Comscore, Inc 10-Q for FY2021 Q3

Comscore, Inc. (SCOR)

10-Q 2021-11-09 For: 2021-09-30

Added on April 06, 2026

About this 10-Q

Comscore, Inc filed this 10-Q on November 9, 2021, covering the quarter ended September 30, 2021 (FY2021 Q3).

Headline figures

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

Revenue: $92.49M; up 5.2% from $87.95M a year earlier
Net income: $1.98M; compared with a net loss of $11.12M a year earlier
Diluted EPS: -$0.02; compared with -$0.16 a year earlier

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Delaware						54-1955550
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)


Cautionary Note Regarding Forward Looking Statements			i
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements			1
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			21
Item 3. Quantitative and Qualitative Disclosure about Market Risk			32
Item 4. Controls and Procedures			33
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			34
Item 1A. Risk Factors			34
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			34
Item 3. Defaults Upon Senior Securities			35
Item 4. Mine Safety Disclosures			35
Item 5. Other Information			35
Item 6. Exhibits			36
SIGNATURE			37


	As of		As of
	September 30, 2021		December 31, 2020
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	15,940	$	31,126
Restricted cash	794		19,615
Accounts receivable, net of allowances of $1,215 and $2,757, respectively ($3,897 and $4,045 of accounts receivable attributable to related parties, respectively)	81,461		69,379
Prepaid expenses and other current assets ($907 and $1,496 attributable to related parties, respectively)	13,662		16,910
Total current assets	111,857		137,030
Property and equipment, net	31,349		30,973
Operating right-of-use assets	30,175		28,959
Goodwill	417,104		418,327
Intangible assets, net	33,473		52,340
Deferred tax assets	2,790		2,741
Other non-current assets	9,888		7,600
Total assets	$	636,636	$	677,970
Liabilities, Convertible Redeemable Preferred Stock and Stockholders' Equity
Current liabilities:
Accounts payable ($8,065 and $2,817 attributable to related parties, respectively)	$	42,424	$	36,640
Accrued expenses ($3,858 and $835 attributable to related parties, respectively)	40,078		48,380
Contract liabilities ($3,715 and $3,538 attributable to related parties, respectively)	51,116		58,529
Customer advances	8,949		12,477
Warrants liability	13,769		2,831
Current operating lease liabilities	7,327		7,024
Secured term note	—		12,644
Other current liabilities ($3,953 and $— attributable to related parties, respectively)	6,504		5,750
Total current liabilities	170,167		184,275
Non-current operating lease liabilities	37,515		36,127
Non-current contract liabilities	2,497		4,156
Deferred tax liabilities	1,515		627
Senior secured convertible notes (related party)	—		192,895
Financing derivatives (related party)	—		11,300
Revolving line of credit	16,000		—
Other non-current liabilities ($6,358 and $6,120 attributable to related parties, respectively)	23,726		19,600
Total liabilities	251,420		448,980
Commitments and contingencies
Convertible redeemable preferred stock, $0.001 par value; 82,527,609 and zero shares authorized, issued and outstanding as of September 30, 2021 and December 31, 2020, respectively; aggregate liquidation preference of $207,953 as of September 30, 2021 (related parties)	187,885		—
Stockholders' equity:
Preferred stock, $0.001 par value; 7,472,391 and 5,000,000 shares authorized as of September 30, 2021 and December 31, 2020, respectively; no shares issued or outstanding as of September 30, 2021 or December 31, 2020	—		—
Common stock, $0.001 par value; 275,000,000 and 150,000,000 shares authorized as of September 30, 2021 and December 31, 2020, respectively; 88,964,022 shares issued and 82,199,226 shares outstanding as of September 30, 2021, and 79,703,342 shares issued and 72,938,546 shares outstanding as of December 31, 2020	82		73
Additional paid-in capital	1,655,288		1,621,986
Accumulated other comprehensive loss	(10,367)		(7,030)
Accumulated deficit	(1,217,688)		(1,156,055)
Treasury stock, at cost, 6,764,796 shares as of September 30, 2021 and December 31, 2020	(229,984)		(229,984)
Total stockholders' equity	197,331		228,990
Total liabilities, convertible redeemable preferred stock and stockholders' equity	$	636,636	$	677,970


