DoubleVerify Announces First Quarter 2021 Financial Results

Rhea-AI Summary

DoubleVerify (DV) announced its Q1 2021 financial results, reporting a 32% increase in total revenue to $67.6 million and 41% growth in Adjusted EBITDA. The gains were driven by new enterprise clients and strong performance in sectors like CTV and Social. Net income rose to $5.6 million, and diluted EPS increased to $0.04. For Q2, DV projects revenues between $72 million and $74 million, anticipating 38% growth. The company remains optimistic about continued growth and has strengthened its balance sheet post-IPO.

Positive

• Total revenue increased by 32% to $67.6 million.
• Adjusted EBITDA rose by 41% to $21.7 million.
• Net income increased to $5.6 million from $2.4 million.
• Diluted EPS rose to $0.04 from $0.02.
• Projected Q2 revenue between $72 to $74 million, a 38% increase.

Negative

• None.

DoubleVerify (“DV”) (NYSE: DV), a leading software platform for digital media measurement, data and analytics, today announced financial results for the first quarter ended March 31, 2021.

“Successfully completing our IPO was an important milestone for DoubleVerify, providing additional capital to further fuel our mission to create a stronger, safer and more secure digital ad ecosystem,” said Mark Zagorski, CEO of DoubleVerify. “We delivered record first quarter revenue, which grew 32% year-over-year, with Adjusted EBITDA exhibiting 41% growth. Our solid topline momentum was driven by global expansion via recent enterprise client wins, product success in fast growing sectors such as CTV, Social and Programmatic and the introduction of new solutions that leverage our ability to measure and verify across both the walled gardens and open internet without cookies or third-party tracking technologies. We are optimistic about continued strong growth for the remainder of 2021 and beyond.”

First Quarter 2021 Financial Highlights:
(All comparisons are to the first quarter of 2020)

• Total revenue of $67.6 million, an increase of 32%.
• Advertiser Direct revenue of $27.5 million, an increase of 24%.
  • Media Transactions Measured (“MTM”) for both CTV and Social increased by approximately 75%.
• Advertiser Programmatic revenue of $33.9 million, an increase of 42%.
• Supply-Side revenue of $6.1 million, an increase of 18%.
• Net income increased to $5.6 million, compared to $2.4 million.
• Adjusted EBITDA of $21.7 million, an increase of 41%.
• Diluted earnings per share increased to $0.04, compared to $0.02.

First Quarter 2021 Business Highlights:

• Grew revenue with recently won business at Unilever, UPS, UK Government (via Omnicom UK), Fujifilm Japan and Arnott’s Australia among numerous others.
• Expanded Custom Contextual targeting for programmatic advertisers, including activation on The Trade Desk.
• Expanded international coverage for CTV on Roku, building upon our existing measurement partnership, with plans for further international expansion.
• Continued to grow supply side business, with new customer wins including News Corp, Time, Inc. and Ziff Davis, among others.
• Enhanced the leadership team with the appointment of Julie Eddleman as EVP, Global Chief Commercial Officer (CCO), who will lead the Company’s sales and client service organizations worldwide, and Doug Campbell as Chief Strategy Officer, who will lead corporate strategy and M&A.
• Achieved additional Media Rating Council (MRC) accreditation in CTV for display and video rendered ad impression measurement and sophisticated invalid traffic (SIVT) filtration, including app fraud.
• Launched DV Authentic Attention™, the first privacy-friendly data solution to provide timely, impression-level insights to optimize campaign performance.
• Expanded Brand Safety/Suitability Services on Facebook video products, now offering the widest brand safety/suitability coverage of any provider on the platform.

“DoubleVerify continues to outpace the growth of the digital advertising market and is well positioned to deliver strong revenue growth and profitability in 2021,” said Nicola Allais, CFO of DoubleVerify. “In the first quarter, revenue growth was driven by continued success in launching new products and expanding market share in the programmatic, CTV and Social sectors. Additionally, we maintained strong customer retention in the quarter, evidenced by a gross revenue retention rate of over 95%. After the quarter closed, we received aggregate net proceeds of $282 million from the IPO and a concurrent private placement, further strengthening our balance sheet and bolstering our ability to expand our global footprint and accelerate our technology roadmap.”

Second Quarter and Full-Year 2021 Guidance:

DoubleVerify anticipates Revenue and Adjusted EBITDA to be in the following ranges:

Second quarter 2021:

• Revenue of $72 to $74 million, a year-over-year increase of 38% at the midpoint.
• Adjusted EBITDA in the range of $20 to $22 million, a year-over-year improvement of 34% at the midpoint.

Full year 2021:

• Revenue of $322 to $326 million, a year-over-year increase of 33% at the midpoint.
• Adjusted EBITDA in the range of $103 to $105 million, a year-over-year increase of 42% at the midpoint.

With respect to the Company’s expectations under "Second Quarter and Full Year 2021 Guidance" above, the Company has not reconciled the non-GAAP measure Adjusted EBITDA to the GAAP measure net income (loss) in this press release because the Company does not provide guidance for stock-based compensation expense, 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 (loss). In addition, the Company believes such a reconciliation would imply a degree of precision that could be confusing or misleading to investors.

Conference Call and Webcast Information

DoubleVerify will host a conference call and live webcast to discuss its first quarter 2021 financial results at 4:30 p.m. Eastern Time today, May 25, 2021. To access the conference call, dial (877) 841-2987 for the U.S. or Canada, or (215) 268-9878 for international callers and provide conference ID 13719679. The webcast will be available live on the Investors section of the Company's website at https://ir.doubleverify.com/. In addition, an archived webcast will be available approximately two hours after the conclusion of the live event.

Key Business Terms

Advertiser Direct 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.

Advertiser Programmatic revenue is generated from the evaluation, verification and measurement of advertising impressions purchased through programmatic demand-side 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 Media Transaction Measured.

DoubleVerify Holdings, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
		As of			As of
(in thousands, except per share data)		March 31, 2021			December 31, 2020
Assets:
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
Liabilities and Stockholders' Equity:
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
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

FAQ

What were DoubleVerify's Q1 2021 revenue results?

DoubleVerify reported a total revenue of $67.6 million for Q1 2021, marking a 32% increase year-over-year.

What is DoubleVerify's guidance for Q2 2021?

DoubleVerify anticipates Q2 2021 revenue between $72 million and $74 million, reflecting a year-over-year growth of approximately 38%.

How much did Adjusted EBITDA grow in Q1 2021 for DoubleVerify?

Adjusted EBITDA for Q1 2021 increased by 41% to $21.7 million compared to Q1 2020.

What was the net income reported by DoubleVerify for Q1 2021?

DoubleVerify reported a net income of $5.6 million for Q1 2021, up from $2.4 million in the previous year.

What significant client wins did DoubleVerify announce during Q1 2021?

DoubleVerify secured new business with clients including Unilever, UPS, and the UK Government.