Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 21, 2021 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2021 | |
Entity File Number | 001-40349 | |
Entity Registrant Name | DoubleVerify Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-2714562 | |
Entity Address, Address Line One | 233 Spring Street | |
Entity Address, City or Town | New York | |
Entity Address State Or Province | NY | |
Entity Address, Postal Zip Code | 10013 | |
City Area Code | 212 | |
Local Phone Number | 631-2111 | |
Title of 12(b) Security | Ordinary Shares, par value $0.001 per share | |
Trading Symbol | DV | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 157,201,888 | |
Entity Central Index Key | 0001819928 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 49,815 | $ 33,354 |
Trade receivables, net of allowances for doubtful accounts of $6,412 and $7,049 as of March 31, 2021 and December 31, 2020 respectively | 86,798 | 94,677 |
Prepaid expenses and other current assets | 12,068 | 13,904 |
Total current assets | 148,681 | 141,935 |
Property, plant and equipment, net | 18,948 | 18,107 |
Goodwill | 227,349 | 227,349 |
Intangible assets, net | 117,245 | 121,710 |
Deferred tax assets | 82 | 82 |
Other non-current assets | 2,089 | 2,151 |
Total assets | 514,394 | 511,334 |
Current liabilities | ||
Trade payables | 3,567 | 3,495 |
Accrued expense | 20,213 | 25,419 |
Income tax liabilities | 1,107 | 1,277 |
Current portion of capital lease obligations | 2,140 | 1,515 |
Contingent considerations current | 1,660 | 1,198 |
Other current liabilities | 1,993 | 1,116 |
Total current liabilities | 30,680 | 34,020 |
Long-term debt | 22,000 | 22,000 |
Capital lease obligations | 4,112 | 3,447 |
Deferred tax liabilities | 30,090 | 31,418 |
Other non-current liabilities | 2,896 | 3,292 |
Contingent considerations non-current | 462 | |
Total liabilities | 89,778 | 94,639 |
Commitments and Contingencies (Note 11) | ||
Stockholders' equity | ||
Common stock, $0.001 par value, 700,000 shares authorized, 140,402 shares issued and 125,256 shares outstanding as of March 31, 2021; 140,222 shares issued and 125,074 shares outstanding as of December 31, 2020 | 140 | 140 |
Preferred stock, $0.01 par value, 61,006 shares authorized, issued, and outstanding as of March 31, 2021 and December 31, 2020. Liquidation preference: $350,000 as of March 31, 2021 and December 31, 2020 | 610 | 610 |
Additional paid-in capital | 623,755 | 620,679 |
Treasury stock, at cost, 15,146 shares as of March 31, 2021 and December 31, 2020. | (260,686) | (260,686) |
Retained earnings | 60,585 | 54,941 |
Accumulated other comprehensive income, net of income taxes | 212 | 1,011 |
Total stockholders' equity | 424,616 | 416,695 |
Total liabilities and stockholders' equity | $ 514,394 | $ 511,334 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Trade Receivables, net of allowances | $ 6,412 | $ 7,049 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 700,000 | 700,000 |
Common stock, shares issued | 140,402 | 140,222 |
Common stock, shares outstanding | 125,256 | 125,074 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 61,006 | 61,006 |
Preferred stock, shares issued | 61,006 | 61,006 |
Preferred stock, shares outstanding | 61,006 | 61,006 |
Preferred stock, liquidation value | $ 350,000 | $ 350,000 |
Treasury stock, shares | 15,146 | 15,146 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | ||
Revenue | $ 67,586 | $ 51,219 |
Cost of revenue (exclusive of depreciation and amortization shown separately below) | 10,203 | 7,310 |
Product development | 14,179 | 10,331 |
Sales, marketing and customer support | 15,534 | 12,319 |
General and administrative | 11,835 | 10,696 |
Depreciation and amortization | 7,057 | 5,934 |
Income from operations | 8,778 | 4,629 |
Interest expense | 390 | 1,164 |
Other (income), net | (49) | (320) |
Income before income taxes | 8,437 | 3,785 |
Income tax expense | 2,793 | 1,345 |
Net income | $ 5,644 | $ 2,440 |
Earnings per share: | ||
Basic | $ 0.05 | $ 0.02 |
Diluted | $ 0.04 | $ 0.02 |
Weighted-average common stock outstanding: | ||
Basic | 125,112 | 139,741 |
Diluted | 133,578 | 147,233 |
Comprehensive income: | ||
Net income | $ 5,644 | $ 2,440 |
Other comprehensive (loss): | ||
Foreign currency cumulative translation adjustment | (799) | (153) |
Total comprehensive income | $ 4,845 | $ 2,287 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Preferred Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Income) Loss Net of Income Taxes | Total |
Balance at Dec. 31, 2019 | $ 140 | $ 283,457 | $ 34,488 | $ (67) | $ 318,018 | ||
Balance (in shares) at Dec. 31, 2019 | 139,721 | ||||||
Foreign currency translation adjustment | (153) | (153) | |||||
Stock-based compensation expense | 802 | 802 | |||||
Common stock issued upon exercise of stock options | 70 | 70 | |||||
Common stock issued upon exercise of stock options (in shares) | 32 | ||||||
Net income | 2,440 | 2,440 | |||||
Balance at Mar. 31, 2020 | $ 140 | 284,329 | 36,928 | (220) | 321,177 | ||
Balance (in shares) at Mar. 31, 2020 | 139,753 | ||||||
Balance at Dec. 31, 2020 | $ 140 | $ 610 | $ (260,686) | 620,679 | 54,941 | 1,011 | 416,695 |
Balance (in shares) at Dec. 31, 2020 | 140,222 | 61,006 | 15,146 | ||||
Foreign currency translation adjustment | (799) | (799) | |||||
Stock-based compensation expense | 2,538 | 2,538 | |||||
Common stock issued upon exercise of stock options | 538 | $ 538 | |||||
Common stock issued upon exercise of stock options (in shares) | 180 | 180 | |||||
Net income | 5,644 | $ 5,644 | |||||
Balance at Mar. 31, 2021 | $ 140 | $ 610 | $ (260,686) | $ 623,755 | $ 60,585 | $ 212 | $ 424,616 |
Balance (in shares) at Mar. 31, 2021 | 140,402 | 61,006 | 15,146 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating activities: | ||
Net income | $ 5,644 | $ 2,440 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Bad debt (recovery) expense | (390) | 709 |
Depreciation and amortization expense | 7,057 | 5,934 |
Amortization of debt issuance costs | 74 | 72 |
Accretion of acquisition liabilities | 21 | |
Deferred taxes | (1,328) | (1,624) |
Stock-based compensation expense | 2,538 | 802 |
Interest expense (income) | 66 | (29) |
Change in fair value of contingent consideration | (979) | |
Offering costs | 3,073 | 870 |
Other | (68) | 621 |
Changes in operating assets and liabilities net of effect of business combinations | ||
Trade receivables | 7,803 | 4,098 |
Prepaid expenses and other current assets | 1,754 | 811 |
Other non-current assets | (12) | (44) |
Trade payables and other liabilities | (524) | 1,291 |
Accrued expenses | (6,469) | (3,854) |
Other current liabilities | 1,102 | 1,093 |
Other non-current liabilities | (856) | 470 |
Net cash provided by operating activities | 19,464 | 12,702 |
Investing activities: | ||
Purchase of property, plant and equipment | (1,915) | (3,049) |
Net cash (used in) investing activities | (1,915) | (3,049) |
Financing activities: | ||
Payments of long-term debt | (188) | |
Payments related to offering costs | (1,181) | (676) |
Payment of contingent consideration related to Zentrick acquisition | (601) | |
Proceeds from common stock issued upon exercise of stock options | 538 | 70 |
Capital lease payments | (235) | (418) |
Net cash (used in) financing activities | (878) | (1,813) |
Effect of exchange rate changes on cash and cash equivalents and restricted cash | (209) | (143) |
Net increase in cash, cash equivalents, and restricted cash | 16,462 | 7,697 |
Cash, cash equivalents, and restricted cash - Beginning of period | 33,395 | 11,342 |
Cash, cash equivalents, and restricted cash - End of period | 49,857 | 19,039 |
Supplemental cash flow information: | ||
Cash paid for taxes | 1,045 | 541 |
Cash paid for interest | 147 | 1,069 |
Non-cash investing and financing activities: | ||
Acquisition of equipment under capital lease | 1,518 | 973 |
