DoubleVerify Holdings, Inc 10-Q for FY2021 Q2

DoubleVerify Holdings, Inc. (DV)

10-Q 2021-07-29 For: 2021-06-30

Added on April 04, 2026

About this 10-Q

DoubleVerify Holdings, Inc filed this 10-Q on July 29, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $76.52M; up 44.3% from $53.02M a year earlier
Net loss: $12.57M; compared with net income of $4.08M a year earlier
Diluted EPS: -$0.08; compared with $0.03 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

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	4

	Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020	4

	Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the three and six months ended June 30, 2021 and 2020	5

	Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2021 and 2020	6

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	31

Item 4.	Controls and Procedures	31

Part II	OTHER INFORMATION

Item 1.	Legal Proceedings	33

Item 1A.	Risk Factors	33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 3.	Defaults Upon Senior Securities	34

Item 4.	Mine Safety Disclosures	34

Item 5.	Other Information	34

Item 6.	Exhibits	35

Signatures		37


	As of		As of
(in thousands, except per share data)	June 30, 2021		December 31, 2020
Assets:
Current assets
Cash and cash equivalents	$	330,355	$	33,354
Trade receivables, net of allowances for doubtful accounts of $6,889 and $7,049 as of June 30, 2021 and December 31, 2020 respectively		85,555		94,677
Prepaid expenses and other current assets		14,106		13,904
Total current assets		430,016		141,935
Property, plant and equipment, net		17,572		18,107
Goodwill		227,349		227,349
Intangible assets, net		112,780		121,710
Deferred tax assets		82		82
Other non-current assets		2,303		2,151
Total assets	$	790,102	$	511,334
Liabilities and Stockholders' Equity:
Current liabilities
Trade payables	$	4,122	$	3,495
Accrued expense		25,460		25,419
Income tax liabilities		670		1,277
Current portion of capital lease obligations		2,021		1,515
Contingent considerations current		1,717		1,198
Other current liabilities		2,101		1,116
Total current liabilities		36,091		34,020
Long-term debt		—		22,000
Capital lease obligations		3,618		3,447
Deferred tax liabilities		28,243		31,418
Other non-current liabilities		2,734		3,292
Contingent considerations non-current		—		462
Total liabilities	$	70,686	$	94,639
Commitments and contingencies (Note 13)
Stockholders’ equity
Common stock, $0.001 par value, 1,000,000 shares authorized, 157,768 shares issued and outstanding as of June 30, 2021; 700,000 shares authorized, 140,222 shares issued and 125,074 shares outstanding as of December 31, 2020		158		140
Preferred stock, $0.01 par value, 100,000 shares authorized and zero shares issued and outstanding as of June 30, 2021 and 61,006 shares authorized, issued, and outstanding as of December 31, 2020. Liquidation preference: $350,000 as of December 31, 2020		—		610
Additional paid-in capital		670,674		620,679
Treasury stock, at cost, zero shares and 15,146 shares as of June 30, 2021 and December 31, 2020, respectively		—		(260,686)
Retained earnings		48,017		54,941
Accumulated other comprehensive income, net of income taxes		567		1,011
Total stockholders’ equity		719,416		416,695
Total liabilities and stockholders' equity	$	790,102	$	511,334


