DoubleVerify Holdings, Inc 10-Q for FY2024 Q2

DoubleVerify Holdings, Inc. (DV)

10-Q 2024-07-30 For: 2024-06-30

Added on April 04, 2026

About this 10-Q

DoubleVerify Holdings, Inc filed this 10-Q on July 30, 2024, covering the quarter ended June 30, 2024 (FY2024 Q2).

Headline figures

Quarter ended June 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $155.89M; up 16.6% from $133.74M a year earlier
Net income: $7.47M; down 41.8% from net income of $12.84M a year earlier
Diluted EPS: $0.04; down 42.9% from $0.07 a year earlier

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Title of Each Class	Trading symbol	Name of Exchange on which registered
Common Stock, par value $0.001 per share	DV	New York Stock Exchange




Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐	Emerging growth company	☐

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Part I FINANCIAL INFORMATION (Unaudited)

		Page

Item 1.	Condensed Consolidated Financial Statements	4

	Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	4

	Condensed Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2024 and 2023	5

	Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2024 and 2023	6

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	31

Item 4.	Controls and Procedures	31

Part II OTHER INFORMATION

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 3.	Defaults Upon Senior Securities	32

Item 4.	Mine Safety Disclosures	32

Item 5.	Other Information	32

Item 6.	Exhibits	33

Signatures		34


	As of		As of
(in thousands, except per share data)	June 30, 2024		December 31, 2023
Assets:
Current assets
Cash and cash equivalents	$	256,066	$	310,131
Short-term investments		82,754		—
Trade receivables, net of allowances for doubtful accounts of $9,564 and $9,442 as of June 30, 2024 and December 31, 2023, respectively		187,761		206,941
Prepaid expenses and other current assets		32,977		15,930
Total current assets		559,558		533,002
Property, plant and equipment, net		64,521		58,020
Operating lease right-of-use assets, net		66,155		60,470
Goodwill		431,496		436,008
Intangible assets, net		125,420		140,883
Deferred tax assets		23,766		13,077
Other non-current assets		1,727		1,571
Total assets	$	1,272,643	$	1,243,031
Liabilities and Stockholders' Equity:
Current liabilities
Trade payables	$	10,604	$	12,932
Accrued expenses		44,136		44,264
Operating lease liabilities, current		10,113		9,029
Income tax liabilities		832		5,833
Current portion of finance lease obligations		2,393		2,934
Other current liabilities		11,447		8,863
Total current liabilities		79,525		83,855
Operating lease liabilities, non-current		76,265		71,563
Finance lease obligations		1,844		2,865
Deferred tax liabilities		7,031		8,119
Other non-current liabilities		2,815		2,690
Total liabilities		167,480		169,092
Commitments and contingencies (Note 15)
Stockholders’ equity
Common stock, $0.001 par value, 1,000,000 shares authorized, 172,634 shares issued and 171,244 outstanding as of June 30, 2024; 1,000,000 shares authorized, 171,168 shares issued and 171,146 outstanding as of December 31, 2023		173		171
Additional paid-in capital		926,062		878,331
Treasury stock, at cost, 1,390 shares and 22 shares as of June 30, 2024 and December 31, 2023, respectively		(25,443)		(743)
Retained earnings		213,613		198,983
Accumulated other comprehensive loss, net of income taxes		(9,242)		(2,803)
Total stockholders’ equity		1,105,163		1,073,939
Total liabilities and stockholders' equity	$	1,272,643	$	1,243,031


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share data)	2024		2023		2024		2023
Revenue	$	155,890	$	133,744	$	296,672	$	256,338
Cost of revenue (exclusive of depreciation and amortization shown separately below)		26,102		26,191		52,720		50,143
Product development		39,806		31,941		76,200		60,496
Sales, marketing and customer support		44,863		31,537		82,735		57,249
General and administrative		23,066		19,755		45,141		39,943
Depreciation and amortization		11,004		9,676		21,932		18,659
Income from operations		11,049		14,644		17,944		29,848
Interest expense		233		247		465		503
Other income, net		(2,064)		(2,476)		(4,336)		(5,210)
Income before income taxes		12,880		16,873		21,815		34,555
Income tax expense		5,406		4,034		7,185		9,541
Net income	$	7,474	$	12,839	$	14,630	$	25,014
Earnings per share:
Basic	$	0.04	$	0.08	$	0.09	$	0.15
Diluted	$	0.04	$	0.07	$	0.08	$	0.15
Weighted-average common stock outstanding:
Basic		171,628		166,540		171,467		166,088
Diluted		175,961		172,488		176,850		172,129
Comprehensive income:
Net income	$	7,474	$	12,839	$	14,630	$	25,014
Other comprehensive (loss) income:
Foreign currency cumulative translation adjustment		(1,814)		(377)		(6,439)		816
Total comprehensive income	$	5,660	$	12,462	$	8,191	$	25,830