Capital assets financed by accounts payable | 16 | |
Offering costs included in accounts payable and accrued expense | $ 1,889 | $ 306 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Reconciliation of Cashflows - USD ($) $ in Thousands | Mar. 31, 2021 | Mar. 31, 2020 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
Cash and cash equivalents | $ 49,815 | $ 18,730 |
Restricted cash (included in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets) | 42 | 309 |
Total cash and cash equivalents and restricted cash | $ 49,857 | $ 19,039 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2021 | |
Description of Business | |
Description of Business | 1. Description of Business DoubleVerify is a software platform for digital media measurement, data and analytics. The Company’s solutions provide advertisers with a single measure of digital ad quality and effectiveness, the DV Authentic Ad, which ensures that a digital ad was delivered in a brand-safe environment, fully viewable, by a real person and in the intended geography. The Company’s software interface, DV Pinnacle, provides customers with access to data on all of their digital ads and enables them to make changes to their ad strategies on a real-time basis. The Company’s software solutions are integrated across the entire digital advertising ecosystem, including programmatic platforms, Connected TV (“CTV”), social media channels and digital publishers. The Company’s solutions are accredited by the Media Rating Council, which allows the Company’s data to be used as a single-source standard in the evaluation and measurement of digital ads. The Company was incorporated on August 16, 2017, is registered in the state of Delaware and is the parent company of DoubleVerify Midco, Inc. (“MidCo”), which is in turn the parent company of DoubleVerify Inc. On August 18, 2017, DoubleVerify Inc. entered into an agreement and plan of merger (the “Agreement”), whereby the Company, formerly known as Pixel Group Holdings, Inc. and Pixel Merger Sub, Inc. (“Merger Sub”), a wholly owned subsidiary of the Company, agreed to provide for the merger of the Merger Sub with DoubleVerify Inc. pursuant to the terms and conditions of the Agreement. On the effective date, Merger Sub was merged with and into DoubleVerify Inc. whereupon the separate corporate existence of Merger Sub ceased and DoubleVerify Inc. continued as the surviving corporation. Through the merger, the Company acquired 100% of the outstanding equity instruments of DoubleVerify Inc. resulting in a change of control at the parent level. The merger resulted in the application of acquisition accounting under the provisions of Financial Accounting Standards Board (“FASB”) Topic Accounting Standards Codification (“ASC”) 805 , “Business Combinations.” The Company has wholly owned subsidiaries in numerous jurisdictions including Israel, the United Kingdom, Germany, Singapore, Australia, Canada, Brazil, Belgium, Mexico, France, Japan, Spain, and Finland, and operates in one reportable segment. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Presentation and Summary of Significant Accounting Policies | 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Preparation and Principles of Consolidation The accompanying Condensed Consolidated Balance Sheets as of March 31, 2021, the Condensed Consolidated Statements of Operations and Comprehensive Income, Cash Flows and Stockholders’ Equity for the three months ended March 31, 2021 and 2020 reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair presentation of the results for the periods shown in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules and regulations of the SEC for interim financial reporting periods. Accordingly, certain information and footnote disclosures have been condensed or omitted pursuant to SEC rules that would ordinarily be required under GAAP for complete financial statements. These unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements as of December 31, 2020 and 2019 and for the years then ended and the accompanying notes thereto included in our Prospectus. On March 29, 2021, the Company effected a 1 Use of Estimates and Judgments in the Preparation of the Condensed Consolidated Financial Statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expense during the reporting periods. Significant estimates and judgments are inherent in the analysis and measurement of items include, but not limited to: revenue recognition criteria including the determination of principal versus agent revenue considerations, income taxes, the valuation and recoverability of goodwill and intangible assets, the assessment of potential loss from contingencies, the allowance for doubtful accounts, and assumptions used in determining the fair value of stock-based compensation. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. These estimates are based on the information available as of the date of the Condensed Consolidated Financial Statements . Recently Issued Accounting Pronouncements The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with certain new or revised accounting standards. Financial Instruments - Credit Losses In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments Cloud Computing In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract Leases In February 2016, the FASB issued ASU No. 2016-02, Leases Topic 842 Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740) (“ASU 2019-12”) certain exceptions to existing guidance related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This guidance also requires an entity to reflect the effect of an enacted change in tax laws or rates in its effective income tax rate in the first interim period that includes the enactment date of the new legislation, aligning the timing of recognition of the effects from enacted tax law changes on the effective income tax rate with the effects on deferred income tax assets and liabilities. Under existing guidance, an entity recognizes the effects of the enacted tax law change on the effective income tax rate in the period that includes the effective date of the tax law. For non-public entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. Certain amendments included in the update allows for a retrospective, modified retrospective, or prospective methods of adoption. The adoption of this guidance is not expected to have a material impact on the Company’s Condensed Consolidated Financial Statements. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2021 | |
Revenue | |
Revenue | 3. Revenue The following table disaggregates revenue between advertiser customers, where revenue is generated based on number of ads measured for Direct or measured and purchased for Programmatic, and supply-side customers, where revenue is generated based on contracts with minimum guarantees or contracts that contain overages after minimum guarantees are achieved. Disaggregated revenue by customer type is as follows: Three Months Ended March 31, ( in thousands) 2021 2020 Advertiser - direct $ 27,541 $ 22,187 Advertiser - programmatic 33,912 23,851 Supply-side customer 6,133 5,181 Total revenue $ 67,586 $ 51,219 Contract assets relate to the Company’s conditional right to consideration for completed performance under the contract (e.g., unbilled receivables). Trade receivables, net of allowance for doubtful accounts, include unbilled receivable balances of $25.7 million and $44.9 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 4. There were no changes to the goodwill carrying value from December 31, 2020 through March 31, 2021. The foreign exchange impact on Goodwill was immaterial for the period. The following table summarizes the Company’s intangible assets and related accumulated amortization: ( in thousands) March 31, 2021 December 31, 2020 Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Amount Amortization Amount Amount Amortization Amount Trademarks and brands 11,690 (2,773) 8,917 11,690 (2,562) 9,128 Customer relationships 102,220 (29,863) 72,357 102,220 (27,720) 74,500 Developed technology 63,196 (27,225) 35,971 63,210 (25,128) 38,082 Total intangible assets $ 177,106 $ (59,861) $ 117,245 $ 177,120 $ (55,410) $ 121,710 Amortization expense for each of the three months ended March 31, 2021 and March 31, 2020 is $4.5 million. Estimated future expected amortization expense of intangible assets as of March 31, 2021, is as follows: (in thousands) 2021 $ 13,395 2022 17,860 2023 17,825 2024 16,205 2025 14,273 2026 9,777 Thereafter 27,910 Total $ 117,245 The weighted-average remaining useful life by major asset classes as of March 31, 2021 is as follows: (In years) Trademarks and brands 11 Customer relationships 9 Developed technology 4 There were no impairments identified during the three months ended March 31, 2021 and March 31, 2020. |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment | |