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share data)	2021		2020		2021		2020
Revenue	$	76,524	$	53,020	$	144,110	$	104,239
Cost of revenue (exclusive of depreciation and amortization shown separately below)		12,291		7,655		22,494		14,965
Product development		15,120		10,906		29,299		21,237
Sales, marketing and customer support		19,580		12,833		35,114		25,152
General and administrative		32,017		8,262		43,852		18,958
Depreciation and amortization		7,440		6,146		14,497		12,080
(Loss) income from operations		(9,924)		7,218		(1,146)		11,847
Interest expense		297		936		687		2,100
Other expense (income), net		49		198		—		(122)
(Loss) income before income taxes		(10,270)		6,084		(1,833)		9,869
Income tax expense		2,298		2,006		5,091		3,351
Net (loss) income	$	(12,568)	$	4,078	$	(6,924)	$	6,518
(Loss) earnings per share:
Basic	$	(0.08)	$	0.03	$	(0.05)	$	0.05
Diluted	$	(0.08)	$	0.03	$	(0.05)	$	0.04
Weighted-average common stock outstanding:
Basic		149,596		139,756		137,355		139,748
Diluted		149,596		146,541		137,355		146,927
Comprehensive (loss) income:
Net (loss) income	$	(12,568)	$	4,078	$	(6,924)	$	6,518
Other comprehensive (loss) income:
Foreign currency cumulative translation adjustment		355		231		(444)		78
Total comprehensive (loss) income	$	(12,213)	$	4,309	$	(7,368)	$	6,596


														Accumulated
														Other
														Comprehensive
										Additional				Income (Loss)		Total
	Common Stock			Preferred Stock			Treasury Stock			Paid-in		Retained		Net of		Stockholders’
(in thousands)	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Earnings		Income Taxes		Equity
Balance 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	—		—	—		—	—		—		—		—		(799)		(799)
Stock-based compensation expense	—		—	—		—	—		—		2,538		—		—		2,538
Common stock issued upon exercise of stock options	180		—	—		—	—		—		538		—		—		538
Net income	—		—	—		—	—		—		—		5,644		—		5,644
Balance as of March 31, 2021	140,402	$	140	61,006	$	610	15,146	$	(260,686)	$	623,755	$	60,585	$	212	$	424,616
Foreign currency translation adjustment	—		—	—		—	—		—		—		—		355		355
Stock-based compensation expense	—		—	—		—	—		—		4,714		—		—		4,714
Common stock issued upon exercise of stock options	871		2	—		—	—		—		2,907		—		—		2,909
RSU vested	217		—	—		—	—		—		—		—		—		—
Conversion of Series A preferred stock to common stock in connection with initial public offering	5,190		5	(61,006)		(610)	(15,146)		260,686		(260,081)		—		—		—
Issuance of common stock in connection with initial public offering	9,977		10	—		—	—		—		269,380		—		—		269,390
Issuance of common stock in connection with the private placement concurrent with the initial public offering	1,111		1	—		—	—		—		29,999		—		—		30,000
Net loss	—		—	—		—	—		—		—		(12,568)		—		(12,568)
Balance as of June 30, 2021	157,768	$	158	—	$	—	—	$	—	$	670,674	$	48,017	$	567	$	719,416

Balance as of January 1, 2020	139,721	$	140	—	$	—	—	$	—	$	283,457	$	34,488	$	(67)	$	318,018
Foreign currency translation adjustment	—		—	—		—	—		—		—		—		(153)		(153)
Stock-based compensation expense	—		—	—		—	—		—		802		—		—		802
Common stock issued upon exercise of stock options	32		—	—		—	—		—		70		—		—		70
Net income	—		—	—		—	—		—		—		2,440		—		2,440
Balance as of March 31, 2020	139,753	$	140	—	$	—	—	$	—	$	284,329	$	36,928	$	(220)	$	321,177
Foreign currency translation adjustment	—		—	—		—	—		—		—		—		231		231
Stock-based compensation	—		—	—		—	—		—		1,140		—		—		1,140
Common stock issued upon exercise of stock options	58		—	—		—	—		—		51		—		—		51
Net income	—		—	—		—	—		—		—		4,078		—		4,078
Balance as of June 30, 2020	139,811	$	140	—	$	—	—	$	—	$	285,520	$	41,006	$	11	$	326,677


