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Share Name | Share Symbol | Market | Type |
---|---|---|---|
DoubleVerify Holdings Inc | NYSE:DV | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.69 | 3.65% | 19.57 | 19.70 | 19.01 | 19.64 | 1,474,462 | 16:57:55 |
Increased Fourth Quarter 2023 Revenue by 29% Year-over-Year to $172.2 Million
Grew Fourth Quarter 2023 Social Measurement Revenue by 62% Year-over Year
Achieved Fourth Quarter 2023 Net Income of $33.1 Million and Adjusted EBITDA of $65.4 Million, representing a 38% Adjusted EBITDA margin
Increased 2023 Revenue by 27% Year-over-Year to $572.5 Million Driven by Global Growth in Social, CTV Measurement and Programmatic Activation
Achieved 2023 Net Income of $71.5 Million and Adjusted EBITDA of $187.1 Million, representing a 33% Adjusted EBITDA margin
DoubleVerify (“DV”) (NYSE: DV), one of the leading software platforms for digital media measurement, data and analytics, today announced financial results for the fourth quarter and full year ended December 31, 2023.
“2023 was another year of exceptional growth and profitability driven by strong execution,” said Mark Zagorski, CEO of DoubleVerify. “We measured 7 trillion media transactions, grew revenue by 27% to more than $572 million, achieved 33% adjusted EBITDA margins and generated approximately $120 million of net cash from operating activities. DV continues to significantly outpace the growth of the broader digital advertising industry as our essential protection and performance solutions scale globally. Exciting differentiated growth opportunities such as Scibids AI and our expanded social video verification suite will leverage our unparalleled global scale and connectivity and leadership in innovation to drive exceptional media performance for global brands, fueling our long-term market share growth trajectory.”
Fourth Quarter 2023 Financial Highlights: (All comparisons are to the fourth quarter of 2022)
Full Year 2023 Financial Highlights: (All comparisons are to full year 2022)
Fourth Quarter and Recent Business Highlights:
“Once again, DV delivered a powerful combination of growth and profitability,” said Nicola Allais, CFO of DoubleVerify. “Our industry-leading 29% year-over-year revenue growth and 38% adjusted EBITDA margins in the fourth quarter are a testament to the strength of our platform and our ability to balance innovation and new business growth with strong profitability and cash flow generation. We remain focused on execution in 2024 and are excited about our solid pipeline of new and expansionary business opportunities as we continue to meaningfully outpace the digital advertising industry and gain market share.”
First Quarter and Full-Year 2024 Guidance:
DoubleVerify anticipates Revenue and Adjusted EBITDA to be in the following ranges:
First Quarter 2024:
Full Year 2024:
With respect to the Company’s expectations under "First Quarter and Full-Year 2024 Guidance" above, the Company has not reconciled the non-GAAP measure Adjusted EBITDA to the GAAP measure net income in this press release because the Company does not provide guidance for depreciation and amortization expense, acquisition-related costs, interest income, and income taxes on a consistent basis as the Company is unable to quantify these amounts without unreasonable efforts, which would be required to include a reconciliation of Adjusted EBITDA to GAAP net income. In addition, the Company believes such a reconciliation would imply a degree of precision that could be confusing or misleading to investors.
Conference Call, Webcast and Other Information
DoubleVerify will host a conference call and live webcast to discuss its fourth quarter 2023 financial results at 4:30 p.m. Eastern Time today, February 28, 2024. To access the conference call, dial (877) 841-2987 for the U.S. or Canada, or (215) 268-9878 for international callers. The webcast will be available live on the Investors section of the Company’s website at https://ir.doubleverify.com/. An archived webcast will be available approximately two hours after the conclusion of the live event.
In addition, DoubleVerify plans to post certain additional historical quarterly financial information on the investor relations portion of its website for easy access to investors.
Key Business Terms and Notes
Activation revenue is generated from the evaluation, verification and measurement of advertising impressions purchased through programmatic demand-side and social media platforms.
Measurement revenue is generated from the verification and measurement of advertising impressions that are directly purchased on digital media properties, including publishers and social media platforms.
Supply-Side revenue is generated from platforms and publisher partners who use DoubleVerify’s data analytics to evaluate, verify and measure their advertising inventory.