Property, Plant and Equipment | 5. Property, Plant and Equipment Property, plant and equipment, including equipment under capital lease obligations and capitalized software development costs, consists of the following: As of (in thousands) March 31, 2021 December 31, 2020 Computers and peripheral equipment $ 16,543 $ 14,577 Office furniture and equipment 1,118 1,124 Leasehold improvements 9,265 9,267 Capitalized software development costs 9,816 8,382 Less accumulated depreciation and amortization (17,794) (15,243) Total property, plant and equipment, net $ 18,948 $ 18,107 For the three months ended March 31, 2021 and 2020, total depreciation expense was $2.6 million and $1.4 million, respectively. Property and equipment financed through capital lease obligations, consisting of computer equipment, totaled $12.3 million and $10.7 million on March 31, 2021 and December 31, 2020 respectively. As of March 31, 2021 and December 31, 2020, accumulated depreciation related to property and equipment financed through capital leases totaled $8.2 million and $7.6 million, respectively refer to Note 11, Commitments and Contingencies. |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Measurement | |
Fair Value Measurement | 6. Fair Value Measurement The following tables present the Company’s financial instruments that are measured at fair value on a recurring basis: As of March 31, 2021 Quoted Market Prices in Active Significant ( in thousands) Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Total Fair Value (Level 1) (Level 2) (Level 3) Measurements Assets: Cash equivalents: $ 2,474 $ — $ — $ 2,474 Liabilities: Contingent consideration current — — 1,660 1,660 Contingent consideration non-current — — — — Total contingent consideration $ — $ — $ 1,660 $ 1,660 As of December 31, 2020 Quoted Market Prices in Active Significant (in thousands) Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Tota1 Fair Value (Level 1) (Level 2) (Level 3) Measurements Assets: Cash equivalents: $ 2,474 $ — $ — $ 2,474 Liabilities: Contingent consideration current — — 1,198 1,198 Contingent consideration non-current — — 462 462 Total contingent consideration $ — $ — $ 1,660 $ 1,660 Cash equivalents, consisting of money market funds and time deposits, of $2.5 million as of March 31, 2021 and December 31, 2020, were classified as Level 1 of the fair value hierarchy and valued using quoted market prices in active markets. Contingent consideration relates to potential payments that the Company may be required to make associated with a business combination. To the extent that the valuations of these liabilities are based on inputs that are less observable or not observable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for measures categorized in Level 3. There were no material changes to the fair value balance of the contingent consideration categorized with Level 3 inputs from December 31, 2020 to March 31, 2021. The fair value of the component of contingent consideration related to achievement of revenue targets have been estimated using a Monte Carlo model to simulate future performance of the acquired business under a risk-neutral framework; significant assumptions include a risk-adjusted discount rate of 12.7% and revenue volatility of 30.0%. The fair value of the component of contingent consideration related to achievement of four technical milestones have been estimated using situation-based modeling, which considers the probability-weighted present value of the expected payout amount. |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2021 | |
Long-term Debt. | |
Long-term Debt | 7. Long-term Debt On October 1, 2020, DoubleVerify Inc., as borrower (the “Borrower”), and MidCo, as guarantor, entered into an amendment and restatement agreement with the banks and other financial institutions party thereto, as lenders, and Capital One, National Association, as administrative agent, letter of credit issuer and swing lender, and others, to (i) amend and restate the Prior Credit Agreement as defined in the Prospectus (the Prior Credit Agreement, as amended and restated on October 1, 2020, the “Credit Agreement”) and (ii) replace the Prior Credit Facilities (as defined in the Prospectus) with a new senior secured revolving credit facility (the “New Revolving Credit Facility”) in an aggregate principal amount of $150.0 million (with a letter of credit facility of up to $15.0 million as a sublimit). Subject to certain terms and conditions, the Borrower is entitled to request additional term loan facilities or increases in the revolving credit commitments under the New Revolving Credit Facility. The New Revolving Credit Facility is payable in quarterly installments for interest, with the principal balance due in full at maturity on October 1, 2025. Additional fees paid quarterly include fees for the unused revolving facility and unused letter of credit. The commitment fee on any unused balance is payable periodically and may range from 0.25% to 0.40% based upon the total net leverage ratio. The New Revolving Credit Facility bears interest at LIBOR plus 2.25%. which may vary from time to time based on the Borrower’s total net leverage ratio calculated in accordance with the Credit Agreement. The New Revolving Credit Facility contains a number of significant negative covenants. Subject to certain exceptions, these covenants require the Borrower to comply with certain requirements and restrictions to, among other things: incur indebtedness; create liens; engage in mergers or consolidations; make investments, loans and advances; pay dividends or other distributions and repurchase capital stock; sell assets; engage in certain transactions with affiliates; enter into sale and leaseback transactions; and make certain accounting changes. As a result of these restrictions, substantially all of the net assets of the Borrower are restricted from distribution to the Company or any of its holders of equity. The New Revolving Credit Facility has a first priority lien on substantially all of the assets of MidCo, the Borrower and Ad-Juster, Inc., the Company’s indirect subsidiary. The New Revolving Credit Facility requires the Borrower to remain in compliance with a maximum total net leverage ratio and a minimum fixed charge coverage ratio as defined in the Credit Agreement. As of March 31, 2021, the maximum total net leverage ratio and minimum fixed charge coverage ratio is 3.5x and 1.25x, respectively. The Borrower is in compliance with all covenants under the New Revolving Credit Facility as of March 31, 2021. As of March 31, 2021 and December 31, 2020, $22.0 million was outstanding under the New Revolving Credit Facility due at maturity, respectively. |
Income Tax
Income Tax | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax | |
