Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 11, 2023 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
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 Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001725134 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Class A Common Stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Class A common stock, $0.0001 par value per share | |
Trading Symbol | DMS | |
Security Exchange Name | NYSE | |
Entity Common Stock, Shares Outstanding | 40,041,025 | |
Class B Common Stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 25,699,464 | |
Redeemable warrants to acquire Class A common stock | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Redeemable warrants to acquire Class A common stock | |
Trading Symbol | DMS WS | |
Security Exchange Name | NYSE | |
Entity Common Stock, Shares Outstanding | 28,443,522 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 20,066 | $ 48,839 |
Accounts receivable, net of allowances of $4,785 and $4,656, respectively | 56,369 | 48,109 |
Prepaid and other current assets | 4,177 | 3,296 |
Income tax receivable | 2,536 | 1,966 |
Total current assets | 83,148 | 102,210 |
Property and equipment, net | 16,719 | 17,702 |
Operating lease right-of-use assets, net | 1,943 | 2,187 |
Goodwill | 83,445 | 77,238 |
Intangible assets, net | 52,829 | 27,519 |
Other assets | 723 | 765 |
Total assets | 238,807 | 227,621 |
Current liabilities: | ||
Accounts payable | 45,598 | 39,908 |
Accrued expenses and other current liabilities | 12,188 | 7,101 |
Current portion of long-term debt | 2,250 | 2,250 |
Tax Receivable Agreement liability | 164 | 164 |
Operating lease liabilities - current | 2,175 | 2,175 |
Contingent consideration payable - current | 1,466 | 1,453 |
Total current liabilities | 63,841 | 53,051 |
Long-term debt | 254,358 | 254,573 |
Deferred tax liabilities | 1,662 | 1,112 |
Operating lease liabilities - non-current | 1,734 | 2,232 |
Warrant liabilities | 13,031 | 600 |
Contingent consideration payable - non-current | 2,457 | 0 |
Total liabilities | 337,083 | 311,568 |
Preferred stock, $0.0001 par value, 100,000 shares authorized; 80 Series A and 60 Series B convertible redeemable issued and outstanding, respectively | 4,993 | 0 |
Stockholders' deficit: | ||
Additional paid-in capital | (16,614) | (14,054) |
Treasury stock, at cost, 138 and 0 shares, respectively | (181) | (181) |
Cumulative deficit | (45,494) | (32,896) |
Total stockholders' deficit | (62,282) | (47,124) |
Non-controlling interest | (40,987) | (36,823) |
Total deficit | (103,269) | (83,947) |
Total liabilities, preferred stock and stockholders' deficit | 238,807 | 227,621 |
Class A Common Stock | ||
Stockholders' deficit: | ||
Common stock | 4 | 4 |
Class B Common Stock | ||
Stockholders' deficit: | ||
Common stock | 3 | 3 |
Class C common stock | ||
Stockholders' deficit: | ||
Common stock | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | |
Allowance for credit loss | $ 4,785 | $ 4,656 | |
Common stock outstanding (in shares) | 25,699,000 | ||
Treasury stock (in shares) | 138,000 | 0 | |
Preferred Stock | |||
Preferred stock outstanding (in shares) | [1] | 140,000 | 0 |
Series A Preferred Stock | |||
Preferred stock par value (usd per share) | $ 0.0001 | $ 0.0001 | |
Preferred stock, authorized (in shares) | 100,000,000 | 100,000,000 | |
Series A Preferred Stock | Preferred Stock | |||
Preferred stock issued (in shares) | 80,000 | 80,000 | |
Preferred stock outstanding (in shares) | 80,000 | 80,000 | |
Series B Preferred Stock | Preferred Stock | |||
Preferred stock issued (in shares) | 60,000 | 60,000 | |
Preferred stock outstanding (in shares) | 60,000 | 60,000 | |
Class A Common Stock | |||
Common stock par value (usd per share) | $ 0.0001 | ||
Common stock authorized (in shares) | 500,000,000 | ||
Common stock issued (in shares) | 39,957,000 | ||
Common stock outstanding (in shares) | 39,957,000 | ||
Class B Common Stock | |||
Common stock par value (usd per share) | $ 0.0001 | ||
Common stock authorized (in shares) | 60,000,000 | ||
Common stock issued (in shares) | 25,699,000 | ||
Class C common stock | |||
Common stock par value (usd per share) | $ 0.0001 | ||
Common stock authorized (in shares) | 40,000,000 | ||
Common stock issued (in shares) | 0 | ||
Common stock outstanding (in shares) | 0 | ||
[1] See Note 8. Fair Value Measurements and Note 9. Equity . |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net revenue | $ 90,313 | $ 109,110 |
Cost of revenue (exclusive of depreciation and amortization) | 68,042 | 77,834 |
Salaries and related costs | 12,226 | 13,705 |
General and administrative expenses | 12,856 | 11,107 |
Depreciation and amortization | 5,082 | 7,060 |
Acquisition costs | 2,345 | 13 |
Change in fair value of contingent consideration liabilities | 13 | 2,591 |
Loss from operations | (10,251) | (3,200) |
Interest expense | 6,699 | 3,687 |
Change in fair value of warrant liabilities | 3,764 | (1,840) |
Net loss before income taxes | (20,714) | (5,047) |
Income tax (benefit) expense | (13) | 310 |
Net loss | (20,701) | (5,357) |
Net loss attributable to non-controlling interest | (8,103) | (2,223) |
Net loss attributable to Digital Media Solutions, Inc. | $ (12,598) | $ (3,134) |
Weighted-average shares outstanding - basic (in shares) | 39,957 | 35,576 |
Weighted-average shares outstanding - diluted (in shares) | 39,957 | 35,576 |
Loss per share attributable to Digital Media Solutions, Inc.: | ||
Basic (usd per share) | $ (0.32) | $ (0.09) |
Diluted (usd per share) | $ (0.32) | $ (0.09) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Preferred Stock and Stockholders’ Deficit - USD ($) shares in Thousands, $ in Thousands | Total | Class A Common Stock | Total Stockholders' Deficit | Preferred Stock | [4] | Preferred Stock Preferred stock series A | Preferred Stock Preferred stock series B | Common Stock Class A Common Stock | Common Stock Class A Common Stock Smarter Chaos | Common Stock Class B Common Stock | Additional Paid-in Capital | Treasury Stock | Cumulative Deficit | Non- controlling Interest | |
Beginning balance (in shares) at Dec. 31, 2021 | 36,226 | 25,699 | |||||||||||||
Beginning balance at Dec. 31, 2021 | $ (47,818) | $ (26,177) | $ 3 | $ 3 | $ (25,239) | $ (944) | $ (21,641) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net (loss) income | (5,357) | (3,134) | (3,134) | (2,223) | |||||||||||
SmarterChaos DMSH units redeemed and issued to Class A Common Stock (in shares) | [1] | 153 | |||||||||||||
Stock-based compensation | 1,942 | 1,942 | 1,942 | ||||||||||||
Shares issued under the 2020 Omnibus Incentive Plan (in shares) | 15 | ||||||||||||||
Distributions to non-controlling interest holders | [2] | (573) | (573) | ||||||||||||
Impact of transactions affecting non-controlling interest | [3] | 0 | (457) | (457) | 457 | ||||||||||
Ending balance (in shares) at Mar. 31, 2022 | 36,394 | 25,699 | |||||||||||||
Ending balance at Mar. 31, 2022 | (51,806) | (27,826) | $ 3 | $ 3 | (23,754) | (4,078) | (23,980) | ||||||||
Preferred stock, beginning balance (in shares) at Dec. 31, 2022 | 0 | 80 | 60 | ||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||
Convertible redeemable preferred stock (in shares) | [4] | 80 | |||||||||||||
Convertible redeemable preferred stock, value | [4] | $ 2,853 | $ 2,140 | ||||||||||||
Preferred stock, ending balance (in shares) at Mar. 31, 2023 | 140 | 80 | 60 | ||||||||||||
Beginning balance (in shares) at Dec. 31, 2022 | 39,957 | 25,699 | |||||||||||||
Beginning balance at Dec. 31, 2022 | (83,947) | (47,124) | $ 0 | $ 4 | $ 3 | (14,054) | $ (181) | (32,896) | (36,823) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net (loss) income | (20,701) | (12,598) | (12,598) | (8,103) | |||||||||||
Stock-based compensation | 1,379 | 1,379 | 1,379 | ||||||||||||
Impact of transactions affecting non-controlling interest | [5] | $ 0 | (3,939) | (3,939) | 3,939 | ||||||||||
Ending balance (in shares) at Mar. 31, 2023 | 25,699 | 39,957 | 39,957 | 25,699 | |||||||||||
Ending balance at Mar. 31, 2023 | $ (103,269) | $ (62,282) | $ 4,993 | $ 4 | $ 3 | $ (16,614) | $ (181) | $ (45,494) | $ (40,987) | ||||||
[1]On January 17, 2022, the Sellers of SmarterChaos redeemed their remaining non-controlling interest held through DMSH Units in exchange for 154 thousand 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.[2]Represents tax distributions to shareholders Prism, Clairvest and the Sellers of SmarterChaos. As of March 31, 2022, $10 thousand of these distributions have not been paid.[3]The carrying amount of non-controlling interest was adjusted primarily to reflect the change in ownership interest caused by additional DMSH units redeemed and issued to Class A Common Stock by the Sellers of SmarterChaos.[4] See Note 8. Fair Value Measurements and Note 9. Equity . |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Preferred Stock and Stockholders’ Deficit (Parenthetical) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 USD ($) shares | ||
Unpaid distributions | $ | $ 10 | |
Common Stock | Smarter Chaos | Class A Common Stock | ||
Stock issued during period, conversion of convertible securities (in shares) | shares | 153 | [1] |
[1]On January 17, 2022, the Sellers of SmarterChaos redeemed their remaining non-controlling interest held through DMSH Units in exchange for 154 thousand 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. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net loss | $ (20,701) | $ (5,357) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Allowance for credit losses | 563 | 532 |
Depreciation and amortization | 5,082 | 7,060 |
Amortization of right-of-use assets | 242 | 0 |
Lease restructuring charges | 0 | (126) |
Stock-based compensation, net of amounts capitalized | 1,258 | 1,842 |
Amortization of debt issuance costs | 390 | 453 |
Deferred income tax provision (benefit), net | 550 | (392) |
Change in fair value of contingent consideration | 13 | 2,591 |
Change in fair value of warrant liabilities | 3,764 | (1,840) |
Loss from preferred warrants issuance | 553 | 0 |
Change in income tax receivable and payable | (570) | 732 |
Change in accounts receivable | (1,371) | (7,368) |
Change in prepaid expenses and other current assets | (657) | 1,150 |
Change in accounts payable and accrued expenses | 6,638 | (1,263) |
Change in operating lease liabilities | (537) | 0 |
Change in other liabilities | 0 | 38 |
Net cash used in operating activities | (4,783) | (1,948) |
Cash flows from investing activities | ||
Additions to property and equipment | (1,215) | (1,617) |
Acquisition of business, net of cash acquired | (35,320) | 0 |
Net cash used in investing activities | (36,535) | (1,617) |
Cash flows from financing activities | ||
Payments of long-term debt and notes payable | (562) | (563) |
Proceeds from preferred shares and warrants issuance, net | 13,107 | 0 |
Distributions to non-controlling interest holders | 0 | (563) |
Net cash provided by (used in) financing activities | 12,545 | (1,126) |
Net change in cash and cash equivalents | (28,773) | (4,691) |
Cash and cash equivalents, beginning of period | 48,839 | 26,394 |
Cash and cash equivalents, end of period | 20,066 | 21,703 |
Supplemental Disclosure of Cash Flow Information | ||
Interest | 6,349 | 3,218 |
Income taxes | 7 | 0 |
Non-Cash Transactions: | ||
Contingent and deferred acquisition consideration | 2,457 | 2,591 |
Stock-based compensation capitalized in property and equipment | 121 | 100 |
Capital expenditures included in accounts payable | $ 176 | $ 216 |
Business, Basis of Presentation
Business, Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
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 Quarterly 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. Basis of Presentation These consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments consisting of normal and recurring entries considered necessary for a fair presentation of the results for the interim periods presented have been included. All significant intercompany balances and transactions have been eliminated. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts in the financial statements and accompanying notes. These estimates are based on information available as of the date of the unaudited consolidated financial statements; therefore, actual results could differ from those estimates. Interim results are not necessarily indicative of the results for a full year. Business Combination On July 15, 2020, Digital Media Solutions Holding (“DMSH”) consummated the Business Combination with Leo Holdings Corp. (“Leo”) pursuant to the Business Combination Agreement (“Business Combination”). Pursuant to the Business Combination, DMS Inc. acquired, directly and through its acquisition of the equity of Blocker, approximately 60.9% of the membership interest in DMSH, while 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”) retained approximately 39.1% of the membership interest in DMSH (“non-controlling interests”). For additional information, see Note 2. Business Combination in the Notes to Consolidated Financial Statements in our 2022 Form 10-K/A. Non-controlling Interest The non-controlling interest represents the membership interest in DMSH held by holders other than the Company. As of March 31, 2023, the Prism, Clairvest Direct Sellers and SmarterChaos combined ownership percentage in DMSH was 39.1% and as of December 31, 2022 it was 39.1%. Principles of Consolidation The Company consists of DMS Inc. and its wholly-owned subsidiary, Blocker. 