $ 5,799 $ 22,845 $ 50,132 (1) Other assets acquired and liabilities assumed, net includes Prepaids and other current assets, partially offset by other current liabilities (i.e., Travel and expense payables, payroll liabilities, tax liabilities). The weighted average amortization period for Aimtell, PushPros and Aramis acquisition technology is 4 years, customer relationships is 4.1 years, brand is 2.1 years and non-compete agreements is 3 years. The weighted average amortization period for Crisp Results acquisition customer relationships is 6 years, and brand is 7 years. In total, the weighted average amortization period for Aimtell, PushPros and Aramis is 4 years and Crisp Results is 5.6 years. The following schedule represents the amounts of net revenue and net loss from operations related to 2021 acquisitions which have been included in the audited consolidated statements of operations for the periods indicated subsequent to the acquisition date (in thousands): Year Ended December 31, 2021 Aimtell, PushPros and Aramis Crisp Results Net revenue $ 21,083 $ 25,637 Net loss from operations (4,661) (1,042) Pro Forma Information The following audited pro forma financial information represents the consolidated financial information as if the acquisitions had been included in our consolidated results beginning on the first day of the fiscal year prior to their respective acquisition dates. The pro forma results do not reflect any cost savings, operating synergies or revenue enhancements that the combined company may achieve as a result of the acquisitions; the costs to combine the companies’ operations; or the costs necessary to achieve these costs savings, operating synergies and revenue enhancements. The pro forma results do not necessarily reflect the actual results of operations of the combined companies under our ownership and operation. Years Ended December 31, 2021 (In thousands) Aimtell, PushPros and Aramis Crisp Results Net revenue $ 23,093 $ 34,035 Net (loss) income from operations $ (4,436) $ 257 Years Ended December 31, 2020 (In thousands) Aimtell, PushPros and Aramis Crisp Results Net revenue $ 26,330 $ 29,811 Net income from operations $ 5,085 $ 5,853 |
RESTRUCTURING COSTS
RESTRUCTURING COSTS | 12 Months Ended |
Dec. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING COSTS | RESTRUCTURING COSTS Restructuring costs include expenses associated with the Company’s effort to continually improve operational efficiency and reposition its assets to remain competitive on a national basis. The Company leases office space in various locations within United States and Canada. The leases entered into by the Company consist of both long-term and short-term leases. Lease agreements in two locations provide the option to extend for three years upon the provision of nine-month notice. No lease agreement or arrangement is considered material to the overall lease portfolio. Termination of office lease and other related costs include lease and termination of fixed assets, employee training, relocation and facility costs. These costs are recorded in General and administrative expenses in the audited consolidated statements of operations. During the year ended December 31, 2020, due to the economic environment caused by the COVID-19 pandemic, the Company entered into negotiations with landlords to terminate lease agreements, for twelve different properties, for a total of approximately 62,113 square feet of office space located in Canada and the United States. The termination of the leases reduced cash needs by approximately $1.9 million over the remaining life of the original leases through April 30, 2025. As of December 31, 2020, the Company concluded negotiations on three properties and agreed to make payments to the landlord totaling approximately $0.4 million in release of all future obligations under the leases. We recorded a reserve of approximately $3.6 million as a result of the cease use of certain leased properties (included in the future minimum lease payments below) , which was included in General and administrative expenses in the consolidated statements of operations during the year ended December 31, 2020. As of December 31, 2020, $1.7 million is accrued for within Accrued expenses and other current liabilities and $1.9 million is accrued for within Other non-current liabilities, on the consolidated balance sheets. For the year ended December 31, 2021, the total balance of the reserve is $2.5 million, with $0.9 million within Accrued expenses and other current liabilities and $1.6 million is accrued for within Other non-current liabilities, on the consolidated balance sheet. During 2021, the Company has continued its negotiations with landlords to terminate lease agreements. One new lease was added to the restructuring lease liability through acquisition of Crisp Results in the second quarter of 2021, resulting in five properties for approximately 57,469 square feet of office space located in the United States that are currently in negotiations. The change in liability for the restructuring costs for the years ended December 31, 2021 and 2020, respectively, was as follows: (in Thousands) Beginning balance at January 1, 2020 $ — Valuation adjustments 3,853 Lease payments (238) Lease accretion 37 Ending balance at December 31, 2020 $ 3,652 Valuation adjustments 373 Lease payments (1,683) Lease accretion 174 Ending balance at December 31, 2021 $ 2,516 The rental expense for the years ended December 31, 2021 and 2020 was $1.0 million and $2.0 million, respectively. At December 31, 2021, the future minimum lease payments for the Company were comprised of the following (in thousands): Year Ending Years Ended December 31,: 2022 $ 1,869 2023 1,707 2024 1,899 2025 546 Total $ 6,021 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The carrying amounts of our cash and cash equivalents, accounts receivable, income taxes receivable, accounts payable, accrued expenses and income taxes payable, approximate fair value because of the short-term maturity of those instruments. Private Placement Warrants - We record the fair value of the Private Placement Warrants as a liability in the Company’s consolidated balance sheet as of December 31, 2021 and 2020, respectively. The fair value of the Private Placement Warrants is considered a Level 3 valuation and is determined using the Black-Scholes-Merton valuation model. Changes in fair value of the Private Placement Warrants are presented under Change in the fair value of warrant liabilities on the Income Statement. As of December 31, 2021, the Company has approximately 4.0 million Private Placement Warrants outstanding. December 31, 2021 Private Placement Warrants Fair Value Per Share $ 0.99 Private and Public Placement Warrant valuation inputs: Stock price $ 4.78 Strike price $ 11.50 Remaining contractual term in years 3.54 Estimated volatility 60.0 % Dividend yield 0.0 % Risk free interest rate 1.05 % Contingent consideration payable related to acquisitions The fair value of the contingent consideration payable for the Aimtell, PushPros, Aramis and Crisp Results acquisitions (described in Note 8 Acquisitions ) were determined using a Monte Carlo fair value analysis based on estimated performance and the probability of achieving certain targets. As certain inputs are not observable in the market, the contingent consideration is classified as a Level 3 instrument. Changes in fair value of contingent consideration are presented under Acquisition costs on the statement of operations. There was no contingent consideration payable at December 31, 2020. The following table presents the contingent consideration assumptions. Aimtell / PushPros CYE2021 Revenue - Actual $ 7,193,881 CYE2022 Revenue - Expectations $ 11,259,147 CYE2023 Revenue - Expectations $ 14,636,891 CYE2022 Risk Adjusted Revenue $ 10,883,930 CYE2023 Risk Adjusted Revenue $ 13,224,456 Revenue Volatility 25 % Iteration (actual) 100,000 Risk adjustment discount rate 7.25 % Risk free / Credit risk 6.5 % Days gap from period end to payment 90 Aramis CYE2022 Earnout Successful Probability 99.0 % Iteration (actual) 100,000 Risk free / Credit risk 6.5 % Days gap from period end to payment 90 Crisp Results EBITDA Historical - 9 Months 7,749,580 EBITDA Expectations - 3 Months 1,800,000 Risk adjusted EBITDA 1,768,807 EBITDA volatility 60 % Iterations (actual) 100,000 Risk adjustment discount rate 16.5 % Risk free / Credit risk 6.5 % Days gap from period end to payment 90 The following table presents assets and liabilities measured at fair value on a recurrent basis (in thousands): December 31, 2020 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Liabilities: Private Warrant Liabilities Total liabilities $ — $ — $ 22,080 $ 22,080 Total $ — $ — $ 22,080 $ 22,080 December 31, 2021 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Liabilities: Private Warrant Liabilities Total liabilities $ — $ — $ 3,960 $ 3,960 Contingent consideration - current Contingent consideration payable $ 7,370 $ 7,370 Contingent consideration -non-current Contingent consideration payable $ — $ — $ 1,069 $ 1,069 Total $ — $ — $ 12,399 $ 12,399 The following table represents the change in the warrant liability and contingent consideration (in thousands): Private Placement Warrants Contingent Consideration Beginning January 1, 2020 $ — $ 1,000 Additions 13,240 — Changes in fair value 8,840 — Settlements — (1,000) Balance December 31, 2020 22,080 — Additions — 7,333 Changes in fair value (18,115) 1,106 Settlements (5) — Ending December 31, 2021 $ 3,960 8,439 |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
EQUITY | EQUITY Authorized Capitalization The total amount of the Company’s authorized capital stock consists of (a) 600,000,000 shares of common stock, par value $0.0001 per share, of the DMS Inc., consisting of (i) 500,000,000 shares of Class A Common Stock, (ii) 60,000,000 shares of Class B Common Stock, and (iii) 40,000,000 shares of Class C Common Stock, and (b) 100,000,000 shares of preferred stock, par value $0.0001 per share, of the DMS Inc. (“Company Preferred Stock”). At December 31, 2021, there were 36,225,611 shares of Class A Common Stock outstanding and 25,699,464 shares of Class B Stock outstanding. Company Common Stock The following table sets forth the Company’s common stock by class at December 31, 2021: December 31, 2021 December 31, 2020 Class Total Shares Ownership % Total Shares Ownership % Class A Common Stock 36,225,611 58.5% 32,392,576 55.5% Class B Common Stock 25,699,464 41.5% 25,999,464 44.5% Total Common Stock 61,925,075 100% 58,392,040 100% Voting Rights Each holder of Company Common Stock is entitled to one (1) vote for each share of Company Common Stock held of record by such holder. The holders of shares of Company Common Stock do not have cumulative voting rights. Except as otherwise required in the Company Certificate of Incorporation or by applicable law, the holders of Class A Common Stock, Class B Common Stock and Class C Common Stock will vote together as a single class on all matters on which stockholders are generally entitled to vote (or, if any holders of Company Preferred Stock are entitled to vote together with the holders of Company Common Stock, as a single class with such holders of Company Preferred Stock). In addition to any other vote required in the Company Certificate of Incorporation or by applicable law, the holders of Class A Common Stock, Class B Common Stock and Class C Common Stock will each be entitled to vote separately as a class only with respect to amendments to the Company Certificate of Incorporation that increase or decrease the par value of the shares of such class or alter or change the powers, preferences or special rights of the shares of such class so as to affect them adversely. Notwithstanding the foregoing, except as otherwise required by law, holders of Company Common Stock, as such, will not be entitled to vote on any amendment to the Company Certificate of Incorporation (including any Preferred Stock Designation relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to the Company Certificate of Incorporation (including any Preferred Stock Designation relating to any series of Preferred Stock) or pursuant to the General Corporation Law of the State of Delaware (the “DGCL”). Dividend Rights Subject to any other provisions of the Company Certificate of Incorporation, as it may be amended from time to time, holders of shares of Class A Common Stock are entitled to receive ratably, in proportion to the number of shares of Class A Common Stock held by them, such dividends and other distributions in cash, stock or property of the Company when, as and if declared thereon by the Company’s board of directors (the “Board”) from time to time out of assets or funds of the Company legally available therefor. Except as provided in the Company Certificate of Incorporation, dividends and other distributions will not be declared or paid on the Class B Common Stock. Subject to any other provisions of the Company Certificate of Incorporation, as it may be amended from time to time, holders of shares of Class C Common Stock are entitled to receive ratably, in proportion to the number of shares held by them, the dividends and other distributions in cash, stock or property of the Company payable or to be made on outstanding shares of Class A Common Stock that would have been payable on the shares of Class C Common Stock if each such share of Class C Common Stock had been converted into a fraction of a share of Class A Common Stock equal to the Conversion Ratio (as defined in the Company Certificate of Incorporation) immediately prior to the record date for such dividend or distribution. The holders of shares of Class C Common Stock are entitled to receive, on a pari passu basis with the holders of the Class A Common Stock, such dividend or other distribution on the Class A Common Stock when, as and if declared by the Board from time to time out of assets or funds of the Company legally available therefor. At December 31, 2021, there were no shares of Class C Common Stock outstanding. Redemption Pursuant to the terms and subject to the conditions of the Amended Partnership Agreement, each holder (other than Blocker) of a DMSH Unit has the right (the “Redemption Right”) to redeem each such DMSH Unit for the applicable Cash Amount (as defined in the Amended Partnership Agreement), subject to the Company’s right, in its sole and absolute discretion, to elect to acquire some or all of such DMSH Units that such holder has tendered for redemption for a number of shares of Class A Common Stock, an amount of cash or a combination of both (the “Exchange Option”), in the case of each of the Redemption Right and the Exchange Option, on and subject to the terms and conditions set forth in the Company Certificate of Incorporation and in the Amended Partnership Agreement. Retirement of Class B Common Stock In the event that (i) any DMSH Unit is consolidated or otherwise cancelled or retired or (ii) any outstanding share of Class B Common Stock held by a holder of a corresponding DMSH Unit otherwise ceases to be held by such holder, in each case, whether as a result of exchange, reclassification, redemption or otherwise (including in connection with the Redemption Right and the Exchange Option as described above), then the corresponding share(s) of Class B Common Stock, if any, or such share of Class B Common Stock (in the case of (ii)) will automatically and without further action on the part of the Company or any holder of Class B Common Stock be transferred to the Company for no consideration and thereupon will be retired and restored to the status of authorized but unissued shares of Class B Common Stock. Rights upon Liquidation In the event of any liquidation, dissolution or winding up (either voluntary or involuntary) of the Company after payments to creditors of the Company that may at the time be outstanding, and subject to the rights of any holders of Preferred Stock that may then be outstanding, holders of shares of Class A Common Stock and Company C Common Stock will be entitled to receive ratably, in proportion to the number of shares held by them, all remaining assets and funds of the Company available for distribution; provided, however, that, for purposes of any such distribution, each share of Class C Common Stock will be entitled to receive the same distribution as would have been payable if such share of Class C Common Stock had been converted into a fraction of a share of Company A Common Stock equal to the Conversion Ratio immediately prior to the record date for such distribution. The holders of shares of Class B Common Stock, as such, will not be entitled to receive any assets of the Company in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company. Conversion of Class C Common Stock Each holder of Class C Common Stock has the right, at such holder’s option, at any time, to convert all or any portion of such holder’s shares of Class C Common Stock, and the Company has the right, at the Company’s option, to convert all or any portion of the issued and outstanding shares of Class C Common Stock, in each case into shares of fully paid and non-assessable Class A Common Stock at the ratio of one (1) share of Class A Common Stock for the number of shares of Class C Common Stock equal to the Issuance Multiple (as defined in the Business Combination Agreement) so converted. As of December 31, 2021, there were no Class C Common Stock issued and outstanding. Transfers The holders of shares of Class B Common Stock will not transfer such shares other than as part of a concurrent transfer of an equal number of DMSH Units, in each case made to the same transferee in accordance with the restrictions on transfer contained in the Amended Partnership Agreement. Other Rights No holder of shares of Company Common Stock are entitled to preemptive or subscription rights. There is no redemption or sinking fund provisions applicable to the Company Common Stock. The rights, preferences and privileges of holders of the Company Common Stock will be subject to those of the holders of any shares of the Preferred Stock the Company may issue in the future. Preferred Stock The Board has the authority to issue shares of preferred stock from time to time on terms it may determine, to divide shares of preferred stock into one or more series and to fix the designations, preferences, privileges, and restrictions of preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, sinking fund terms, and the number of shares constituting any series or the designation of any series to the fullest extent permitted by the DGCL. The issuance of Preferred Stock of the Company could have the effect of decreasing the trading price of Company Common Stock, restricting dividends on the capital stock of the Company, diluting the voting power of the Company Common Stock, impairing the liquidation rights of the capital stock of the Company, or delaying or preventing a change in control of the Company. The Company is authorized to issue 100,000,000 preferred shares with such designations, voting, and other rights and preferences as may be determined from time to time by the Board. As of December 31, 2021 and 2020, there were no shares of preferred stock issued. Public Warrants Each Company Public Warrant entitles the registered holder to purchase one share of Class A Common Stock at a price of $11.50 per share, subject to adjustment. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of Class A Common Stock. This means only a whole warrant may be exercised at a given time by a warrant holder. The warrants will expire five years after the Business Combination, or earlier upon redemption or liquidation. The Company may call the Company Public Warrants for redemption as follows: (1) in whole and not in part; (2) at a price of $0.01 per warrant; (3) upon a minimum of 30 days’ prior written notice of redemption; and (4) only if the last reported closing price of the Class A Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. If the Company calls the Company Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Company Public Warrants to do so on a “cashless basis.” The exercise price and number of Class A Common Stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of Class A Common Stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrant shares. At December 31, 2021 and 2020, approximately 10.0 million Public Warrants were outstanding. Non-controlling Interests The non-controlling interests represent the membership interests in DMSH held by holders other than the Company. Changes to ownership interests in DMSH while the controlling interests in DMSH is retained will be accounted for as equity transactions. As such, future redemptions or direct exchanges of the Company’s Interests in DMSH by the other members of the Company will result in a change in ownership and reduce the amount recorded as non-controlling interest and increase additional paid-in capital. The Company has consolidated the financial position and results of operations of DMSH and reflected the proportionate interests held by Prism, Clairvest Direct Seller and the SmarterChaos sellers as non-controlling interests. The following table summarizes the ownership interest in DMSH as of December 31, 2021 and 2020: December 31, 2021 December 31, 2020 Interests Ownership % Interests Ownership % Number of Interests held by DMS, Inc. 36,225,611 58.4% 32,392,576 55.5% Number of Interests held by non-controlling interests holders 25,853,152 41.6% 25,999,464 44.5% Total Interests Outstanding 62,078,763 100.0% 58,392,040 100.0% The following table summarizes the effects of changes in ownership in DMS, Inc. on our equity during the years ended December 31, 2021 and 2020 (in thousands): Years Ended December 31, 2021 2020 Net income (loss) attributable to DMS, Inc. shareholders $ 2,202 $ (8,696) Transfers to (from) non-controlling interests due to: DMSH units issued in SmarterChaos acquisition (Note 8) — 103 Shares issued in connection with acquisition of Aramis, PushPros, and Aimtell (Note 6) (1,589) — Exercise of warrants to issue Class A common stock (1) — Shares issued in connection with acquisition of Crisp Results (Note 6) (1,960) — Prism shares redeemed and issued to Class A Common Stock (369) — SmarterChaos DMSH units redeemed and issued to Class A Common Stock (189) — Stock-based compensation - Vested & Exercised (602) — Net transfers to (from) non-controlling interests (4,710) 103 Change from net income attributable to DMS Inc. shareholders and transfers to (from) noncontrolling interest $ (2,508) $ (8,593) On July 15, 2020, upon the close of the Business Combination, the Prism and Clairvest Direct Seller combined ownership percentage in DMSH was 44.5%. On July 16, 2020, DMSH issued approximately 307 thousand additional DMSH Units to the sellers in the SmarterChaos acquisition, which are included in the non-controlling interest. On October 22, 2020, the Company issued additional 142 thousand shares of Class B Common Stock to Prism and Clairvest Direct Seller, upon a post-closing Business Combination working capital adjustment. On June 30, 2021, the sellers of SmarterChaos redeemed approximately one-half of their non-controlling interest held through DMSH Units in exchange for Class A Common Stock in DMS Inc. The non-controlling interest held by the Sellers of SmarterChaos did not include related Class B Common Stock to be retired upon redemption. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Registration Rights At the Closing, the Company entered into an amended and restated registration rights agreement with certain Sellers (the “Amended and Restated Registration Rights Agreement”), pursuant to which the Company registered for resale certain shares of Class A Common Stock and warrants to purchase Class A Common Stock that were held by the parties thereto. Additionally, the Sellers may request to sell all or any portion of their shares of Class A Common Stock in an underwritten offering that is registered pursuant to the shelf registration statement filed by the Company (each, an “Underwritten Shelf Takedown”); however, the Company will only be obligated to effect an Underwritten Shelf Takedown if such offering will include securities with a total offering price reasonably expected to exceed, in the aggregate, $20.0 million and will not be required to effect more than four Underwritten Shelf Takedowns in any six-month period. The Amended and Restated Registration Rights Agreement also includes customary piggy-back rights, subject to cooperation and cut-back provisions. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Amended Partnership Agreement Pursuant to the Amended Partnership Agreement, the non-controlling interests (as defined in the Amended Partnership Agreement) have the right to redeem their DMSH Units for cash (based on the market price of the shares of Class A Common Stock) or, at the Company’s option, the Company may acquire such DMSH Units (which DMSH Units are expected to be contributed to Blocker) in exchange for cash or Class A Common Stock (a “Redemption”) on a one-for-one basis (subject to customary conversion rate adjustments, including for stock splits, stock dividends and reclassifications), in each case subject to certain restrictions and conditions set forth therein, including that any such Redemption be for an amount no less than the lesser of 10,000 DMSH Units or all of the remaining DMSH Units held by such Non-Blocker Member. In the event of a change of control transaction with respect to a Non-Blocker Member, DMSH will have the right to require such Non-Blocker Member to effect a Redemption with respect to all or any portion of the DMSH Units transferred in such change of control transaction. In connection with any Redemption a number of shares of Class B Common Stock will automatically be surrendered and cancelled in accordance with the Company Certificate of Incorporation. Tax Receivable Agreement Through the completion of the 2020 tax return during the interim period ended September 30, 2021, we identified an error recorded upon the Business Combination that resulted in a decrease in the deferred tax asset of $2.1 million, a decrease in the Tax Receivable Agreement liability of $1.8 million and a decrease in Additional Paid-In Capital of $0.3 million, as compared to the amounts recorded in the consolidated balance sheet as of December 31, 2020 and interim periods in the current fiscal year. As the effect of the correction to these accounts was not material to the prior period financial statements, we elected to correct the balance as of September 30, 2021, with the offset to Additional Paid-In Capital, which was consistent with the method to record the Deferred Tax Asset and Tax Receivable Agreement liability on the date of the Business Combination. There was no impact to continuing operations, net income, or related per-share amounts for each period. As of December 31, 2021, the Company recorded a full valuation allowance on our DTA related to the Tax Receivable Agreement along with the entire DTA inventory at DMS, Inc. and Blocker, as these assets are not more likely than not to be realized based on the positive and negative evidence that we considered. The Tax Receivable Agreement liability that originated from the Business Combination is not probable under ASC 450 - Contingencies since a valuation allowance has been recorded against the related DTA. As such, the Tax Receivable Agreement Liability of $15.3 million has been reversed through Income Before Taxes as a Change in Tax Receivable Agreement Liability. The remaining short-term Tax Receivable Agreement liability of $1.3 million is attributable to carryback claims. We will continue to evaluate the positive and negative evidence in determining the realizability of the Company’s DTAs. For further details, see Note 14. Income Taxes. Management Agreement Prior to the Business Combination, the Management Agreement included consideration for various management and advisory services, where DMSH made payment to one of its members a quarterly retainer of $50 thousand plus any out-of-pocket expenses. The total expense for the year ended December 31, 2020 was $0.1 million, which was recorded in General and administrative expenses in the consolidated statements of operations. The management agreement was terminated in connection with the Business Combination. Prism Incentive Agreement On October 1, 2017, DMS, through a subsidiary, acquired the assets of Mocade Media LLC (“Mocade”). On that date, in connection with the acquisition, DMS also entered into a consulting agreement with Singularity Consulting LLC (“Singularity”), a Texas limited liability company owned by the former management of Mocade. On August 1, 2018, in order to further incentivize Singularity’s efforts with respect to the acquired Mocade assets, DMS entered into an amendment to the Singularity consulting agreement. On that date, Prism Data, the then majority equityholder of DMS, also entered into an incentive agreement with Singularity, to which DMS was not a party, providing for certain incentive payments to be accounted for in accordance with applicable accounting standards by Prism Data to Singularity in the event of certain specified change of control sale transactions involving DMS. Following the Business Combination, in November 2020, DMS and Singularity resolved all outstanding amounts due under the Singularity consulting agreement between DMS and Singularity with a payment of $850,000. In addition, Prism Data and Singularity agreed that Singularity would be entitled to a payment from Prism Data of $2,000,000 in the event of certain specified change of control sale transactions involving DMS . DMSH Member Tax Distributions For the years ended December 31, 2021 and 2020, tax distributions to members of DMSH were $0.2 million and $0.2 million, respectively. |
EMPLOYEE AND DIRECTOR INCENTIVE
EMPLOYEE AND DIRECTOR INCENTIVE PLANS | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
EMPLOYEE AND DIRECTOR INCENTIVE PLANS | EMPLOYEE AND DIRECTOR INCENTIVE PLANS 2020 Omnibus Incentive Plan On July 15, 2020, Leo’s shareholders approved the 2020 Omnibus Incentive Plan (the “2020 Plan”). The 2020 Plan allows for the issuance of stock options, stock appreciation rights, stock awards (including restricted stock awards (“RSAs”) and Restricted Stock Units (“RSUs”)) and other stock-based awards. Directors, officers and employees, as well as others performing independent consulting or advisory services for the Company or its affiliates, will be eligible for grants under the 2020 Plan. The aggregate number of shares reserved under the 2020 Plan is approximately 11.6 million. The 2020 Plan terminates on June 24, 2030. On October 28, 2020, the Board of Directors of DMS Inc. approved the grant of approximately 1.2 million RSUs, including 65,000 units granted for Directors under the 2020 Plan. The RSUs vest one-third each year based on three years of continuous service starting with July 16, 2021 through July 16, 2023. The related stock-based compensation expense is recognized on a straight-line basis over the vesting period. The 2020 Plan provides Directors’ and employees’ vesting rights after each year for completed service to the Company. The related costs were approximately $6.8 million and $1.0 million for the years ended December 31, 2021 and 2020, respectively, and are included in “Salaries and related costs” within the Consolidated Statement of Operations. The participants have no rights of a stockholder with respect to the RSUs, including the right to vote and the right to receive distributions or dividends until the shares become vested and settled. The settlement occurs after the vesting date and shall represent the right to receive one Share of Class A of common stock. RSUs awards provide for accelerated vesting if there is a change in control. The Company’s common stock began trading on April 20, 2018; no cash dividends have been declared since that time, and we do not anticipate paying cash dividends in the foreseeable future. The risk-free rate within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. We recognize forfeitures and/or cancellations based on an actual occurrence. The fair value of non-vested stock is determined based on the closing trading price of the Company’s stock on the grant date and are amortized over the award’s service period. At December 31, 2021, total non-vested stock-based compensation expense related to restricted stock and options was $16.7 million, which will be recognized over a weighted-average remaining period of 2.7 years. Restricted Stock Units Stock awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those stock awards vest on 3 to 4 years of continuous service, depending on when the award was granted, and have 10-year contractual terms. The 2020 Plan allows employees’ vesting rights after each year for completed service to the Company. The following table presents the restricted stock units activity for the years ended December 31, 2021 and 2020 (in thousands, except price per share): Number of Restricted Stock Weighted-Average Grant Date Fair Value Outstanding at January 1, 2020 — $ — Granted 1,245 $ 7.31 Vested — $ — Forfeited/Canceled 48 $ 7.31 Outstanding at December 31, 2020 1,197 $ 7.31 Granted 1,084 $ 8.43 Vested 490 $ 7.59 Forfeited/Canceled 350 $ 8.11 Outstanding at December 31, 2021 1,441 $ 7.98 Vested as of December 31, 2021 490 $ 7.59 For the year ended December 31, 2021, the fair value of vested restricted stock units was $3.7 million. For the year ended December 31, 2020, no restricted stock units had vested. As of December 31, 2021, the total number of awards issued to other nonemployee consultants for advisory and consulting services were 126 thousand restricted stock units and 118 thousand stock options that represent total stock-based compensation fair value of $1.8 million, for which $0.2 million has been recorded for services provided to date. On October 27, 2021, the board voted to accelerate the vesting of 34,000 restricted units and 32,000 stock options, which will result in immediate recognition of approximately $0.5 million expense in Q4 2021. Stock Options The participants have no rights of a stockholder with respect to the stock options, including the right to vote and the right to receive distributions or dividends until the shares become vested and exercised. The exercise occurs after the vesting date and the participant may exercise the option by giving written notice of exercise to the Company specifying the number of shares to be purchased, accompanied by full payment of the exercise price or by means of a broker-assisted cashless exercise. Stock option awards provide for accelerated vesting if there is a change in control. The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton valuation method, which uses the assumptions noted in the following table. Because Black-Scholes-Merton option valuation models incorporate ranges of assumption for inputs, the selected inputs are disclosed below. Expected volatilities are based on implied volatilities from traded options on the Company’s peer group. The expected term is calculated using the simplified method, due to insufficient exercise activity during recent years as a basis from which to estimate future exercise patterns. The following is the weighted average of the assumptions used in calculating the fair value of the total stock options granted in 2021 using the Black-Scholes-Merton method: Fair market value $ 5.95 Risk-free rate 0.8 % Dividend yield — % Expected volatility 50.5 % Expected term (in years) 6.1 years The following table presents the stock option activity for the years ended December 31, 2021 and 2020 (in thousands, except price per share): Number of Stock Options Weighted-Average Grant Date Fair Value Weighted-Average Remaining Contractual Term (in Years) Total Intrinsic Value of Restricted Stock Options Exercisable Outstanding at January 1, 2020 — $ — — $ — Granted 574 $ 3.34 5.9 years $ — Exercised — $ — — $ — Forfeited/expired 23 $ — — $ — Outstanding at December 31, 2020 551 $ 3.34 5.9 years $ — Granted 1,706 $ 4.14 6.1 years $ — Exercised — $ — — $ — Forfeited/expired 179 $ 4.07 6.1 years $ — Outstanding at December 31, 2021 2,078 $ 3.92 6.1 years $ — Exercisable at December 31, 2021 169 $ 7.58 — $ 1,279 Defined Contribution Plans The Company offers a 401(k) plan with a mandatory match and a discretionary bonus contribution to all of its eligible employees. The Company matches employees’ contributions based on a percentage of salary contributed by the employees. The Company’s match cost for the years ended December 31, 2021 and 2020 was $0.9 million and $0.8 million respectively, recorded within “Salaries and related costs” on the consolidated statements of operations. Employee Incentive Plan The Company instituted a transaction-based cash bonus plan, the Digital Media Solutions, LLC Employee Incentive Plan (the “EIP”), in 2017, which was amended and restated on January 31, 2019. The EIP provides for a cash bonus pool payout to vested participants upon the occurrence of a “Sale of the Company” prior to December 31, 2024, in which the equity value (as determined by the board of managers) exceeds $100 million. Each EIP participant was awarded a number of bonus pool units, and is entitled to a pro rata share of the aggregate bonus pool based on the total number of vested bonus pool units held among all participants. DMSH also instituted a second transaction-based cash bonus plan on November 1, 2019, which mirrors the first plan, except that the equity value was raised to $325 million. On April 23, 2020, DMSH entered into a Business Combination agreement with Leo. Although this business combination is not considered a “Sale of the Company” for purposes of the EIP, the board of managers was permitted at its discretion to make a payment under the plan as it deemed fit upon consummation of the business combination. The board of managers elected to pay a total of approximately $250 thousand in cash to EIP participants in connection with the Business Combination, which was paid during the year ended December 31, 2020, and these plans were terminated. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The provision (benefit) for income taxes consist of the following (in thousands): Years Ended December 31, 2021 2020 Current: Federal $ 2,539 3,101 State 307 216 Foreign 26 248 Total Current 2,872 3,565 Deferred Federal 12,848 69 State 3,591 (549) Total Deferred 16,439 (480) Provision for income taxes $ 19,311 $ 3,085 The provision for income taxes shown above varies from the statutory federal income tax rate for those periods as follows (in thousands): Years Ended December 31, 2021 2020 Tax provision (benefit) from federal statutory rate $ 5,356 $ (2,190) Tax on income not subject to entity level federal income tax 1,074 1,897 State income taxes, net of federal tax effect (817) (280) Warrant liability fair value change (3,804) 1,856 Permanent adjustments - Tax Receivable Agreement (3,211) — Other permanent adjustments (36) 434 True-ups and other (919) (465) Foreign tax credit 63 (63) Undistributed earnings 529 823 Canadian tax expense 26 261 Valuation allowance 21,240 812 Tax credits (190) — Tax provision $ 19,311 $ 3,085 As a result of a Business Combination, the Company consists of DMS Inc. and its wholly-owned subsidiary, Blocker, which owns 58.4% of equity interests in DMSH (after the SmarterChaos acquisition). DMSH is treated as a partnership for purposes of U.S. federal and certain state and local income tax. As a U.S. partnership, generally DMSH will not be subject to corporate income taxes (except with respect to UE, as described below). Instead, each of the ultimate partners (including DMS Inc.) are taxed on their proportionate share of DMSH taxable income. While the Company consolidates DMSH for financial reporting purposes, the Company will only be taxed on its allocable share of earnings. The Company’s income tax expense is attributable to the allocable share of earnings from DMSH, a portion of activities of DMSH that are subject to Canadian income tax, and the activities of UE, a wholly-owned U.S. corporate subsidiary of DMSH, which is subject to U.S. federal and state and local income taxes. The income tax burden on the earnings allocated to the non-controlling interests is not reported by the Company in its consolidated financial statements under GAAP. As a result of the foregoing reasons, the Company’s effective tax rate is expected to differ materially from the statutory rate. Any change in the fair value of the Private Placement Warrants, which are classified as a liability on the Company’s consolidated balance sheet at December 31, 2021, is recognized as a gain or loss in the Company’s consolidated statements of earnings (loss). The Private Placement Warrants are deemed equity instruments for income tax purposes, and accordingly, there is no change to income tax expense relating to changes in the fair value of such warrants. Deferred tax assets and liabilities are composed of the following (in thousands): Years Ended December 31, 2021 2020 Deferred tax assets: Investment in DMS Holdings LLC $ 29,066 $ 30,017 Reserve accruals 418 140 Charitable contributions 11 9 Interest carryforward 2,562 1,158 Tax credit carryforwards 190 63 Property and equipment 42 — Net operating loss 1,808 150 Total gross deferred tax assets 34,097 31,537 Less: Valuation allowance (32,970) (11,626) Total deferred tax assets, net $ 1,127 $ 19,911 Deferred tax liabilities: Intangibles (4,561) (6,971) Property and equipment — (193) Undistributed earnings (1,352) (823) Total deferred tax liabilities (5,913) (7,987) Net deferred tax (liability) asset $ (4,786) $ 11,924 At December 31, 2021, the Company has federal or state net operating loss carryforwards attributable to DMS, Inc. in the amount of $6.0 million and $9.0 million, respectively. The federal carryforwards are not subject to expiration, and the state carryforwards begin to expire in 2030, however certain state carryforwards are indefinite. At December 31, 2021, the Company has an expected federal income tax credit carryforward of $0.2 million which would expire at December 31, 2030, unless utilized. Utilization of some of the federal and state net operating loss and credit carryforwards are subject to annual limitations due to the “change in ownership” provisions of the Internal Revenue Code and similar state provisions. The annual limitations may result in the expiration of net operating losses and credits before utilization. We do not expect any annual limitation to materially impact the utilization of net operating losses and credits. The Company records a deferred tax asset if it is more likely than not that the Company will realize a future tax benefit. Ultimate realization of any deferred tax asset is dependent on the Company’s ability to generate sufficient future taxable income in the appropriate tax jurisdiction before the expiration of carryforward periods, if any. Our assessment of deferred tax asset realizability considers many different factors including historical and projected operating results, the reversal of existing deferred tax liabilities that provide a source of future taxable income, the impact of current tax planning strategies and the availability of future tax planning strategies. The Company establishes a valuation allowance against any deferred tax asset for which we are unable to conclude that realizability is more likely than not. This is inherently judgmental since we are required to assess many different factors and evaluate as much objective evidence as we can in reaching an overall conclusion. The particularly sensitive component of our evaluation is our projection of future operating results since this relies heavily on our estimates of future revenue and expense levels by tax jurisdiction. We have determined the need for an additional $21 million valuation allowance for the period ending December 31, 2021. In doing so we assessed the available positive and negative evidence to estimate whether future taxable income would be generated to permit use of the existing deferred tax assets (“DTAs”). A significant piece of objective negative evidence evaluated was the three-year cumulative loss before taxes. Such objective evidence limits the ability to consider other subjective evidence, such as projections for future growth. Therefore, a full valuation allowance has been recorded against the DTAs at DMS, Inc. The amount of DTA considered realizable could be adjusted if objective negative evidence in the form of cumulative losses is no longer present. The Company is subject to examination by the Internal Revenue Service and taxing authorities in various states. The Company’s U.S. federal income tax returns remain subject to examination by tax authorities for the years 2017 to 2019. The Company’s state income tax returns are no longer subject to income tax examination by tax authorities prior to 2016; however, our net operating loss carryforwards arising prior to that year are subject to adjustment. The Company regularly assesses the likelihood of tax deficiencies in each of the tax jurisdictions and, accordingly, makes appropriate adjustments to the tax provision as deemed necessary. The Company records interest and penalties, if any, as a component of its income tax (benefit) expense in the consolidated statements of operations. No interest expense or penalties were recognized during the years ended December 31, 2021, and 2020. Tax Receivable Agreement Through the completion of the 2020 tax return during the interim period ended September 30, 2021, we identified an error recorded upon the Business Combination that resulted in a decrease in the deferred tax asset of $2.1 million, a decrease in the Tax Receivable Agreement liability of $1.8 million and a decrease in Additional Paid-In Capital of $0.3 million, as compared to the amounts recorded in the consolidated balance sheet as of December 31, 2020 and interim periods in the current fiscal year. As the effect of the correction to these accounts was not material to the prior period financial statements, we elected to correct the balance as of September 30, 2021, with the offset to Additional Paid-In Capital, which was consistent with the method to record the Deferred Tax Asset and Tax Receivable Agreement liability on the date of the Business Combination. There was no impact to continuing operations, net income, or related per-share amounts for each period. As of December 31, 2021, the Company recorded a full valuation allowance on our DTA related to the Tax Receivable Agreement along with the entire DTA inventory at DMS, Inc. and Blocker, as these assets are not more likely than not to be realized based on the positive and negative evidence that we considered. The Tax Receivable Agreement liability that originated from the Business Combination is not probable under ASC 450 - Contingencies |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share of Class A Common Stock is computed by dividing net income attributable to DMS Inc. by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted earnings per share of Class A Common Stock is computed by dividing net income attributable to DMS Inc. adjusted for the income effects of dilutive instruments by the weighted-average number of shares of Class A Common Stock outstanding adjusted to give effect to potentially dilutive elements. Prior to the Business Combination, the membership structure of DMSH included units which had profit interests. The Company analyzed the calculation of earnings per unit for periods prior to the Business Combination and determined that it resulted in values that would not be meaningful to the users of these consolidated financial statements. Therefore, the basic and diluted earnings (loss) per share for the year ended December 31, 2020 represent only the period of July 15, 2020 to December 31, 2020. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings (loss) per share of Class A Common Stock: Years Ended December 31, 2021 2020 Numerator: Net income (loss) $ 6,193 $ (13,714) Net income (loss) attributable to DMSH prior to the Business Combination — (1,345) Net income (loss) attributable to non-controlling interest 3,991 (5,018) Net income (loss) attributable to Digital Media Solutions, Inc. - basic and diluted $ 2,202 $ (7,351) Denominator: Weighted average shares - basic $ 35,249 $ 32,335 Add: dilutive effects of employee equity awards 389 — Add: dilutive effects of public warrants 126 — Weighted average shares - diluted $ 35,764 $ 32,335 Net earnings (loss) per common share: Basic $ 0.06 $ (0.23) Diluted $ 0.06 $ (0.23) Shares of the Company’s Class B Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate basic and diluted earnings per share of Class B Common Stock under the two-class method has not been presented. For the year ended December 31, 2021, the Company excluded $25.7 million shares of Class B Common Stock, $4 million Private warrants, $1.9 million shares of restrictive stock units and stock options, contingent and deferred considerations issued in connection with the Aramis, Aimtell, PushPros and Crisp Results acquisition and the DMSH Units issued in the SmarterChaos acquisition, as their effect would have been anti-dilutive. At December 31, 2020, the Company excluded 26.0 million shares of Class B Common Stock, 14.0 million Public and Private warrants, 1.8 million shares of restrictive stock units and stock options, and the DMSH Units issued in the SmarterChaos acquisition as their effect would have been anti-dilutive. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal proceedings In the ordinary course of business, we are involved from time to time in various claims and legal actions incident to our operations, both as a plaintiff and defendant. In the opinion of management, after consulting with legal counsel, none of these other claims are currently expected to have a material adverse effect on the results of operations, financial position or cash flows. We intend to vigorously defend ourselves in these matters. DMSH Unit Redemption Rights The Amended and Restated Partnership Agreement includes provisions intended to ensure that the Company at all times maintains a one-to-one ratio between (i) the number of outstanding shares of Class A Common Stock (including the number of shares of Class A Common Stock into which all of the outstanding shares of Class C Common Stock are convertible in |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSOn January 17, 2022, the sellers of SmarterChaos redeemed their remaining non-controlling interest held through DMSH Units in exchange for 154,000 shares of Class A Common Stock in DMS, Inc. The non-controlling interest held by the Sellers of SmarterChaos did not include related Class B Common Stock to be retired upon redemption. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES | SCHEDULE II DIGITAL MEDIA SOLUTIONS, INC. VALUATION AND QUALIFYING ACCOUNTS AND RESERVES SUPPLEMENTAL SCHEDULE (IN THOUSANDS) Description Year Ended Balance at Beginning of Period Charge to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Period Accounts receivable reserves 2020 $ 941 $ 3,039 $ — $ 859 $ 3,121 2021 $ 3,121 $ 4,798 $ — $ 2,989 $ 4,930 |
BUSINESS, BASIS OF PRESENTATI_2
BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of PresentationThese consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the SEC. |
Principles of Consolidation | Principles of Consolidation The Company consists of DMS Inc. and its wholly-owned subsidiary, Blocker. Pursuant to the Business Combination, DMS Inc. acquired, directly and through its acquisition of the equity of Blocker, approximately 58.4% of the membership interest in DMSH, while the Sellers (as defined in Note 2. Business Combination) retained approximately 41.6% of the membership interest in DMSH (“non-controlling interests”). The Company consolidates the assets, liabilities and operating results of DMSH and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The results of operations attributable to the non-controlling interests are included in the Company’s consolidated statements of operations, and the non-controlling interests are reported as a separate component of equity. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported as separate financial statement line items in the consolidated financial statements. Actual results could differ from those estimates. Management regularly makes estimates and assumptions that are inherent in the preparation of the consolidated financial statements including, but not limited to, the fair value of private placement warrants, the allowance for doubtful accounts, stock-based compensation, fair value of intangibles acquired in business combinations, loss contingencies, contingent consideration liabilities, asset impairments, and deferred taxes and amounts associated with the Tax Receivable Agreement. |
Revenue recognition | Revenue recognition The Company derives revenue primarily from fees earned through the delivery of qualified clicks, leads, inquiries, calls, applications, customers and, to a lesser extent, display advertisements, or impressions. The Company recognizes revenue when the Company transfers promised goods or services to clients in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company recognizes revenue pursuant to the five-step framework contained in ASC 606, Revenue from Contracts with Customers : (i) identify the contract with a client; (ii) identify the performance obligations in the contract, including whether they are distinct in the context of the contract; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligations. As part of determining whether a contract exists, probability of collection is assessed on a client-by-client basis at the outset of the contract. If it is determined from the outset of an arrangement that the client does not have the ability or intention to pay, the Company will conclude that a contract does not exist and will continuously reassess its evaluation until the Company is able to conclude that a contract does exist. Generally, the Company’s contracts specify the period of time as one month, but in some instances the term may be longer. However, for most of the Company’s contracts with clients, either party can terminate the contract at any time without penalty. Consequently, enforceable rights and obligations only exist on a day-to-day basis, resulting in individual daily contracts during the specified term of the contract or until one party terminates the contract prior to the end of the specified term. The Company has assessed the services promised in its contracts with clients and has identified one performance obligation, which is a series of distinct services. Depending on the client’s needs, these services consist of a specified number or an unlimited number of clicks, leads, calls, applications, customers, etc. (hereafter collectively referred to as “marketing results”) to be delivered over a period of time. The Company satisfies these performance obligations over time as the services are provided. The Company does not promise to provide any other significant goods or services to its clients. Transaction price is measured based on the consideration that the Company expects to receive from a contract with a client. The Company’s contracts with clients contain variable consideration as the price for an individual marketing result varies on a day-to-day basis depending on the market-driven amount a client has committed to pay. However, because the Company ensures the stated period of its contracts does not generally span multiple reporting periods, the contractual amount within a period is based on the number of marketing results delivered within the period. Therefore, the transaction price for any given period is fixed and no estimation of variable consideration is required. If a marketing result delivered to a client does not meet the contractual requirements associated with that marketing result, the Company’s contracts allow for clients to return a marketing result generally within 5-10 days of having received the marketing result. Such returns are factored into the amount billed to the client on a monthly basis and consequently result in a reduction to revenue in the same month the marketing result is delivered. No warranties are offered to the Company’s clients. The Company does not allocate transaction price as the Company has only one performance obligation and its contracts do not generally span multiple periods. Taxes collected from clients and remitted to governmental authorities are not included in revenue. The Company elected to use the practical expedient which allows the Company to record sales commissions as expense as incurred when the amortization period would have been one year or less. The Company bills clients monthly in arrears for the marketing results delivered during the preceding month. The Company’s standard payment terms are 30-60 days. Consequently, the Company does not have significant financing components in its arrangements. Separately from the agreements the Company has with clients, the Company has agreements with Internet search companies, third-party publishers and strategic partners that we engage with to generate targeted marketing results for its clients. The Company receives a fee from its clients and separately pays a fee to the Internet search companies, third-party publishers and strategic partners. Other than certain of its managed services arrangements, the Company is the principal in the transaction. For the transactions where the Company is the principal, the fees paid by its clients are recognized as revenue and the fees paid to its Internet search companies, third-party publishers and strategic partners are included in cost of revenue. Customer acquisition The Company’s performance obligation for Customer acquisition contracts is to deliver an unspecified number of potential customers or leads (i.e., number of clicks, emails, calls and applications) to the customer in real-time, on a daily basis as the leads are generated, based on predefined qualifying characteristics specified by our customer. The contracts generally have a one-month term and the Company has an enforceable right to payment for all leads delivered to the customer. The Company’s customers simultaneously receive and consume the benefits provided, as the Company satisfies its performance obligations. The Company recognizes revenue as the performance obligations are satisfied over time. When there is a delay between the period in which revenue is recognized and when a customer invoice is issued, revenue is recognized and the corresponding amounts are recorded as unbilled revenue (i.e., contract assets) within Accounts receivable, net on the consolidated balance sheets. In line with industry practice, the Company applies the constraint on variable consideration and records revenue based on internally tracked conversions (leads delivered), net of the amount tracked and subsequently confirmed by customers. A significant portion of the unbilled estimated revenue balance is finalized and invoiced to customers within sixty days following the period of service. Any remaining estimates are finalized and invoiced as billing totals are reconciled with the customer. Historical estimates related to unbilled revenue have not been materially different from actual revenue billed. Managed services The Company’s performance obligation for Managed service contracts is to provide continuous service of managing the customer’s media spend for the purpose of generating leads through a third-party supplier of leads, as requested by our customer. Each month of service is distinct, and any variable consideration is allocated to a distinct month. Therefore, revenue is recognized as the performance obligation is satisfied each month and there is no estimation of revenue required at each reporting period for managed services contracts. The Company enters into agreements with internet search companies, third-party publishers and/or strategic partners to generate customer acquisition services for their Managed service customers. The Company receives a fee from its customers and separately pays a fee to the internet search companies, third-party publishers and/or strategic partners. The third-party supplier is primarily responsible for the performance and deliverable to the customer, and the Company solely arranges for the third-party supplier to provide services to the customer. Therefore, in certain cases, the Company acts as the agent and the net fees earned by the Company are recorded as revenue, with no associated costs of revenue attributable to the Company. Software services The Company’s performance obligation for Software services contracts is to provide the customer with continuous, daily access to the Company’s proprietary software. Service provided each month is distinct, and any variable consideration is allocated to a distinct month. Therefore, revenue is recognized as the performance obligations are satisfied each month and there is no estimation of revenue required at each reporting period for Software services contracts. The Company derives revenue primarily through the delivery of various types of services, including: customer acquisition, managed services and software as a service (“SaaS”). The Company recognizes revenue when the promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services. The Company has elected the practical expedient to not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which revenue is recognized in the amount to which the Company has the right to invoice for services performed. The Company has organized its operations into three reportable segments: Brand-Direct, Marketplace and Other. The Brand Direct reportable segment consists of services delivered against our customer’s brand, while the Marketplace reportable segment includes services delivered directly against the DMS brand. In the Other reportable segment, services offered by the Company include software services and digital media services that are managed on behalf of the customer. Corporate and other represents other business activities and includes eliminating entries. Management uses these segments to evaluate the performance of its businesses and to assess its financial results and forecasts. |