Income Tax | 8. Income Tax The Company’s quarterly income tax provision is calculated using an estimated annual effective income tax rate (“ETR”) based on actual historical information and forward-looking estimates. The Company’s estimated annual ETR may fluctuate due to changes in forecasted annual pre-tax income, changes in the jurisdictional mix of forecasted pre-tax income, and changes to actual or forecasted permanent book to tax differences (e.g., non-deductible expenses). In addition, the Company’s ETR for a particular reporting period may fluctuate as the result of changes to the valuation allowance for net deferred tax assets, the impact of anticipated tax settlements with federal, state, or foreign tax authorities, or the impact of tax law changes. The Company identifies items that are unusual and non-recurring in nature and treat these as discrete events. The tax effect of these discrete events is booked entirely in the quarter in which they occur. During the three months ended March 31, 2021, the Company recorded an income tax provision of $2.8 million, resulting in an effective tax rate of 33.1%, which includes an annualized effective tax provision of $2.5 million (representing an effective tax rate of 29.7%) and a discrete item relating to state tax refunds of $0.3 million (representing an effective tax rate of 3.4%). During the three months ended March 31, 2020, the Company recorded an income tax provision of $1.3 million, resulting in an effective tax rate of 35.6%. These effective tax rates differ from the U.S. federal statutory rate primarily due to the effects of foreign tax rate differences, U.S. tax on foreign operations, and U.S. state/local taxes. The COVID-19 (as defined herein) pandemic has a global reach, and many countries are introducing measures that provide relief to taxpayers in a variety of ways. In March 2020, the U.S. government enacted tax legislation containing provisions to support businesses during the COVID-19 pandemic (the “CARES Act”), including deferment of the employer portion of certain payroll taxes, refundable payroll tax credits, and technical amendments to tax depreciation methods for qualified improvement property. The CARES Act did not have a material impact on the Company’s income tax provision for the three months ended March 31, 2021. A valuation allowance has been established against a small amount of certain net foreign deferred tax assets and US tax loss carryforward. All other net deferred tax assets have been determined to be more likely than not realizable. The Company and its subsidiaries file income tax returns with the Internal Revenue Service (“IRS”) and various state and international jurisdictions. The Company’s Israeli subsidiary is under audit by the Israeli Tax Authority for the 2016-2018 tax years. This examination may lead to ordinary course adjustments or proposed adjustments to the Company’s taxes. Aside from this, the Company is not currently under audit in any other jurisdiction. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share | |
Earnings Per Share | 9. Earnings Per Share The following table reconciles the numerators and denominators used in computations of the basic and diluted EPS for the three months ended March 31: Three Months Ended March 31, 2021 2020 Numerator: Net Income (basic and diluted) $ 5,644 $ 2,440 Denominator: Weighted-average common shares outstanding 125,112 139,741 Dilutive effect of share-based awards 8,466 7,492 Weighted-average dilutive shares outstanding 133,578 147,233 Basic earnings per share $ 0.05 $ 0.02 Diluted earnings per share $ 0.04 $ 0.02 Approximately 4.4 million, and 7.0 million weighted average shares issuable under stock-based awards were not included in the diluted EPS calculation in the three months ended March 31, 2021 and March 31, 2020 because they were antidilutive. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Stock-Based Compensation | |
Stock-Based Compensation | 10. Stock-Based Compensation Employee Equity Incentive Plan On September 20, 2017, the Company established its 2017 Omnibus Equity Incentive Program (the “2017 Plan”) which provides for the granting of equity based awards to certain employees, directors, independent contractors, consultants and agents. Under the 2017 Plan, the Company may grant non-qualified stock options, stock appreciation rights, restricted stock units, and other stock-based awards up to 22,182 shares of common stock. Options become exercisable subject to vesting schedules up to four years from the date of the grant and subject to certain timing restrictions upon an employee’s separation of service and no later than 10 years after the grant date. Restricted stock units are subject to vesting schedules up to four years from the date of the grant and subject to certain timing restrictions upon an employee’s separation. A summary of stock option activity for the three-months ended March 31, 2021 is as follows: Stock Option Weighted Average Remaining Number of Weighted Average Contractual Life Aggregate Options Exercise Price (Years) Intrinsic Value Outstanding as of December 31, 2020 14,713 $ 4.47 7.79 $ 181,914 Options granted 436 20.10 — — Options exercised (180) 3.25 — — Options forfeited (117) 5.84 — — Outstanding as of March 31, 2021 14,852 $ 4.94 7.61 $ 244,811 Options expected to vest as of March 31, 2021 4,945 $ 8.60 — $ 63,365 Options exercisable as of March 31, 2021 5,952 $ 2.65 — $ 111,718 Stock options include grants to executives that contain both market-based and performance-based vesting conditions. There were no stock options granted that contain both market-based and performance-based vesting conditions during the three months ended March 31, 2021. As of March 31, 2021, 3,433 market-based and performance-based awards were outstanding. As of March 31, 2021, the Company did not consider the performance condition to be probable and did not recognize any expense associated with these options. The weighted average grant date fair value of options granted during the three months ended March 31, 2021 and 2020 was $8.39 and $3.18, respectively The total intrinsic value of options exercised during the three months ended March 31, 2021 and 2020 was $3.3 million and $0.2 million, respectively. The fair market value of each option granted during the three months ended March 31, 2021 has been estimated on the grant date using the Black-Scholes-Merton option-pricing model with the following assumptions: 2021 Risk - free interest rate (percentage) 0.6. - 0.8 Expected term (years) 6.1 Expected dividend yield (percentage) — Expected volatility (percentage) 43.4 - 43.6 The Company’s board of directors (the “Board”) did not declare or pay dividends of the Company’s common or preferred stock during the three months ended March 31, 2021 or during the three months ended March 31, 2020. A summary of restricted stock unit activity for the three-months ended March 31, 2021 is as follows: Restricted Stock Number of Weighted Average Shares Grant Date Fair Value Outstanding as of December 31, 2020 1,261 $ 7.74 Granted 484 19.44 Vested — Forfeited — Outstanding as of March 31, 2021 1,745 $ 10.99 Expected to vest as of March 31, 2021 1,578 As of March 31, 2021, unrecognized stock-based compensation expense was $24.2 million, which is expected to be recognized over a weighted-average period of 1.3 years. Total stock-based compensation expense recorded in the Condensed Consolidated Statements of Operations and Comprehensive Income as follows: Three Months Ended March 31, (in thousands) 2021 2020 Product development $ 278 $ 101 Sales, marketing and customer support 624 172 General and administrative 1,636 529 Total stock-based compensation $ 2,538 $ 802 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 11. Commitments and Contingencies Accrued Expense Accrued expenses as of March 31, 2021 and December 31, 2020 were as follows: As of (in thousands) March 31, 2021 December 31, 2020 Vendor