											Accumulated
											Other
											Comprehensive
							Additional				(Loss) Income		Total
	Common Stock			Treasury Stock			Paid-in		Retained		Net of		Stockholders’
(in thousands)	Shares	Amount		Shares	Amount		Capital		Earnings		Income Taxes		Equity
Balance as of January 1, 2024	171,168	$	171	22	$	(743)	$	878,331	$	198,983	$	(2,803)	$	1,073,939
Foreign currency translation adjustment	—		—	—		—		—		—		(4,625)		(4,625)
Shares repurchased for settlement of employee tax withholdings	—		—	48		(1,792)		—		—		—		(1,792)
Stock-based compensation expense	—		—	—		—		20,718		—		—		20,718
Common stock issued upon exercise of stock options	153		—	—		—		1,695		—		—		1,695
Common stock issued upon vesting of restricted stock units	435		1	—		—		(1)		—		—		—
Treasury stock reissued upon settlement of equity awards	—		—	(38)		1,389		(1,389)		—		—		—
Net income	—		—	—		—		—		7,156		—		7,156
Balance as of March 31, 2024	171,756		172	32		(1,146)		899,354		206,139		(7,428)		1,097,091
Foreign currency translation adjustment	—		—	—		—		—		—		(1,814)		(1,814)
Shares repurchased for settlement of employee tax withholdings	—		—	30		(660)		—		—		—		(660)
Stock-based compensation expense	—		—	—		—		25,315		—		—		25,315
Common stock issued under employee purchase plan	124		—	—		—		1,914		—		—		1,914
Common stock issued upon exercise of stock options	126		—	—		—		870		—		—		870
Common stock issued upon vesting of restricted stock units	628		1	—		—		(1)		—		—		—
Shares repurchased under the Repurchase Program	—		—	1,369		(25,027)		—		—		—		(25,027)
Treasury stock reissued upon settlement of equity awards	—		—	(41)		1,390		(1,390)		—		—		—
Net income	—		—	—		—		—		7,474		—		7,474
Balance as of June 30, 2024	172,634	$	173	1,390	$	(25,443)	$	926,062	$	213,613	$	(9,242)	$	1,105,163

Balance as of January 1, 2023	165,448	$	165	31	$	(796)	$	756,299	$	127,517	$	(6,326)	$	876,859
Foreign currency translation adjustment	—		—	—		—		—		—		1,193		1,193
Shares repurchased for settlement of employee tax withholdings	—		—	30		(787)		—		—		—		(787)
Stock-based compensation expense	—		—	—		—		11,992		—		—		11,992
Common stock issued upon exercise of stock options	527		1	—		—		1,765		—		—		1,766
Common stock issued upon vesting of restricted stock units	182		—	—		—		—		—		—		—
Treasury stock reissued upon settlement of equity awards	—		—	(35)		914		(914)		—		—		—
Net income	—		—	—		—		—		12,175		—		12,175
Balance as of March 31, 2023	166,157		166	26		(669)		769,142		139,692		(5,133)		903,198
Foreign currency translation adjustment	—		—	—		—		—		—		(377)		(377)
Shares repurchased for settlement of employee tax withholdings	—		—	57		(1,966)		—		—		—		(1,966)
Stock-based compensation expense	—		—	—		—		15,399		—		—		15,399
Common stock issued under employee purchase plan	49		—	—		—		1,138		—		—		1,138
Common stock issued upon exercise of stock options	711		1	—		—		3,990		—		—		3,991
Common stock issued upon vesting of restricted stock units	333		—	—		—		—		—		—		—
Treasury stock reissued upon settlement of equity awards	—		—	(67)		2,107		(2,107)		—		—		—
Net income	—		—	—		—		—		12,839		—		12,839
Balance as of June 30, 2023	167,250	$	167	16	$	(528)	$	787,562	$	152,531	$	(5,510)	$	934,222