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenues (1)	$	92,487	$	87,952	$	270,476	$	266,046

Cost of revenues (1) (2) (3) (4)	49,179		46,466		153,267		137,213
Selling and marketing (2) (3) (4)	15,212		17,131		49,569		52,351
Research and development (2) (3) (4)	9,051		9,501		29,536		29,402
General and administrative (2) (3) (4)	16,895		12,136		45,609		41,420
Amortization of intangible assets	6,172		6,750		18,866		20,514
Impairment of right-of-use and long-lived assets	—		—		—		4,671
Total expenses from operations	96,509		91,984		296,847		285,571
Loss from operations	(4,022)		(4,032)		(26,371)		(19,525)
Other income (expense), net	5,713		4,191		(9,069)		12,862
Gain (loss) from foreign currency transactions	1,180		(2,012)		1,884		(2,152)
Interest expense, net (1)	(169)		(9,027)		(7,569)		(26,729)
Loss on extinguishment of debt (1)	—		—		(9,629)		—
Income (loss) before income taxes	2,702		(10,880)		(50,754)		(35,544)
Income tax (provision) benefit	(722)		(241)		(2,166)		838
Net income (loss)	$	1,980	$	(11,121)	$	(52,920)	$	(34,706)
Net loss available to common stockholders
Net income (loss)	$	1,980	$	(11,121)	$	(52,920)	$	(34,706)
Convertible redeemable preferred stock dividends (1)	(3,910)		—		(8,713)		—
Total net loss available to common stockholders	$	(1,930)	$	(11,121)	$	(61,633)	$	(34,706)
Net loss per common share:
Basic and diluted	$	(0.02)	$	(0.16)	$	(0.77)	$	(0.49)

Weighted-average number of shares used in per share calculation - Common Stock:
Basic and diluted	82,185,009		71,222,122		79,951,857		70,638,292

Comprehensive income (loss):
Net income (loss)	$	1,980	$	(11,121)	$	(52,920)	$	(34,706)
Other comprehensive (loss) income:
Foreign currency cumulative translation adjustment	(1,917)		2,750		(3,337)		1,441
Total comprehensive income (loss)	$	63	$	(8,371)	$	(56,257)	$	(33,265)

(1) Transactions with related parties are included in the line items above (refer to Footnote 8, Related Party Transactions, of the Notes to Condensed Consolidated Financial Statements for additional information).

(2) Excludes amortization of intangible assets, which is presented as a separate line item.


(3) Stock-based compensation expense is included in the line items above as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Cost of revenues	$	231	$	503	$	1,554	$	1,199
Selling and marketing	208		625		1,679		1,954
Research and development	170		386		1,162		817
General and administrative	2,425		1,010		6,761		3,558
Total stock-based compensation expense	$	3,034	$	2,524	$	11,156	$	7,528


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


(4) Lease cost, net of sublease income, is included in the line items above as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Operating lease cost
Cost of revenues	$	778	$	832	$	2,385	$	2,668
Selling and marketing	866		911		2,646		3,055
Research and development	586		636		1,802		1,953
General and administrative	427		428		1,293		1,618
Total operating lease cost	$	2,657	$	2,807	$	8,126	$	9,294

Amortization of right-of-use assets
Cost of revenues	$	401	$	311	$	1,098	$	884
Selling and marketing	61		45		165		127
Research and development	50		47		135		135
General and administrative	32		22		87		63
Total amortization of right-of-use assets	$	544	$	425	$	1,485	$	1,209


	Convertible Redeemable Preferred Stock			Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Treasury stock, at cost		Total Stockholders' Equity
	Shares	Amount		Shares	Amount


































Balance as of December 31, 2020	—	$	—	72,938,546	$	73	$	1,621,986	$	(7,030)	$	(1,156,055)	$	(229,984)	$	228,990