payments $ 4,688 $ 3,896 Employee commissions and bonuses 5,801 11,344 Payroll and other employee related expense 7,308 6,957 401k and pension expense 427 1,358 Other taxes 1,989 1,864 Total accrued expense $ 20,213 $ 25,419 Operating Leases The Company and its subsidiaries have entered into operating lease agreements for certain of its office space, and data centers. The offices are located in the United States, Israel, Belgium, Finland, France and Singapore. The data centers are premises used to house computing and networking equipment. The data center leases are located within the United States, Netherlands, Germany and Singapore. For the three months ended March 31, 2021 and March 31, 2020 office rent expense was $0.9 million and $1.4 million respectively. For the three months ended March 31, 2021 and March 31, 2020 data center rent expense was $0.5 million and $0.3 million respectively. Future minimum lease obligations are as follows: Year Ending (in thousands) December 31, 2021 $ 4,211 2022 4,250 2023 3,631 2024 277 $ 12,369 Capital Leases As of March 31, 2021, the Company has seven lease agreements for certain equipment which provide for the transfer of ownership at the end of the lease term or are for underlying assets that will have an insignificant fair value at the end of the lease term. The Company has classified these agreements as capital leases and recognized the corresponding assets and liabilities within the Condensed Consolidated Balance Sheet. The following is a schedule of future minimum lease payments under these agreements (including interest) as of March 31, 2021. Year Ending (in thousands) December 31, 2021 $ 1,792 2022 2,144 2023 1,937 2024 598 2025 170 Total 6,641 Less: Amount representing interest (389) Present Value of net minimum capital lease payments $ 6,252 Capital leases short term $ 2,140 Capital leases long term 4,112 Total $ 6,252 Contingencies From time to time, the Company is subject to various legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business. The Company records liabilities for contingencies including legal costs when it is probable that a liability has been incurred and when the amount can be reasonably estimated. Legal costs are expensed as incurred. Although the outcome of the various legal proceedings and claims cannot be predicted with certainty, management does not believe that any of these proceedings or other claims will have a material effect on the Company’s business, financial condition, results of operations or cash flows. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Information | |
Segment Information | 12. Segment Information The Company has determined that it operates as one operating and reportable The Company has not disclosed certain geographic information pertaining to revenues and total assets as it is impracticable to disclose, is not utilized by the Company’s chief operating decision maker to review operating results or make decisions about how to allocate resources, and would not be useful to users of the Condensed Consolidated Financial Statements to disclose such information. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events | |
Subsequent Events | 13. Subsequent Events On April 9, 2021, the Company entered into an arrangement with an affiliate of Tiger Global Management, LLC (the ‘‘Tiger Investor’’) whereby the Tiger Investor purchased $30.0 million of the Company’s common stock in a private placement (‘‘concurrent private placement’’) concurrent with the completion of the initial public offering of the Company’s common stock (the ‘‘IPO’’). The price per share was equal to the IPO price of $27.00, for a total of 1,111 shares. The Company received total aggregate net proceeds of $29.0 million, after deducting fees of $1.0 million. On April 19, 2021 the Board and the stockholders of the Company approved the 2021 Omnibus Equity Incentive Plan (“2021 Equity Plan”). The maximum number of shares of common stock available for issuance under the 2021 Equity Plan is equal to the sum of (i) 30,000 shares of common stock and (ii) an annual increase on the first day of each year beginning in 2022 and ending in and including 2031, equal to the lesser of (A) five percent (5%) of the outstanding shares of common stock on the last day of the immediately preceding fiscal year and (B) such lesser amount as determined by the Board’s compensation committee. The 2021 Equity Plan provides for the grant of stock options (including qualified incentive stock options and nonqualified stock options), stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, and other stock or cash settled incentive awards. Any shares covered by an award, or portion of an award, granted under the 2021 Equity Plan that expires or is forfeited, canceled, cash-settled, or otherwise terminated for any reason will again be available for the grant of awards under the 2021 Equity Plan. On April 19, 2021, the Board and the stockholders of the Company approved its 2021 Employee Stock Purchase Plan (“ESPP”). The aggregate number of shares of common stock that will initially be reserved for issuance under the ESPP will be equal to the sum of (i) 3,000 shares of the Company’s common stock and (ii) an annual increase on the first day of each year beginning in 2022 and ending in and including 2031, equal to the lesser of (A) one percent (1%) of the outstanding shares of common stock on the last day of the immediately preceding fiscal year and (B) such lesser amount as determined by the Board. On April 19, 2021, the Company approved 133 stock options and 35 restricted stock units to be granted under the 2021 Equity Plan and 7 stock options and 4 restricted stock units under the 2017 Plan. On May 21, 2021, the Company approved 20 stock options and 47 restricted stock units to be granted under the 2021 Equity Plan and 1 restricted stock units under the 2017 Plan. On April 23, 2021, the Company completed its IPO in which the Company issued and sold 9,977 shares of common stock at a public offering price of $27.00 per share, which included the full exercise of the underwriters’ option to purchase 1,350 additional shares of common stock. The Company received aggregate net proceeds of $253.2 million from the IPO, after deducting underwriting discount fees of $16.2 million. The Company incurred offering costs of approximately $26.3 for the concurrent private placement and IPO, of which $3.1 million was included in General and Administrative expenses in the Condensed Consolidated Statement of Operations and Comprehensive Income for the three months ended March 31, 2021. The IPO offering also included 5,356 shares sold by Providence VII U.S. Holdings L.P. (“Providence”) and other existing stockholders, which included the full exercise of the underwriters’ option to purchase 650 additional shares from Providence, in which the Company did not receive any proceeds from the shares sold. In connection with the Company’s IPO, all shares of the Company’s outstanding preferred stock automatically converted into 20,335 shares of common stock on a one On April 30, 2021, DoubleVerify Inc. paid the entire outstanding balance under the New Revolving Credit Facility of $22.0 million using proceeds from the IPO. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Basis of Presentation and Summary of Significant Accounting Policies | |
Basis of Preparation and Principles of Consolidation | Basis of Preparation and Principles of Consolidation The accompanying Condensed Consolidated Balance Sheets as of March 31, 2021, the Condensed Consolidated Statements of Operations and Comprehensive Income, Cash Flows and Stockholders’ Equity for the three months ended March 31, 2021 and 2020 reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair presentation of the results for the periods shown in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules and regulations of the SEC for interim financial reporting periods. Accordingly, certain information and footnote disclosures have been condensed or omitted pursuant to SEC rules that would ordinarily be required under GAAP for complete financial statements. These unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements as of December 31, 2020 and 2019 and for the years then ended and the accompanying notes thereto included in our Prospectus. On March 29, 2021, the Company effected a 1 |