	Six Months Ended
	June 30,
(in thousands)	2024		2023
Operating activities:
Net income	$	14,630	$	25,014
Adjustments to reconcile net income to net cash provided by operating activities
Bad debt expense		1,453		3,706
Depreciation and amortization expense		21,932		18,659
Amortization of debt issuance costs		147		147
Non-cash lease expense		3,191		3,293
Deferred taxes		(11,530)		(16,639)
Stock-based compensation expense		44,956		26,980
Interest (income) expense, net		(784)		25
Loss on disposal of fixed assets		—		5
Other		1,582		209
Changes in operating assets and liabilities
Trade receivables		16,397		(12,214)
Prepaid expenses and other assets		(17,208)		(11,168)
Trade payables		(2,076)		2,126
Accrued expenses and other liabilities		(5,035)		(7,979)
Net cash provided by operating activities		67,655		32,164
Investing activities:
Purchase of property, plant and equipment		(13,558)		(7,671)
Purchase of short-term investments		(81,937)		—
Net cash used in investing activities		(95,495)		(7,671)
Financing activities:
Proceeds from revolving credit facility		—		50,000
Payments to revolving credit facility		—		(50,000)
Proceeds from common stock issued upon exercise of stock options		2,565		5,757
Proceeds from common stock issued under employee purchase plan		1,914		1,138
Finance lease payments		(1,562)		(1,028)
Shares repurchased under the Repurchase Program		(25,027)		—
Shares repurchased for settlement of employee tax withholdings		(2,452)		(2,753)
Net cash (used in) provided by financing activities		(24,562)		3,114
Effect of exchange rate changes on cash and cash equivalents and restricted cash		(850)		15
Net (decrease) increase in cash, cash equivalents, and restricted cash		(53,252)		27,622
Cash, cash equivalents, and restricted cash - Beginning of period		310,257		267,938
Cash, cash equivalents, and restricted cash - End of period	$	257,005	$	295,560

Cash and cash equivalents	$	256,066	$	295,437
Restricted cash (included in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets)		939		123
Total cash and cash equivalents and restricted cash	$	257,005	$	295,560
Supplemental cash flow information:
Cash paid for taxes	$	29,491	$	41,284
Cash paid for interest	$	350	$	389
Non-cash investing and financing activities:
Right-of-use assets obtained in exchange for new operating lease liabilities, net of impairments and tenant improvement allowances	$	9,211	$	1,261
Acquisition of equipment under finance lease	$	—	$	5,479
Capital assets financed by accounts payable and accrued expenses	$	18	$	480
Stock-based compensation included in capitalized software development costs	$	1,064	$	411


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands)	2024		2023		2024		2023
Activation	$	87,471	$	77,942	$	166,793	$	147,834
Measurement		54,817		44,989		104,092		86,374
Supply-side customer		13,602		10,813		25,787		22,130
Total revenue	$	155,890	$	133,744	$	296,672	$	256,338


(in thousands)
Goodwill at December 31, 2023	$	436,008
Measurement period adjustments		(300)
Foreign exchange impact		(4,212)
Goodwill at June 30, 2024	$	431,496


(in thousands)
2024 (for remaining six months)	$	14,247
2025		26,702
2026		21,948
2027		18,045
2028		14,913
2029		12,562
Thereafter		17,003
Total	$	125,420


		(In years)
Trademarks and brands		8
Customer relationships		6
Developed technology		2


	June 30, 2024
(in thousands)	Operating Leases		Finance Leases
2024 (for remaining six months)	$	5,327	$	1,497
2025		10,153		2,150
2026		9,414		819
2027		8,863
2028		7,722
2029		8,145
Thereafter		67,156
Total lease payments		116,780		4,466
Less amount representing interest		(30,402)		(229)
Present value of total lease payments	$	86,378	$	4,237


	As of June 30, 2024
	Quoted Market
	Prices in Active				Significant
	Markets for		Significant Other		Unobservable
	Identical Assets		Observable Inputs		Inputs		Total Fair Value
(in thousands)	(Level 1)		(Level 2)		(Level 3)		Measurements
Assets:
Cash equivalents	$	707	$	—	$	—	$	707
Short-term investments	$	82,754	$	—	$	—	$	82,754