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 preferred warrants, private placement warrants, the allowance for credit losses, 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. Reclassifications Certain prior period balances have been reclassified to conform to the current period presentation in the consolidated financial statements and the accompanying notes. Significant Accounting Policies There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in Note 1. Business, Basis of Presentation and Summary of Significant Accounting Policies in our 2022 Form 10-K/A except those related to the accounting and valuation of preferred stock and warrants. See Note 8. Fair Value Measurements and Note 9. Equity . New Accounting Standards Accounting Standards Recently Adopted In June 2016, the FASB issued authoritative guidance ASC 326 Financial Instruments - Credit Losses , regarding the impairment model known as the current expected credit loss (“CECL”) model 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 CECL 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 emerging growth companies for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted this guidance effective January 1, 2023, which was not material to the consolidated financial statements for the three months ended March 31, 2023. 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. As of March 31, 2023, there were no new accounting standards that would need to be disclosed. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of Revenue The following tables present the disaggregation of revenue by reportable segment and type of service (in thousands): Three Months Ended March 31, 2023 Brand Direct (1) Marketplace Technology Solutions Intercompany eliminations Total Net revenue: Customer acquisition $ 54,020 $ 37,288 $ — $ (4,714) $ 86,594 Managed services 1,383 — 753 — 2,136 Software services — — 1,583 — 1,583 Total Net revenue $ 55,403 $ 37,288 $ 2,336 $ (4,714) $ 90,313 ____________________ (1) ClickDealer net revenue for the one day between March 30, 2023 and March 31, 2023 was considered immaterial; therefore it is excluded from the Company’s consolidated statement of operation for the three months ended March 31, 2023. Three Months Ended March 31, 2022 Brand Marketplace Technology Solutions Intercompany eliminations Total Net revenue: Customer acquisition $ 59,619 $ 58,806 $ — $ (13,260) $ 105,165 Managed services 1,609 — 1,510 — 3,119 Software services — — 826 — 826 Total Net revenue $ 61,228 $ 58,806 $ 2,336 $ (13,260) $ 109,110 Accounts Receivable, net Accounts receivable are recorded at the invoiced amount and do not bear interest. The Allowance for credit losses is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance based on historical write-off experience. The Company reviews its Allowance for credit losses monthly. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. All other balances are reviewed on a pooled basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers. The activity in the Allowance for credit losses is as follows (in thousands): Three Months Ended March 31, 2023 2022 Balance, beginning of period $ 4,656 $ 4,930 Additions charged to costs and expenses 483 529 Deductions/write-offs 398 — ASU 2016-13 (Topic 326) adjustment 44 — Balance, end of period $ 4,785 $ 5,459 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 unaudited consolidated balance sheets. As of March 31, 2023 and December 31, 2022, the balance of deferred revenue was $0.5 million and $1.0 million, respectively, and is recorded within “Accrued expenses and other current liabilities” on the unaudited consolidated balance sheets. We expect the majority of the deferred revenue balance at March 31, 2023 to be recognized as revenue during the following quarter. For the three months ended March 31, 2023 and 2022, one customer accounted for approximately 16.6% and 18.1%, respectively, of our total revenues. |
Reportable Segments
Reportable Segments | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable SegmentsThe 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 loss from operations (in thousands): Three Months Ended March 31, 2023 (1) 2022 Net revenue $ 90,313 $ 109,110 Brand Direct 55,403 61,228 Marketplace 37,288 58,806 Technology Solutions 2,336 2,336 Intercompany eliminations (4,714) (13,260) Cost of revenue (exclusive of depreciation and amortization) 68,042 77,834 Brand Direct 42,816 48,448 Marketplace 29,338 42,380 Technology Solutions 602 266 Intercompany eliminations (4,714) (13,260) Gross profit (exclusive of depreciation and amortization) 22,271 31,276 Brand Direct 12,587 12,780 Marketplace 7,950 16,426 Technology Solutions 1,734 2,070 Salaries and related costs 12,226 13,705 General and administrative expenses 12,856 11,107 Depreciation and amortization 5,082 7,060 Acquisition costs 2,345 13 Change in fair value of contingent consideration liabilities 13 2,591 Loss from operations $ (10,251) $ (3,200) ____________________ (1) ClickDealer’s net revenue, cost of revenue and operating expenses for the one day between March 30, 2023 and March 31, 2023 were considered immaterial; therefore it is excluded from the Company’s consolidated statement of operation for the three months ended March 31, 2023. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
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 Technology Solutions Total Balance, December 31, 2022 $ 18,321 $ 54,554 $ 4,363 $ 77,238 Additions (Note 5) — — 6,207 6,207 Balance, March 31, 2023 $ 18,321 $ 54,554 $ 10,570 $ 83,445 The carrying amount of Goodwill for all reporting units had no accumulated impairments as of March 31, 2023 and December 31, 2022. Intangible assets, net Finite-lived Intangible assets, net consisted of the following (in thousands): March 31, 2023 December 31, 2022 Amortization Gross Impairment Accumulated Net Gross Impairment Accumulated Net Technology 4 to 7 $ 59,326 $ (5,933) $ (40,865) $ 12,528 $ 54,316 $ (5,933) $ (39,411) $ 8,972 Customer relationships 4 to 15 69,823 (12,387) (22,424) 35,012 49,423 (12,387) (21,205) 15,831 Brand 1 to 7 15,009 (3,250) (6,493) 5,266 12,169 (3,250) (6,233) 2,686 Non-competition agreements 1 1,898 — (1,875) 23 1,898 — (1,868) 30 Total $ 146,056 $ (21,570) $ (71,657) $ 52,829 $ 117,806 $ (21,570) $ (68,717) $ 27,519 The weighted average amortization period for intangible assets is 8 years in total, and by category is 6 years for technology, 10 years for customer relationships, 6 years for brand, 3 years for non-competition agreements. 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): 2023 2024 2025 2026 2027 Thereafter Amortization expense $ 9,239 $ 10,789 $ 6,264 $ 5,574 $ 4,401 $ 16,562 Amortization expense for finite-lived intangible assets is recorded on an accelerated straight-line basis. Amortization expense related to finite-lived intangible assets was $2.9 million and $4.9 million for the three months ended March 31, 2023 and 2022, respectively. Impairment analysis Related to goodwill impairment, the Company considered if an event occurred or circumstances changed that would more likely than not reduce the fair value of a reporting unit below its carrying amount noting none in the three months ended March 31, 2023 and 2022, respectively. Related to intangibles impairment, the Company noted no triggering events in the three months ended March 31, 2023 and 2022, respectively. For the three months ended March 31, 2023 and 2022, respectively, there was no impairment to intangible assets. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions ClickDealer On March 30, 2023, the Company completed a transaction to acquire the HomeQuote.io home services marketplace from Customer Direct Group, along with the supporting media and technology assets of the ClickDealer international ad network, ("ClickDealer"). ClickDealer’s international performance ad network and the HomeQuote.io marketplace connects consumers with brands within the home improvement and related home services sector. The Company paid cash consideration of $35.0 million upon closing of the transaction. The transaction also included up to $10.0 million in contingent consideration, subject to the achievement of certain revenue and net margin based milestones in two subsequent one-year measurement periods, payable in cash or in Class A Common Stock at the election of the Company. The Estimated Net Working Capital adjustment upon closing was $0.32 million. 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. All recognized assets and liabilities are preliminary, including any foreign jurisdiction taxation, if any, and except for the contingent consideration. 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. Future further analysis of the forecast and refinements to the significant assumptions in the valuation models used to value the intangibles and contingent consideration liabilities may be needed to adjust their fair value throughout the measurement period. As of March 30, 2023, the acquisition date, the fair value of the intangibles, contingent consideration liability and working capital accounts are as follows (in thousands): ClickDealer Acquisition Date Fair Value Goodwill $ 6,207 Intangible Assets: Technology $ 5,010 Customer relationships $ 20,400 Brand $ 2,840 Contingent consideration liability $ 2,457 Working capital accounts $ 3,320 The Company primarily used Income Approach methodologies, 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 excluded in the Company’s results of operations since the acquisition date of March 30, 2023, as they were immaterial. Under 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 the ClickDealer and Homequote.io brands was determined using the Income Approach and Relief from Royalty Method, fair value of the technology was determined using the Relief from Royalty Method, and 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 ClickDealer and will be included in the Brand Direct reportable segment. The goodwill expected to be deductible for tax purposes is being evaluated. Intangible assets primarily consist of brand, technology and customer relationships with an estimated useful life of five years for brand, seven years for technology and fifteen years for customer relationships. Traverse On May 10, 2022, the Company acquired Traverse Data, Inc. (“Traverse”). Traverse is a marketing and advertising technology company. The Company paid cash consideration of $2.5 million upon closing of the transaction. The transaction also includes up to $0.5 million in contingent consideration, subject to the achievement of certain milestones, which is payable in cash 15 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): Traverse Acquisition Date Fair Value Fair Value Mark-to-Market Changes Revised Acquisition Date Fair Value Goodwill $ 444 $ 291 $ 735 Intangible Assets: Technology $ 2,500 $ (30) $ 2,470 Customer relationships $ 50 $ — $ 50 Brand $ 59 $ 1 $ 60 Non-competition agreements $ 3 $ (3) $ — Contingent consideration liability $ 428 $ 3 $ 431 Working capital accounts $ (49) $ 333 $ 284 The Company primarily used Income Approach methodologies, 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 May 10, 2022. 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 technology, brand, customer relationships and non-competition agreements. Fair value of the technology was determined using the Multi Period Excess Earnings Approach; fair value of the customer relationships was determined using the Excess Earnings Method utilizing distributor inputs; fair value of the brand was determined using the Relief from Royalty Method; and fair value of the non-competition agreements was determined using the Discounted Cash Flow Approach. The Goodwill related to this transaction reflects the synergies expected from combining the operations of Traverse and is included in the Technology Solutions reportable segment. Goodwill is expected to be deductible for tax purposes. Intangible assets primarily consist of technology, brand and customer relationships with an estimated useful life of five years for technology, three years for brand and five years for customer relationships. 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 included up to $10.0 million in contingent consideration, and a $5.0 million deferred payment, to be paid 18 months after the acquisition date. Accounting for the acquisition was completed on March 31, 2022. The Company paid the contingent consideration on July 1, 2022 in the form of 2.99 million unregistered shares of Class A Common Stock, priced at $3.3455, the average closing price of the Class A common stock during the twenty Aimtell, Aramis and PushPros On February 1, 2021, the Company acquired Aimtell, Inc. (“Aimtell”), PushPros, Inc. (“PushPros”) and Aramis Interactive (“Aramis”, and together with Aimtell and PushPros, “AAP”). 