Use of Estimates and Judgments in the Preparation of the Condensed Consolidated Financial Statements | Use of Estimates and Judgments in the Preparation of the Condensed Consolidated Financial Statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expense during the reporting periods. Significant estimates and judgments are inherent in the analysis and measurement of items include, but not limited to: revenue recognition criteria including the determination of principal versus agent revenue considerations, income taxes, the valuation and recoverability of goodwill and intangible assets, the assessment of potential loss from contingencies, the allowance for doubtful accounts, and assumptions used in determining the fair value of stock-based compensation. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. These estimates are based on the information available as of the date of the Condensed Consolidated Financial Statements . |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with certain new or revised accounting standards. Financial Instruments - Credit Losses In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments Cloud Computing In August 2018, the FASB issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract Leases In February 2016, the FASB issued ASU No. 2016-02, Leases Topic 842 Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740) (“ASU 2019-12”) certain exceptions to existing guidance related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This guidance also requires an entity to reflect the effect of an enacted change in tax laws or rates in its effective income tax rate in the first interim period that includes the enactment date of the new legislation, aligning the timing of recognition of the effects from enacted tax law changes on the effective income tax rate with the effects on deferred income tax assets and liabilities. Under existing guidance, an entity recognizes the effects of the enacted tax law change on the effective income tax rate in the period that includes the effective date of the tax law. For non-public entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. Certain amendments included in the update allows for a retrospective, modified retrospective, or prospective methods of adoption. The adoption of this guidance is not expected to have a material impact on the Company’s Condensed Consolidated Financial Statements. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue | |
Schedule of disaggregated revenue | Three Months Ended March 31, ( in thousands) 2021 2020 Advertiser - direct $ 27,541 $ 22,187 Advertiser - programmatic 33,912 23,851 Supply-side customer 6,133 5,181 Total revenue $ 67,586 $ 51,219 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets | |
Schedule of intangible assets and related accumulated amortization | ( in thousands) March 31, 2021 December 31, 2020 Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying Amount Amortization Amount Amount Amortization Amount Trademarks and brands 11,690 (2,773) 8,917 11,690 (2,562) 9,128 Customer relationships 102,220 (29,863) 72,357 102,220 (27,720) 74,500 Developed technology 63,196 (27,225) 35,971 63,210 (25,128) 38,082 Total intangible assets $ 177,106 $ (59,861) $ 117,245 $ 177,120 $ (55,410) $ 121,710 (In years) Trademarks and brands 11 Customer relationships 9 Developed technology 4 |
Schedule of Estimated future expected amortization expense of intangible assets | (in thousands) 2021 $ 13,395 2022 17,860 2023 17,825 2024 16,205 2025 14,273 2026 9,777 Thereafter 27,910 Total $ 117,245 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment | |
Schedule of Property, Plant and Equipment | As of (in thousands) March 31, 2021 December 31, 2020 Computers and peripheral equipment $ 16,543 $ 14,577 Office furniture and equipment 1,118 1,124 Leasehold improvements 9,265 9,267 Capitalized software development costs 9,816 8,382 Less accumulated depreciation and amortization (17,794) (15,243) Total property, plant and equipment, net $ 18,948 $ 18,107 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Measurement | |
Schedule of financial instruments measured at fair value on recurring basis | As of March 31, 2021 Quoted Market Prices in Active Significant ( in thousands) Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Total Fair Value (Level 1) (Level 2) (Level 3) Measurements Assets: Cash equivalents: $ 2,474 $ — $ — $ 2,474 Liabilities: Contingent consideration current — — 1,660 1,660 Contingent consideration non-current — — — — Total contingent consideration $ — $ — $ 1,660 $ 1,660 As of December 31, 2020 Quoted Market Prices in Active Significant (in thousands) Markets for Significant Other Unobservable Identical Assets Observable Inputs Inputs Tota1 Fair Value (Level 1) (Level 2) (Level 3) Measurements Assets: Cash equivalents: $ 2,474 $ — $ — $ 2,474 Liabilities: Contingent consideration current — — 1,198 1,198 Contingent consideration non-current — — 462 462 Total contingent consideration $ — $ — $ 1,660 $ 1,660 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share | |
Schedule of computations of the basic and diluted EPS | Three Months Ended March 31, 2021 2020 Numerator: Net Income (basic and diluted) $ 5,644 $ 2,440 Denominator: Weighted-average common shares outstanding 125,112 139,741 Dilutive effect of share-based awards 8,466 7,492 Weighted-average dilutive shares outstanding 133,578 147,233 Basic earnings per share $ 0.05 $ 0.02 Diluted earnings per share $ 0.04 $ 0.02 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stock-Based Compensation | |
Schedule of stock option activity | Stock Option Weighted Average Remaining Number of Weighted Average Contractual Life Aggregate Options Exercise Price (Years) Intrinsic Value Outstanding as of December 31, 2020 14,713 $ 4.47 7.79 $ 181,914 Options granted 436 20.10 — — Options exercised (180) 3.25 — — Options forfeited (117) 5.84 — — Outstanding as of March 31, 2021 14,852 $ 4.94 7.61 $ 244,811 Options expected to vest as of March 31, 2021 4,945 $ 8.60 — $ 63,365 Options exercisable as of March 31, 2021 5,952 $ 2.65 — $ 111,718 |
Schedule of Black-Scholes-Merton option-pricing model | 2021 Risk - free interest rate (percentage) 0.6. - 0.8 Expected term (years) 6.1 Expected dividend yield (percentage) — Expected volatility (percentage) 43.4 - 43.6 |
Schedule of restricted stock activity | Restricted Stock Number of Weighted Average Shares Grant Date Fair Value Outstanding as of December 31, 2020 1,261 $ 7.74 Granted 484 19.44 Vested — Forfeited — Outstanding as of March 31, 2021 1,745 $ 10.99 Expected to vest as of March 31, 2021 1,578 |
Schedule of stock-based compensation expense | Three Months Ended March 31, (in thousands) 2021 2020 Product development $ 278 $ 101 Sales, marketing and customer support 624 172 General and administrative 1,636 529 Total stock-based compensation $ 2,538 $ 802 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies. | |
Schedule of accrued expenses | As of (in thousands) March 31, 2021 December 31, 2020 Vendor payments $ 4,688 $ 3,896 Employee commissions and bonuses 5,801 11,344 Payroll and other employee related expense 7,308 6,957 401k and pension expense 427 1,358 Other taxes 1,989 1,864 Total accrued expense $ 20,213 $ 25,419 |
Schedule of future minimum lease obligations | Year Ending (in thousands) December 31, 2021 $ 4,211 2022 4,250 2023 3,631 2024 277 $ 12,369 |