Cost of revenue | Cost of revenue Cost of revenue primarily includes media and related costs, which consist of the cost to acquire traffic through the purchase of impressions, clicks or actions from publishers or third-party intermediaries, such as advertising exchanges, and technology costs that enable media acquisition. These media costs are used primarily to drive user traffic to the Company’s and its clients’ media properties. Cost of revenue additionally consists of indirect costs such as data verification, hosting and fulfillment costs. Cost of revenue is presented exclusive of depreciation and amortization expenses, as well as salaries and related costs. |
Cash and cash equivalents | Cash and cash equivalentsThe Company considers highly liquid securities and other investments purchased with an original or remaining maturity of three months or less at the date of the purchase to be cash equivalents. The Company’s cash is primarily held as cash deposits with no cash restrictions at retail and commercial banks. |
Accounts receivable, net | Accounts receivable, netAccounts receivables are recorded net of the allowance for doubtful accounts. Management determines the allowance for doubtful accounts based on factors including past write-offs, delinquency trends and current credit conditions. Accounts are written off when management determines that collection is unlikely. |
Property and equipment, net | Property and equipment, net Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Property and equipment consist of computer and office equipment, furniture and fixtures and leasehold improvements, which are depreciated on a straight-line basis over the estimated useful lives of the assets. Costs for websites and internal-use software are capitalized as Property and Equipment, net on the Consolidated Balance Sheets during the preliminary project and application stages. Any initial research and development costs incurred during the preliminary project stage or costs incurred for data conversion activities, training, maintenance, general and administrative or overhead costs are expensed as incurred. Qualified costs incurred during the operating stage of our websites and software applications relating to upgrades and enhancements are capitalized to the extent it is probable that they will result in added functionality, while costs that cannot be separated between maintenance of, and minor upgrades and enhancements to, websites and internal‑use software are expensed as incurred. Capitalized software development costs are amortized on a straight line basis over the estimated useful life or 3 years, whichever is shorter. Website and s oftware development costs that do not qualify for capitalization are expensed as incurred - through salaries and related costs for employees time or through cost of goods sold for 3rd party maintenance efforts, which are recorded in Salaries and related costs or in General and administrative expenses, respectively, within the consolidated statements of operations. The capitalization and ongoing assessment of recoverability of development costs require considerable judgment by management with respect to certain external factors, including estimated economic life. Management regularly assesses the carrying value of its long-lived assets to be held and used, including property and equipment and intangible assets, for impairment when events or changes in circumstances indicate that their carrying value may not be recoverable. If such events or circumstances are present, a loss is recognized to the extent the carrying value of the asset is in excess of estimated fair value. |
Goodwill and other intangible assets | Goodwill and other intangible assets We account for our business combinations using the acquisition accounting method, which requires us to determine the fair value of net assets acquired and the related goodwill and other intangible assets. Determining the fair value of assets acquired and liabilities assumed requires management's judgment and involves the use of significant estimates, including projections of future cashflows, discount rates, asset lives and market multiples. We review goodwill as of December 31st each year and whenever events or significant changes in circumstances indicate that the carrying value may not be recoverable. We evaluate the recoverability of goodwill at a reporting unit level. We have 3 reporting units that were subject to the 2021 annual impairment testing. Our annual impairment review as of December 31, 2021 did not result in an impairment charge for any of our reporting units. The fair value of each reporting unit for 2021 was estimated using a combination of the income approach, which incorporates the use of the discounted cash flow method, and the market approach, which incorporates the use of earnings and revenue multiples based on market data. We review intangible assets with definite lives subject to amortization whenever events or circumstances indicate that a carrying amount of an asset may not be recoverable. Recoverability of these assets is determined by comparing the carrying value of these assets to the estimated undiscounted future cash flows expected to be generated by these asset groups. These asset groups are impaired when their carrying value exceeds their fair value. Impaired intangible assets with definite lives subject to amortization are written down to their fair value with a charge to expense in the period the impairment is identified. Intangible assets with definite lives are amortized on a straight-line basis with estimated useful lives generally between 1 and 9 years. Events or circumstances that might require impairment testing include the loss of a significant client, the identification of other impaired assets within a reporting unit, loss of key personnel, the disposition of a significant portion of a reporting unit, significant decline in stock price or a significant adverse change in business climate or regulations. Determining fair value requires the use of estimates and assumptions. Such estimates and assumptions include revenue growth rates, operating profit margins, royalty rates, weighted average costs of capital, terminal growth rates, future market share, the impact of new product development, and future market conditions, among others. The Company recognizes a goodwill impairment charge for the amount by which the carrying value of goodwill exceeds the reporting unit’s fair value. Intangible assets with definite lives are amortized based on the estimated consumption of the economic benefit over their estimated useful lives. For additional information on goodwill, see Note 6. Goodwill and Intangible Assets. |
Contingencies and Contingent consideration | Contingencies The Company is subject to legal, regulatory and other proceedings and claims that arise in the ordinary course of business. An estimated liability is recorded for those proceedings and claims when the loss from such proceedings and claims becomes probable and reasonably estimable. Outstanding claims are reviewed with internal and external counsel to assess the probability and the estimates of loss, including the possible range of an estimated loss. The risk of loss is reassessed each period and as new information becomes available, liabilities are adjusted as appropriate. The actual cost of resolving a claim may be substantially different from the amount of the liability recorded. Differences between the estimated and actual amounts determined upon ultimate resolution, individually or in the aggregate, are not expected to have a material adverse effect on the consolidated financial position but could possibly be material to the consolidated results of operations or cash flows for any one period. Contingent consideration The Company recognizes the fair value of any contingent consideration that is transferred to the seller in a business combination on the date at which control of the acquiree is obtained. Contingent consideration is classified as a liability or as equity on the basis of the definitions of an equity instrument and a financial liability. Since the Company’s contingent consideration can be paid in cash or DMS Class A Common Stock, at the election of the Company, the Company classifies its contingent consideration as a liability. Contingent consideration payments related to acquisitions are measured at fair value at |
Acquisitions | Acquisitions Under the acquisition method of accounting, the Company recognizes, separately from goodwill, the identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities are recorded as goodwill. The Company performs valuations of assets acquired and liabilities assumed and allocates the purchase price to its respective assets and liabilities. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates, and selection of comparable companies. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable. As a result, actual results may differ from these estimates. During the measurement period, the Company may record adjustments to acquired assets and assumed liabilities, with corresponding offsets to goodwill. Upon the conclusion of a measurement period, any subsequent adjustments are recorded to earnings. At the acquisition date, the Company measures the fair values of all assets acquired and liabilities assumed that arise from contractual contingencies. The Company also measures the fair values of all non-contractual contingencies if, as of the acquisitions date, it is more likely than not that the contingencies will give rise to assets or liabilities. Acquisition related costs not considered part of the considerations are expensed as incurred and recorded in Acquisition costs within the consolidated statement of operations. |
Fair value measurement | Fair value measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. In most cases, the exit price and transaction (or entry) price will be the same at initial recognition. In the Company’s case, the fair value of financial instruments approximates fair value. The fair value hierarchy uses a framework which requires categorizing assets and liabilities into one of three levels based on the inputs used in valuing the asset or liability. • Level 1 inputs are unadjusted, quoted market prices in active markets for identical assets or liabilities. • Level 2 inputs are observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. • Level 3 inputs include unobservable inputs that are supported by little, infrequent or no market activity and reflect management’s own assumptions about inputs used in pricing the asset or liability. |
Private Placement Warrants Liabilities | Private Placement Warrants Liabilities The Company Private Placement Warrants are not redeemable by the Company so long as they are held by Sponsor or its permitted transferees. Sponsor, or its permitted transferees, has the option to exercise the Company Private Placement Warrants on a cashless basis. Except for the forgoing, the Company Private Placement Warrants have terms and provisions that are identical to those of the Company Public Warrants. If the Company Private Placement Warrants are held by holders other than Sponsor or its permitted transferees, the Company Private Placement Warrants will be redeemable by Company and exercisable by the holders on the same basis as the Company Public Warrants. See Note 11. Equity for description of the Public Warrants’ terms. Because the Company’s Private Placement Warrants contain provisions whereby the settlement amount varies depending upon the characteristics of the warrant holder, they meet the definition of a derivative under ASC 815, Derivatives and Hedging . The Private Placement Warrants are recorded as liabilities on the balance sheet at fair value, with subsequent changes in their respective fair values recognized in the consolidated statement of earnings (loss) at each reporting date. The Company estimates the Private Placement Warrants fair value using a Black-Scholes-Merton option pricing model using a combination of the historical share price volatility of the Company’s and other similar companies’ share prices and the implied volatility of the public warrants, market price and exercise price and the remaining life of the Private Placement Warrants. |
Advertising costs | Advertising costsAll advertising, promotional and marketing costs are expensed when incurred. |
Stock-based compensation | Stock-based compensation Stock-based compensation is measured using the grant-date fair value of the award of equity instruments, including stock options and restricted stock units (“RSUs”). The expense is recognized over the requisite service period and forfeitures are recognized as incurred. The fair value of options granted to employees is estimated on the grant date using the Black-Scholes-Merton option valuation model. This valuation model for stock-based compensation expense requires the Company to make assumptions and judgments about the variables used in the calculation, including the expected term (weighted-average period of time that the options granted are expected to be outstanding), the expected volatility in the fair market value of the Company’s common stock, a risk- free interest rate and expected dividends. The Company uses the simplified calculation of expected life as the contractual term for options of 10 years is longer than the Company has been publicly traded. The Company does not have enough historical perspective to estimate the volatility of its publicly traded shares in regards to the valuation of its stock options awarded to employees. The Company’s common stock began trading on April 20, 2018; no cash dividends have been declared since that time, and we do not anticipate paying cash dividends in the foreseeable future. Expected volatility is based on an average of the historical volatilities of the common stock of several entities with characteristics similar to those of the Company. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. The Company uses the straight-line method for expense attribution. During the year ended December 31, 2020, the Company began granting RSUs to its employees and directors. RSUs have a service-based vesting conditions, which must be satisfied in order for RSUs to vest. The service-based vesting condition for these awards is typically satisfied over three to four years, depending on the award, with a cliff vesting period on the anniversary of the award. The related stock-based compensation expense is recognized on a straight-line basis over the requisite service period. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that the deferred tax assets will be realized. A valuation allowance will be recorded to reduce deferred tax assets to an amount that is anticipated to be realized on a more likely than not basis. Deferred tax assets and liabilities are calculated by applying existing tax laws and the rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the year of the enacted rate change. The Company accounts for uncertainty in income taxes using a recognition and measurement threshold for tax positions taken or expected to be taken in a tax return, which are subject to examination by federal and state taxing authorities. The tax benefit from an uncertain tax position is recognized when it is more likely than not that the position will be sustained upon examination by taxing authorities based on technical merits of the position. The amount of the tax benefit recognized is the largest amount of the benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The effective tax rate and the tax basis of assets and liabilities reflect management’s estimates of the ultimate outcome of various tax uncertainties. The Company recognizes penalties and interest related to uncertain tax positions within the provision (benefit) for income taxes line in the accompanying consolidated statements of operations. DMSH, the Company’s accounting predecessor, is a limited liability company treated as a partnership for U.S. federal income tax purposes and is not subject to entity-level U.S. federal income tax, except with respect to UE, which was acquired in November 2019. Because UE is treated as a corporation for U.S. federal income tax purposes, it is subject to entity-level U.S. federal income tax. As a result of the Business Combination, Blocker’s allocable share of earnings from DMSH is also subject to U.S. federal and state and local income taxes. Tax Receivable Agreement In conjunction with the Business Combination, DMS Inc. and Blocker also entered into the Tax Receivable Agreement with the Sellers. Pursuant to the Tax Receivable Agreement, DMS Inc. is required to pay the Sellers (i) 85% of the amount of savings, if any, in U.S. federal, state and local income tax that DMS Inc. and Blocker actually realize as a result of (A) certain existing tax attributes of Blocker acquired in the Business Combination, and (B) increases in Blocker’s allocable share of the tax basis of the assets of DMS and certain other tax benefits related to the payment of the cash consideration pursuant to the Business Combination Agreement and any redemptions or exchanges of DMS Units for cash or Class A Common Stock after the Business Combination and (ii) 100% of certain refunds of pre-Closing taxes of DMSH and Blocker received during a taxable year beginning within two (2) years after the Closing. All such payments to the Sellers are the obligation of DMS Inc., and not that of DMSH. As a result of the Business Combination, the Company recorded an initial deferred tax asset and income tax receivable of $20.1 million and $199 thousand, respectively, with the offset as a long-term Tax Receivable Agreement liability of $16.3 million and Additional Paid-in Capital of $4.0 million in the consolidated balance sheet. Valuation Allowances for Deferred Tax Assets |