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 included 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. Accounting for the acquisition was completed on March 31, 2022. The contingent consideration for the Aramis acquisition was finalized on December 31, 2022, the end of the earnout period, and will become payable during the second quarter of 2023, in the form of cash or Class A Common Stock, at the election of the Company. The contingent consideration for the Aimtell / PushPros acquisition will finalize on December 31, 2023, the end of the earnout period. Acquisitions’ Fair Value Measurement and Pro Forma Information The acquisition date fair value of assets acquired and liabilities assumed from the AAP, Crisp Results and Traverse acquisitions consist of the following (in thousands): Expected Useful Life AAP Crisp Results Traverse ClickDealer 2021 2021 2022 2023 Cash $ — $ — $ 232 $ — Goodwill 9,761 21,894 735 6,207 Technology 4 to 7 3,900 — 2,470 5,010 Customer relationships 4 to 15 7,690 19,600 50 20,400 Accounts receivable 3,100 2,610 276 7,452 Brand 1 to 7 208 7,400 60 2,840 Non-competitive agreements 1 to 3 83 — — — Property and equipment 3 to 5 250 220 — — Accounts payable (2,887) (1,593) (232) (4,357) Other assets acquired and liabilities assumed, net (1) 740 1 7 225 Net assets and liabilities acquired $ 22,845 $ 50,132 $ 3,598 $ 37,777 ____________________ (1) Other assets acquired and liabilities assumed, net includes prepaids and other current assets, partially offset by other current liabilities (e.g., Travel and expense payables, payroll liabilities, tax liabilities, and transition services payable). The weighted average amortization period for AAP 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. The weighted average amortization period for Traverse acquisition technology is 5 years, customer relationships is 5 years, brand is 3 years and non-compete agreements is 1 year. The weighted average amortization period for ClickDealer acquisition technology is 7 years, customer relationships is 15 years and brand is 5 years. In total, the weighted average amortization period for AAP is 4 years, Crisp Results is 5.6 years, Traverse is 5 years and ClickDealer is 13 years. The following schedule represents the amounts of net revenue and net loss from operations related to Traverse, AAP and Crisp Results acquisitions which have been included in the consolidated statements of operations for the periods indicated subsequent to the acquisition date in the period of acquisition (in thousands): Three Months Ended March 31, 2023 (1) Traverse Net revenue $ 824 Net income from operations $ 220 ____________________ (1) ClickDealer net revenue and net income from operations for the one day between March 30, 2023 and March 31, 2023 were considered immaterial; therefore it is excluded from the Company’s consolidated statement of operation for the three months ended March 31, 2023. Three Months Ended March 31, 2022 AAP Crisp Results Net revenue $ 4,073 $ 8,238 Net income (loss) from operations $ (731) $ 839 Pro Forma Information The following 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 (in thousands): Three Months Ended March 31, 2023 (unaudited) DMS ClickDealer Pro Forma Net revenue $ 90,313 $ 19,865 $ 110,178 Net income (loss) from operations $ (10,251) $ 1,704 $ (8,547) Three Months Ended March 31, 2022 (unaudited) DMS ClickDealer Traverse Pro Forma Net revenue $ 109,110 $ 18,550 $ 722 $ 128,382 Net income from operations $ (3,200) $ 1,580 $ 17 $ (1,603) |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table presents the components of outstanding debt (in thousands): March 31, 2023 December 31, 2022 Term loan $ 221,063 $ 221,625 Revolving credit facility 40,000 40,000 Total debt 261,063 261,625 Less: Unamortized debt issuance costs (1) (4,455) (4,802) Debt, net 256,608 256,823 Less: Current portion of long-term debt (2,250) (2,250) Long-term debt $ 254,358 $ 254,573 ____________________ (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, is 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. The Term Loan bears interest at our option, at either (i) adjusted LIBOR plus 5.00% or (ii) the Base Rate plus 4.00%. Since May 25, 2021 our interest rate is based on LIBOR plus 5.00%. For the three months ended March 31, 2023, the effective interest rate was 10.36%. 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) the 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%. Under the Revolving Facility, DMS LLC pays a 0.50% per annum commitment fee in arrears on the undrawn portion of the revolving commitments. Since May 25, 2021 our interest rate is based on LIBOR plus 5.00%. The Company drew $5.0 million and $35.0 million on October 4, 2022 and December 29, 2022, respectively. For the three months ended March 31, 2023, the effective interest rate was 8.33%. The initial $4.2 million debt discount and $3.5 million debt issuance cost related to the Term Loan and Revolving Facility is being amortized over the term of the loan using the effective interest method. As of March 31, 2023, the Term Loan debt discount and debt issuance cost classified as debt had a remaining unamortized balance of $2.7 million and $1.7 million, respectively. As of December 31, 2022, the Term Loan debt discount and debt issuance cost included in the carrying value of the debt had a remaining unamortized balance of $3.7 million and $2.4 million, respectively. At March 31, 2023 and December 31, 2022, the unamortized debt issuance cost of $0.5 million and $0.8 million, respectively, associated with the Revolving Facility is classified and amortized as Other assets within the consolidated balance sheets. The Company’s ability to borrow amounts under the Credit Facility is conditioned upon its compliance with specified covenants, including certain reporting covenants and financial covenants that, in addition to other items, require the Company to maintain a maximum net leverage ratio (ratio of total debt borrowed by the Company to EBITDA for the four consecutive fiscal quarters most recently ended, subject to certain adjustments set forth in the Credit Facility) not to exceed 4.5:1.0 on the last day of the quarter ended March 31, 2023, which net leverage ratio is adjusted for subsequent quarters as set forth in the Credit Facility. In the event the Company breaches the net leverage ratio, the Company may cure such breach by raising capital through the sale of equity, which capital will be added on a dollar-for-dollar basis to the calculation of EBITDA for purposes of such test period to determine compliance with the financial covenant. As of December 31, 2022, the Company was in breach of the net leverage ratio, which it cured on March 30, 2023 through the funds received in connection with the issuance of Series A and Series B convertible Preferred stock and Warrants. As of March 31, 2023, the Company was in material compliance with all financial covenants. Debt Maturity Schedule The scheduled maturities of our total debt are estimated as follows at March 31, 2023 (in thousands): 2023 $ 1,688 2024 2,250 2025 2,250 2026 254,875 Total debt $ 261,063 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases The following table summarizes the maturities of undiscounted cash flows of operating lease liabilities reconciled to total lease liability as of March 31, 2023 (in thousands): Lease Amounts 2023 $ 1,638 2024 1,851 2025 546 Total 4,035 Less: Imputed interest (126) Present value of operating lease liabilities $ 3,909 As of March 31, 2023, the operating lease weighted average remaining lease term is 1.9 years and the operating lease weighted average remaining discount rate is 3.74%. The discount rate for each lease represents the incremental borrowing rate that the Company would incur at commencement of the lease to borrow on a collateralized basis over a similar term and amount equal to lease payments in a similar economic environment. The following table represents the Company’s aggregate lease costs, by lease classification (in thousands): Category Statement of Operations Location March 31, 2023 Operating lease costs General and administrative expenses $ 284 Short-term lease costs General and administrative expenses 153 Sub-lease income General and administrative expenses (179) Total lease costs, net $ 258 The rental expense for the three months ended March 31, 2023 and 2022 was $0.4 million and $0.3 million, respectively. As of March 31, 2023 the cash paid for amounts included in the measurement of operating leases was $0.5 million. As part of the Company’s restructuring costs reduction plan, the Company subleased a certain portion of its leased office space. Income from the sublease was $0.2 million and $0.1 million for the three months ended March 31, 2023 and 2022, respectively, which is included within General and administrative expenses in the consolidated statements of operations. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
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. Series A and Series B Preferred Warrants On March 29, 2023, the Company completed a securities purchase agreement (the “SPA”) with certain investors to purchase 80 thousand shares of Series A convertible redeemable Preferred stock (“Series A Preferred stock”) and 60 thousand shares of Series B convertible redeemable Preferred stock (“Series B Preferred stock”, and together with Series A Preferred stock, “Preferred Warrants”) for an aggregate purchase price of $14.0 million, including $6.0 million of related party participation. The Company also issued the purchasers in the Preferred Offering warrants to acquire 14.4 million shares of Class A Common Stock. The Preferred Warrants are exercisable for shares of the Company’s Class A Common Stock at any time at the option of the holder and expire five years from the date of issuance. The Preferred Warrants are exercisable on a cashless basis or for cash at an exercise price of $0.6453 per share of Class A Common Stock. The exercise price of the Preferred Warrants is subject to appropriate adjustment in the event of stock dividends, stock splits, subdivisions, combinations, reclassifications, or similar events affecting the Company’s Common Stock. The Preferred Warrants contain a put feature providing the right to the holder for a net cash settlement in the event of a fundamental transaction, which is defined as instances where the Company (i) effects any merger or consolidation of the Company, (ii) effects any sale, lease, license, assignment, transfer, conveyance, or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) completes any purchase offer, tender offer, or exchange offer that has been accepted by the holders of at least 50% of the outstanding Class A Common Stock, (iv) effects any reclassification, reorganization, or recapitalization of the Class A Common Stock or any compulsory share exchange pursuant to which the Class A Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) consummates a stock or share purchase agreement or other business combination in which more than 50% of the outstanding shares of Class A Common Stock is acquired. Under such a fundamental transaction, the holder can require the Company to purchase any unexercised warrant shares at the pro-rata share of the sales price or calculated value less the exercise price of the Warrant share. Due to the tender offer provision, the Preferred Warrants are classified as a derivative liability measured at fair value, with changes in fair value reported each period in earnings. The fair value of the warrant is estimated using the Black-Scholes pricing model. The fair value of the Preferred Warrants of approximately $8.7 million was estimated at the date of issuance using the following weighted average assumptions. Transaction costs incurred attributable to the issuance of the Preferred Warrants were part of the preferred shares issuance costs that were 0.9 million. During the three months ended March 31, 2023, the Company recorded a loss of approximately $4.0 million related to the change in fair value of the warrant liability. The fair value of the Preferred Warrants of approximately $12.7 million was estimated at March 31, 2023. The fair value of the derivative Preferred Warrants is considered a Level 3 valuation and is determined using the Black-Scholes-Merton valuation model. The change in the value of the derivative Preferred Warrants are shown in the accompanying consolidated statements of operations as “Change in fair value of derivative liabilities”. The significant assumptions were as follows: March 29, 2023 March 31, 2023 (Issuance Date) (Fair Value) Preferred Warrants Fair Value Per Share $ 0.60 $ 0.88 Preferred Warrant valuation inputs: Stock price - DMS Inc. Class A Common Stock $ 0.80 $ 1.12 Remaining contractual term in years 5.00 5.00 Estimated volatility 90.0 % 90.0 % Dividend yield 0.0 % 0.0 % Risk free interest rate 3.64 % 3.57 % Private Placement Warrants Each Company Private Placement 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 Private Placement 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 Private Placement 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. We record the fair value of the Private Placement Warrants as a liability in our consolidated balance sheet as of March 31, 2023 and 2022, 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 fair value of warrant liabilities on the consolidated statements of operations. As of March 31, 2023, the Company has approximately 4.0 million Private Placement Warrants outstanding. The significant assumptions were as follows: March 31, 2023 Private Placement Warrants Fair Value Per Share $ 0.08 Private Placement Warrant valuation inputs: Stock price - DMS Inc. Class A Common Stock $ 1.12 Remaining contractual term in years 2.29 Estimated volatility 90.0 % Dividend yield 0.0 % Risk free interest rate 3.95 % Contingent consideration payable related to acquisitions The fair value of the contingent considerations payable for the AAP, Traverse and ClickDealer acquisitions (described in Note 5. Acquisitions ) were determined using a Monte Carlo fair value analysis and a scenario-based methodology, respectively, 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 “Change in fair value of contingent consideration liabilities” on the consolidated statements of operations. The contingent consideration payable for the Crisp acquisition was finalized on April 1, 2022, the end of the earnout period. As the full target was met, the payment was made on July 1, 2022 in the form of Class A Common Stock.(See Note 5. Acquisitions ). The contingent consideration for the Aramis acquisition was finalized on December 31, 2022, the end of the earnout period, and will become payable during the second quarter of 2023, in the form of cash or Class A Common Stock, at the election of the Company. (See Note 5. Acquisitions ). The following table presents the contingent consideration assumptions. Aimtell / PushPros Revenue Volatility 25 % Iteration (actual) 100,000 Risk adjustment discount rate 10.50 % Risk free / Credit risk 12.00 % Days gap from period end to payment 90 Traverse CYE2023 Earnout Successful Probability 95.0 % Risk free / Credit risk 12.00 % Days gap from period end to payment 90 ClickDealer Revenue Volatility 50 % Iteration (actual) 100,000 Risk Adjustment Discount Rate 24.75 % Risk free / Credit risk 12.00 % 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): March 31, 2023 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Liabilities: Private placement warrants - Class B common stock Warrant liabilities $ — $ — $ 320 $ 320 Preferred warrants - Series A preferred stock Warrant liabilities — — 8,997 8,997 Preferred warrants - Series B preferred stock Warrant liabilities — — 3,714 3,714 Contingent consideration - Aramis Contingent consideration payable - current — — 1,000 1,000 Contingent consideration - Traverse Contingent consideration payable - current — — 466 466 Contingent consideration - ClickDealer Contingent consideration payable - non-current — — 2,457 2,457 Total $ — $ — $ 16,954 $ 16,954 March 31, 2022 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Liabilities: Private placement warrants - Class B common stock Warrant liabilities $ — $ — $ 2,120 $ 2,120 Contingent consideration - Crisp Results Contingent consideration payable - current — — 10,000 10,000 Contingent consideration - Aramis Contingent consideration payable - non-current — — 917 917 Contingent consideration - Aimtell/PushPros Contingent consideration payable - non-current — — 113 113 Total $ — $ — $ 13,150 $ 13,150 The following table represents the change in the warrant liability and contingent consideration (in thousands): Private Placement Warrants Series A and B Preferred Warrants Contingent Consideration Balance, January 1, 2023 $ 600 $ — $ 1,453 Additions — 8,667 2,457 Changes in fair value (280) 4,044 13 Balance, March 31, 2023 $ 320 $ 12,711 3,923 Private Placement Warrants Contingent Consideration Balance, January 1, 2022 $ 3,960 $ 8,439 Changes in fair value (1,840) 2,591 Balance, March 31, 2022 $ 2,120 $ 11,030 |