Schedule of future minimum lease payments under agreement (including interest) | Year Ending (in thousands) December 31, 2021 $ 1,792 2022 2,144 2023 1,937 2024 598 2025 170 Total 6,641 Less: Amount representing interest (389) Present Value of net minimum capital lease payments $ 6,252 Capital leases short term $ 2,140 Capital leases long term 4,112 Total $ 6,252 |
Description of Business (Detail
Description of Business (Details) - segment | 3 Months Ended | |
Mar. 31, 2021 | Aug. 18, 2017 | |
Description of Business | ||
Number of reportable segments | 1 | |
DoubleVerify Inc. | ||
Description of Business | ||
Ownership percentage acquired | 100.00% |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details) | Mar. 29, 2021$ / shares | Mar. 31, 2021$ / shares | Dec. 31, 2020$ / shares |
Basis of Presentation and Summary of Significant Accounting Policies | |||
Stock split, conversion ratio | 0.333 | ||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, par value | $ 0.01 | $ 0.01 | $ 0.01 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Disaggregation of revenue | |||
Total revenue | $ 67,586 | $ 51,219 | |
Unbilled receivable | 25,700 | $ 44,900 | |
Advertiser - direct | |||
Disaggregation of revenue | |||
Total revenue | 27,541 | 22,187 | |
Advertiser - programmatic | |||
Disaggregation of revenue | |||
Total revenue | 33,912 | 23,851 | |
Supply - side customer | |||
Disaggregation of revenue | |||
Total revenue | $ 6,133 | $ 5,181 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Goodwill and Intangible Assets | ||
Change in goodwill | $ 0 | $ 0 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Company's intangible assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 177,106 | $ 177,120 | |
Accumulated Amortization | (59,861) | (55,410) | |
Total | 117,245 | 121,710 | |
Amortization expense | 4,500 | $ 4,500 | |
Trademarks and brands | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 11,690 | 11,690 | |
Accumulated Amortization | (2,773) | (2,562) | |
Total | 8,917 | 9,128 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 102,220 | 102,220 | |
Accumulated Amortization | (29,863) | (27,720) | |
Total | 72,357 | 74,500 | |
Developed Technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 63,196 | 63,210 | |
Accumulated Amortization | (27,225) | (25,128) | |
Total | $ 35,971 | $ 38,082 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Estimated future expected amortization expense (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2021 | $ 13,395 | |
2022 | 17,860 | |
2023 | 17,825 | |
2024 | 16,205 | |
2025 | 14,273 | |
2026 | 9,777 | |
Thereafter | 27,910 | |
Total | $ 117,245 | $ 121,710 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Weighted-average remaining useful life (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets | $ 0 | $ 0 |
Trademarks and brands | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remaining useful life | 11 years | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remaining useful life | 9 years | |
Developed Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remaining useful life | 4 years |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Less: Accumulated Depreciation and Amortization | $ (17,794) | $ (15,243) | |
Total property, plant and equipment, net | 18,948 | 18,107 | |
Depreciation expense | 2,600 | $ 1,400 | |
Capital lease assets | 12,300 | 10,700 | |
Capital lease assets, accumulated depreciation | 8,200 | 7,600 | |
Computers and Peripheral Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment gross | 16,543 | 14,577 | |
Office Furniture and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment gross | 1,118 | 1,124 | |
Leasehold Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment gross | 9,265 | 9,267 | |
Capitalized software development costs | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment gross | $ 9,816 | $ 8,382 |
Fair Value Measurement - Fair v
Fair Value Measurement - Fair value on a recurring basis (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Liabilities: | ||
Contingent consideration current | $ 1,660 | $ 1,198 |
Contingent consideration non-current | 462 | |
Recurring | ||
Assets: | ||
Cash equivalents: | 2,474 | 2,474 |
Liabilities: | ||
Contingent consideration current | 1,660 | 1,198 |
Contingent consideration non-current | 462 | |
Total contingent consideration | 1,660 | 1,660 |
Recurring | Level 1 | ||
Assets: | ||
Cash equivalents: | 2,474 | 2,474 |
Recurring | Level 3 | ||
Liabilities: | ||
Contingent consideration current | 1,660 | 1,198 |
Contingent consideration non-current | 462 | |
Total contingent consideration | $ 1,660 | $ 1,660 |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021USD ($)Milestone | Dec. 31, 2020USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Business Combination, Contingent Consideration, Number Of Technical Milestone | Milestone | 4 | |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 2,474 | $ 2,474 |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 2,474 | 2,474 |
Recurring | Level 1 | Money market funds and time deposits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 2,500 | |
Recurring | Business Combination, Contingent Consideration Liability [Member] | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Change in fair value during the period | $ 0 | $ 0 |
Discount rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value inputs | 12.7 | |
Revenue Volatility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value inputs | 30 |
Long-term Debt (Details)
Long-term Debt (Details) $ in Millions | Oct. 01, 2020USD ($) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |||
Maximum total net leverage ratio | 3.5 | ||
Minimum fixed charge coverage ratio | 1.25 | ||
Minimum | |||
Debt Instrument [Line Items] | |||
Percentage of commitment fee payable periodically | 0.25% | ||
Maximum | |||
Debt Instrument [Line Items] | |||
Percentage of commitment fee payable periodically | 0.40% | ||
New Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 150 | ||
Outstanding amount | $ 22 | $ 22 | |
New Revolving Credit Facility | LIBOR | |||
Debt Instrument [Line Items] | |||
Line of credit facility bears interest (as a percent) | 2.25% | ||
Letter of Credit | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 15 |
Income Tax (Details)
Income Tax (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax | ||
Income tax provision | $ 2,793 | $ 1,345 |
Annualized effective tax provision | $ 2,500 | |
Effective tax rate | 33.10% | 35.60% |
Annualized effective tax rate | 29.70% | |
Effective income tax reconciliation, state taxes | $ 300 | |
Effective income tax reconciliation, state taxes (as a percent) | 3.40% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Numerator: | ||
Net Income (basic and diluted) | $ 5,644 | $ 2,440 |
Denominator: | ||
Weighted-average common shares outstanding | 125,112 | 139,741 |
Dilutive effect of share-based awards | 8,466 | 7,492 |
Weighted-average dilutive shares outstanding | 133,578 | 147,233 |
Basic earnings per share | $ 0.05 | $ 0.02 |
Diluted earnings per share | $ 0.04 | $ 0.02 |
Weighted average shares issuable under stock-based awards, excluded from diluted EPS calculation | 4,400 | 7,000 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Sep. 20, 2017 | |
Equity Incentive Program | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 22,182 | |
Term of award | 10 years | |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock option activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Number of Options | ||
Outstanding beginning balance | 14,713 | |
Options granted | 436 | |
Options exercised | (180) | |
Options forfeited | (117) | |
Outstanding Ending balance | 14,852 | 14,713 |
Options expected to vest | 4,945 | |
Options exercisable | 5,952 | |
Weighted Average Exercise Price | ||