	Six Months Ended
	June 30,
(in thousands)	2021		2020
Operating activities:
Net (loss) income	$	(6,924)	$	6,518
Adjustments to reconcile net (loss) income to net cash provided by operating activities
Bad debt expense		199		1,748
Depreciation and amortization expense		14,496		12,080
Amortization of debt issuance costs		147		142
Accretion of acquisition liabilities		—		36
Deferred taxes		(3,175)		(3,096)
Stock-based compensation expense		7,252		1,942
Interest expense (income)		9		(42)
Change in fair value of contingent consideration		57		(899)
Offering costs		21,801		1,058
Other		62		621
Changes in operating assets and liabilities net of effect of business combinations
Trade receivables		8,518		(47)
Prepaid expenses and other current assets		(284)		855
Other non-current assets		(299)		3
Trade payables and other liabilities		541		2,057
Accrued expenses		121		(2,978)
Other current liabilities		827		(2,680)
Other non-current liabilities		(1,120)		148
Net cash provided by operating activities		42,228		17,466
Investing activities:
Purchase of property, plant and equipment		(3,513)		(4,562)
Net cash (used in) investing activities		(3,513)		(4,562)
Financing activities:
Payments of long-term debt		(22,000)		(189)
Deferred payment related to Leiki acquisition		—		(2,033)
Deferred payment related to Zentrick acquisition		(50)		(50)
Payment of contingent consideration related to Zentrick acquisition		—		(601)
Proceeds from common stock issued upon exercise of stock options		3,447		121
Proceeds from issuance of common stock upon initial public offering		269,390		—
Proceeds from issuance of common stock in connection with concurrent private placement		30,000		—
Payments related to offering costs		(21,708)		(1,107)
Capital lease payments		(804)		(874)
Net cash provided by (used in) financing activities		258,275		(4,733)
Effect of exchange rate changes on cash and cash equivalents and restricted cash		13		(80)
Net increase in cash, cash equivalents, and restricted cash		297,003		8,091
Cash, cash equivalents, and restricted cash - Beginning of period		33,395		11,342
Cash, cash equivalents, and restricted cash - End of period	$	330,398	$	19,433

Cash and cash equivalents		330,355		19,038
Restricted cash (included in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets)		43		395
Total cash and cash equivalents and restricted cash	$	330,398	$	19,433
Supplemental cash flow information:
Cash paid for taxes		3,305		7,777
Cash paid for interest		525		1,654
Non-cash investing and financing activities:
Conversion of Series A preferred stock to common stock in connection with the initial public offering		610		—
Treasury stock reissued upon the conversion of Series A preferred stock to common stock		260,686		—
Acquisition of equipment under capital lease		1,518		973
Capital assets financed by accounts payable		—		76
Offering costs included in accounts payable and accrued expense		89		100


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands)	2021		2020		2021		2020
Advertiser - direct	$	31,662	$	23,707	$	59,203	$	45,894
Advertiser - programmatic		37,880		24,128		71,792		47,979
Supply-side customer		6,982		5,185		13,115		10,366
Total revenue	$	76,524	$	53,020	$	144,110	$	104,239


(in thousands)
2021	$	8,930
2022		17,860
2023		17,825
2024		16,205
2025		14,273
2026		9,777
Thereafter		27,910
Total	$	112,780


		(In years)
Trademarks and brands		11
Customer relationships		8
Developed technology		4


	As of June 30, 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:	$	9,808		—		—		9,808
Liabilities:
Contingent consideration current		—		—		1,717		1,717
Contingent consideration non-current		—		—		—		—
Total contingent consideration	$	—	$	—	$	1,717	$	1,717


	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


(in thousands)
Balance at January 1, 2021	$	1,660
Fair value adjustments		57
Payments during the year		—
Balance at June 30, 2021	$	1,717


	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	598		22.12	—		—
Options exercised	(1,078)		3.35	—		—
Options forfeited	(189)		6.47	—		—
Outstanding as of June 30, 2021	14,044	$	5.29	7.45	$	520,634
Options expected to vest as of June 30, 2021	3,818	$	9.72	—	$	124,523
Options exercisable as of June 30, 2021	6,483	$	3.62	—	$	251,007