Gross Revenue Retention Rate is the total prior period revenue earned from advertiser customers, less the portion of prior period revenue attributable to lost advertiser customers, divided by the total prior period revenue from advertiser customers.
Media Transactions Measured (MTM) is the volume of media transactions that DoubleVerify’s software platform measures.
Measured Transaction Fee (MTF) is the fixed fee DoubleVerify charges per thousand Media Transactions Measured.
International Revenue Growth Rates are inclusive of foreign currency fluctuations.
DoubleVerify Holdings, Inc.
CONSOLIDATED BALANCE SHEETS
As of December 31,
(in thousands, except per share data)
2023
2022
Assets:
Current assets
Cash and cash equivalents
$
310,131
$
267,813
Trade receivables, net of allowances for doubtful accounts of $9,442 and $8,893 as of December 31, 2023 and December 31, 2022, respectively
206,941
167,122
Prepaid expenses and other current assets
15,930
10,161
Total current assets
533,002
445,096
Property, plant and equipment, net
58,020
47,034
Operating lease right-of-use assets, net
60,470
64,692
Goodwill
436,008
343,011
Intangible assets, net
140,883
135,429
Deferred tax assets
13,077
35
Other non‑current assets
1,571
1,731
Total assets
$
1,243,031
$
1,037,028
Liabilities and Stockholder’s Equity:
Current liabilities
Trade payables
$
12,932
$
6,675
Accrued expense
44,264
33,085
Operating lease liabilities, current
9,029
7,041
Income tax liabilities
5,833
11,953
Current portion of finance lease obligations
2,934
1,846
Other current liabilities
8,863
8,310
Total current liabilities
83,855
68,910
Operating lease liabilities, non-current
71,563
74,086
Finance lease obligations
2,865
779
Deferred tax liabilities
8,119
12,890
Other non‑current liabilities
2,690
3,504
Total liabilities
169,092
160,169
Commitments and contingencies (Note 16)
Stockholders’ equity
Common stock, $0.001 par value, 1,000,000 shares authorized, 171,168 shares issued and 171,146 outstanding as of December 31, 2023; 1,000,000 shares authorized, 165,448 shares issued and 165,417 outstanding as of December 31, 2022
171
165
Additional paid‑in capital
878,331
756,299
Treasury stock, at cost, 22 shares and 31 shares as of December 31, 2023 and December 31, 2022, respectively
(743
)
(796
)
Retained earnings
198,983
127,517
Accumulated other comprehensive loss, net of income taxes
(2,803
)
(6,326
)
Total stockholders’ equity
1,073,939
876,859
Total liabilities and stockholders’ equity
$
1,243,031
$
1,037,028
DoubleVerify Holdings, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Year Ended December 31,
(in thousands, except per share data)
2023
2022
2021
Revenue
$
572,543
$
452,418
$
332,741
Cost of revenue (exclusive of depreciation and amortization shown separately below)
106,631
77,866
54,382
Product development
125,376
95,118
62,698
Sales, marketing and customer support
125,953
107,416
77,312
General and administrative
87,971
78,666
81,380
Depreciation and amortization
40,885
34,328
30,285
Income from operations
85,727
59,024
26,684
Interest expense
1,066
905
1,172
Other income, net
(11,216
)
(1,249
)
(309
)
Income before income taxes
95,877
59,368
25,821
Income tax expense (benefit)
24,411
16,100
(3,487
)
Net income
$
71,466
$
43,268
$
29,308
Earnings per share:
Basic
$
0.43
$
0.26
$
0.20
Diluted
$
0.41
$
0.25
$
0.18
Weighted‑average common stock outstanding:
Basic
167,803
163,882
148,309
Diluted
173,435
170,755
160,264
Comprehensive income:
Net income
$
71,466
$
43,268
$
29,308
Other comprehensive income (loss):
Foreign currency cumulative translation adjustment
3,523
(5,555
)
(1,782
)
Total comprehensive income
$
74,989
$
37,713
$
27,526
DoubleVerify Holdings, Inc.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Accumulated
Other
Comprehensive
Common Stock
Preferred Stock
Additional