Equity
Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Equity | Equity 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. March 2023 Offering On March 29, 2023, the Company entered into a Securities Purchase Agreement with certain investors, pursuant to which the Company sold (i) 80,000 shares of Series A Preferred Stock accompanied with warrants to purchase 8,253,968 Class A Common Stock (“Series A Warrant”) and (ii) 60,000 shares of Series B Preferred Stock accompanied with warrants to purchase 6,190,476 shares of Class A Common Stock (“Series B Warrants”). One share of Series A Preferred Stock with the accompanying warrants (“Series A Unit”) and one share of Series B Preferred Stock with the accompanying warrants (“Series B Unit”) were sold at $100 per unit. Although the Preferred Stock are mandatorily redeemable, the Preferred Stock have a substantive conversion feature; and therefore, are not required to be classified as a liability under ASC 480, Distinguishing Liabilities from Equity . However, as the Preferred Stock are mandatorily redeemable, redeemable in certain circumstances at the option of the holder, and redeemable in certain circumstances upon the occurrence of an event that is not solely within the Company’s control, the Company has classified the Preferred Stock as mezzanine equity in the consolidated balance sheets. The Company measures the Preferred Stock at its maximum redemption value plus dividends not currently declared or paid but which will be payable upon redemption. The fair value of the preferred stock at issuance was recognized using the discount method, which accounts for the 11% discount of the stated value and a pro-rata allocation of the proceeds between the preferred shares and the warrants, less a pro-rata amount of the transaction costs. Dividend Rights The holders are entitled to cumulative dividends at a 4.0% rate, which is accrued and compound annually whether or not declared. These dividends are payable in cash or Class A Common Stock upon conversion or redemption of the underlying preferred stock. Additionally, the holders are also entitled to participate in dividends declared or paid on Class A Common Stock on an as-converted basis. Conversion Rights Each holder has the right, at its option, to convert its Preferred Stock into Class A Common Stock at either, at the option of the holder, (1) the Conversion Price, which is equal to $0.56 per share or (2) the Alternate Conversion Price, which is equal to the lesser of (i) 90% of the arithmetic average of the three lowest daily VWAPs (as defined in the Securities Purchase Agreement) of the 20 trading days prior to the applicable conversion date or (ii) 90% of the VWAP of the trading day prior to the applicable conversion date. Both the Conversion Price and the Alternate Conversion Price are subject to a floor price of $0.484 (“Floor Price”). However, for the Series A Preferred Stock only, if redemption of the Series A Preferred Stock is accelerated by either the Company or the holder (see the Accelerated Redemption provisions defined below), (i) any cash payment required to be made is not made, and (ii) the existing investors have defaulted under their obligations to purchase the Series A pursuant to the terms of a side letter, then the Floor Price shall be $0.161. The Conversion Price is subject to customary anti-dilution adjustments, including in the event of any stock split, stock dividend, subdivisions, combinations, recapitalization, or similar events, and subject to price-based adjustment in the event of any issuances of Class A Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Conversion Price (subject to certain exceptions). Additionally, the Conversion Price is subject to adjustment for any increase or decrease to the exercise price or conversion price to any outstanding options or convertible securities the Company has issued. Pursuant to the terms of the Securities Purchase Agreement, unless and until approval of our stockholders is obtained as contemplated by NYSE listing rules, the holders may not convert shares of Series A Preferred Stock into shares of Class A Common Stock if and solely to the extent that such conversion would result in the holders beneficially owning in excess of 20% of the then outstanding voting power or the common stock outstanding before the issuance (“20% Threshold”). For the number of Class A Common Stock that are not able to be delivered upon conversion due to exceeding this 20% Threshold, the Company is required to redeem those excess shares of Class A Common Stock in cash at their closing price on the trading day preceding the notice of conversion. Further, under the Securities Purchase Agreement, the Company is prohibited from effecting a conversion of Series A, and the holder is not allowed to convert the Series A if, upon conversion of the Series A, the holder would beneficially own more than 4.99% (or upon election by the holder prior to the issuance of the Series A, 9.99%) of the Class A Common Stock outstanding. Additionally, unless and until approval of our stockholders is obtained as contemplated by NYSE listing rules, no holder may convert shares of Series B Preferred Stock into shares of Class A Common Stock if and solely to the extent that such conversion would result in the holder beneficially owning in excess of 1% of the then outstanding voting power or the common stock outstanding before the issuance (“1% Threshold”). For the number of Class A Common Stock that are not able to be delivered upon conversion due to exceeding this 1% Threshold, the Company is required to redeem those excess shares of Class A Common Stock in cash at their closing price on the trading day preceding the notice of conversion. The Company determined that the nature of the Preferred Stock was more akin to an equity instrument than a debt instrument because the Preferred Stock are subject to a substantive Conversion Option that is in-the-money and the Company has the ultimate authority to settle redemption of the Preferred Warrants upon the Mandatory Redemption or Accelerated Redemption (all defined below) by issuing shares of Class A Common Stock rather than paying cash. Further, such potential share settlement will be at the lower of the Conversion Price or based on the Company’s VWAP allowing for the holder to be exposed to the risks and returns of the underlying Class A Common Stock. Accordingly, the economic characteristics and risks of the embedded option to convert the Preferred Stock at the Conversion Price (the “Conversion Option”) was clearly and closely related to the host contract. As such, the Conversion Option was not required to be bifurcated from the host under ASC 815, Derivatives and Hedging . Redemption Rights In addition to the share-settled redemption feature discussed above in the Conversion Rights section (e.g., conversion of the Preferred Stock at the Alternate Conversion Price), the Preferred Warrants are subject to several redemption features. Mandatory Redemption – On and after June 29, 2023, the Preferred Stock are required to redeem 1/10th of the number of the issued shares of Preferred Stock on a monthly basis (“Installments”). The redemption price is paid, at the option of the Company: (i) in cash at an amount that is approximately 116% of the $100 per share purchase price plus all accrued and unpaid dividends and any other amounts due (the “Mandatory Redemption Price”), (ii) in a variable number shares of Class A Common Stock based on a share price equal to the lesser of (1) the prevailing Conversion Price, (2) 90% of the arithmetic average of the three lowest daily VWAPs of the 20 Trading Days prior to the applicable mandatory redemption date, or (3) 90% of the VWAP of the trading day prior to the applicable mandatory redemption date, provided that such share price used will not be below the Floor Price, or (iii) in a combination thereof. Installments may be deferred or reallocated to other dates at the Preferred Stockholders’ discretion. Accelerated Redemption – The holders of the Preferred Stock have the right to require redemption of all or any part of the Preferred Stock at any time after June 15, 2023. Additionally, the Company has the option to elect redemption of all Series A shares at any time on or after June 15, 2023. The redemption price, as elected by the holder, is paid in either (i) the Mandatory Redemption Price in cash, (ii) in a variable number of shares of Common Stock based on a share price equal to the lesser of (1) the prevailing Conversion Price, (2) 90% of the arithmetic average of the three lowest daily VWAPs of the 20 Trading Days prior to the applicable accelerated redemption date or (3) 90% of the VWAP of the trading day prior to the applicable accelerated redemption date, provided that such share price used will not be below the Floor Price, or (iii) a combination thereof. Triggered Optional Redemption – If the Company closes a debt or equity financing, then each holder has the right to require the Company to use 30% of the proceeds from the financing to repurchase a pro rata portion of that holder's Preferred Stock in cash at the Mandatory Redemption Price. Default Redemption – Upon certain default events in which the Company defaults on its covenants, promises, or obligations under the Securities Purchase Agreement or defaults on any of its other obligations, the holder has the option to redeem the Preferred Stock for a cash amount equal to 115% of the Mandatory Redemption Price. Bankruptcy Redemption – If the Company is subject to a bankruptcy event, then the Company is required to immediately redeem the outstanding Preferred Stock for cash. The redemption price paid shall equal 115% of the Mandatory Redemption Price. Change of Control Redemption – Upon change of control events (as defined in the Securities Purchase Agreement), the holders have the option to require the Company to redeem the Preferred Stock for cash. The redemption price paid shall equal the greater of (i) the product of 115% multiplied by the Mandatory Redemption Price and (ii) the prevailing Conversion Price plus all accrued but unpaid dividends. If upon an Accelerated Redemption, Triggered Optional Redemption, or Default Redemption, any cash payment required to be made is not made, then the holder can elect to retain its shares of Preferred Warrants that have not been redeemed for cash and sell the shares of Preferred Stock to a third party. Additionally, if such an election is not made by the holder, the Company has the authority to pay to the holder the unpaid cash redemption payment in duly authorized, validly issued, fully paid and non-assessable shares of Class A Common Stock. As noted above, the Company determined that the nature of the Preferred Stock were more akin to an equity instrument than a debt instrument. The Company determined that the economic characteristics and risks of the embedded redemption features discussed above were not clearly and closely related to the host contract. However, the Company assessed these items further and determined they did not meet the definition of a derivative under ASC 815, Derivatives and Hedging . Liquidation Rights Upon any liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), prior and in preference to the common stock and the Series B Preferred Stock, the holders of Series A Preferred Stock are entitled to receive out of the assets available for distribution to stockholders an amount equal in cash to approximately 128% of the $100 per share purchase price plus all accrued and unpaid dividends and any other amounts due. After the payment of all preferential amounts required to be paid to the Series A holders, the Series B holders shall be entitled to receive out of the assets available for distribution to stockholders an amount equal in cash to approximately 128% of the $100 per share purchase price plus all accrued and unpaid dividends and any other amounts due. Voting Rights |
Employee and Director Incentive
Employee and Director Incentive Plans | 3 Months Ended |
Mar. 31, 2023 | |