		2021
Risk - free interest rate (percentage)		0.6. - 1.1
Expected term (years)		6.1
Expected dividend yield (percentage)		—
Expected volatility (percentage)		42.1 - 43.6


(in thousands)	June 30, 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		(2,985)		8,705		11,690		(2,562)		9,128
Customer relationships		102,220		(32,006)		70,214		102,220		(27,720)		74,500
Developed technology		63,205		(29,344)		33,861		63,210		(25,128)		38,082
Total intangible assets	$	177,115	$	(64,335)	$	112,780	$	177,120	$	(55,410)	$	121,710


	Year Ending
(in thousands)	December 31,
2021	$	2,848
2022		4,778
2023		4,211
2024		563
	$	12,400

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)


	Restricted Stock
	Number of	Weighted Average
	Shares	Grant Date Fair Value
Outstanding as of December 31, 2020	1,261	$	7.74
Granted	576		21.30
Vested	(217)		10.26
Forfeited	—
Outstanding as of June 30, 2021	1,620	$	12.23
Expected to vest as of June 30, 2021	1,486


	Three Months Ended June 30,				Change		Change		Six Months Ended June 30,				Change		Change
	2021		2020		$		%		2021		2020		$		%

	(In Thousands)								(In Thousands)
Revenue by customer type:
Advertiser - direct	$	31,662	$	23,707	$	7,955	34	%	$	59,203	$	45,894	$	13,309	29	%
Advertiser - programmatic		37,880		24,128		13,752	57			71,792		47,979		23,813	50
Supply-side customer		6,982		5,185		1,797	35			13,115		10,366		2,749	27
Total revenue	$	76,524	$	53,020	$	23,504	44	%	$	144,110	$	104,239	$	39,871	38	%


Exhibit No.		Description

3.1		Second Amended and Restated Certificate of Incorporation, dated April 23, 2021 (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on April 26, 2021 (File No. 001-40349))

3.2		Amended and Restated Bylaws, currently in effect (incorporated by reference to Exhibit 3.2 to the registrant’s Current Report on Form 8-K filed with the SEC on April 26, 2021 (File No. 001-40349))

4.1		Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Amendment No. 1 to the registrant’s Registration Statement on Form S-1 filed with the SEC on April 12, 2021 (File No. 333-254380))

10.1		Form of Director Indemnification Agreement (incorporated by reference to Exhibit 10.8 to Amendment No. 1 to the registrant’s Registration Statement on Form S-1 filed with the SEC on April 12, 2021 (File No. 333-254380))

10.2		2021 Omnibus Equity Incentive Plan (incorporated by reference to Exhibit 4.3 to the registrant’s Registration Statement on Form S-8 filed with the SEC on April 20, 2021 (File No. 333-255374))

10.3		2021 Employee Stock Purchase Plan (incorporated by reference to Exhibit 4.4 to the registrant’s Registration Statement on Form S-8 filed with the SEC on April 20, 2021 (File No. 333-255374))

10.4		Registration Rights Agreement by and among DoubleVerify Holdings, Inc., Providence VII U.S. Holdings L.P. and the other stockholders of DoubleVerify Holdings, Inc. listed on Schedule I thereto, dated as of April 19, 2021 (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on April 26, 2021 (File No. 001-40349))

10.5		Stockholder’s Agreement, by and between DoubleVerify Holdings, Inc. and Providence VII U.S. Holdings L.P., dated as of April 20, 2021 (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed with the SEC on April 26, 2021 (File No. 001-40349))

10.6		Common Stock Purchase Agreement by and among DoubleVerify Holdings, Inc. and Tiger Global Investments, L.P., dated as of April 9, 2021 (incorporated by reference to Exhibit 10.24 to Amendment No. 1 to the registrant’s Registration Statement on Form S-1 filed with the SEC on April 12, 2021 (File No. 333-254380))

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


	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)