Loss,
Total
Shares
Shares
Treasury Stock
Paid‑in
Retained
Net of
Stockholders’
(in thousands)
Issued
Amount
Issued
Amount
Shares
Amount
Capital
Earnings
Income Taxes
Equity
Balances as of January 1, 2021
140,222
$
140
61,006
$
610
15,146
$
(260,686
)
$
620,679
$
54,941
$
1,011
$
416,695
Foreign currency translation adjustment
—
—
—
—
—
—
—
—
(1,782
)
(1,782
)
Shares repurchased for settlement of employee tax withholdings
—
—
—
—
50
(1,802
)
—
—
—
(1,802
)
Issuance of common stock as consideration for acquisition
684
1
—
—
—
—
22,525
—
—
22,526
Stock-based compensation
—
—
—
—
—
—
21,887
—
—
21,887
Common stock issued under employee purchase plan
15
—
—
—
—
—
404
—
—
404
Common stock issued upon exercise of stock options
4,782
5
—
—
—
—
12,435
—
—
12,440
Common stock issued upon vesting of restricted stock units
366
—
—
—
—
—
—
—
—
—
Conversion of Series A preferred stock to common stock
5,190
5
(61,006
)
(610
)
(15,146
)
260,686
(260,081
)
—
—
—
Issuance of common stock upon initial public offering
9,977
10
—
—
—
—
269,380
—
—
269,390
Private placement stock issuance concurrent with initial public offering
1,111
1
—
—
—
—
29,999
—
—
30,000
Net income
—
—
—
—
—
—
—
29,308
—
29,308
Balances as of December 31, 2021
162,347
$
162
—
$
—
50
$
(1,802
)
$
717,228
$
84,249
$
(771
)
$
799,066
Foreign currency translation adjustment
—
—
—
—
—
—
—
—
(5,555
)
(5,555
)
Shares repurchased for settlement of employee tax withholdings
—
—
—
—
402
(10,244
)
—
—
—
(10,244
)
Stock-based compensation expense
—
—
—
—
—
—
42,787
—
—
42,787
Common stock issued to non-employees
4
—
—
—
—
—
—
—
—
—
Common stock issued upon exercise of stock options
1,518
2
—
—
—
—
5,801
—
—
5,803
Common stock issued upon vesting of restricted stock units
1,488
1
—
—
—
—
(1
)
—
—
—
Common stock issued under employee purchase plan
91
—
—
—
—
—
1,734
—
—
1,734
Treasury stock reissued upon settlement of equity awards
—
—
—
—
(421
)
11,250
(11,250
)
—
—
—
Net income
—
—
—
—
—
—
—
43,268
—
43,268
Balances as of December 31, 2022
165,448
$
165
—
$
—
31
$
(796
)
$
756,299
$
127,517
$
(6,326
)
$
876,859
Foreign currency translation adjustment
—
—
—
—
—
—
—
—
3,523
3,523
Shares repurchased for settlement of employee tax withholdings
—
—
—
—
142
(4,586
)
—
—
—
(4,586
)
Issuance of common stock as consideration for acquisition
1,642
2
—
—
—
—
52,935
—
—
52,937
Stock-based compensation expense
—
—
—
—
—
—
60,351
—
—
60,351
Common stock issued under employee purchase plan
105
—
—
—
—
—
2,723
—
—
2,723
Common stock issued upon exercise of stock options
2,634
3
—
—
—
—
10,663
—
—
10,666
Common stock issued upon vesting of restricted stock units
1,339
1
—
—
—
—
(1
)
—
—
—
Treasury stock reissued upon settlement of equity awards
—
—
—
—
(151
)
4,639
(4,639
)
—
—
—
Net income
—
—
—
—
—
—
—
71,466
—
71,466
Balances as of December 31, 2023
171,168
$
171
—
$
—
22
$
(743
)
$
878,331
$
198,983
$
(2,803
)
$
1,073,939
DoubleVerify Holdings, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
(in thousands)
2023
2022
2021
Operating activities:
Net income
$
71,466
$
43,268
$
29,308
Adjustments to reconcile net income to net cash provided by operating activities
Bad debt expense (recovery)
10,075
5,033
(711
)
Depreciation and amortization expense
40,885
34,328
30,285
Amortization of debt issuance costs
294
294
294
Non-cash lease expense
6,727
7,339
—
Deferred taxes
(25,046
)
(19,581
)
(7,866
)
Stock-based compensation expense
59,244
42,307
21,887
Interest expense
68
107
103
Loss on disposal of fixed assets
5
1,353
—
Impairment of long-lived assets
—
1,510
—
Change in fair value of contingent consideration
(1,193
)
—
57
Offering costs
—
—
22,074
Other
492
87
733
Changes in operating assets and liabilities, net of effects of business combinations
Trade receivables
(43,691
)
(49,765
)
(22,004
)
Prepaid expenses and other assets