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 and repurchase 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, are 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. The related costs were approximately $1.3 million and $1.9 million for the three months ended March 31, 2023 and 2022, respectively, and are included in “Salaries and related costs” within the consolidated statements of operations. Fair value of stock-based compensation is based on the closing trading price of the Company’s stock on the grant date. Restricted Stock Units For the three months ended March 31, 2023 and 2022, respectively, there were no new RSU awards. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes As a result of the Business Combination, the Company consists of DMS Inc. and its wholly-owned subsidiary, Blocker, which owns 60.9% of equity interests in DMSH. 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 and Traverse, 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 future earnings (i.e. those earnings not attributed to the non-controlling interests, which continue to be taxed on their own allocable share of future earnings of DMSH). The Company’s income tax expense is attributable to the allocable share of earnings from DMSH, and the activities of UE and Traverse, wholly-owned U.S. corporate subsidiaries 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, the Company’s effective tax rate is expected to differ materially from the statutory rate. The Company’s tax provision or benefit from income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any. Each quarter the Company updates its estimate of the annual effective tax rate and makes a year-to-date adjustment to the provision. The Company recorded income tax benefit of $(0.01) million for the three months ended March 31, 2023. The blended effective tax rate for the three months ended March 31, 2023 was 0.1%, which varies from our statutory U.S. tax rate due to taxable income or loss that is allocated to the non-controlling interest and impact of the valuation allowance on DMS, Inc. The Company recorded $0.3 million income tax expense for the three months ended March 31, 2022. The blended effective tax rate for the three months ended March 31, 2022 was (6.1)%, which varies from our statutory U.S. tax rate due to taxable income or loss that is allocated to the non-controlling interest. Tax Receivable Agreement In conjunction with the Business Combination, DMS Inc. and Blocker also entered into a Tax Receivable Agreement (“TRA”) 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 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
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. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted loss per share of Class A common stock: Three Months Ended March 31, 2023 2022 Numerator: Net loss $ (20,701) $ (5,357) Net loss attributable to non-controlling interest (8,103) (2,223) Net loss attributable to Digital Media Solutions, Inc.- basic and diluted $ (12,598) $ (3,134) Denominator: Weighted average shares - basic and diluted 39,957 35,576 Net loss per common share: Basic and diluted $ (0.32) $ (0.09) Shares of the Company’s Class B convertible 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 convertible common stock under the two-class method has not been presented. |
Business, Basis of Presentati_2
Business, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation These consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by GAAP for annual financial statements. In the opinion of management, all adjustments consisting of normal and recurring entries considered necessary for a fair presentation of the results for the interim periods presented have been included. All significant intercompany balances and transactions have been eliminated. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts in the financial statements and accompanying notes. These estimates are based on information available as of the date of the unaudited consolidated financial statements; therefore, actual results could differ from those estimates. Interim results are not necessarily indicative of the results for a full year. |
Business Combination | Business Combination On July 15, 2020, Digital Media Solutions Holding (“DMSH”) consummated the Business Combination with Leo Holdings Corp. (“Leo”) pursuant to the Business Combination Agreement (“Business Combination”). Pursuant to the Business Combination, DMS Inc. acquired, directly and through its acquisition of the equity of Blocker, approximately 60.9% of the membership interest in DMSH, while 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”) retained approximately 39.1% of the membership interest in DMSH (“non-controlling interests”). For additional information, see Note 2. Business Combination in the Notes to Consolidated Financial Statements in our 2022 Form 10-K/A. |
Non-controlling Interest | Non-controlling Interest The non-controlling interest represents the membership interest in DMSH held by holders other than the Company. As of March 31, 2023, the Prism, Clairvest Direct Sellers and SmarterChaos combined ownership percentage in DMSH was 39.1% and as of December 31, 2022 it was 39.1%. |
Principles of Consolidation | Principles of Consolidation The Company consists of DMS Inc. and its wholly-owned subsidiary, Blocker. 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 preferred warrants, private placement warrants, the allowance for credit losses, 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. |
Reclassifications | Reclassifications Certain prior period balances have been reclassified to conform to the current period presentation in the consolidated financial statements and the accompanying notes. |
New Accounting Standards | New Accounting Standards Accounting Standards Recently Adopted In June 2016, the FASB issued authoritative guidance ASC 326 Financial Instruments - Credit Losses , regarding the impairment model known as the current expected credit loss (“CECL”) model 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 CECL 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 emerging growth companies for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted this guidance effective January 1, 2023, which was not material to the consolidated financial statements for the three months ended March 31, 2023. 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. |
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. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Disaggregation of Revenue The following tables present the disaggregation of revenue by reportable segment and type of service (in thousands): Three Months Ended March 31, 2023 Brand Direct (1) Marketplace Technology Solutions Intercompany eliminations Total Net revenue: Customer acquisition $ 54,020 $ 37,288 $ — $ (4,714) $ 86,594 Managed services 1,383 — 753 — 2,136 Software services — — 1,583 — 1,583 Total Net revenue $ 55,403 $ 37,288 $ 2,336 $ (4,714) $ 90,313 ____________________ (1) ClickDealer net revenue for the one day between March 30, 2023 and March 31, 2023 was considered immaterial; therefore it is excluded from the Company’s consolidated statement of operation for the three months ended March 31, 2023. Three Months Ended March 31, 2022 Brand Marketplace Technology Solutions Intercompany eliminations Total Net revenue: Customer acquisition $ 59,619 $ 58,806 $ — $ (13,260) $ 105,165 Managed services 1,609 — 1,510 — 3,119 Software services — — 826 — 826 Total Net revenue $ 61,228 $ 58,806 $ 2,336 $ (13,260) $ 109,110 |
Schedule of Allowance for Credit Loss | The activity in the Allowance for credit losses is as follows (in thousands): Three Months Ended March 31, 2023 2022 Balance, beginning of period $ 4,656 $ 4,930 Additions charged to costs and expenses 483 529 Deductions/write-offs 398 — ASU 2016-13 (Topic 326) adjustment 44 — Balance, end of period $ 4,785 $ 5,459 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Reconciliation of Operations of Segments | The following tables are a reconciliation of the operations of our segments to loss from operations (in thousands): Three Months Ended March 31, 2023 (1) 2022 Net revenue $ 90,313 $ 109,110 Brand Direct 55,403 61,228 Marketplace 37,288 58,806 Technology Solutions 2,336 2,336 Intercompany eliminations (4,714) (13,260) Cost of revenue (exclusive of depreciation and amortization) 68,042 77,834 Brand Direct 42,816 48,448 Marketplace 29,338 42,380 Technology Solutions 602 266 Intercompany eliminations (4,714) (13,260) Gross profit (exclusive of depreciation and amortization) 22,271 31,276 Brand Direct 12,587 12,780 Marketplace 7,950 16,426 Technology Solutions 1,734 2,070 Salaries and related costs 12,226 13,705 General and administrative expenses 12,856 11,107 Depreciation and amortization 5,082 7,060 Acquisition costs 2,345 13 Change in fair value of contingent consideration liabilities 13 2,591 Loss from operations $ (10,251) $ (3,200) ____________________ (1) ClickDealer’s net revenue, cost of revenue and operating expenses for the one day between March 30, 2023 and March 31, 2023 were considered immaterial; therefore it is excluded from the Company’s consolidated statement of operation for the three months ended March 31, 2023. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 Technology Solutions Total Balance, December 31, 2022 $ 18,321 $ 54,554 $ 4,363 $ 77,238 Additions (Note 5) — — 6,207 6,207 Balance, March 31, 2023 $ 18,321 $ 54,554 $ 10,570 $ 83,445 |
Schedule of Finite-Lived Intangible Assets | Finite-lived Intangible assets, net consisted of the following (in thousands): March 31, 2023 December 31, 2022 Amortization Gross Impairment Accumulated Net Gross Impairment Accumulated Net Technology 4 to 7 $ 59,326 $ (5,933) $ (40,865) $ 12,528 $ 54,316 $ (5,933) $ (39,411) $ 8,972 Customer relationships 4 to 15 69,823 (12,387) (22,424) 35,012 49,423 (12,387) (21,205) 15,831 Brand 1 to 7 15,009 (3,250) (6,493) 5,266 12,169 (3,250) (6,233) 2,686 Non-competition agreements 1 1,898 — (1,875) 23 1,898 — (1,868) 30 Total $ 146,056 $ (21,570) $ (71,657) $ 52,829 $ 117,806 $ (21,570) $ (68,717) $ 27,519 |
Finite-Lived Intangible Assets 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): 2023 2024 2025 2026 2027 Thereafter Amortization expense $ 9,239 $ 10,789 $ 6,264 $ 5,574 $ 4,401 $ 16,562 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Changes in Fair Value of Assets Acquired and Liabilities Assumed as Part of Business Combination | As of March 30, 2023, the acquisition date, the fair value of the intangibles, contingent consideration liability and working capital accounts are as follows (in thousands): ClickDealer Acquisition Date Fair Value Goodwill $ 6,207 Intangible Assets: Technology $ 5,010 Customer relationships $ 20,400 Brand $ 2,840 Contingent consideration liability $ 2,457 Working capital accounts $ 3,320 Traverse Acquisition Date Fair Value Fair Value Mark-to-Market Changes Revised Acquisition Date Fair Value Goodwill $ 444 $ 291 $ 735 Intangible Assets: Technology $ 2,500 $ (30) $ 2,470 Customer relationships $ 50 $ — $ 50 Brand $ 59 $ 1 $ 60 Non-competition agreements $ 3 $ (3) $ — Contingent consideration liability $ 428 $ 3 $ 431 Working capital accounts $ (49) $ 333 $ 284 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The acquisition date fair value of assets acquired and liabilities assumed from the AAP, Crisp Results and Traverse acquisitions consist of the following (in thousands): Expected Useful Life AAP Crisp Results Traverse ClickDealer 2021 2021 2022 2023 Cash $ — $ — $ 232 $ — Goodwill 9,761 21,894 735 6,207 Technology 4 to 7 3,900 — 2,470 5,010 Customer relationships 4 to 15 7,690 19,600 50 20,400 Accounts receivable 3,100 2,610 276 7,452 Brand 1 to 7 208 7,400 60 2,840 Non-competitive agreements 1 to 3 83 — — — Property and equipment 3 to 5 250 220 — — Accounts payable (2,887) (1,593) (232) (4,357) Other assets acquired and liabilities assumed, net (1) 740 1 7 225 Net assets and liabilities acquired $ 22,845 $ 50,132 $ 3,598 $ 37,777 ____________________ (1) Other assets acquired and liabilities assumed, net includes prepaids and other current assets, partially offset by other current liabilities (e.g., Travel and expense payables, payroll liabilities, tax liabilities, and transition services payable). |
Schedule of Business Acquisitions, by Acquisition | The following schedule represents the amounts of net revenue and net loss from operations related to Traverse, AAP and Crisp Results acquisitions which have been included in the consolidated statements of operations for the periods indicated subsequent to the acquisition date in the period of acquisition (in thousands): Three Months Ended March 31, 2023 (1) Traverse Net revenue $ 824 Net income from operations $ 220 ____________________ (1) ClickDealer net revenue and net income from operations for the one day between March 30, 2023 and March 31, 2023 were considered immaterial; therefore it is excluded from the Company’s consolidated statement of operation for the three months ended March 31, 2023. Three Months Ended March 31, 2022 AAP Crisp Results Net revenue $ 4,073 $ 8,238 Net income (loss) from operations $ (731) $ 839 |
Pro Forma Information | The following 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 (in thousands): Three Months Ended March 31, 2023 (unaudited) DMS ClickDealer Pro Forma Net revenue $ 90,313 $ 19,865 $ 110,178 Net income (loss) from operations $ (10,251) $ 1,704 $ (8,547) Three Months Ended March 31, 2022 (unaudited) DMS ClickDealer Traverse Pro Forma Net revenue $ 109,110 $ 18,550 $ 722 $ 128,382 Net income from operations $ (3,200) $ 1,580 $ 17 $ (1,603) |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table presents the components of outstanding debt (in thousands): March 31, 2023 December 31, 2022 Term loan $ 221,063 $ 221,625 Revolving credit facility 40,000 40,000 Total debt 261,063 261,625 Less: Unamortized debt issuance costs (1) (4,455) (4,802) Debt, net 256,608 256,823 Less: Current portion of long-term debt (2,250) (2,250) Long-term debt $ 254,358 $ 254,573 ____________________ (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 March 31, 2023 (in thousands): 2023 $ 1,688 2024 2,250 2025 2,250 2026 254,875 Total debt $ 261,063 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Operating Lease Maturity | The following table summarizes the maturities of undiscounted cash flows of operating lease liabilities reconciled to total lease liability as of March 31, 2023 (in thousands): Lease Amounts 2023 $ 1,638 2024 1,851 2025 546 Total 4,035 Less: Imputed interest (126) Present value of operating lease liabilities $ 3,909 |