Earnings per share | Earnings per share Basic earnings per share of Class A Common Stock is computed by dividing net income attributable to DMS Inc. by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted earnings per share of Class A Common Stock is computed by dividing net income attributable to DMS Inc., adjusted for the assumed exchange of all potentially dilutive securities, including the Private Placement Warrants’ fair value adjustments recognized in earnings, by the weighted-average number of shares of Class A Common Stock outstanding adjusted to give effect to potentially dilutive securities, to the extent their inclusion is dilutive to earnings per share. |
New Accounting Standards | New Accounting Standards Accounting Standards Recently Adopted In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" ("ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. 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 new guidance was effective for the Company beginning on January 1, 2021, and did not have a material impact on the Company’s condensed consolidated financial statements. Accounting Standards Not Yet Adopted The Company qualifies as an “emerging growth company” and has elected to adhere to the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act. This election allows the Company to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. In February 2016, the FASB issued authoritative guidance ASC 842, Lease Accounting , regarding the accounting for leases, and has since issued subsequent updates to the initial guidance. The amended guidance requires the recognition of assets and liabilities for operating leases. The standard was initially effective for annual and interim reporting periods beginning after December 15, 2019. However, in November 2019, the FASB issued amended guidance, which defers for Emerging Growth Companies (“EGC”) the effective date for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The standard must be adopted using a modified retrospective transition. We plan to elect the package of practical expedients permitted under the transition guidance of the new standards, which allows us to not reassess whether any expired or existing contracts contain leases, allows us to carry forward the historical lease classification, and permits us to exclude from our assessment initial direct costs for any existing leases. We will also make an accounting policy election to exclude leases with an initial term of twelve months or less from our transition adjustment. We are currently evaluating the impact on our consolidated balance sheets, recognizing assets and related lease liabilities, which may or may not have a material impact on the Company’s Consolidated Financial Statements. In June 2016, the FASB issued authoritative guidance on accounting for credit losses on financial instruments, including trade receivables, and has since issued subsequent updates to the initial guidance. The amended guidance requires the application of a current expected credit loss model, which measures credit losses based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts. The guidance requires adoption using a modified retrospective approach and is effective for EGC fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. We are currently evaluating the impact on our consolidated financial statements. |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following tables presents the disaggregation of revenue by reportable segment and type of service (in thousands): Year Ended December 31, 2021 Brand Direct Marketplace Other Intercompany eliminations Total Net revenue: Customer acquisition $ 244,942 $ 224,158 $ — $ (59,650) $ 409,450 Managed services 8,845 — 6,471 — 15,316 Software services — — 3,169 — 3,169 Total Net revenue $ 253,787 $ 224,158 $ 9,640 $ (59,650) $ 427,935 Year Ended December 31, 2020 Brand Marketplace Other Intercompany eliminations Total Net revenue: Customer acquisition 179,682 155,999 — (30,051) 305,630 Managed services 17,869 — 6,139 — 24,008 Software services — — 3,218 — 3,218 Total Net revenue $ 197,551 $ 155,999 $ 9,357 $ (30,051) $ 332,856 |
REPORTABLE SEGMENTS (Tables)
REPORTABLE SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Reconciliation of Operations of Segments | The following tables are a reconciliation of the operations of our segments to income from operations (in thousands): Years Ended December 31, 2021 2020 Net revenue $ 427,935 $ 332,856 Brand Direct 253,787 197,551 Marketplace 224,158 155,999 Other 9,640 9,357 Intercompany eliminations (59,650) (30,051) Cost of revenue 300,016 234,731 Brand Direct 192,479 151,526 Marketplace 163,637 109,921 Other 3,550 3,335 Intercompany eliminations (59,650) (30,051) Gross profit $ 127,919 $ 98,125 Brand Direct 61,308 46,025 Marketplace 60,521 46,078 Other 6,090 6,022 Salaries and related costs 48,014 33,386 General and administrative expenses 43,049 30,020 Depreciation and amortization 25,401 17,954 Acquisition costs 1,967 4,814 Contingent consideration changes in fair value of acquisition 1,106 — Income from operations $ 8,382 $ 11,951 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | The following table presents major classifications of property and equipment and the related useful lives (in thousands, except useful lives): December 31, Useful Lives 2021 2020 Computers and office equipment 3 years $ 2,467 $ 1,684 Furniture and fixtures 5 years 437 305 Leasehold improvements 7 years 385 320 Software development costs 3 years 28,272 18,913 Total 31,561 21,222 Less: Accumulated depreciation and amortization (12,393) (6,206) Property and equipment, net $ 19,168 $ 15,016 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Changes in the carrying value of goodwill, by reporting segment, were as follows (in thousands): Brand Direct Marketplace Other Total Balance, December 31, 2019 $ 8,616 $ 32,660 $ 550 $ 41,826 Additions (Note 8) — — 3,078 3,078 Balance, December 31, 2020 8,616 32,660 3,628 44,904 Additions (Note 8) 9,760 21,894 — 31,654 Balance, December 31, 2021 $ 18,376 $ 54,554 $ 3,628 $ 76,558 |
Schedule of Finite-Lived Intangible Assets | Finite-lived intangible assets, net consisted of the following (in thousands): December 31, 2021 December 31, 2020 Amortization Gross Accumulated Net Gross Accumulated Net Technology 3 to 5 $ 51,946 $ (29,929) $ 22,017 $ 48,008 $ (21,454) $ 26,554 Customer relationships 2 to 9 49,273 (13,076) 36,197 21,794 (6,749) 15,045 Brand 1 to 7 12,109 (4,575) 7,534 4,295 (961) 3,334 Non-competition agreements 3 1,898 (1,418) 480 2,105 (591) 1,514 Total $ 115,226 $ (48,998) $ 66,228 $ 76,202 $ (29,755) $ 46,447 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Amortization expense relating to intangible assets subject to amortization for each of the next five years and thereafter is estimated to be as follows (in thousands): 2022 2023 2024 2025 2026 and Thereafter Amortization expense $ 19,398 $ 16,366 $ 13,792 $ 6,564 $ 10,108 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table presents the components of outstanding debt (in thousands): December 31, 2021 December 31, 2020 Term loan $ 223,875 $ 190,541 Revolving credit facility — 4,000 Delayed draw term loan — 8,236 Notes payable — 1,074 Total debt 223,875 203,851 Less: Unamortized debt issuance costs (1) (6,120) (2,293) Debt, net 217,755 201,558 Less: Current portion of long-term debt (2,250) (7,967) Long-term debt $ 215,505 $ 193,591 __________ (1) Includes net debt issuance discount and other costs. |
Schedule of Maturities of Long-term Debt | The scheduled maturities of our total debt are estimated as follows at December 31, 2021: (in thousands) 2022 $ 2,250 2023 2,250 2024 2,250 2025 2,250 2026 and thereafter 214,875 Total debt $ 223,875 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Net assets and liabilities acquired from the 2020 and 2021 acquisitions consist of the following (in thousands): Expected Useful Life SmarterChaos Aimtell, PushPros and Aramis Crisp Results 2020 2021 2021 Goodwill $ 3,078 $ 9,761 $ 21,894 Technology 4 — 3,900 — Customer relationships 4 to 6 2,500 7,690 19,600 Accounts receivable 576 3,100 2,610 Brand 1 to 7 277 208 7,400 Non-competitive agreements 3 — 83 — Property and equipment 3 to 5 28 250 220 Accounts payable (1,156) (2,887) (1,593) Other assets acquired and liabilities assumed, net (1) 496 740 1 Net assets and liabilities acquired $ 5,799 $ 22,845 $ 50,132 (1) Other assets acquired and liabilities assumed, net includes Prepaids and other current assets, partially offset by other current liabilities (i.e., Travel and expense payables, payroll liabilities, tax liabilities). |
Schedule of Business Acquisitions, by Acquisition | The following schedule represents the amounts of net revenue and net loss from operations related to 2021 acquisitions which have been included in the audited consolidated statements of operations for the periods indicated subsequent to the acquisition date (in thousands): Year Ended December 31, 2021 Aimtell, PushPros and Aramis Crisp Results Net revenue $ 21,083 $ 25,637 Net loss from operations (4,661) (1,042) |
Pro Forma Information | The pro forma results do not necessarily reflect the actual results of operations of the combined companies under our ownership and operation. Years Ended December 31, 2021 (In thousands) Aimtell, PushPros and Aramis Crisp Results Net revenue $ 23,093 $ 34,035 Net (loss) income from operations $ (4,436) $ 257 Years Ended December 31, 2020 (In thousands) Aimtell, PushPros and Aramis Crisp Results Net revenue $ 26,330 $ 29,811 Net income from operations $ 5,085 $ 5,853 |
Schedule of Changes in Fair Value of Assets Acquired and Liabilities Assumed as Part of Business Combination | The impact of these adjustments are as follows (in thousands): Crisp Results Original Acquisition Date Fair Value Revised Acquisition Date Fair Value Fair Value Mark-to-Market changes Fair Value as of December 31, 2021 Goodwill $ 17,370 $ 21,894 $ — $ 21,894 Intangible Assets: Technology $ — $ — $ — $ — Customer relationships $ 26,000 $ 19,600 $ — $ 19,600 Brand $ 5,100 $ 7,400 $ — $ 7,400 Non-competition agreements $ — $ — $ — $ — Contingent Consideration $ 4,763 $ 5,186 $ 2,184 $ 7,370 Working Capital $ 1,018 $ 1,018 $ — $ 1,018 Aimtell, PushPros, and Aramis Original Acquisition Date Fair Value Revised Acquisition Date Fair Value Fair Value Mark-to-Market changes Fair Value as of December 31, 2021 Goodwill $ 4,853 $ 9,761 $ — $ 9,761 Intangible Assets: Technology $ 10,500 $ 3,900 $ — $ 3,900 Customer relationships $ 7,920 $ 7,690 $ — $ 7,690 Brand $ 226 $ 208 $ — $ 208 Non-competition agreements $ 117 $ 83 $ — $ 83 Contingent Consideration $ 4,925 $ 2,147 $ (1,078) $ 1,069 Working Capital $ 1,404 $ 944 $ — $ 944 |
RESTRUCTURING COSTS (Tables)
RESTRUCTURING COSTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The change in liability for the restructuring costs for the years ended December 31, 2021 and 2020, respectively, was as follows: (in Thousands) Beginning balance at January 1, 2020 $ — Valuation adjustments 3,853 Lease payments (238) Lease accretion 37 Ending balance at December 31, 2020 $ 3,652 Valuation adjustments 373 Lease payments (1,683) Lease accretion 174 Ending balance at December 31, 2021 $ 2,516 |
Schedule of Future Minimum Lease Payments | At December 31, 2021, the future minimum lease payments for the Company were comprised of the following (in thousands): Year Ending Years Ended December 31,: 2022 $ 1,869 2023 1,707 2024 1,899 2025 546 Total $ 6,021 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement Inputs and Valuation Techniques | As of December 31, 2021, the Company has approximately 4.0 million Private Placement Warrants outstanding. December 31, 2021 Private Placement Warrants Fair Value Per Share $ 0.99 Private and Public Placement Warrant valuation inputs: Stock price $ 4.78 Strike price $ 11.50 Remaining contractual term in years 3.54 Estimated volatility 60.0 % Dividend yield 0.0 % Risk free interest rate 1.05 % The following table presents the contingent consideration assumptions. Aimtell / PushPros CYE2021 Revenue - Actual $ 7,193,881 CYE2022 Revenue - Expectations $ 11,259,147 CYE2023 Revenue - Expectations $ 14,636,891 CYE2022 Risk Adjusted Revenue $ 10,883,930 CYE2023 Risk Adjusted Revenue $ 13,224,456 Revenue Volatility 25 % Iteration (actual) 100,000 Risk adjustment discount rate 7.25 % Risk free / Credit risk 6.5 % Days gap from period end to payment 90 Aramis CYE2022 Earnout Successful Probability 99.0 % Iteration (actual) 100,000 Risk free / Credit risk 6.5 % Days gap from period end to payment 90 Crisp Results EBITDA Historical - 9 Months 7,749,580 EBITDA Expectations - 3 Months 1,800,000 Risk adjusted EBITDA 1,768,807 EBITDA volatility 60 % Iterations (actual) 100,000 Risk adjustment discount rate 16.5 % Risk free / Credit risk 6.5 % Days gap from period end to payment 90 |
Fair Value Measurements, Recurring and Nonrecurring | The following table presents assets and liabilities measured at fair value on a recurrent basis (in thousands): December 31, 2020 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Liabilities: Private Warrant Liabilities Total liabilities $ — $ — $ 22,080 $ 22,080 Total $ — $ — $ 22,080 $ 22,080 December 31, 2021 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Liabilities: Private Warrant Liabilities Total liabilities $ — $ — $ 3,960 $ 3,960 Contingent consideration - current Contingent consideration payable $ 7,370 $ 7,370 Contingent consideration -non-current Contingent consideration payable $ — $ — $ 1,069 $ 1,069 Total $ — $ — $ 12,399 $ 12,399 |
Fair Value, Liabilities Measured on Recurring Basis, Level 2 Input Reconciliation | The following table represents the change in the warrant liability and contingent consideration (in thousands): Private Placement Warrants Contingent Consideration Beginning January 1, 2020 $ — $ 1,000 Additions 13,240 — Changes in fair value 8,840 — Settlements — (1,000) Balance December 31, 2020 22,080 — Additions — 7,333 Changes in fair value (18,115) 1,106 Settlements (5) — Ending December 31, 2021 $ 3,960 8,439 |
EQUITY (Tables)
EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule of Stockholders Equity | The following table sets forth the Company’s common stock by class at December 31, 2021: December 31, 2021 December 31, 2020 Class Total Shares Ownership % Total Shares Ownership % Class A Common Stock 36,225,611 58.5% 32,392,576 55.5% Class B Common Stock 25,699,464 41.5% 25,999,464 44.5% Total Common Stock 61,925,075 100% 58,392,040 100% The following table summarizes the ownership interest in DMSH as of December 31, 2021 and 2020: December 31, 2021 December 31, 2020 Interests Ownership % Interests Ownership % Number of Interests held by DMS, Inc. 36,225,611 58.4% 32,392,576 55.5% Number of Interests held by non-controlling interests holders 25,853,152 41.6% 25,999,464 44.5% Total Interests Outstanding 62,078,763 100.0% 58,392,040 100.0% Years Ended December 31, 2021 2020 Net income (loss) attributable to DMS, Inc. shareholders $ 2,202 $ (8,696) Transfers to (from) non-controlling interests due to: DMSH units issued in SmarterChaos acquisition (Note 8) — 103 Shares issued in connection with acquisition of Aramis, PushPros, and Aimtell (Note 6) (1,589) — Exercise of warrants to issue Class A common stock (1) — Shares issued in connection with acquisition of Crisp Results (Note 6) (1,960) — Prism shares redeemed and issued to Class A Common Stock (369) — SmarterChaos DMSH units redeemed and issued to Class A Common Stock (189) — Stock-based compensation - Vested & Exercised (602) — Net transfers to (from) non-controlling interests (4,710) 103 Change from net income attributable to DMS Inc. shareholders and transfers to (from) noncontrolling interest $ (2,508) $ (8,593) |
EMPLOYEE AND DIRECTOR INCENTI_2
EMPLOYEE AND DIRECTOR INCENTIVE PLANS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Nonvested Restricted Stock Shares Activity | The following table presents the restricted stock units activity for the years ended December 31, 2021 and 2020 (in thousands, except price per share): Number of Restricted Stock Weighted-Average Grant Date Fair Value Outstanding at January 1, 2020 — $ — Granted 1,245 $ 7.31 Vested — $ — Forfeited/Canceled 48 $ 7.31 Outstanding at December 31, 2020 1,197 $ 7.31 Granted 1,084 $ 8.43 Vested 490 $ 7.59 Forfeited/Canceled 350 $ 8.11 Outstanding at December 31, 2021 1,441 $ 7.98 Vested as of December 31, 2021 490 $ 7.59 |
Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions | The following is the weighted average of the assumptions used in calculating the fair value of the total stock options granted in 2021 using the Black-Scholes-Merton method: Fair market value $ 5.95 Risk-free rate 0.8 % Dividend yield — % Expected volatility 50.5 % Expected term (in years) 6.1 years |
Share-Based Payment Arrangement, Option, Activity | The following table presents the stock option activity for the years ended December 31, 2021 and 2020 (in thousands, except price per share): Number of Stock Options Weighted-Average Grant Date Fair Value Weighted-Average Remaining Contractual Term (in Years) Total Intrinsic Value of Restricted Stock Options Exercisable Outstanding at January 1, 2020 — $ — — $ — Granted 574 $ 3.34 5.9 years $ — Exercised — $ — — $ — Forfeited/expired 23 $ — — $ — Outstanding at December 31, 2020 551 $ 3.34 5.9 years $ — Granted 1,706 $ 4.14 6.1 years $ — Exercised — $ — — $ — Forfeited/expired 179 $ 4.07 6.1 years $ — Outstanding at December 31, 2021 2,078 $ 3.92 6.1 years $ — Exercisable at December 31, 2021 169 $ 7.58 — $ 1,279 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The provision (benefit) for income taxes consist of the following (in thousands): Years Ended December 31, 2021 2020 Current: Federal $ 2,539 3,101 State 307 216 Foreign 26 248 Total Current 2,872 3,565 Deferred Federal 12,848 69 State 3,591 (549) Total Deferred 16,439 (480) Provision for income taxes $ 19,311 $ 3,085 |
Schedule of Effective Income Tax Rate Reconciliation | The provision for income taxes shown above varies from the statutory federal income tax rate for those periods as follows (in thousands): Years Ended December 31, 2021 2020 Tax provision (benefit) from federal statutory rate $ 5,356 $ (2,190) Tax on income not subject to entity level federal income tax 1,074 1,897 State income taxes, net of federal tax effect (817) (280) Warrant liability fair value change (3,804) 1,856 Permanent adjustments - Tax Receivable Agreement (3,211) — Other permanent adjustments (36) 434 True-ups and other (919) (465) Foreign tax credit 63 (63) Undistributed earnings 529 823 Canadian tax expense 26 261 Valuation allowance 21,240 812 Tax credits (190) — Tax provision $ 19,311 $ 3,085 |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities are composed of the following (in thousands): Years Ended December 31, 2021 2020 Deferred tax assets: Investment in DMS Holdings LLC $ 29,066 $ 30,017 Reserve accruals 418 140 Charitable contributions 11 9 Interest carryforward 2,562 1,158 Tax credit carryforwards 190 63 Property and equipment 42 — Net operating loss 1,808 150 Total gross deferred tax assets 34,097 31,537 Less: Valuation allowance (32,970) (11,626) Total deferred tax assets, net $ 1,127 $ 19,911 Deferred tax liabilities: Intangibles (4,561) (6,971) Property and equipment — (193) Undistributed earnings (1,352) (823) Total deferred tax liabilities (5,913) (7,987) Net deferred tax (liability) asset $ (4,786) $ 11,924 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings (loss) per share of Class A Common Stock: Years Ended December 31, 2021 2020 Numerator: Net income (loss) $ 6,193 $ (13,714) Net income (loss) attributable to DMSH prior to the Business Combination — (1,345) Net income (loss) attributable to non-controlling interest 3,991 (5,018) Net income (loss) attributable to Digital Media Solutions, Inc. - basic and diluted $ 2,202 $ (7,351) Denominator: Weighted average shares - basic $ 35,249 $ 32,335 Add: dilutive effects of employee equity awards 389 — Add: dilutive effects of public warrants 126 — Weighted average shares - diluted $ 35,764 $ 32,335 Net earnings (loss) per common share: Basic $ 0.06 $ (0.23) Diluted $ 0.06 $ (0.23) |