(5,591
)
9,094
(7,567
)
Trade payables
5,476
2,884
(49
)
Accrued expenses and other liabilities
530
16,604
16,205
Net cash provided by operating activities
119,741
94,862
82,749
Investing activities:
Purchase of property, plant and equipment
(17,009
)
(39,981
)
(9,397
)
Acquisition of businesses, net of cash acquired
(67,240
)
—
(149,217
)
Net cash used in investing activities
(84,249
)
(39,981
)
(158,614
)
Financing activities:
Payments of long-term debt
—
—
(22,000
)
Deferred payment related to Zentrick acquisition
—
—
(50
)
Proceeds from revolving credit facility
50,000
—
—
Payments to revolving credit facility
(50,000
)
—
—
Payment of contingent consideration related to Zentrick acquisition
—
(3,247
)
—
Proceeds from common stock issued upon exercise of stock options
10,666
5,803
12,440
Proceeds from common stock issued under employee purchase plan
2,723
1,734
404
Proceeds from issuance of common stock upon initial public offering
—
—
269,390
Proceeds from issuance of common stock in connection to concurrent private placement
—
—
30,000
Payments related to offering costs
—
(6
)
(22,069
)
Finance lease payments
(2,314
)
(1,924
)
(1,918
)
Shares repurchased for settlement of employee tax withholdings
(4,586
)
(10,244
)
(1,802
)
Net cash provided by (used in) financing activities
6,489
(7,884
)
264,395
Effect of exchange rate changes on cash and cash equivalents and restricted cash
338
(784
)
(200
)
Net increase in cash, cash equivalents, and restricted cash
42,319
46,213
188,330
Cash, cash equivalents, and restricted cash—Beginning of period
267,938
221,725
33,395
Cash, cash equivalents, and restricted cash—End of period
$
310,257
$
267,938
$
221,725
Cash and cash equivalents
$
310,131
$
267,813
$
221,591
Restricted cash (included in prepaid expenses and other assets on the Consolidated Balance Sheets)
126
125
134
Total cash and cash equivalents and restricted cash
$
310,257
$
267,938
$
221,725
Supplemental cash flow information:
Cash paid for taxes
$
60,883
$
12,351
$
7,698
Cash paid for interest
$
714
$
554
$
774
Non‑cash investing and financing transactions:
Right-of-use assets obtained in exchange for new operating lease liabilities, net of impairments and tenant improvement allowances
$
2,547
$
71,979
$
—
Acquisition of equipment under finance lease
$
5,479
$
—
$
1,518
Capital assets financed by accounts payable and accrued expenses
$
261
$
12
$
36
Stock-based compensation included in capitalized software development costs
$
1,103
$
480
$
—
Common stock issued in connection with acquisition
$
52,937
$
—
$
22,526
Liabilities for contingent consideration
$
1,193
$
—
$
—
Treasury stock reissued upon the conversion of Series A preferred stock for common stock
$
—
$
—
$
260,686
Offering costs included in accounts payable and accrued expense
$
—
$
—
$
5
Comparison of the Three and Twelve Months Ended December 31, 2023 and December 31, 2022
Revenue
Three Months Ended December 31,
Change
Change
Year Ended December 31,
Change
Change
2023
2022
$
%
2023
2022
$
%
(In Thousands)
(In Thousands)
Revenue by customer type:
Activation
$
99,402
$
75,502
$
23,900
32
%
$
328,936
$
251,198
$
77,738
31
%
Measurement
60,387
46,324
14,063
30
198,024
157,908
40,116
25
Supply-side customer
12,442
11,810
632
5
45,583
43,312
2,271
5
Total revenue
$
172,231
$
133,636
$
38,595
29
%
$
572,543
$
452,418
$
120,125
27
%
Adjusted EBITDA
In addition to results determined in accordance with GAAP, management believes that certain non-GAAP financial measures, including Adjusted EBITDA and Adjusted EBITDA Margin, are useful in evaluating our business. Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by total revenue. The following table presents a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to the most directly comparable financial measure prepared in accordance with GAAP.