Operating Leases Cost | The following table represents the Company’s aggregate lease costs, by lease classification (in thousands): Category Statement of Operations Location March 31, 2023 Operating lease costs General and administrative expenses $ 284 Short-term lease costs General and administrative expenses 153 Sub-lease income General and administrative expenses (179) Total lease costs, net $ 258 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement Inputs and Valuation Techniques | The significant assumptions were as follows: March 29, 2023 March 31, 2023 (Issuance Date) (Fair Value) Preferred Warrants Fair Value Per Share $ 0.60 $ 0.88 Preferred Warrant valuation inputs: Stock price - DMS Inc. Class A Common Stock $ 0.80 $ 1.12 Remaining contractual term in years 5.00 5.00 Estimated volatility 90.0 % 90.0 % Dividend yield 0.0 % 0.0 % Risk free interest rate 3.64 % 3.57 % The significant assumptions were as follows: March 31, 2023 Private Placement Warrants Fair Value Per Share $ 0.08 Private Placement Warrant valuation inputs: Stock price - DMS Inc. Class A Common Stock $ 1.12 Remaining contractual term in years 2.29 Estimated volatility 90.0 % Dividend yield 0.0 % Risk free interest rate 3.95 % The following table presents the contingent consideration assumptions. Aimtell / PushPros Revenue Volatility 25 % Iteration (actual) 100,000 Risk adjustment discount rate 10.50 % Risk free / Credit risk 12.00 % Days gap from period end to payment 90 Traverse CYE2023 Earnout Successful Probability 95.0 % Risk free / Credit risk 12.00 % Days gap from period end to payment 90 ClickDealer Revenue Volatility 50 % Iteration (actual) 100,000 Risk Adjustment Discount Rate 24.75 % Risk free / Credit risk 12.00 % 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): March 31, 2023 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Liabilities: Private placement warrants - Class B common stock Warrant liabilities $ — $ — $ 320 $ 320 Preferred warrants - Series A preferred stock Warrant liabilities — — 8,997 8,997 Preferred warrants - Series B preferred stock Warrant liabilities — — 3,714 3,714 Contingent consideration - Aramis Contingent consideration payable - current — — 1,000 1,000 Contingent consideration - Traverse Contingent consideration payable - current — — 466 466 Contingent consideration - ClickDealer Contingent consideration payable - non-current — — 2,457 2,457 Total $ — $ — $ 16,954 $ 16,954 March 31, 2022 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Liabilities: Private placement warrants - Class B common stock Warrant liabilities $ — $ — $ 2,120 $ 2,120 Contingent consideration - Crisp Results Contingent consideration payable - current — — 10,000 10,000 Contingent consideration - Aramis Contingent consideration payable - non-current — — 917 917 Contingent consideration - Aimtell/PushPros Contingent consideration payable - non-current — — 113 113 Total $ — $ — $ 13,150 $ 13,150 |
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 Series A and B Preferred Warrants Contingent Consideration Balance, January 1, 2023 $ 600 $ — $ 1,453 Additions — 8,667 2,457 Changes in fair value (280) 4,044 13 Balance, March 31, 2023 $ 320 $ 12,711 3,923 Private Placement Warrants Contingent Consideration Balance, January 1, 2022 $ 3,960 $ 8,439 Changes in fair value (1,840) 2,591 Balance, March 31, 2022 $ 2,120 $ 11,030 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 loss per share of Class A common stock: Three Months Ended March 31, 2023 2022 Numerator: Net loss $ (20,701) $ (5,357) Net loss attributable to non-controlling interest (8,103) (2,223) Net loss attributable to Digital Media Solutions, Inc.- basic and diluted $ (12,598) $ (3,134) Denominator: Weighted average shares - basic and diluted 39,957 35,576 Net loss per common share: Basic and diluted $ (0.32) $ (0.09) |
Business, Basis of Presentati_3
Business, Basis of Presentation and Summary of Significant Accounting Policies (Details) - DMSH | Mar. 31, 2023 | Dec. 31, 2022 |
DMSH | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Equity method investment, ownership percentage | 60.90% | |
Sellers | ||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | ||
Noncontrolling interest, ownership percentage by noncontrolling owners | 39.10% | 39.10% |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 90,313 | $ 109,110 |
Brand Direct | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 55,403 | 61,228 |
Marketplace | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 37,288 | 58,806 |
Technology Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 2,336 | 2,336 |
Intercompany eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | (4,714) | (13,260) |
Customer acquisition | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 86,594 | 105,165 |
Customer acquisition | Brand Direct | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 54,020 | 59,619 |
Customer acquisition | Marketplace | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 37,288 | 58,806 |
Customer acquisition | Technology Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 0 | 0 |
Customer acquisition | Intercompany eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | (4,714) | (13,260) |
Managed services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 2,136 | 3,119 |
Managed services | Brand Direct | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 1,383 | 1,609 |
Managed services | Marketplace | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 0 | 0 |
Managed services | Technology Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 753 | 1,510 |
Managed services | Intercompany eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 0 | 0 |
Software services | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 1,583 | 826 |
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 | Technology Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | 1,583 | 826 |
Software services | Intercompany eliminations | ||
Disaggregation of Revenue [Line Items] | ||
Net revenue | $ 0 | $ 0 |
Revenue - Schedule of Allowance
Revenue - Schedule of Allowance for Credit Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance, beginning of period | $ 4,656 | $ 4,930 |
Additions charged to costs and expenses | 483 | 529 |
Deductions/write-offs | 398 | 0 |
ASU 2016-13 (Topic 326) adjustment | 44 | 0 |
Balance, end of period | $ 4,785 | $ 5,459 |
Revenue - Additional Liabilitie
Revenue - Additional Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |||
Contract with customer, liability | $ 0.5 | $ 1 | |
Customer1 | Revenue from Contract with Customer, Product and Service Benchmark | Customer Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Concentration risk | 16.60% | 18.10% |
Reportable Segments (Details)
Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Net revenue | $ 90,313 | $ 109,110 |
Cost of revenue (exclusive of depreciation and amortization) | 68,042 | 77,834 |
Gross profit (exclusive of depreciation and amortization) | 22,271 | 31,276 |
Salaries and related costs | 12,226 | 13,705 |
General and administrative expenses | 12,856 | 11,107 |
Depreciation and amortization | 5,082 | 7,060 |
Acquisition costs | 2,345 | 13 |
Change in fair value of contingent consideration liabilities | 13 | 2,591 |
Loss from operations | (10,251) | (3,200) |
Intercompany eliminations | ||
Segment Reporting Information [Line Items] | ||
Net revenue | (4,714) | (13,260) |
Cost of revenue (exclusive of depreciation and amortization) | (4,714) | (13,260) |
Brand Direct | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 55,403 | 61,228 |
Brand Direct | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 55,403 | 61,228 |
Cost of revenue (exclusive of depreciation and amortization) | 42,816 | 48,448 |
Gross profit (exclusive of depreciation and amortization) | 12,587 | 12,780 |
Marketplace | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 37,288 | 58,806 |
Marketplace | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 37,288 | 58,806 |
Cost of revenue (exclusive of depreciation and amortization) | 29,338 | 42,380 |
Gross profit (exclusive of depreciation and amortization) | 7,950 | 16,426 |
Technology Solutions | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 2,336 | 2,336 |
Technology Solutions | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 2,336 | 2,336 |
Cost of revenue (exclusive of depreciation and amortization) | 602 | 266 |
Gross profit (exclusive of depreciation and amortization) | $ 1,734 | $ 2,070 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 77,238 |
Additions (Note 5) | 6,207 |
Goodwill, ending balance | 83,445 |
Brand Direct | Operating Segments | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 18,321 |
Additions (Note 5) | 0 |
Goodwill, ending balance | 18,321 |
Marketplace | Operating Segments | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 54,554 |
Additions (Note 5) | 0 |
Goodwill, ending balance | 54,554 |
Technology Solutions | Operating Segments | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 4,363 |
Additions (Note 5) | 6,207 |
Goodwill, ending balance | $ 10,570 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | |||
Accumulated impairments | $ 0 | $ 0 | |
Weighted average useful life | 8 years | ||
Amortization of intangible assets | $ 2,900,000 | $ 4,900,000 | |
Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted average useful life | 6 years | ||
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted average useful life | 10 years | ||
Brand | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted average useful life | 6 years | ||
Non-competition agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted average useful life | 3 years |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Finite-lived Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 146,056 | $ 117,806 |
Impairment | (21,570) | (21,570) |
Accumulated Amortization | (71,657) | (68,717) |
Net | 52,829 | 27,519 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 59,326 | 54,316 |
Impairment | (5,933) | (5,933) |
Accumulated Amortization | (40,865) | (39,411) |
Net | $ 12,528 | 8,972 |
Technology | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 4 years | |
Technology | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 7 years | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 69,823 | 49,423 |
Impairment | (12,387) | (12,387) |
Accumulated Amortization | (22,424) | (21,205) |
Net | $ 35,012 | 15,831 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 4 years | |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period (Years) | 15 years | |
Brand | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 15,009 | 12,169 |
Impairment | (3,250) | (3,250) |
Accumulated Amortization | (6,493) | (6,233) |
Net | $ 5,266 | 2,686 |
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) | 1 year | |
Gross | $ 1,898 | 1,898 |
Impairment | 0 | 0 |
Accumulated Amortization | (1,875) | (1,868) |
Net | $ 23 | $ 30 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Amortization Expense (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 9,239 |
2024 | 10,789 |
2025 | 6,264 |
2026 | 5,574 |
2027 | 4,401 |
Thereafter | $ 16,562 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 2 Months Ended | 3 Months Ended | ||||||||
Mar. 30, 2023 | Jul. 01, 2022 | May 10, 2022 | Apr. 01, 2021 | Feb. 01, 2021 | Jun. 30, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Oct. 04, 2022 | |
Business Acquisition [Line Items] | ||||||||||
Estimated net working capital adjustment amount | $ 320 | |||||||||
Expected Useful Life | 8 years | |||||||||
Payments to acquire business | $ 35,320 | $ 0 | ||||||||
Change in fair value of contingent consideration liabilities | 13 | $ 2,591 | ||||||||
Contingent consideration payable - non-current | $ 2,457 | $ 0 | ||||||||
Technology | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 6 years | |||||||||
Brand | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 6 years | |||||||||
Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 10 years | |||||||||
Non-competition agreements | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 3 years | |||||||||
Maximum | Technology | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 7 years | |||||||||
Maximum | Brand | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 7 years | |||||||||
Maximum | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 15 years | |||||||||
Maximum | Non-competition agreements | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 3 years | |||||||||
ClickDealer | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration transferred | 35,000 | |||||||||
Contingent consideration liability | 2,457 | |||||||||
Expected Useful Life | 13 years | |||||||||
ClickDealer | Class A Common Stock | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Contingent consideration liability | $ 10,000 | |||||||||
ClickDealer | Technology | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 5 years | 7 years | ||||||||
ClickDealer | Brand | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 7 years | 5 years | ||||||||
ClickDealer | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 15 years | 15 years | ||||||||
Traverse | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration transferred | $ 2,500 | |||||||||
Contingent consideration liability | $ 428 | $ 431 | ||||||||
Expected Useful Life | 5 years | |||||||||
Milestone period for contingent consideration | 15 months | |||||||||
Change in fair value of contingent consideration liabilities | $ 3 | |||||||||
Goodwill, measurement period adjustment | $ 291 | |||||||||
Traverse | Technology | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 5 years | 5 years | ||||||||
Traverse | Brand | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 3 years | 3 years | ||||||||
Traverse | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 5 years | 5 years | ||||||||
Traverse | Non-competition agreements | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 1 year | |||||||||
Traverse | Maximum | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Contingent consideration liability | $ 500 | |||||||||
Crisp Results | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration transferred | $ 40,000 | |||||||||
Expected Useful Life | 5 years 7 months 6 days | |||||||||
Payments to acquire business | $ 20,000 | |||||||||
Equity issued to acquiree (in shares) | 1,600 | |||||||||