Outstanding beginning balance (in dollars per share) | $ 4.47 | |
Options granted (in dollars per share) | 20.10 | |
Options exercised (in dollars per share) | 3.25 | |
Options forfeited (in dollars per share) | 5.84 | |
Outstanding ending balance (in dollars per share) | 4.94 | $ 4.47 |
Options expected to vest (in dollars per share) | 8.60 | |
Options exercisable (in dollars per share) | $ 2.65 | |
Additional disclosures | ||
Weighted Average Remaining Contractual Life (Years) | 7 years 7 months 9 days | 7 years 9 months 14 days |
Aggregate Intrinsic Value, outstanding (Beginning balance) | $ 181,914 | |
Aggregate Intrinsic Value, outstanding (ending balance) | 244,811 | $ 181,914 |
Aggregate Intrinsic Value, expected to vest | 63,365 | |
Aggregate Intrinsic Value, exercisable | $ 111,718 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding Ending balance | 14,852 | |
Weighted average grant date fair value (in dollars per share) | $ 8.39 | $ 3.18 |
Intrinsic value | $ 3.3 | $ 0.2 |
Performance and Market Based Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted | 0 | |
Outstanding Ending balance | 3,433 |
Stock-Based Compensation - Blac
Stock-Based Compensation - Black-Scholes-Merton option-pricing model (Details) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |
Risk - free interest rate (percentage), minimum | 0.60% |
Risk - free interest rate (percentage), maximum | 0.80% |
Expected volatility (percentage), minimum | 43.40% |
Expected volatility (percentage), maximum | 43.60% |
Expected term (years) | 6 years 1 month 6 days |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted stock award activity (Details) - Restricted Stock Units (RSUs) shares in Thousands | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Number of Shares | |
Outstanding beginning balance | 1,261 |
Granted | 484 |
Outstanding ending balance | 1,745 |
Expected to vest | 1,578 |
Weighted Average Grant Date Fair Value | |
Outstanding beginning balance (in dollars per share) | $ / shares | $ 7.74 |
Granted (in dollars per share) | $ / shares | 19.44 |
Outstanding ending balance (in dollars per share) | $ / shares | $ 10.99 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based payment arrangements information | ||
Total stock-based compensation expense | $ 2,538 | $ 802 |
Unrecognized stock-based compensation expense | $ 24,200 | |
Weighted-average period over which unrecognized stock-based compensation expense are expected to be recognized | 1 year 3 months 18 days | |
Product development | ||
Share-based payment arrangements information | ||
Total stock-based compensation expense | $ 278 | 101 |
Sales, marketing and customer support | ||
Share-based payment arrangements information | ||
Total stock-based compensation expense | 624 | 172 |
General and administrative | ||
Share-based payment arrangements information | ||
Total stock-based compensation expense | $ 1,636 | $ 529 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Accrued Liabilities, Current [Abstract] | ||
Vendor payments | $ 4,688 | $ 3,896 |
Employee commissions and bonuses | 5,801 | 11,344 |
Payroll and other employee related expense | 7,308 | 6,957 |
401k and pension expense | 427 | 1,358 |
Other taxes | 1,989 | 1,864 |
Total accrued expense | $ 20,213 | $ 25,419 |
Commitments and Contingencies -
Commitments and Contingencies - Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating leases future minimum lease obligations | ||
2021 | $ 4,211 | |
2022 | 4,250 | |
2023 | 3,631 | |
2024 | 277 | |
Total | 12,369 | |
Office | ||
Operating Leased Assets [Line Items] | ||
Rent expense | 900 | $ 1,400 |
Data center | ||
Operating Leased Assets [Line Items] | ||
Rent expense | $ 500 | $ 300 |
Commitments and Contingencies_3
Commitments and Contingencies - Capital Leases (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021USD ($)agreement | Dec. 31, 2020USD ($) | |
Commitments and Contingencies. | ||
Number of lease agreement | agreement | 7 | |
Future minimum capital lease payments | ||
2021 | $ 1,792 | |
2022 | 2,144 | |
2023 | 1,937 | |
2024 | 598 | |
2025 | 170 | |
Total | 6,641 | |
Less: Amount representing interest | (389) | |
Present Value of net minimum capital lease payments | 6,252 | |
Capital leases short term | 2,140 | $ 1,515 |
Capital leases long term | 4,112 | $ 3,447 |
Total | $ 6,252 |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended |
Mar. 31, 2021segment | |
Segment Information | |
Number of operating segment | 1 |
Number of reportable segments | 1 |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, shares in Thousands, $ in Thousands | May 21, 2021shares | Apr. 30, 2021USD ($) | Apr. 23, 2021USD ($)$ / sharesshares | Apr. 19, 2021shares | Apr. 09, 2021USD ($)$ / sharesshares | Mar. 31, 2021USD ($)shares | Mar. 31, 2020USD ($) |
Subsequent Event [Line Items] | |||||||
Granted | 436 | ||||||
Underwriting discount fees | $ | $ 1,181 | $ 676 | |||||
Stock offering cost | $ | 3,073 | $ 870 | |||||
Treasury stock, shares reissued | $ | $ 15,146 | ||||||
IPO | General and administrative | |||||||
Subsequent Event [Line Items] | |||||||
Stock offering cost | $ | $ 3,100 | ||||||
Stock options | |||||||
Subsequent Event [Line Items] | |||||||
Number of days option to purchase | 4 years | ||||||
Restricted Stock Units (RSUs) | |||||||
Subsequent Event [Line Items] | |||||||
Granted | 484 | ||||||
Number of days option to purchase | 4 years | ||||||
Subsequent Event | Providence | |||||||
Subsequent Event [Line Items] | |||||||
Number of shares issued | 5,356 | ||||||
Subsequent Event | Private Placement | Tiger Global Management, LLC | |||||||
Subsequent Event [Line Items] | |||||||
Number of shares issued | 1,111 | ||||||
Purchase price per share | $ / shares | $ 27 | ||||||
Gross proceeds | $ | $ 30,000 | ||||||
Aggregate net proceeds | $ | 29,000 | ||||||
Underwriting discount fees | $ | $ 1,000 | ||||||
Subsequent Event | IPO | |||||||
Subsequent Event [Line Items] | |||||||
Number of shares issued | 9,977 | ||||||
Purchase price per share | $ / shares | $ 27 | ||||||
Aggregate net proceeds | $ | $ 253,200 | ||||||
Underwriting discount fees | $ | 16,200 | ||||||
Stock offering cost | $ | $ 26,300 | ||||||
Number of shares converted | 20,335 | ||||||
Convertible preferred stock, conversion ratio | 0.333 | ||||||
Subsequent Event | Underwriter Option | |||||||
Subsequent Event [Line Items] | |||||||
Number of shares issued | 1,350 | ||||||
Subsequent Event | Underwriter Option | Providence | |||||||
Subsequent Event [Line Items] | |||||||
Number of shares issued | 650 | ||||||
Subsequent Event | New Revolving Credit Facility | |||||||
Subsequent Event [Line Items] | |||||||
Payment of outstanding amount | $ | $ 22,000 | ||||||
Subsequent Event | Equity Incentive Program | Stock options | |||||||
Subsequent Event [Line Items] | |||||||
Granted | 7 | ||||||
Subsequent Event | Equity Incentive Program | Restricted Stock Units (RSUs) | |||||||
Subsequent Event [Line Items] | |||||||
Granted | 1 | 4 | |||||
Subsequent Event | 2021 Omnibus Equity Incentive Plan | |||||||
Subsequent Event [Line Items] | |||||||
Number of common stock | 30,000 | ||||||
Shares reserved for issuance as percentage of the outstanding shares of common stock on the last day of the immediately preceding fiscal year | 5.00% | ||||||
Subsequent Event | 2021 Omnibus Equity Incentive Plan | Stock options | |||||||
Subsequent Event [Line Items] | |||||||
Granted | 20 | 133 | |||||
Subsequent Event | 2021 Omnibus Equity Incentive Plan | Restricted Stock Units (RSUs) | |||||||
Subsequent Event [Line Items] | |||||||
Granted | 47 | 35 | |||||
Subsequent Event | Employee Stock Purchase Plan | |||||||
Subsequent Event [Line Items] | |||||||
Number of common stock | 3,000 | ||||||
Shares reserved for issuance as percentage of the outstanding shares of common stock on the last day of the immediately preceding fiscal year | 1.00% |