Net loss	—	—		—	—		—		—		(36,355)		—		(36,355)
Convertible redeemable preferred stock, net of issuance costs	82,527,609	188,183		—	—		—		—		—		—		—
Convertible redeemable preferred stock dividends	—	—		—	—		—		—		(935)		—		(935)
Interest paid in Common Stock	—	—		4,165,781	4		10,808		—		—		—		10,812
Conversion shares issued as extinguishment cost on senior secured convertible notes	—	—		3,150,000	3		9,605		—		—		—		9,608
Restricted stock units distributed	—	—		442,051	1		—		—		—		—		1
Settlement of restricted stock unit liability	—	—		—	—		7,117		—		—		—		7,117
Amortization of stock-based compensation	—	—		—	—		1,358		—		—		—		1,358
Foreign currency translation adjustment	—	—		—	—		—		(2,151)		—		—		(2,151)





Payments for taxes related to net share settlement of equity awards	—	—		(10,231)	—		(37)		—		—		—		(37)
Balance as of March 31, 2021	82,527,609	$	188,183	80,686,147	$	81	$	1,650,837	$	(9,181)	$	(1,193,345)	$	(229,984)	$	218,408
Net loss	—	—		—	—		—		—		(18,545)		—		(18,545)


Convertible redeemable preferred stock dividends	—	—		—	—		—		—		(3,868)		—		(3,868)
Adjustment to issuance costs on convertible redeemable preferred stock	—	(298)		—	—		—		—		—		—		—
Restricted stock units distributed	—	—		1,486,344	1		—		—		—		—		1

Amortization of stock-based compensation	—	—		—	—		1,895		—		—		—		1,895
Foreign currency translation adjustment	—	—		—	—		—		731		—		—		731





Payments for taxes related to net share settlement of equity awards	—	—		(414)	—		(1)		—		—		—		(1)
Balance as of June 30, 2021	82,527,609	$	187,885	82,172,077	$	82	$	1,652,731	$	(8,450)	$	(1,215,758)	$	(229,984)	$	198,621
Net income	—	—		—	—		—		—		1,980		—		1,980
Convertible redeemable preferred stock dividends	—	—		—	—		—		—		(3,910)		—		(3,910)

Restricted stock units distributed	—	—		28,989	—		—		—		—		—		—
Amortization of stock-based compensation	—	—		—	—		2,563		—		—		—		2,563
Foreign currency translation adjustment	—	—		—	—		—		(1,917)		—		—		(1,917)
Payments for taxes related to net share settlement of equity awards	—	—		(1,840)	—		(6)		—		—		—		(6)
Balance as of September 30, 2021	82,527,609	$	187,885	82,199,226	$	82	$	1,655,288	$	(10,367)	$	(1,217,688)	$	(229,984)	$	197,331


	As of September 30,
	2021		2020
Cash and cash equivalents	$	15,940	$	32,221
Restricted cash	794		19,613
Total cash, cash equivalents and restricted cash	$	16,734	$	51,834


	Three Months Ended September 30,			Nine Months Ended September 30,
(In thousands)		2021		2020		2021		2020
Change in fair value of warrants liability		$	5,582	$	1,872	$	(10,938)	$	5,765
Change in fair value of financing derivatives		—		2,200		1,800		6,887

Other		131		119		69		210
Total other income (expense), net		$	5,713	$	4,191	$	(9,069)	$	12,862


(In thousands)	Interest Make-whole Derivative Liability		Financing Derivative Liabilities		Warrants Liability
Balance as of December 31, 2020	$	871	$	11,300	$	2,831

Total losses (gains) included in other income (expense), net (1)	150		(1,800)		10,938
Settlement or derecognition upon extinguishment of host debt (2)	(1,021)		(9,500)		—
Balance as of September 30, 2021	$	—	$	—	$	13,769


(In thousands)	Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021
Revenues	$	487	$	1,366
Cost of revenues	5,529		16,471