Issuance of equity for AAP and Crisp Results | $ 20,000 | |||||||||
Contingent consideration | 10,000 | |||||||||
Deferred payment | $ 5,000 | |||||||||
Deferred payment period | 18 months | |||||||||
Deferred payment period | 20 days | |||||||||
Deferred acquisition consideration payable | $ 5,000 | |||||||||
Crisp Results | Class A Common Stock | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Shares issued in connection with acquisition (in shares) | 2,990 | |||||||||
Sale of stock price per unit (usd per share) | $ 3.3455 | |||||||||
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 | |||||||||
AAP | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Consideration transferred | $ 20,000 | |||||||||
Expected Useful Life | 4 years | |||||||||
Payments to acquire business | $ 5,000 | |||||||||
Equity issued to acquiree (in shares) | 1,290 | |||||||||
Issuance of equity for AAP and Crisp Results | $ 15,000 | |||||||||
Contingent consideration payable - non-current | $ 15,000 | |||||||||
Earnout period | 3 years | |||||||||
AAP | Technology | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 4 years | |||||||||
AAP | Brand | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 2 years 1 month 6 days | |||||||||
AAP | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 4 years 1 month 6 days | |||||||||
AAP | Non-competition agreements | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Expected Useful Life | 3 years |
Acquisitions - Changes in Fair
Acquisitions - Changes in Fair Value (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | ||||
Jun. 30, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Mar. 30, 2023 | Dec. 31, 2022 | May 10, 2022 | |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 83,445 | $ 77,238 | ||||
Change in fair value of contingent consideration liabilities | 13 | $ 2,591 | ||||
ClickDealer | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 6,207 | $ 6,207 | ||||
Contingent consideration liability | 2,457 | |||||
Working capital accounts | 3,320 | |||||
ClickDealer | Technology | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets acquired | 5,010 | 5,010 | ||||
ClickDealer | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets acquired | 20,400 | 20,400 | ||||
ClickDealer | Brand | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets acquired | 2,840 | $ 2,840 | ||||
ClickDealer | Non-competition agreements | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets acquired | 0 | |||||
Traverse | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 735 | 735 | $ 444 | |||
Goodwill, measurement period adjustment | $ 291 | |||||
Contingent consideration liability | 431 | 428 | ||||
Change in fair value of contingent consideration liabilities | 3 | |||||
Working capital accounts | 284 | (49) | ||||
Fair Value Mark-to-Market changes, Working capital accounts | 333 | |||||
Traverse | Technology | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets acquired | 2,470 | 2,470 | 2,500 | |||
Fair Value Mark-to-Market changes, Finite-lived intangible assets acquired | (30) | |||||
Traverse | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets acquired | 50 | 50 | 50 | |||
Fair Value Mark-to-Market changes, Finite-lived intangible assets acquired | 0 | |||||
Traverse | Brand | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets acquired | 60 | 60 | 59 | |||
Fair Value Mark-to-Market changes, Finite-lived intangible assets acquired | 1 | |||||
Traverse | Non-competition agreements | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets acquired | $ 0 | $ 0 | $ 3 | |||
Fair Value Mark-to-Market changes, Finite-lived intangible assets acquired | $ (3) |
Acquisitions - Net Assets And L
Acquisitions - Net Assets And Liabilities Acquired (Details) - USD ($) $ in Thousands | 3 Months Ended | |||||
Mar. 30, 2023 | May 10, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 8 years | |||||
Goodwill | $ 83,445 | $ 77,238 | ||||
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 | 6 years | |||||
Technology | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 4 years | |||||
Technology | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 7 years | |||||
Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 10 years | |||||
Customer relationships | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 4 years | |||||
Customer relationships | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 15 years | |||||
Brand | ||||||
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 | |||||
Non-competition agreements | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 1 year | |||||
Non-competition agreements | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 3 years | |||||
AAP | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 4 years | |||||
Cash | $ 0 | |||||
Goodwill | 9,761 | |||||
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 | |||||
AAP | Technology | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 4 years | |||||
Finite-lived intangible assets acquired | 3,900 | |||||
AAP | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 4 years 1 month 6 days | |||||
Finite-lived intangible assets acquired | 7,690 | |||||
AAP | Brand | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 2 years 1 month 6 days | |||||
Finite-lived intangible assets acquired | 208 | |||||
AAP | Non-competition agreements | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 3 years | |||||
Finite-lived intangible assets acquired | 83 | |||||
Crisp Results | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 5 years 7 months 6 days | |||||
Cash | 0 | |||||
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] | ||||||
Expected Useful Life | 6 years | |||||
Finite-lived intangible assets acquired | 19,600 | |||||
Crisp Results | Brand | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 7 years | |||||
Finite-lived intangible assets acquired | 7,400 | |||||
Crisp Results | Non-competition agreements | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived intangible assets acquired | $ 0 | |||||
Traverse | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 5 years | |||||
Cash | $ 232 | |||||
Goodwill | $ 444 | $ 735 | 735 | |||
Accounts receivable | 276 | |||||
Property and equipment | 0 | |||||
Accounts payable | (232) | |||||
Other assets acquired and liabilities assumed, net | 7 | |||||
Net assets and liabilities acquired | 3,598 | |||||
Traverse | Technology | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 5 years | 5 years | ||||
Finite-lived intangible assets acquired | $ 2,500 | $ 2,470 | 2,470 | |||
Traverse | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 5 years | 5 years | ||||
Finite-lived intangible assets acquired | $ 50 | $ 50 | 50 | |||
Traverse | Brand | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 3 years | 3 years | ||||
Finite-lived intangible assets acquired | $ 59 | $ 60 | 60 | |||
Traverse | Non-competition agreements | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 1 year | |||||
Finite-lived intangible assets acquired | $ 3 | $ 0 | 0 | |||
ClickDealer | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 13 years | |||||
Cash | 0 | |||||
Goodwill | $ 6,207 | 6,207 | ||||
Accounts receivable | 7,452 | |||||
Property and equipment | 0 | |||||
Accounts payable | (4,357) | |||||
Other assets acquired and liabilities assumed, net | 225 | |||||
Net assets and liabilities acquired | 37,777 | |||||
ClickDealer | Technology | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 5 years | 7 years | ||||
Finite-lived intangible assets acquired | $ 5,010 | 5,010 | ||||
ClickDealer | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 15 years | 15 years | ||||
Finite-lived intangible assets acquired | $ 20,400 | 20,400 | ||||
ClickDealer | Brand | ||||||
Business Acquisition [Line Items] | ||||||
Expected Useful Life | 7 years | 5 years | ||||
Finite-lived intangible assets acquired | $ 2,840 | 2,840 | ||||
ClickDealer | 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) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Traverse | ||
Business Acquisition [Line Items] | ||
Net revenue | $ 824 | |
Net income (loss) from operations | $ 220 | |
AAP | ||
Business Acquisition [Line Items] | ||
Net revenue | $ 4,073 | |
Net income (loss) from operations | (731) | |
Crisp Results | ||
Business Acquisition [Line Items] | ||
Net revenue | 8,238 | |
Net income (loss) from operations | $ 839 |
Acquisitions - Pro Forma Inform
Acquisitions - Pro Forma Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Business Acquisition [Line Items] | ||
Net revenue | $ 110,178 | $ 128,382 |
Net (loss) income from operations | (8,547) | (1,603) |
DMS | ||
Business Acquisition [Line Items] | ||
Net revenue | 90,313 | 109,110 |
Net (loss) income from operations | (10,251) | (3,200) |
ClickDealer | ||
Business Acquisition [Line Items] | ||
Net revenue | 19,865 | 18,550 |
Net (loss) income from operations | $ 1,704 | 1,580 |
Traverse | ||
Business Acquisition [Line Items] | ||
Net revenue | 722 | |
Net (loss) income from operations | $ 17 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total debt | $ 261,063 | $ 261,625 |
Less: Unamortized debt issuance costs | (4,455) | (4,802) |
Debt, net | 256,608 | 256,823 |
Less: Current portion of long-term debt | (2,250) | (2,250) |
Long-term debt | 254,358 | 254,573 |
Term loan | ||
Debt Instrument [Line Items] | ||
Total debt | 221,063 | 221,625 |
Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Total debt | $ 40,000 | $ 40,000 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||||
Dec. 29, 2022 | Oct. 04, 2022 | Mar. 31, 2023 | Mar. 29, 2023 | Dec. 31, 2022 | May 25, 2021 | |
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 14,000 | |||||
Unamortized debt issuance costs | $ 4,455 | $ 4,802 | ||||
Senior Secured Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Debt term | 5 years | |||||
Senior secured revolving credit facility | $ 275,000 | |||||
Discount amount | 2,700 | 3,700 | 4,200 | |||
Proceeds from borrowings on revolving credit facilities | $ 35,000 | $ 5,000 | ||||
Debt issuance costs, before amortization | 3,500 | |||||
Unamortized debt issuance costs | $ 1,700 | 2,400 | ||||
Senior Secured Credit Facility | Line of Credit | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 225,000 | |||||
Discount as a percentage | 1.80% | |||||
Discount amount | $ 4,200 | |||||
Payment of original principal amount paid quarterly | 1% | |||||
Effective rate | 10.36% | |||||
Senior Secured Credit Facility | Line of Credit | Secured Debt | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate | 5% | |||||
Senior Secured Credit Facility | Line of Credit | Secured Debt | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate | 4% | |||||
Senior Secured Credit Facility | Line of Credit | Revolving credit facility | ||||||
Debt Instrument [Line Items] | ||||||
Senior secured revolving credit facility | $ 50,000 | |||||
Effective rate | 8.33% | |||||
Per annum commitment fee | 0.50% | |||||
Unamortized debt issuance costs | $ 500 | $ 800 | ||||
Senior Secured Credit Facility | Line of Credit | Revolving credit facility | London Interbank Offered Rate (LIBOR) | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate | 4.25% | |||||
Alternate base rate | 1% | |||||
Senior Secured Credit Facility | Line of Credit | Revolving credit facility | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate | 3.25% | |||||
Stated rate | 1.75% | |||||
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% | |||||
The Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum net debt to EBITDA ratio | 4.5 |
Debt - Debt Maturity Schedule (
Debt - Debt Maturity Schedule (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
2023 | $ 1,688 | |
2024 | 2,250 | |
2025 | 2,250 | |
2026 | 254,875 | |
Total debt | $ 261,063 | $ 261,625 |
Leases - Operating Lease Maturi
Leases - Operating Lease Maturity (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Leases [Abstract] | |
2023 | $ 1,638 |
2024 | 1,851 |
2025 | 546 |
Total | 4,035 |
Less: Imputed interest | (126) |
Present value of operating lease liabilities | $ 3,909 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Operating lease, weighted average remaining lease term | 1 year 10 months 24 days | |
Operating lease weighted average remaining discount rate | 3.74% | |
Operating lease expense | $ 400 | $ 300 |
Operating cash flows used in operating leases | 500 | |
Sublease income | $ 179 | $ 100 |
Leases - Operating Leases Cost
Leases - Operating Leases Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Operating lease costs | $ 284 | |
Short-term lease costs | 153 | |
Sub-lease income | (179) | $ (100) |
Total lease costs, net | $ 258 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||||
Mar. 29, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Debt instrument, face amount | $ 14,000 | ||||
Warrants, term | 5 years | ||||
Issuance costs | $ 900 | ||||
Warrant exercise price (usd per share) | $ 0.01 | ||||
Minimum number of redemption days | 30 days | ||||
Trading day threshold | 20 days | ||||
Trading day period | 30 days | ||||
Convertible Debenture | Convertible Debt | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Debt instrument, face amount | $ 6,000 | ||||
Class A Common Stock | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Preferred stock (in shares) | 14,400,000 | ||||
Warrants, term | 5 years | ||||
Common stock par value (usd per share) | $ 0.6453 | $ 0.0001 | |||
Acceptance percentage threshold | 50% | ||||
Threshold percentage of shares acquired | 50% | ||||
Share price (usd per share) | $ 18 | ||||
Series B Preferred Stock | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Preferred stock outstanding (in shares) | 60,000 | 60,000 | |||
Preferred stock issued (in shares) | 60,000 | 60,000 | |||
Class A Common Stock | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Number of securities called by each warrant | 1 | ||||
Warrant exercise price (usd per share) | $ 11.50 | ||||
Series A and B Preferred Warrants | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Additions | $ 8,667 | ||||
Changes in fair value | 4,044 | ||||