Three Months Ended December 31,
Year Ended December 31,
2023
2022
2023
2022
(In Thousands)
(In Thousands)
Net income
$
33,105
$
18,068
$
71,466
$
43,268
Net income margin
19
%
14
%
12
%
10
%
Depreciation and amortization
11,520
8,882
40,885
34,328
Stock-based compensation
16,473
11,083
59,244
42,307
Interest expense
275
224
1,066
905
Income tax expense
8,636
11,979
24,411
16,100
M&A and restructuring (recoveries) costs (a)
(359
)
5
1,262
1,224
Offering, IPO readiness and secondary offering costs (b)
315
566
910
1,292
Other (recoveries) costs (c)
(164
)
(245
)
(964
)
3,414
Other income (d)
(4,373
)
(1,671
)
(11,216
)
(1,249
)
Adjusted EBITDA
$
65,428
$
48,891
$
187,064
$
141,589
Adjusted EBITDA margin
38
%
37
%
33
%
31
%
We use Adjusted EBITDA and Adjusted EBITDA Margin as measures of operational efficiency to understand and evaluate our core business operations. We believe that these non-GAAP financial measures are useful to investors for period to period comparisons of the core business and for understanding and evaluating trends in operating results on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.
These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for an analysis of our results as reported under GAAP. Some of the limitations of these measures are:
In addition, other companies in the industry may calculate these non-GAAP financial measures differently, therefore limiting their usefulness as a comparative measure. You should compensate for these limitations by relying primarily on our GAAP results and using the non-GAAP financial measures only supplementally.
Total stock-based compensation expense recorded in the Consolidated Statements of Operations and Comprehensive Income is as follows:
Three Months Ended
Year Ended
December 31,
December 31,
(in thousands)
2023
2022
2023
2022
Product development
$
6,366
$
4,455
$
22,955
$
15,030
Sales, marketing and customer support
5,101
3,547
18,299
14,265
General and administrative
5,006
3,081
17,990
13,012
Total stock‑based compensation
$
16,473
$
11,083
$
59,244
$
42,307
The weighted average basic and diluted shares outstanding for the three months and year ended December 31, 2023 is as follows:
Three Months Ended
Year Ended
(in thousands)
December 31, 2023
December 31, 2023
Weighted‑average common shares outstanding:
Basic
170,374
167,803
Diluted
175,008
173,435
Forward-Looking Statements
This press release includes “forward-looking statements”. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Any statements in this press release regarding future revenues, earnings, margins, financial performance or results of operations (including the guidance provided under “First Quarter and Full-Year 2024 Guidance”), and any other statements that are not historical facts are forward-looking statements. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking information presented in this press release is not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release. These risks, uncertainties, assumptions and other factors include, but are not limited to, the competitiveness of our solutions amid technological developments or evolving industry standards, the competitiveness of our market, system failures, security breaches, cyberattacks or natural disasters, economic downturns and unstable market conditions, our ability to collect payments, data privacy legislation and regulation, public criticism of digital advertising technology, our international operations, our use of “open source” software, our limited operating history and the potential for our revenues and results of operations to fluctuate in the future. Moreover, we operate in a very competitive and rapidly changing environment, and new risks may emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results or outcomes to differ materially from those contained in any forward-looking statements we may make.
Further information on these and additional risks, uncertainties, and other factors that could cause actual outcomes and results to differ materially from those included in or contemplated by the forward-looking statements contained in this press release are included under the caption “Risk Factors” under our Annual Report on Form 10-K filed with the SEC on February 28, 2024 and other filings and reports we make with the SEC from time to time.
We have based our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. Any forward-looking information presented herein is made only as of the date of this press release, and, except as required by law, we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
About DoubleVerify
DoubleVerify (“DV”) (NYSE: DV) is the industry’s leading media effectiveness platform that leverages AI to drive superior outcomes for global brands. By creating more effective, transparent ad transactions, we make the digital advertising ecosystem stronger, safer and more secure, thereby preserving the fair value exchange between buyers and sellers of digital media. Learn more at www.doubleverify.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240228743205/en/
Investor Relations Tejal Engman DoubleVerify IR@doubleverify.com Media Contact Chris Harihar Crenshaw Communications 646‑535‑9475 chris@crenshawcomm.com
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