BUSINESS, BASIS OF PRESENTATI_3
BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | Sep. 30, 2021USD ($) | |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Number of reportable segments | segment | 3 | ||
Decrease to deferred tax asset | $ 0 | $ 18,948 | |
Additional paid-in capital | (25,239) | (48,027) | |
Allowance for credit loss | 4,930 | 3,121 | |
Provision for bad debt | 4,798 | 3,039 | |
Advertising expense | $ 11,300 | 1,200 | |
Contract period | 10 years | ||
Refund of preclosing taxes to be paid to Sellers | 100.00% | ||
Refund of preclosing taxes to be paid to Sellers, period after closing | 2 years | ||
Deferred tax asset | 11,924 | ||
Tax Receivable Agreement liability - current | $ 1,310 | $ 510 | |
Blocker Corp | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Tax receivable agreement liability | 16,300 | ||
Additional paid-in capital | 4,000 | ||
Deferred tax asset | 20,100 | ||
Income taxes receivable | $ 199 | ||
Maximum | Software Development Costs | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Amortization Period (Years) | 3 years | ||
Revision of Prior Period, Adjustment | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Decrease to deferred tax asset | $ 2,100 | ||
Tax receivable agreement liability | 1,800 | ||
Additional paid-in capital | $ 300 | ||
DMSH | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Equity method investment, ownership percentage | 58.40% | ||
Sellers | DMSH | |||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||
Noncontrolling interest, ownership percentage by noncontrolling owners | 41.60% |
BUSINESS COMBINATION (Details)
BUSINESS COMBINATION (Details) $ in Thousands | Oct. 22, 2020shares | Jul. 15, 2020USD ($)shares | Sep. 30, 2021USD ($) | Dec. 31, 2021USD ($)shares | Dec. 31, 2020USD ($)shares | Mar. 14, 2022shares |
Business Acquisition [Line Items] | ||||||
Payments to acquire business | $ | $ 25,129 | $ 2,799 | ||||
Repayments of debt | $ | $ 200,977 | 5,641 | ||||
Refund of preclosing taxes to be paid to Sellers | 100.00% | |||||
Refund of preclosing taxes to be paid to Sellers, period after closing | 2 years | |||||
Deferred tax asset | $ | (11,924) | |||||
Current tax receivable agreement | $ | $ 1,310 | 510 | ||||
Additional paid-in capital | $ | $ (25,239) | $ (48,027) | ||||
Common stock outstanding (in shares) | 61,925,075 | 58,392,040 | ||||
Warrants outstanding (in shares) | 10,000,000 | 10,000,000 | ||||
Error Corrections Resulting From Completion of Tax Return | Revision of Prior Period, Error Correction, Adjustment | ||||||
Business Acquisition [Line Items] | ||||||
Deferred tax asset | $ | $ 2,100 | |||||
Decrease in tax receivable agreement liability | $ | (1,800) | |||||
Common Class B | ||||||
Business Acquisition [Line Items] | ||||||
Antidilutive securities excluded (in shares) | 25,699,464 | 26,000,000 | ||||
Blocker Corp | ||||||
Business Acquisition [Line Items] | ||||||
Payments to acquire business | $ | $ 57,300 | |||||
Cash acquired from acquisition | $ | $ 30,000 | |||||
Unit redemption rights ratio | 1 | |||||
Blocker Corp | Error Corrections Resulting From Completion of Tax Return | Revision of Prior Period, Error Correction, Adjustment | ||||||
Business Acquisition [Line Items] | ||||||
Deferred tax asset | $ | 2,100 | |||||
Decrease in tax receivable agreement liability | $ | 1,800 | |||||
Net adjustments to additional paid in capital due to tax receivable agreement changes | $ | $ 300 | |||||
Leo | ||||||
Business Acquisition [Line Items] | ||||||
Warrants issued (in shares) | 2,000,000 | |||||
Common Class A | ||||||
Business Acquisition [Line Items] | ||||||
Common stock shares outstanding (in shares) | 36,225,611 | 36,394,335 | ||||
Common stock outstanding (in shares) | 36,225,611 | 32,392,576 | ||||
Common Class A | Blocker Corp | ||||||
Business Acquisition [Line Items] | ||||||
Warrants issued (in shares) | 2,000,000 | |||||
Common Class A | Leo | IPO | ||||||
Business Acquisition [Line Items] | ||||||
Warrants issued (in shares) | 10,000,000 | |||||
Common Class B | ||||||
Business Acquisition [Line Items] | ||||||
Common stock shares outstanding (in shares) | 25,699,464 | |||||
Common stock outstanding (in shares) | 25,699,464 | 25,999,464 | ||||
Common Class B | Blocker Corp | ||||||
Business Acquisition [Line Items] | ||||||
Shares issued (in shares) | 25,857,070 | |||||
Class C common stock | ||||||
Business Acquisition [Line Items] | ||||||
Common stock outstanding (in shares) | 0 | |||||
Class C common stock | Blocker Corp | ||||||
Business Acquisition [Line Items] | ||||||
Shares issued (in shares) | 17,937,954 | |||||
Redeemable warrants to acquire Class A common stock | ||||||
Business Acquisition [Line Items] | ||||||
Common stock shares outstanding (in shares) | 13,999,078 | |||||
Blocker Corp | ||||||
Business Acquisition [Line Items] | ||||||
Deferred tax asset | $ | $ (20,100) | |||||
Income taxes receivable | $ | 199 | |||||
Tax receivable agreement liability | $ | 16,300 | |||||
Additional paid-in capital | $ | $ 4,000 | |||||
Acquisition costs | $ | $ 2,400 | |||||
Line of Credit | DMSH | ||||||
Business Acquisition [Line Items] | ||||||
Repayments of debt | $ | $ 10,000 | |||||
PIPE Investors | Common Class A | ||||||
Business Acquisition [Line Items] | ||||||
Common stock, subscribed (in shares) | 10,424,282 | |||||
Sale of stock consideration received | $ | $ 100,000 | |||||
Blocker Corp | ||||||
Business Acquisition [Line Items] | ||||||
Other ownership interests, units outstanding (in shares) | 32,293,793 | |||||
Blocker Corp | Common Class A | ||||||
Business Acquisition [Line Items] | ||||||
Shares issued (in shares) | 98,783 | |||||
Prism and Clairvest Direct Seller | DMSH | ||||||
Business Acquisition [Line Items] | ||||||
Economic ownership in company | 44.00% | |||||
Prism and Clairvest Direct Seller | DMS | ||||||
Business Acquisition [Line Items] | ||||||
Voting ownership in the company | 44.00% | |||||
Prism and Clairvest Direct Seller | DMSH | ||||||
Business Acquisition [Line Items] | ||||||
Shares issued (in shares) | 142,394 | |||||
Prism and Clairvest Direct Seller | Common Class B | ||||||
Business Acquisition [Line Items] | ||||||
Shares issued (in shares) | 142,394 | |||||
Other ownership interests, units outstanding (in shares) | 25,857,070 |
REVENUE - Additional Liabilitie
REVENUE - Additional Liabilities (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | |
Revenue from Contract with Customer [Abstract] | ||
Number of reportable segments | segment | 3 | |
Contract with customer, liability | $ 1.8 | $ 1.7 |
Contract with customer, receivable, net | $ 2.9 | $ 1.8 |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 427,935 | $ 332,856 |
Revenue from Contract with Customer, Product and Service Benchmark | Customer Concentration Risk | Customer1 | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk | 13.50% | |
Brand Direct | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 253,787 | 197,551 |
Marketplace | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 224,158 | 155,999 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 9,640 | 9,357 |
Intercompany eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | (59,650) | (30,051) |
Customer acquisition | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 409,450 | 305,630 |
Customer acquisition | Brand Direct | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 244,942 | 179,682 |
Customer acquisition | Marketplace | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 224,158 | 155,999 |
Customer acquisition | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 0 | 0 |
Customer acquisition | Intercompany eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | (59,650) | (30,051) |
Managed services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 15,316 | 24,008 |
Managed services | Brand Direct | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 8,845 | 17,869 |
Managed services | Marketplace | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 0 | 0 |
Managed services | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 6,471 | 6,139 |
Managed services | Intercompany eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 0 | 0 |
Software services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 3,169 | 3,218 |
Software services | Brand Direct | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 0 | 0 |
Software services | Marketplace | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 0 | 0 |
Software services | Other | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 3,169 | 3,218 |
Software services | Intercompany eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 0 | $ 0 |
REPORTABLE SEGMENTS (Details)
REPORTABLE SEGMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Net revenue | $ 427,935 | $ 332,856 |
Cost of revenue (exclusive of depreciation and amortization shown separately below) | 300,016 | 234,731 |
Gross profit | 127,919 | 98,125 |
Salaries and related costs | 48,014 | 33,386 |
General and administrative expenses | 43,049 | 30,020 |
Depreciation and amortization | 25,401 | 17,954 |
Acquisition costs | 1,967 | 4,814 |
Change in fair value of contingent consideration liabilities | 1,106 | 0 |
Income from operations | 8,382 | 11,951 |
Intercompany eliminations | ||
Segment Reporting Information [Line Items] | ||
Net revenue | (59,650) | (30,051) |
Cost of revenue (exclusive of depreciation and amortization shown separately below) | (59,650) | (30,051) |
Brand Direct | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 253,787 | 197,551 |
Brand Direct | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 253,787 | 197,551 |
Cost of revenue (exclusive of depreciation and amortization shown separately below) | 192,479 | 151,526 |
Gross profit | 61,308 | 46,025 |
Marketplace | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 224,158 | 155,999 |
Marketplace | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 224,158 | 155,999 |
Cost of revenue (exclusive of depreciation and amortization shown separately below) | 163,637 | 109,921 |
Gross profit | 60,521 | 46,078 |
Other | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 9,640 | 9,357 |
Other | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 9,640 | 9,357 |
Cost of revenue (exclusive of depreciation and amortization shown separately below) | 3,550 | 3,335 |
Gross profit | $ 6,090 | $ 6,022 |
PROPERTY AND EQUIPMENT - Classi
PROPERTY AND EQUIPMENT - Classifications of Property and Equipment and the Related Useful Lives (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Gross, total | $ 31,561 | $ 21,222 |
Less: Accumulated depreciation and amortization | (12,393) | (6,206) |
Property and equipment, net | $ 19,168 | 15,016 |
Computers and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 3 years | |
Gross, total | $ 2,467 | 1,684 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 5 years | |
Gross, total | $ 437 | 305 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 7 years | |
Gross, total | $ 385 | 320 |
Software development costs | ||
Property, Plant and Equipment [Line Items] | ||
Useful Lives | 3 years | |
Gross, total | $ 28,272 | $ 18,913 |
PROPERTY AND EQUIPMENT - Additi
PROPERTY AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 6.2 | $ 3.7 |
Unamortized balance of capitalized software development costs | 16.7 | 14 |
Capitalized computer software, amortization | $ 5.5 | $ 3 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 44,904 | $ 41,826 |
Additions (Note 8) | 31,654 | 3,078 |
Goodwill, ending balance | 76,558 | 44,904 |
Brand Direct | Operating Segments | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 8,616 | 8,616 |
Additions (Note 8) | 9,760 | 0 |
Goodwill, ending balance | 18,376 | 8,616 |
Marketplace | Operating Segments | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 32,660 | 32,660 |
Additions (Note 8) | 21,894 | 0 |
Goodwill, ending balance | 54,554 | 32,660 |
Other | Operating Segments | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 3,628 | 550 |
Additions (Note 8) | 0 | 3,078 |
Goodwill, ending balance | $ 3,628 | $ 3,628 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Accumulated impairments | $ 0 | $ 0 |
Amortization of intangible assets | $ 19,100,000 | $ 14,200,000 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 115,226 | $ 76,202 |
Accumulated Amortization | (48,998) | (29,755) |
Net | 66,228 | 46,447 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 51,946 | 48,008 |
Accumulated Amortization | (29,929) | (21,454) |
Net | $ 22,017 | 26,554 |
Technology | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 3 years | |
Technology | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 5 years | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 49,273 | 21,794 |
Accumulated Amortization | (13,076) | (6,749) |
Net | $ 36,197 | 15,045 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 2 years | |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 9 years | |
Brand | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 12,109 | 4,295 |
Accumulated Amortization | (4,575) | (961) |
Net | $ 7,534 | 3,334 |
Brand | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 1 year | |
Brand | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 7 years | |
Non-competition agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 3 years | |
Gross | $ 1,898 | 2,105 |
Accumulated Amortization | (1,418) | (591) |
Net | $ 480 | $ 1,514 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Amortization Expense (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 | $ 19,398 |
2023 | 16,366 |
2024 | 13,792 |
2025 | 6,564 |
2026 and Thereafter | $ 10,108 |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Total debt | $ 223,875 | $ 203,851 |
Unamortized debt issuance costs | (6,120) | (2,293) |
Debt, net | 217,755 | 201,558 |
Less: Current portion of long-term debt | (2,250) | (7,967) |
Long-term debt | 215,505 | 193,591 |
Term loan | ||
Debt Instrument [Line Items] | ||
Total debt | 223,875 | 190,541 |
Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Total debt | 0 | 4,000 |
Delayed draw term loan | ||
Debt Instrument [Line Items] | ||
Total debt | 0 | 8,236 |
Notes payable | ||
Debt Instrument [Line Items] | ||
Notes payable | $ 0 | $ 1,074 |
DEBT - Additional Information (
DEBT - Additional Information (Details) - USD ($) | May 25, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||
Unamortized debt issuance costs | $ 6,120,000 | $ 2,293,000 | |
Debt extinguishment | 2,108,000 | $ 0 | |
Senior Secured Credit Facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Debt term | 5 years | ||
Senior secured revolving credit facility | $ 275,000,000 | ||
Discount amount | 4,200,000 | 3,700,000 | |
Debt issuance costs, before amortization | 3,500,000 | ||
Unamortized debt issuance costs | $ 2,400,000 | ||
Senior Secured Credit Facility | Line of Credit | Secured Debt | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 225,000,000 | ||
Discount as a percentage | 1.80% | ||
Discount amount | $ 4,200,000 | ||
Payment of original principal amount paid quarterly | 1.00% | ||
Senior Secured Credit Facility | Line of Credit | Secured Debt | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Variable rate | 5.00% | ||
Senior Secured Credit Facility | Line of Credit | Secured Debt | Base Rate | |||
Debt Instrument [Line Items] | |||
Variable rate | 4.00% | ||
Senior Secured Credit Facility | Line of Credit | Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Senior secured revolving credit facility | $ 50,000,000 | ||
Per annum commitment fee | 0.50% | ||
Effective rate | 6.29% | ||
Unamortized debt issuance costs | $ 800,000 | ||
Senior Secured Credit Facility | Line of Credit | Revolving credit facility | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Variable rate | 5.00% | 4.25% | |
Alternate base rate | 1.00% | ||
Senior Secured Credit Facility | Line of Credit | Revolving credit facility | Fed Funds Effective Rate Overnight Index Swap Rate | |||
Debt Instrument [Line Items] | |||
Alternate base rate | 0.50% | ||
Senior Secured Credit Facility | Line of Credit | Revolving credit facility | Base Rate | |||
Debt Instrument [Line Items] | |||
Variable rate | 3.25% | ||
Stated rate | 1.75% | ||
Monroe Facility | Line of Credit | Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Senior secured revolving credit facility | $ 15,000,000 | ||
Aggregate principal amount extinguished | $ 210,000,000 |
DEBT - Debt Maturity Schedule (
DEBT - Debt Maturity Schedule (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
2022 | $ 2,250 | |
2023 | 2,250 | |
2024 | 2,250 | |
2025 | 2,250 | |
2026 and thereafter | 214,875 | |
Total debt | $ 223,875 | $ 203,851 |
ACQUISITIONS - Additional Infor
ACQUISITIONS - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Apr. 01, 2021 | Feb. 01, 2021 | Jul. 16, 2020 | Sep. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 15, 2020 | |
Business Acquisition [Line Items] | |||||||||
Payments to acquire business | $ 25,129 | $ 2,799 | |||||||
Issuance of equity for Aimtell/PushPros/Aramis, Crisp Results and SmarterChaos | 35 | 3,000 | |||||||
Change in fair value of contingent consideration liabilities | 1,106 | 0 | |||||||
Acquisition costs | 1,967 | 4,814 | |||||||
Payment of equity issuance | 493 | 0 | |||||||
Contingent consideration payable - non-current | $ 1,069 | $ 0 | |||||||
Technology | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 4 years | ||||||||
Non-competition agreements | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 3 years | ||||||||
Minimum | Brand | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 1 year | ||||||||
Minimum | Customer relationships | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 4 years | ||||||||
Maximum | Brand | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 7 years | ||||||||
Maximum | Customer relationships | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 6 years | ||||||||
Crisp Results | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 40,000 | ||||||||
Payments to acquire business | $ 20,000 | ||||||||
Equity issued to acquiree (in shares) | 1,600,000 | ||||||||
Issuance of equity for Aimtell/PushPros/Aramis, Crisp Results and SmarterChaos | $ 20,000 | ||||||||
Contingent consideration | $ 10,000 | ||||||||
Earnout period | 12 months | ||||||||
Deferred payment | $ 5,000 | ||||||||
Deferred payment period | 18 months | ||||||||
Contingent Consideration | $ 4,763 | $ 7,370 | |||||||
Deferred acquisition consideration payable | $ 4,600 | 4,800 | |||||||
Acquisition costs | 800 | ||||||||
Payment of equity issuance | $ 200 | ||||||||
Expected useful life | 5 years 7 months 6 days | ||||||||
Crisp Results | Scenario, Adjustment | Fair Value Mark-to-Market changes | |||||||||
Business Acquisition [Line Items] | |||||||||
Contingent Consideration | $ 2,184 | ||||||||
Deferred acquisition consideration payable | $ 200 | ||||||||
Crisp Results | Brand | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 7 years | ||||||||
Crisp Results | Customer relationships | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 6 years | ||||||||
Crisp Results | Maximum | Brand | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 7 years | ||||||||
Crisp Results | Maximum | Customer relationships | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 6 years | ||||||||
Aimtell, PushPros and Aramis | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 20,000 | ||||||||