Preferred warrants | 12,711 | $ 0 | |||
Private placement warrants - Class B common stock | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Additions | 0 | ||||
Changes in fair value | (280) | $ (1,840) | |||
Preferred warrants | $ 320 | $ 2,120 | $ 600 | $ 3,960 | |
Warrants outstanding (in shares) | 4,000,000 |
Fair Value Measurements - Input
Fair Value Measurements - Inputs and Valuations (Details) | Mar. 31, 2023 $ / shares yr | Mar. 29, 2023 $ / shares yr |
Private Placement Warrants Fair Value Per Share | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants outstanding, measurement inputs | 0.08 | |
Private Placement Warrants Fair Value Per Share | Series A and B Preferred Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants outstanding, measurement inputs | 0.88 | 0.60 |
Stock price - DMS Inc. Class A Common Stock | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants outstanding, measurement inputs | 1.12 | |
Stock price - DMS Inc. Class A Common Stock | Series A and B Preferred Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants outstanding, measurement inputs | 1.12 | 0.80 |
Remaining contractual term in years | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants outstanding, measurement inputs | yr | 2.29 | |
Remaining contractual term in years | Series A and B Preferred Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants outstanding, measurement inputs | yr | 5 | 5 |
Estimated volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants outstanding, measurement inputs | 0.900 | |
Estimated volatility | Series A and B Preferred Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants outstanding, measurement inputs | 0.900 | 0.900 |
Dividend yield | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants outstanding, measurement inputs | 0 | |
Dividend yield | Series A and B Preferred Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants outstanding, measurement inputs | 0 | 0 |
Risk free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants outstanding, measurement inputs | 0.0395 | |
Risk free interest rate | Series A and B Preferred Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants outstanding, measurement inputs | 0.0357 | 0.0364 |
Fair Value Measurements - Conti
Fair Value Measurements - Contingent Consideration Assumptions (Details) | Mar. 31, 2023 d |
Aimtell / PushPros | Revenue Volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.25 |
Aimtell / PushPros | Iteration (actual) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 100,000 |
Aimtell / PushPros | Risk adjustment discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.1050 |
Aimtell / PushPros | Risk free / Credit risk | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.1200 |
Aimtell / PushPros | Days gap from period end to payment | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 90 |
Traverse | Risk free / Credit risk | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.1200 |
Traverse | Days gap from period end to payment | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 90 |
Traverse | CYE2023 Earnout Successful Probability | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.950 |
ClickDealer | Revenue Volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.50 |
ClickDealer | Iteration (actual) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 100,000 |
ClickDealer | Risk adjustment discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.2475 |
ClickDealer | Risk free / Credit risk | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 0.1200 |
ClickDealer | Days gap from period end to payment | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration assumptions | 90 |
Fair Value Measurements - Liabi
Fair Value Measurements - Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liabilities | $ 13,031 | $ 600 | |
Contingent consideration payable - current | 1,466 | 1,453 | |
Contingent consideration payable - non-current | 2,457 | 0 | |
Fair Value, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total | 16,954 | $ 13,150 | |
Fair Value, Recurring | Aramis | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - current | 1,000 | ||
Contingent consideration payable - non-current | 917 | ||
Fair Value, Recurring | Traverse | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - current | 466 | ||
Fair Value, Recurring | ClickDealer | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - non-current | 2,457 | ||
Fair Value, Recurring | Crisp Results | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - current | 10,000 | ||
Fair Value, Recurring | Aimtell / PushPros | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - non-current | 113 | ||
Fair Value, Recurring | Private placement warrants - Class B common stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liabilities | 320 | 2,120 | |
Fair Value, Recurring | Preferred warrants - Series A preferred stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liabilities | 8,997 | ||
Fair Value, Recurring | Preferred warrants - Series B preferred stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liabilities | 3,714 | ||
Fair Value, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total | 0 | 0 | |
Fair Value, Recurring | Level 1 | Aramis | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - current | 0 | ||
Contingent consideration payable - non-current | 0 | ||
Fair Value, Recurring | Level 1 | Traverse | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - current | 0 | ||
Fair Value, Recurring | Level 1 | ClickDealer | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - non-current | 0 | ||
Fair Value, Recurring | Level 1 | Crisp Results | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - current | 0 | ||
Fair Value, Recurring | Level 1 | Aimtell / PushPros | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - non-current | 0 | ||
Fair Value, Recurring | Level 1 | Private placement warrants - Class B common stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liabilities | 0 | 0 | |
Fair Value, Recurring | Level 1 | Preferred warrants - Series A preferred stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liabilities | 0 | ||
Fair Value, Recurring | Level 1 | Preferred warrants - Series B preferred stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liabilities | 0 | ||
Fair Value, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total | 0 | 0 | |
Fair Value, Recurring | Level 2 | Aramis | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - current | 0 | ||
Contingent consideration payable - non-current | 0 | ||
Fair Value, Recurring | Level 2 | Traverse | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - current | 0 | ||
Fair Value, Recurring | Level 2 | ClickDealer | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - non-current | 0 | ||
Fair Value, Recurring | Level 2 | Crisp Results | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - current | 0 | ||
Fair Value, Recurring | Level 2 | Aimtell / PushPros | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - non-current | 0 | ||
Fair Value, Recurring | Level 2 | Private placement warrants - Class B common stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liabilities | 0 | 0 | |
Fair Value, Recurring | Level 2 | Preferred warrants - Series A preferred stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liabilities | 0 | ||
Fair Value, Recurring | Level 2 | Preferred warrants - Series B preferred stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liabilities | 0 | ||
Fair Value, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total | 16,954 | 13,150 | |
Fair Value, Recurring | Level 3 | Aramis | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - current | 1,000 | ||
Contingent consideration payable - non-current | 917 | ||
Fair Value, Recurring | Level 3 | Traverse | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - current | 466 | ||
Fair Value, Recurring | Level 3 | ClickDealer | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - non-current | 2,457 | ||
Fair Value, Recurring | Level 3 | Crisp Results | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - current | 10,000 | ||
Fair Value, Recurring | Level 3 | Aimtell / PushPros | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration payable - non-current | $ 113 | ||
Fair Value, Recurring | Level 3 | Private placement warrants - Class B common stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liabilities | 320 | $ 2,120 | |
Fair Value, Recurring | Level 3 | Preferred warrants - Series A preferred stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liabilities | 8,997 | ||
Fair Value, Recurring | Level 3 | Preferred warrants - Series B preferred stock | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrant liabilities | $ 3,714 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Contingent Consideration | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 1,453 | $ 8,439 |
Additions | 2,457 | |
Changes in fair value | 13 | 2,591 |
Ending balance | 3,923 | 11,030 |
Private placement warrants - Class B common stock | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 600 | 3,960 |
Additions | 0 | |
Changes in fair value | (280) | (1,840) |
Ending balance | 320 | $ 2,120 |
Series A and B Preferred Warrants | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 0 | |
Additions | 8,667 | |
Changes in fair value | 4,044 | |
Ending balance | $ 12,711 |
Equity (Details)
Equity (Details) | Mar. 29, 2023 trading_day $ / shares shares | Mar. 31, 2023 $ / shares shares |
Class of Stock [Line Items] | ||
Preferred stock, authorized (in shares) | shares | 100,000,000 | |
Warrant exercise price (usd per share) | $ 0.01 | |
Preferred stock, fair value of discount rate | 11% | |
Dividend rate | 4% | |
Preferred stock, convertible, conversion price (usd per share) | $ 0.56 | |
Percentage of alternate conversion price | 90% | |
Convertible threshold trading days | trading_day | 20 | |
Percentage of trading days prior to conversion rate | 90% | |
Conversion floor price | $ 0.484 | |
Conversion effective percentage | 4.99% | |
Issuance of effective percentage | 9.99% | |
Redemption percentage requirement | 10% | |
Redemption price percentage | 116% | |
Redemption price per share (usd per share) | $ 100 | |
Percentage of accelerated redemption price | 90% | |
Mandatory redemption trading days | trading_day | 20 | |
Percentage of trading days prior to mandatory redemption rate | 90% | |
Accelerated redemption trading days | trading_day | 20 | |
Percentage of trading days prior to accelerated redemption rate | 90% | |
Percentage of triggered optional redemption price | 30% | |
Percentage of default redemption price | 115% | |
Percentage of bankruptcy redemption price | 115% | |
Percentage of change of control redemption price | 115% | |
Class A Common Stock | ||
Class of Stock [Line Items] | ||
Number of securities called by each warrant | shares | 1 | |
Warrant exercise price (usd per share) | $ 11.50 | |
Convertible, threshold percentage of stock price | 20% | |
Convertible due, threshold percentage | 1% | |
Series A Preferred Stock | ||
Class of Stock [Line Items] | ||
Warrants issued (in shares) | shares | 80,000 | |
Conversion floor price | $ 0.161 | |
Liquidation rights of percentage | 128% | |
Preferred stock, liquidation preference per share (usd per share) | $ 100 | |
Series B Preferred Stock | ||
Class of Stock [Line Items] | ||
Warrants issued (in shares) | shares | 60,000 | |
Liquidation rights of percentage | 128% | |
Preferred stock, liquidation preference per share (usd per share) | $ 100 | |
Class A Common Stock | Series A Warrant | ||
Class of Stock [Line Items] | ||
Number of securities called by each warrant | shares | 1 | |
Warrants exercised (in shares) | shares | 8,253,968 | |
Warrant exercise price (usd per share) | $ 100 | |
Class A Common Stock | Series B Warrant | ||
Class of Stock [Line Items] | ||
Number of securities called by each warrant | shares | 1 | |
Warrants exercised (in shares) | shares | 6,190,476 |
Employee and Director Incenti_2
Employee and Director Incentive Plans (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Jul. 15, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock based compensation expense | $ 1.3 | $ 1.9 | |
2020 Omnibus Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Capital shares reserved for future issuance (in shares) | 11.6 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Income Tax Examination [Line Items] | |||
Income tax (benefit) expense | $ (13) | $ 310 | |
Effective tax rate | 0.10% | (6.10%) | |
Amount required to be paid to sellers | 85% | ||
Refund of preclosing taxes to be paid to Sellers | 100% | ||
Refund of preclosing taxes to be paid to Sellers, period after closing | 2 years | ||
Current tax receivable agreement | $ 164 | $ 164 | |
DMSH | DMSH | |||
Income Tax Examination [Line Items] | |||
Equity method investment, ownership percentage | 60.90% |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator: | ||
Net loss | $ (20,701) | $ (5,357) |
Net loss attributable to non-controlling interest | (8,103) | (2,223) |
Net loss attributable to Digital Media Solutions, Inc.- basic and diluted | $ (12,598) | $ (3,134) |
Denominator: | ||
Weighted average shares - basic (in shares) | 39,957 | 35,576 |
Weighted-average shares - diluted (in shares) | 39,957 | 35,576 |
Net loss per common share: | ||
Basic (usd per share) | $ (0.32) | $ (0.09) |
Diluted (usd per share) | $ (0.32) | $ (0.09) |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Class B Common Stock | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 25.7 | 25.7 |
Private Warrant | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 4 | 4 |
Public Warrant | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 10 | 10 |
Preferred Warrant | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 14.4 | |
Stock Options | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 1.6 | 2 |
Restricted Stock Units (RSUs) | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 1.2 | 1.6 |
Performance Shares | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive securities excluded (in shares) | 0.4 |