	Stock Option
				Weighted Average
				Remaining
	Number of	Weighted Average		Contractual Life		Aggregate
	Options	Exercise Price		(Years)		Intrinsic Value
Outstanding as of December 31, 2023	9,992	$	17.01	6.91	$	197,598
Options granted	—		—
Options exercised	(363)		7.09
Options forfeited	(46)		31.01
Outstanding as of June 30, 2024	9,583	$	17.32	6.42	$	61,419
Options expected to vest as of June 30, 2024	2,194	$	25.96	7.94	$	1,271
Options exercisable as of June 30, 2024	7,297	$	14.61	5.94	$	60,147


	RSUs
	Number of	Weighted Average
	Shares	Grant Date Fair Value
Outstanding as of December 31, 2023	4,720	$	28.03
Granted	2,727		32.97
Vested	(1,063)		28.96
Forfeited	(152)		29.00
Outstanding as of June 30, 2024	6,232	$	30.01


(in thousands)	June 30, 2024						December 31, 2023
	Gross Carrying		Accumulated		Net Carrying		Gross Carrying		Accumulated		Net Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Trademarks and brands	$	11,733	$	(5,561)	$	6,172	$	11,734	$	(5,140)	$	6,594
Customer relationships		160,520		(69,985)		90,535		161,173		(62,955)		98,218
Developed technology		92,243		(63,530)		28,713		93,013		(56,942)		36,071
Non-compete agreements		64		(64)		—		66		(66)		—
Total intangible assets	$	264,560	$	(139,140)	$	125,420	$	265,986	$	(125,103)	$	140,883


		2024
Risk‑free interest rate (percentage)		3.9 - 4.1
Expected dividend yield (percentage)		—
Expected volatility (percentage)		46.7


	PSUs
		Weighted
		Average Grant
	Number of	Date Fair
	Shares ⁽¹⁾	Value
Outstanding as of December 31, 2023	480	$	41.31
Granted	186		41.28
Vested	—		—
Forfeited	—		—
Outstanding as of June 30, 2024	666	$	41.30


	Three Months Ended June 30,				Change		Change		Six Months Ended June 30,				Change		Change
	2024		2023		$		%		2024		2023		$		%

	(In Thousands)								(In Thousands)
Revenue by customer type:
Activation	$	87,471	$	77,942	$	9,529	12	%	$	166,793	$	147,834	$	18,959	13	%
Measurement		54,817		44,989		9,828	22			104,092		86,374		17,718	21
Supply-side customer		13,602		10,813		2,789	26			25,787		22,130		3,657	17
Total revenue	$	155,890	$	133,744	$	22,146	17	%	$	296,672	$	256,338	$	40,334	16	%


					Total Number of Shares		Maximum Approximate Dollar
					Purchased as Part of		Value of Shares that
	Total Number of Shares		Average Price Paid		Publicly Announced Plans or		May Yet Be Purchased
Period	Purchased ⁽¹⁾		Per Share ⁽²⁾		Programs ⁽¹⁾		Under the Plans or Programs ⁽¹⁾
	(in thousands)				(in thousands)		(in thousands)
April 1 - 30		—	$	—		—	$	—
May 1 - 31		—		—		—		150,000
June 1 - 30		1,369	$	18.27		1,369	$	125,000
Total for the three months ended June 30, 2024		1,369				1,369


Exhibit No.		Description


31.1†		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2†		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1†*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2†*		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS†		XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH†		XBRL Taxonomy Extension Schema Document

101.CAL†		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF†		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB†		XBRL Taxonomy Extension Label Linkbase Document

101.PRE†		XBRL Taxonomy Extension Presentation Linkbase Document
104†		Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)


	DOUBLEVERIFY HOLDINGS, INC.

	By:	/s/ Mark Zagorski
	Name:	Mark Zagorski
	Title:	Chief Executive Officer and Director
		(Principal Executive Officer)

	By:	/s/ Nicola Allais
	Name:	Nicola Allais
	Title:	Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

Date:	July 30, 2024	/s/ Mark Zagorski
		Mark Zagorski
		Chief Executive Officer
		(Principal Executive Officer)