Payments to acquire business | $ 5,000 | ||||||||
Equity issued to acquiree (in shares) | 1,290,000 | ||||||||
Issuance of equity for Aimtell/PushPros/Aramis, Crisp Results and SmarterChaos | $ 15,000 | ||||||||
Contingent consideration | $ 4,900 | ||||||||
Earnout period | 3 years | ||||||||
Contingent Consideration | $ 4,925 | $ 1,069 | |||||||
Change in fair value of contingent consideration liabilities | 1,000 | ||||||||
Acquisition costs | $ 600 | ||||||||
Expected useful life | 4 years | ||||||||
Contingent consideration payable - non-current | $ 15,000 | ||||||||
Aimtell, PushPros and Aramis | Scenario, Adjustment | Fair Value Mark-to-Market changes | |||||||||
Business Acquisition [Line Items] | |||||||||
Contingent Consideration | $ (1,078) | ||||||||
Aimtell, PushPros and Aramis | Technology | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 4 years | ||||||||
Aimtell, PushPros and Aramis | Brand | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 2 years 1 month 6 days | ||||||||
Aimtell, PushPros and Aramis | Customer relationships | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 4 years 1 month 6 days | ||||||||
Aimtell, PushPros and Aramis | Non-competition agreements | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 3 years | ||||||||
Aimtell, PushPros and Aramis | Minimum | Customer relationships | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 4 years | ||||||||
Aimtell, PushPros and Aramis | Maximum | Customer relationships | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 6 years | ||||||||
SmarterChaos | |||||||||
Business Acquisition [Line Items] | |||||||||
Acquisition costs | $ 400 | ||||||||
Payments to acquire business | $ 5,800 | ||||||||
Units/shares redeemed and issued to Class A Common Stock (in shares) | 154,000 | ||||||||
Units/shares redeemed and issued to Class A Common Stock | $ 3,000 | $ 392 | [1] | ||||||
SmarterChaos | Minimum | Brand | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 1 year | ||||||||
SmarterChaos | Minimum | Customer relationships | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 5 years | ||||||||
SmarterChaos | Maximum | Brand | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 7 years | ||||||||
SmarterChaos | Maximum | Customer relationships | |||||||||
Business Acquisition [Line Items] | |||||||||
Expected useful life | 6 years | ||||||||
SmarterChaos | DMSH | |||||||||
Business Acquisition [Line Items] | |||||||||
Equity issued to acquiree (in shares) | 307,000 | ||||||||
Value of equity issued | $ 3,000 | ||||||||
[1] | On June 30, 2021, the sellers of SmarterChaos redeemed approximately one-half of their non-controlling interest held through DMSH Units in exchange for Class A Common Stock in DMS Inc. The non-controlling interest held by the Sellers of SmarterChaos did not include related Class B Common Stock to be retired upon redemption. |
ACQUISITIONS - Changes in Fair
ACQUISITIONS - Changes in Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Apr. 01, 2021 | Feb. 01, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 76,558 | $ 44,904 | $ 41,826 | ||
Crisp Results | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 21,894 | $ 17,370 | |||
Contingent Consideration | 7,370 | 4,763 | |||
Working capital | 1,018 | 1,018 | |||
Crisp Results | Scenario, Adjustment | Revised Acquisition Date Fair Value | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 21,894 | ||||
Contingent Consideration | 5,186 | ||||
Working capital | 1,018 | ||||
Crisp Results | Scenario, Adjustment | Fair Value Mark-to-Market changes | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 0 | ||||
Contingent Consideration | 2,184 | ||||
Working capital | 0 | ||||
Crisp Results | Technology | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 0 | 0 | |||
Crisp Results | Technology | Scenario, Adjustment | Revised Acquisition Date Fair Value | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 0 | ||||
Crisp Results | Technology | Scenario, Adjustment | Fair Value Mark-to-Market changes | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 0 | ||||
Crisp Results | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 19,600 | 26,000 | |||
Crisp Results | Customer relationships | Scenario, Adjustment | Revised Acquisition Date Fair Value | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 19,600 | ||||
Crisp Results | Customer relationships | Scenario, Adjustment | Fair Value Mark-to-Market changes | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 0 | ||||
Crisp Results | Brand | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 7,400 | 5,100 | |||
Crisp Results | Brand | Scenario, Adjustment | Revised Acquisition Date Fair Value | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 7,400 | ||||
Crisp Results | Brand | Scenario, Adjustment | Fair Value Mark-to-Market changes | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 0 | ||||
Crisp Results | Non-competition agreements | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 0 | 0 | |||
Crisp Results | Non-competition agreements | Scenario, Adjustment | Revised Acquisition Date Fair Value | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | $ 0 | ||||
Crisp Results | Non-competition agreements | Scenario, Adjustment | Fair Value Mark-to-Market changes | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 0 | ||||
Aimtell, PushPros and Aramis | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 9,761 | $ 4,853 | |||
Contingent Consideration | 1,069 | 4,925 | |||
Working capital | 944 | 1,404 | |||
Aimtell, PushPros and Aramis | Scenario, Adjustment | Revised Acquisition Date Fair Value | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 9,761 | ||||
Contingent Consideration | 2,147 | ||||
Working capital | 944 | ||||
Aimtell, PushPros and Aramis | Scenario, Adjustment | Fair Value Mark-to-Market changes | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 0 | ||||
Contingent Consideration | (1,078) | ||||
Working capital | 0 | ||||
Aimtell, PushPros and Aramis | Technology | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 3,900 | 10,500 | |||
Aimtell, PushPros and Aramis | Technology | Scenario, Adjustment | Revised Acquisition Date Fair Value | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 3,900 | ||||
Aimtell, PushPros and Aramis | Technology | Scenario, Adjustment | Fair Value Mark-to-Market changes | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 0 | ||||
Aimtell, PushPros and Aramis | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 7,690 | 7,920 | |||
Aimtell, PushPros and Aramis | Customer relationships | Scenario, Adjustment | Revised Acquisition Date Fair Value | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 7,690 | ||||
Aimtell, PushPros and Aramis | Customer relationships | Scenario, Adjustment | Fair Value Mark-to-Market changes | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 0 | ||||
Aimtell, PushPros and Aramis | Brand | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 208 | 226 | |||
Aimtell, PushPros and Aramis | Brand | Scenario, Adjustment | Revised Acquisition Date Fair Value | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 208 | ||||
Aimtell, PushPros and Aramis | Brand | Scenario, Adjustment | Fair Value Mark-to-Market changes | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 0 | ||||
Aimtell, PushPros and Aramis | Non-competition agreements | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | 83 | 117 | |||
Aimtell, PushPros and Aramis | Non-competition agreements | Scenario, Adjustment | Revised Acquisition Date Fair Value | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | $ 83 | ||||
Aimtell, PushPros and Aramis | Non-competition agreements | Scenario, Adjustment | Fair Value Mark-to-Market changes | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangible assets acquired | $ 0 |
ACQUISITIONS - Net Assets And L
ACQUISITIONS - Net Assets And Liabilities Acquired (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Feb. 01, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 76,558 | $ 44,904 | $ 41,826 | |
Minimum | ||||
Business Acquisition [Line Items] | ||||
Expected useful life of acquired property, plant and equipment | 3 years | |||
Maximum | ||||
Business Acquisition [Line Items] | ||||
Expected useful life of acquired property, plant and equipment | 5 years | |||
Technology | ||||
Business Acquisition [Line Items] | ||||
Expected Useful Life | 4 years | |||
Customer relationships | Minimum | ||||
Business Acquisition [Line Items] | ||||
Expected Useful Life | 4 years | |||
Customer relationships | Maximum | ||||
Business Acquisition [Line Items] | ||||
Expected Useful Life | 6 years | |||
Brand | Minimum | ||||
Business Acquisition [Line Items] | ||||
Expected Useful Life | 1 year | |||
Brand | Maximum | ||||
Business Acquisition [Line Items] | ||||
Expected Useful Life | 7 years | |||
Non-competition agreements | ||||
Business Acquisition [Line Items] | ||||
Expected Useful Life | 3 years | |||
SmarterChaos | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 3,078 | |||
Accounts receivable | 576 | |||
Property and equipment | 28 | |||
Accounts payable | (1,156) | |||
Other assets acquired and liabilities assumed, net | 496 | |||
Net assets and liabilities acquired | 5,799 | |||
SmarterChaos | Technology | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | 0 | |||
SmarterChaos | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | $ 2,500 | |||
SmarterChaos | Customer relationships | Minimum | ||||
Business Acquisition [Line Items] | ||||
Expected Useful Life | 5 years | |||
SmarterChaos | Customer relationships | Maximum | ||||
Business Acquisition [Line Items] | ||||
Expected Useful Life | 6 years | |||
SmarterChaos | Brand | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | $ 277 | |||
SmarterChaos | Brand | Minimum | ||||
Business Acquisition [Line Items] | ||||
Expected Useful Life | 1 year | |||
SmarterChaos | Brand | Maximum | ||||
Business Acquisition [Line Items] | ||||
Expected Useful Life | 7 years | |||
SmarterChaos | Non-competition agreements | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | $ 0 | |||
Aimtell, PushPros and Aramis | ||||
Business Acquisition [Line Items] | ||||
Expected Useful Life | 4 years | |||
Goodwill | $ 9,761 | $ 4,853 | ||
Accounts receivable | 3,100 | |||
Property and equipment | 250 | |||
Accounts payable | (2,887) | |||
Other assets acquired and liabilities assumed, net | 740 | |||
Net assets and liabilities acquired | $ 22,845 | |||
Aimtell, PushPros and Aramis | Technology | ||||
Business Acquisition [Line Items] | ||||
Expected Useful Life | 4 years | |||
Finite-lived intangible assets acquired | $ 3,900 | 10,500 | ||
Aimtell, PushPros and Aramis | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Expected Useful Life | 4 years 1 month 6 days | |||
Finite-lived intangible assets acquired | $ 7,690 | 7,920 | ||
Aimtell, PushPros and Aramis | Customer relationships | Minimum | ||||
Business Acquisition [Line Items] | ||||
Expected Useful Life | 4 years | |||
Aimtell, PushPros and Aramis | Customer relationships | Maximum | ||||
Business Acquisition [Line Items] | ||||
Expected Useful Life | 6 years | |||
Aimtell, PushPros and Aramis | Brand | ||||
Business Acquisition [Line Items] | ||||
Expected Useful Life | 2 years 1 month 6 days | |||
Finite-lived intangible assets acquired | $ 208 | 226 | ||
Aimtell, PushPros and Aramis | Non-competition agreements | ||||
Business Acquisition [Line Items] | ||||
Expected Useful Life | 3 years | |||
Finite-lived intangible assets acquired | $ 83 | $ 117 | ||
Crisp Results | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 21,894 | |||
Accounts receivable | 2,610 | |||
Property and equipment | 220 | |||
Accounts payable | (1,593) | |||
Other assets acquired and liabilities assumed, net | 1 | |||
Net assets and liabilities acquired | 50,132 | |||
Crisp Results | Technology | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | 0 | |||
Crisp Results | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | 19,600 | |||
Crisp Results | Brand | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | 7,400 | |||
Crisp Results | Non-competition agreements | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | $ 0 |
ACQUISITIONS - Net Revenue and
ACQUISITIONS - Net Revenue and Net Income (Loss) Attributable to DMS (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Aimtell, PushPros and Aramis | |
Business Acquisition [Line Items] | |
Net revenue | $ 21,083 |
Net loss from operations | (4,661) |
Crisp Results | |
Business Acquisition [Line Items] | |
Net revenue | 25,637 |
Net loss from operations | $ (1,042) |
ACQUISITIONS - Pro Forma Inform
ACQUISITIONS - Pro Forma Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Aimtell, PushPros and Aramis | ||
Business Acquisition [Line Items] | ||
Net revenue | $ 23,093 | $ 26,330 |
Net (loss) income from operations | (4,436) | 5,085 |
Crisp Results | ||
Business Acquisition [Line Items] | ||
Net revenue | 34,035 | 29,811 |
Net (loss) income from operations | $ 257 | $ 5,853 |
RESTRUCTURING COSTS - Additiona
RESTRUCTURING COSTS - Additional Information (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2021USD ($)ft²leaserental_location | Dec. 31, 2020USD ($)ft²rental_location | |
Restructuring Cost and Reserve [Line Items] | ||
Number of properties under lease termination agreement | rental_location | 5 | 12 |
Number of properties under lease termination agreement, rental area | ft² | 57,469 | 62,113 |
Decrease in cash for rent expense | $ 1.9 | |
Payment made to release all future obligations | 0.4 | |
Lease reserve | $ 2.5 | 3.6 |
Number of leases added to lease termination agreement through acquisition | lease | 1 | |
Lease cost | $ 1 | 2 |
Accrued Liabilities | ||
Restructuring Cost and Reserve [Line Items] | ||
Lease reserve | 0.9 | 1.7 |
Other Noncurrent Liabilities | ||
Restructuring Cost and Reserve [Line Items] | ||
Lease reserve | $ 1.6 | $ 1.9 |
RESTRUCTURING COSTS - Restructu
RESTRUCTURING COSTS - Restructuring Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $ 3,652 | $ 0 |
Valuation adjustments | 373 | 3,853 |
Lease payments | (1,683) | (238) |
Lease accretion | 174 | 37 |
Ending balance | $ 2,516 | $ 3,652 |
RESTRUCTURING COSTS - Lease Lia
RESTRUCTURING COSTS - Lease Liability (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Restructuring and Related Activities [Abstract] | |
2022 | $ 1,869 |
2023 | 1,707 |
2024 | 1,899 |
2025 | 546 |
Total | $ 6,021 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) - shares shares in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants outstanding (in shares) | 10 | 10 |
Private Warrant Liabilities | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants outstanding (in shares) | 4 |
FAIR VALUE MEASUREMENTS - Input
FAIR VALUE MEASUREMENTS - Inputs and Valuations (Details) | Dec. 31, 2021yr$ / shares |
Private Placement Warrants Fair Value Per Share | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants outstanding, measurement inputs | 0.99 |
Stock price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants outstanding, measurement inputs | 4.78 |
Strike price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants outstanding, measurement inputs | 11.50 |
Remaining contractual term in years | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants outstanding, measurement inputs | yr | 3.54 |
Estimated volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants outstanding, measurement inputs | 0.600 |
Dividend yield | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants outstanding, measurement inputs | 0 |
Risk free interest rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants outstanding, measurement inputs | 0.0105 |
FAIR VALUE MEASUREMENTS - Conti
FAIR VALUE MEASUREMENTS - Contingent Consideration Assumptions (Details) | Dec. 31, 2021USD ($)d |
Aimtell And PushPros | CYE2021 Revenue - Actual | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 7,193,881 |
Aimtell And PushPros | CYE2022 Revenue - Expectations | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 11,259,147 |
Aimtell And PushPros | CYE2023 Revenue - Expectations | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 14,636,891 |
Aimtell And PushPros | CYE2022 Risk Adjusted Revenue | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 10,883,930 |
Aimtell And PushPros | CYE2023 Risk Adjusted Revenue | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 13,224,456 |
Aimtell And PushPros | Revenue Volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.25 |
Aimtell And PushPros | Iteration (actual) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 100,000 |
Aimtell And PushPros | Risk adjustment discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.0725 |
Aimtell And PushPros | Risk free / Credit risk | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.065 |
Aimtell And PushPros | Days gap from period end to payment | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | d | 90 |
Aramis | Iteration (actual) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 100,000 |
Aramis | Risk free / Credit risk | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.065 |
Aramis | Days gap from period end to payment | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | d | 90 |
Aramis | CYE2022 Earnout Successful Probability | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.990 |
Crisp Results | Iteration (actual) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 100,000 |
Crisp Results | Risk adjustment discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.165 |
Crisp Results | Risk free / Credit risk | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.065 |
Crisp Results | Days gap from period end to payment | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | d | 90 |
Crisp Results | EBITDA volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.60 |
Crisp Results | EBITDA Historical - 9 Months | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 7,749,580 |
Crisp Results | EBITDA Expectations - 3 Months | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 1,800,000 |
Crisp Results | Risk adjusted EBITDA | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 1,768,807 |
FAIR VALUE MEASUREMENTS - Liabi
FAIR VALUE MEASUREMENTS - Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Private Placement Warrant liabilities | $ 3,960 | $ 22,080 |
Contingent consideration payable - current | 7,370 | 0 |
Contingent consideration payable - non-current | 1,069 | 0 |
Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration payable - current | 7,370 | |
Contingent consideration payable - non-current | 1,069 | |
Total | 12,399 | |
Fair Value, Recurring | Private Warrant Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Private Placement Warrant liabilities | 3,960 | 22,080 |
Fair Value, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration payable - non-current | 0 | |
Total | 0 | |
Fair Value, Recurring | Level 1 | Private Warrant Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Private Placement Warrant liabilities | 0 | 0 |
Fair Value, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration payable - non-current | 0 | |
Total | 0 | |
Fair Value, Recurring | Level 2 | Private Warrant Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Private Placement Warrant liabilities | 0 | 0 |
Fair Value, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration payable - current | 7,370 | |
Contingent consideration payable - non-current | 1,069 | |
Total | 12,399 | |
Fair Value, Recurring | Level 3 | Private Warrant Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Private Placement Warrant liabilities | $ 3,960 | $ 22,080 |
FAIR VALUE MEASUREMENTS - Level
FAIR VALUE MEASUREMENTS - Level 3 Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Contingent Consideration | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 0 | $ 1,000 |
Additions | 7,333 | 0 |
Changes in fair value | 1,106 | 0 |
Settlements | 0 | (1,000) |
Ending balance | 8,439 | 0 |