ITEM 3.			QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


ITEM 2.			UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


	Nine Months Ended September 30,
(In thousands)	2021		2020
Beginning Balance	$	(2,757)	$	(1,919)
Bad debt benefit (expense)	218		(1,664)
Recoveries	(147)		(162)
Write-offs	1,471		982
Ending Balance	$	(1,215)	$	(2,763)


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
By solution group:
Ratings and Planning	$	62,127	$	62,718	$	190,351	$	190,018
Analytics and Optimization	22,485		17,432		57,950		49,827
Movies Reporting and Analytics	7,875		7,802		22,175		26,201
Total	$	92,487	$	87,952	$	270,476	$	266,046
By geographical market:
United States	$	81,187	$	77,672	$	236,593	$	232,345
Europe	6,312		6,401		20,025		20,301
Canada	1,914		1,689		5,475		5,262
Latin America	1,947		1,178		5,227		4,675
Other	1,127		1,012		3,156		3,463
Total	$	92,487	$	87,952	$	270,476	$	266,046
By timing of revenue recognition:
Products and services transferred over time	$	72,660	$	67,828	$	210,432	$	208,321
Products and services transferred at a point in time	19,827		20,124		60,044		57,725
Total	$	92,487	$	87,952	$	270,476	$	266,046



	Nine Months Ended September 30,
(In thousands)	2021		2020
Revenue recognized that was included in the opening contract liabilities balance	$	(46,734)	$	(49,784)
Cash received or amounts billed in advance and not recognized as revenue	41,160		40,212


	Three Months Ended September 30,
(In thousands)	2021		% of Revenue		2020		% of Revenue		$ Variance		% Variance
Ratings and Planning	$	62,127	67.2	%	$	62,718	71.3	%	$	(591)	(0.9)	%
Analytics and Optimization	22,485		24.3	%	17,432		19.8	%	5,053		29.0	%
Movies Reporting and Analytics	7,875		8.5	%	7,802		8.9	%	73		0.9	%
Total revenues	$	92,487	100.0	%	$	87,952	100.0	%	$	4,535	5.2	%


Exhibit No.						Exhibit Document

3.1						Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.3 to the Registrant's Registration Statement on Form S-1, as amended, filed June 12, 2007) (File No. 333-141740)

3.2						Certificate of Amendment of Amended and Restated Certificate of Incorporation of comScore, Inc. (incorporated by reference to Exhibit 4.2 to the Registrant's Registration Statement on Form S-8, filed June 4, 2018) (File No. 333-225400)

3.3						Certificate of Designation of Series A Junior Participating Preferred Stock of comScore, Inc., as filed with the Secretary of State of the State of Delaware on February 9, 2017 (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed February 9, 2017) (File No. 001-33520)

3.4						Certificate of Elimination of Designation of Series A Junior Participating Preferred Stock of comScore, Inc., as filed with the Secretary of State of the State of Delaware on September 29, 2017 (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed October 4, 2017) (File No. 001-33520)

3.5						Certificate of Amendment to Amended and Restated Certificate of Incorporation of comScore, Inc., dated March 10, 2021 (incorporated by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K, filed March 15, 2021) (File No. 001-33520)

3.6						Certificate of Designations of Series B Convertible Preferred Stock, par value $0.001, of comScore, Inc. (incorporated by reference to Exhibit 3.2 to the Registrant's Current Report on Form 8-K, filed March 15, 2021) (File No. 001-33520)

3.7						Amended and Restated Bylaws of comScore, Inc. (incorporated by reference to Exhibit 3.2 to the Registrant's Quarterly Report on Form 10-Q for the period ended June 30, 2018, filed August 10, 2018) (File No. 001-33520)

10.1+*						Separation and General Release Agreement, dated as of July 21, 2021, by and between comScore, Inc. and Gregory Fink

31.1+						Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2+						Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1+						Certification of Principal 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 Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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/s/ William P. Livek
William P. Livek
Chief Executive Officer
(Principal Executive Officer)