Private Warrant Liabilities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 22,080 | 0 |
Additions | 0 | 13,240 |
Changes in fair value | (18,115) | 8,840 |
Settlements | (5) | 0 |
Ending balance | $ 3,960 | $ 22,080 |
EQUITY - Additional Information
EQUITY - Additional Information (Details) | Oct. 22, 2020shares | Jul. 16, 2020shares | Dec. 31, 2021votingRight$ / sharesshares | Dec. 31, 2020shares | Jul. 15, 2020 |
Class of Stock [Line Items] | |||||
Common stock authorized (in shares) | 600,000,000 | ||||
Common stock par value (usd per share) | $ / shares | $ 0.0001 | ||||
Preferred stock, authorized (in shares) | 100,000,000 | ||||
Preferred stock par value (usd per share) | $ / shares | $ 0.0001 | ||||
Common stock outstanding (in shares) | 61,925,075 | 58,392,040 | |||
Voting rights per each share | votingRight | 1 | ||||
Equity conversion ratio | 1 | ||||
Preferred stock issued (in shares) | 0 | 0 | |||
Warrant exercise price (usd per share) | $ / shares | $ 0.01 | ||||
Warrants, term | 5 years | ||||
Warrants outstanding (in shares) | 10,000,000 | 10,000,000 | |||
SmarterChaos | DMSH | |||||
Class of Stock [Line Items] | |||||
Equity issued to acquiree (in shares) | 307,000 | ||||
Prism and Clairvest Direct Seller | DMSH | |||||
Class of Stock [Line Items] | |||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 44.50% | ||||
Common Class A | |||||
Class of Stock [Line Items] | |||||
Warrant exercise price (usd per share) | $ / shares | $ 11.50 | ||||
Common Class A | |||||
Class of Stock [Line Items] | |||||
Common stock authorized (in shares) | 500,000,000 | ||||
Common stock par value (usd per share) | $ / shares | $ 0.0001 | ||||
Common stock outstanding (in shares) | 36,225,611 | 32,392,576 | |||
Common stock issued (in shares) | 36,226,000 | ||||
Share price (usd per share) | $ / shares | $ 18 | ||||
Common Class B | |||||
Class of Stock [Line Items] | |||||
Common stock authorized (in shares) | 60,000,000 | ||||
Common stock par value (usd per share) | $ / shares | $ 0.0001 | ||||
Common stock outstanding (in shares) | 25,699,464 | 25,999,464 | |||
Common stock issued (in shares) | 25,699,000 | ||||
Common Class B | Prism and Clairvest Direct Seller | SmarterChaos | DMSH | |||||
Class of Stock [Line Items] | |||||
Equity issued to acquiree (in shares) | 142,000 | ||||
Class C common stock | |||||
Class of Stock [Line Items] | |||||
Common stock authorized (in shares) | 40,000,000 | ||||
Common stock par value (usd per share) | $ / shares | $ 0.0001 | ||||
Common stock outstanding (in shares) | 0 | ||||
Equity conversion ratio | 1 | ||||
Common stock issued (in shares) | 0 |
EQUITY - Authorized Capitalizat
EQUITY - Authorized Capitalization (Details) - shares | Dec. 31, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | ||
Common stock outstanding (in shares) | 61,925,075 | 58,392,040 |
Company Stock, Economic Ownership in Affiliate | 100.00% | 100.00% |
Common Class A | ||
Class of Stock [Line Items] | ||
Common stock outstanding (in shares) | 36,225,611 | 32,392,576 |
Company Stock, Economic Ownership in Affiliate | 58.50% | 55.50% |
Common Class B | ||
Class of Stock [Line Items] | ||
Common stock outstanding (in shares) | 25,699,464 | 25,999,464 |
Company Stock, Economic Ownership in Affiliate | 41.50% | 44.50% |
EQUITY - Noncontrolling Interes
EQUITY - Noncontrolling Interest (Details) - DMSH - shares | Dec. 31, 2021 | Dec. 31, 2020 |
Noncontrolling Interest [Line Items] | ||
Noncontrolling interest, ownership by parent (in shares) | 36,225,611 | 32,392,576 |
Equity method investment, ownership percentage | 58.40% | 55.50% |
Ownership, Including Noncontrolling Interests, Shares | 62,078,763 | 58,392,040 |
Ownership Percentage, Including Noncontrolling Interests | 1 | 1 |
Prism and Clairvest Direct Seller | ||
Noncontrolling Interest [Line Items] | ||
Noncontrolling interest, ownership by noncontrolling owners (in shares) | 25,853,152 | 25,999,464 |
Noncontrolling interest, ownership percentage by noncontrolling owners | 41.60% | 44.50% |
EQUITY - Summary of Changes in
EQUITY - Summary of Changes in Ownership (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Class of Stock [Line Items] | |||||
Net income (loss) | $ 6,193 | $ (13,714) | |||
Shares issued in connection with acquisition | 3,000 | ||||
Stock issued during the period | 17 | 20,491 | |||
Transfers | |||||
Class of Stock [Line Items] | |||||
Net income (loss) | 2,202 | (8,696) | |||
Stock issued during the period | (1) | 0 | |||
Stock-based compensation - Vested & Exercised | (602) | 0 | |||
Net transfers to (from) non-controlling interests | (4,710) | 103 | |||
Change from net income attributable to DMS Inc. shareholders and transfers to (from) noncontrolling interest | (2,508) | (8,593) | |||
Additional Paid-in Capital | |||||
Class of Stock [Line Items] | |||||
Shares issued in connection with acquisition | 1,861 | ||||
Stock issued during the period | 17 | (50,846) | |||
SmarterChaos | |||||
Class of Stock [Line Items] | |||||
Units/shares redeemed and issued to Class A Common Stock | $ 3,000 | 392 | [1] | ||
SmarterChaos | Transfers | |||||
Class of Stock [Line Items] | |||||
Shares issued in connection with acquisition | 0 | 103 | |||
Units/shares redeemed and issued to Class A Common Stock | (189) | 0 | |||
SmarterChaos | Additional Paid-in Capital | |||||
Class of Stock [Line Items] | |||||
Units/shares redeemed and issued to Class A Common Stock | [1] | 392 | |||
Aimtell, PushPros and Aramis | |||||
Class of Stock [Line Items] | |||||
Shares issued in connection with acquisition | 14,889 | ||||
Aimtell, PushPros and Aramis | Transfers | |||||
Class of Stock [Line Items] | |||||
Shares issued in connection with acquisition | (1,589) | 0 | |||
Aimtell, PushPros and Aramis | Additional Paid-in Capital | |||||
Class of Stock [Line Items] | |||||
Shares issued in connection with acquisition | 8,688 | ||||
Crisp Results | |||||
Class of Stock [Line Items] | |||||
Shares issued in connection with acquisition | 19,823 | ||||
Crisp Results | Additional Paid-in Capital | |||||
Class of Stock [Line Items] | |||||
Shares issued in connection with acquisition | 11,567 | ||||
Crisp Results | Additional Paid-in Capital | Transfers | |||||
Class of Stock [Line Items] | |||||
Shares issued in connection with acquisition | (1,960) | 0 | |||
Prism Data | |||||
Class of Stock [Line Items] | |||||
Units/shares redeemed and issued to Class A Common Stock | 192 | ||||
Prism Data | Transfers | |||||
Class of Stock [Line Items] | |||||
Units/shares redeemed and issued to Class A Common Stock | (369) | $ 0 | |||
Prism Data | Additional Paid-in Capital | |||||
Class of Stock [Line Items] | |||||
Units/shares redeemed and issued to Class A Common Stock | $ 192 | ||||
[1] | On June 30, 2021, the sellers of SmarterChaos redeemed approximately one-half of their non-controlling interest held through DMSH Units in exchange for Class A Common Stock in DMS Inc. The non-controlling interest held by the Sellers of SmarterChaos did not include related Class B Common Stock to be retired upon redemption. |
RELATED PARTY TRANSACTIONS - Re
RELATED PARTY TRANSACTIONS - Registration Rights (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($)takedown | |
Related Party Transactions [Abstract] | |
Shelf takedown, aggregate minimum amount | $ | $ 20 |
Shelf takedown, maximum number | takedown | 4 |
Shelf takedown, period per incident | 6 months |
RELATED PARTY TRANSACTIONS - Am
RELATED PARTY TRANSACTIONS - Amended Partnership Agreement (Details) | 12 Months Ended |
Dec. 31, 2021shares | |
Related Party Transaction [Line Items] | |
Equity conversion ratio | 1 |
Non-Blocker Members | Amended Partnership Agreement | |
Related Party Transaction [Line Items] | |
Equity conversion ratio | 1 |
Conversion, minimum units (in shares) | 10,000 |
RELATED PARTY TRANSACTIONS - Ta
RELATED PARTY TRANSACTIONS - Tax Receivable Agreement (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Refund of preclosing taxes to be paid to Sellers | 100.00% | ||
Refund of preclosing taxes to be paid to Sellers, period after closing | 2 years | ||
Deferred tax asset | $ (11,924) | ||
Additional paid-in capital | $ (25,239) | (48,027) | |
Tax Receivable Agreement liability - current | 1,310 | $ 510 | |
Error Corrections Resulting From Completion of Tax Return | Revision of Prior Period, Error Correction, Adjustment | |||
Related Party Transaction [Line Items] | |||
Deferred tax asset | $ 2,100 | ||
Decrease in tax receivable agreement liability | 1,800 | ||
Decrease to additional paid in capital, tax receivable agreement changes | $ 300 | ||
Blocker Corp | |||
Related Party Transaction [Line Items] | |||
Deferred tax asset | (20,100) | ||
Income taxes receivable | 199 | ||
Tax receivable agreement liability | 16,300 | ||
Additional paid-in capital | $ 4,000 |
RELATED PARTY TRANSACTIONS - Ma
RELATED PARTY TRANSACTIONS - Management Agreement (Details) - Management and Advisory Services - Management - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Quarterly retainer to related party | $ 50 | |
General and administrative, related party expenses | $ 100 |
RELATED PARTY TRANSACTIONS - Pr
RELATED PARTY TRANSACTIONS - Prism Incentive Agreement (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Payments to acquire business | $ 25,129,000 | $ 2,799,000 | |
Prism Data | |||
Related Party Transaction [Line Items] | |||
Payments to acquire business | $ 850,000 | ||
Loss Contingency Accrual | $ 2,000,000 |
RELATED PARTY TRANSACTIONS - DM
RELATED PARTY TRANSACTIONS - DMSH Member Tax Distributions (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | ||
Tax distributions to members | $ 0.2 | $ 0.2 |
EMPLOYEE AND DIRECTOR INCENTI_3
EMPLOYEE AND DIRECTOR INCENTIVE PLANS - Additional Information (Details) | Oct. 27, 2021shares | Oct. 28, 2020shares | Jul. 15, 2020shares | Apr. 23, 2020USD ($) | Dec. 31, 2021USD ($)shares | Dec. 31, 2021USD ($)shares | Dec. 31, 2020USD ($)shares | Nov. 01, 2019USD ($) | Jan. 31, 2019USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock based compensation expense | $ | $ 6,800,000 | $ 1,000,000 | |||||||
Equity conversion ratio | 1 | ||||||||
Contract period | 10 years | ||||||||
Immediate recognition of expense | $ | $ 500,000 | ||||||||
Employer discretionary contribution amount | $ | $ 900,000 | $ 800,000 | |||||||
Equity value of plan | $ | $ 325,000,000 | $ 100,000,000 | |||||||
Payments to employee incentive plan participants | $ | $ 250,000 | ||||||||
Nonemployee Consultants | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock based compensation expense | $ | 200,000 | ||||||||
Stock-based compensation fair value | $ | $ 1,800,000 | $ 1,800,000 | |||||||
Restricted Stock Units (RSUs) | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares granted (in shares) | shares | 1,084,000 | 1,245,000 | |||||||
Stock based compensation expense | $ | $ 16,700,000 | ||||||||
Weighted-average remaining period of RSUs | 2 years 8 months 12 days | ||||||||
Fair value of vested restricted stock units | $ | $ 3,700,000 | $ 0 | |||||||
Accelerated number of shares (in shares) | shares | 34,000 | ||||||||
Restricted Stock Units (RSUs) | Nonemployee Consultants | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares issued (in shares) | shares | 126,000 | 126,000 | |||||||
Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Accelerated number of shares (in shares) | shares | 32,000 | ||||||||
Exercised (in shares) | shares | 0 | 0 | |||||||
Stock Options | Nonemployee Consultants | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares issued (in shares) | shares | 118,000 | 118,000 | |||||||
2020 Omnibus Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Capital shares reserved for future issuance (in shares) | shares | 11,600,000 | ||||||||
2020 Omnibus Incentive Plan | Restricted Stock Units (RSUs) | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares granted (in shares) | shares | 1,200,000 | ||||||||
Continuous service period | 3 years | ||||||||
2020 Omnibus Incentive Plan | Restricted Stock Units (RSUs) | Director | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares granted (in shares) | shares | 65,000 | ||||||||
2020 Omnibus Incentive Plan | Stock Options | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Contract period | 10 years | ||||||||
2020 Omnibus Incentive Plan | Stock Options | Minimum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award vesting period | 3 years | ||||||||
2020 Omnibus Incentive Plan | Stock Options | Maximum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Award vesting period | 4 years |
EMPLOYEE AND DIRECTOR INCENTI_4
EMPLOYEE AND DIRECTOR INCENTIVE PLANS - RSU Activity (Details) - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Restricted Stock | ||
Vested (in shares) | 490 | |
Weighted-Average Grant Date Fair Value | ||
Vested, Weighted average grant date fair value (usd per share) | $ 7.59 | |
Restricted Stock Units (RSUs) | ||
Number of Restricted Stock | ||
Beginning balance (in shares) | 1,197 | 0 |
Granted (in shares) | 1,084 | 1,245 |
Vested (in shares) | 490 | 0 |
Forfeited/Canceled (in shares) | 350 | 48 |
Ending balance (in shares) | 1,441 | 1,197 |
Weighted-Average Grant Date Fair Value | ||
Beginning balance, Weighted average grant date fair value (usd per share) | $ 7.31 | $ 0 |
Granted, Weighted average grant date fair value (usd per share) | 8.43 | 7.31 |
Vested, weighted average grant date fair value (usd per share) | 7.59 | 0 |
Forfeited, Weighted average grant date fair value (usd per share) | 8.11 | 7.31 |
Ending balance, Weighted average grant date fair value (usd per share) | $ 7.98 | $ 7.31 |
EMPLOYEE AND DIRECTOR INCENTI_5
EMPLOYEE AND DIRECTOR INCENTIVE PLANS - Share-based Compensation Weighted Average Assumptions (Details) - Stock Options | 12 Months Ended |
Dec. 31, 2021$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share price (usd per share) | $ 5.95 |
Risk-free rate | 0.80% |
Dividend yield | 0.00% |
Expected volatility | 50.50% |
Expected term (in years) | 6 years 1 month 6 days |
EMPLOYEE AND DIRECTOR INCENTI_6
EMPLOYEE AND DIRECTOR INCENTIVE PLANS - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Total Intrinsic Value of Restricted Stock Options Exercisable | ||
Total intrinsic value of stock options outstanding at beginning of period | $ 0 | $ 0 |
Total intrinsic value of stock options granted | 0 | 0 |
Intrinsic value of options exercised | 0 | 0 |
Total intrinsic value of stock options forfeited/expired | 0 | 0 |
Total intrinsic value of stock options outstanding at end of period | 0 | $ 0 |
Total intrinsic value of stock options exercisable | $ 1,279 | |
Stock Options | ||
Number of Stock Options | ||
Beginning balance (in shares) | 551 | 0 |
Granted (in shares) | 1,706 | 574 |
Exercised (in shares) | 0 | 0 |
Forfeited/expired (in shares) | 179 | 23 |
Ending balance (in shares) | 2,078 | 551 |
Exercisable (in shares) | 169 | |
Weighted-Average Grant Date Fair Value | ||
Beginning balance (usd per share) | $ 3.34 | $ 0 |
Granted (in usd per share) | 4.14 | 3.34 |
Exercised (usd per share) | 0 | 0 |
Forfeited/expired (usd per share) | 4.07 | 0 |
Ending balance (usd per share) | 3.92 | $ 3.34 |
Weighted-average grant-date strike price of options (in dollars per share) | $ 7.58 | |
Weighted-Average Remaining Contractual Term (in Years) | ||
Granted (in years) | 6 years 1 month 6 days | 5 years 10 months 24 days |
Forfeited/Expired (in years) | 6 years 1 month 6 days | |
Outstanding (in years) | 6 years 1 month 6 days | 5 years 10 months 24 days |
INCOME TAXES - Provision (Benef
INCOME TAXES - Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | ||
Federal | $ 2,539 | $ 3,101 |
State | 307 | 216 |
Foreign | 26 | 248 |
Total Current | 2,872 | 3,565 |
Deferred | ||
Federal | 12,848 | 69 |
State | 3,591 | (549) |
Total Deferred | 16,439 | (480) |
Provision for income taxes | $ 19,311 | $ 3,085 |
INCOME TAXES - Tax Rate Reconci
INCOME TAXES - Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Tax provision (benefit) from federal statutory rate | $ 5,356 | $ (2,190) |
Tax on income not subject to entity level federal income tax | 1,074 | 1,897 |
State income taxes, net of federal tax effect | (817) | (280) |
Warrant liability fair value change | (3,804) | 1,856 |
Permanent adjustments - Tax Receivable Agreement | (3,211) | 0 |
Other permanent adjustments | (36) | 434 |
True-ups and other | (919) | (465) |
Foreign tax credit | 63 | (63) |
Undistributed earnings | 529 | 823 |
Canadian tax expense | 26 | 261 |
Valuation allowance | 21,240 | 812 |
Tax credits | (190) | 0 |
Provision for income taxes | $ 19,311 | $ 3,085 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Examination [Line Items] | ||
Operating loss carryforwards | $ 6,000 | $ 9,000 |
Tax credit carryforward | 200 | |
Valuation allowance | 21,240 | 812 |
Deferred tax asset | (11,924) | |
Change in tax receivable agreement liability | 15,289 | 0 |
Current tax receivable agreement | $ 1,310 | $ 510 |
DMSH | ||
Income Tax Examination [Line Items] | ||
Equity method investment, ownership percentage | 58.40% | 55.50% |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Investment in DMS Holdings LLC | $ 29,066 | $ 30,017 |
Reserve accruals | 418 | 140 |
Charitable contributions | 11 | 9 |
Interest carryforward | 2,562 | 1,158 |
Tax credit carryforwards | 190 | 63 |
Property and equipment | 42 | 0 |
Net operating loss | 1,808 | 150 |
Total gross deferred tax assets | 34,097 | 31,537 |
Less: Valuation allowance | (32,970) | (11,626) |
Total deferred tax assets, net | 1,127 | 19,911 |
Deferred tax liabilities: | ||
Intangibles | (4,561) | (6,971) |
Property and equipment | 0 | (193) |
Undistributed earnings | (1,352) | (823) |
Total deferred tax liabilities | (5,913) | (7,987) |
Net deferred tax (liability) asset | $ (4,786) | |
Net deferred tax (liability) asset | $ 11,924 |
EARNINGS PER SHARE - Reconcilia
EARNINGS PER SHARE - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | ||
Net income (loss) | $ 6,193 | $ (13,714) |
Net income (loss) attributable to DMSH prior to the Business Combination | 0 | (1,345) |
Net income (loss) attributable to non-controlling interest | 3,991 | (5,018) |
Net income (loss) attributable to Digital Media Solutions, Inc. - basic and diluted | $ 2,202 | $ (7,351) |
Denominator: | ||
Weighted-average shares outstanding - basic (in shares) | 35,249 | 32,335 |
Add: dilutive effects of employee equity awards (in shares) | 389 | 0 |
Weighted-average shares outstanding - diluted (in shares) | 35,764 | 32,335 |
Net earnings (loss) per common share: | ||
Basic (usd per share) | $ 0.06 | $ (0.23) |
Diluted (usd per share) | $ 0.06 | $ (0.23) |
Public Warrant | ||
Denominator: | ||
Add: dilutive effects of warrants (in shares) | 126 | 0 |
EARNINGS PER SHARE - Additional
EARNINGS PER SHARE - Additional Information (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Common Class B | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 25,699,464 | 26,000,000 |
Share-based Payment Arrangement | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 1,900,000 | 1,800,000 |
Private Warrant | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 4,000,000 | 14,000,000 |
Public Warrant | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 14,000,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - SmarterChaos - shares | Jan. 17, 2022 | Jun. 30, 2021 |
Subsequent Event [Line Items] | ||
Units/shares redeemed and issued to Class A Common Stock (in shares) | 154,000 | |
Subsequent Event | Common Class A | ||
Subsequent Event [Line Items] | ||
Units/shares redeemed and issued to Class A Common Stock (in shares) | 154,000 |
SCHEDULE II - VALUATION AND Q_2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (Details) - SEC Schedule, 12-09, Allowance, Credit Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Balance at Beginning of Period | $ 3,121 | $ 941 |
Charge to Costs and Expenses | 4,798 | 3,039 |
Charged to Other Accounts | 0 | 0 |
Deductions | 2,989 | 859 |
Balance at End of Period | $ 4,930 | $ 3,121 |