10-Q 1 dv-20240331x10q.htm 10-Q
0001819928--12-312024Q1false00New YorkP1Y10001819928us-gaap:CommonStockMember2024-01-012024-03-310001819928us-gaap:CommonStockMember2023-01-012023-03-310001819928us-gaap:RetainedEarningsMember2024-03-310001819928us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2024-03-310001819928us-gaap:AdditionalPaidInCapitalMember2024-03-310001819928us-gaap:RetainedEarningsMember2023-12-310001819928us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2023-12-310001819928us-gaap:AdditionalPaidInCapitalMember2023-12-310001819928us-gaap:RetainedEarningsMember2023-03-310001819928us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2023-03-310001819928us-gaap:AdditionalPaidInCapitalMember2023-03-310001819928us-gaap:RetainedEarningsMember2022-12-310001819928us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2022-12-310001819928us-gaap:AdditionalPaidInCapitalMember2022-12-310001819928us-gaap:TreasuryStockCommonMember2024-03-310001819928us-gaap:CommonStockMember2024-03-310001819928us-gaap:TreasuryStockCommonMember2023-12-310001819928us-gaap:CommonStockMember2023-12-310001819928us-gaap:TreasuryStockCommonMember2023-03-310001819928us-gaap:CommonStockMember2023-03-310001819928us-gaap:TreasuryStockCommonMember2022-12-310001819928us-gaap:CommonStockMember2022-12-3100018199282023-01-012023-12-310001819928dvh:PerformanceAndMarketBasedSharesMember2024-03-310001819928dvh:EquityIncentiveProgramMember2024-01-012024-03-310001819928us-gaap:RestrictedStockUnitsRSUMember2024-03-310001819928us-gaap:PerformanceSharesMember2024-03-310001819928us-gaap:RestrictedStockUnitsRSUMember2023-12-310001819928us-gaap:PerformanceSharesMember2023-12-310001819928dvh:PerformanceAndMarketBasedSharesMember2024-01-012024-03-310001819928us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001819928us-gaap:EmployeeStockOptionMember2024-01-012024-03-310001819928us-gaap:PerformanceSharesMember2024-01-012024-03-310001819928srt:MinimumMember2024-04-012024-03-310001819928srt:MaximumMember2024-04-012024-03-310001819928dvh:SupplySideCustomerMember2024-01-012024-03-310001819928dvh:MeasurementMember2024-01-012024-03-310001819928dvh:ActivationMember2024-01-012024-03-310001819928dvh:SupplySideCustomerMember2023-01-012023-03-310001819928dvh:MeasurementMember2023-01-012023-03-310001819928dvh:ActivationMember2023-01-012023-03-310001819928us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2024-03-310001819928us-gaap:LeaseholdImprovementsMember2024-03-310001819928us-gaap:FurnitureAndFixturesMember2024-03-310001819928us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2023-12-310001819928us-gaap:LeaseholdImprovementsMember2023-12-310001819928us-gaap:FurnitureAndFixturesMember2023-12-310001819928us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2024-01-012024-03-310001819928us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2023-01-012023-03-310001819928us-gaap:RetainedEarningsMember2024-01-012024-03-310001819928us-gaap:RetainedEarningsMember2023-01-012023-03-310001819928us-gaap:RevolvingCreditFacilityMember2024-03-310001819928us-gaap:RevolvingCreditFacilityMember2023-12-310001819928us-gaap:LetterOfCreditMember2020-10-010001819928srt:MinimumMember2020-10-012020-10-010001819928srt:MaximumMember2020-10-012020-10-010001819928us-gaap:USTreasurySecuritiesMember2024-03-310001819928us-gaap:PropertyPlantAndEquipmentMember2024-01-012024-03-310001819928us-gaap:PropertyPlantAndEquipmentMember2023-01-012023-03-310001819928us-gaap:TrademarksAndTradeNamesMember2024-03-310001819928us-gaap:NoncompeteAgreementsMember2024-03-310001819928us-gaap:DevelopedTechnologyRightsMember2024-03-310001819928us-gaap:CustomerRelationshipsMember2024-03-310001819928us-gaap:TrademarksAndTradeNamesMember2023-12-310001819928us-gaap:NoncompeteAgreementsMember2023-12-310001819928us-gaap:DevelopedTechnologyRightsMember2023-12-310001819928us-gaap:CustomerRelationshipsMember2023-12-310001819928us-gaap:ComputerEquipmentMember2024-03-310001819928us-gaap:ComputerEquipmentMember2023-12-310001819928us-gaap:RevolvingCreditFacilityMember2020-10-010001819928us-gaap:RevolvingCreditFacilityMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2023-03-292023-03-290001819928us-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2023-03-292023-03-2900018199282022-12-310001819928us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001819928dvh:MoneyMarketFundsAndTimeDepositsMemberus-gaap:FairValueInputsLevel1Member2024-03-310001819928us-gaap:FairValueMeasurementsRecurringMember2024-03-310001819928us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001819928dvh:MoneyMarketFundsAndTimeDepositsMemberus-gaap:FairValueInputsLevel1Member2023-12-310001819928us-gaap:FairValueMeasurementsRecurringMember2023-12-3100018199282023-03-310001819928dvh:DoubleverifyInc.Member2017-08-180001819928srt:MaximumMemberdvh:EmployeeStockPurchasePlan2021Member2024-01-012024-03-310001819928us-gaap:SellingAndMarketingExpenseMember2024-01-012024-03-310001819928us-gaap:ResearchAndDevelopmentExpenseMember2024-01-012024-03-310001819928us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-03-310001819928srt:MaximumMemberdvh:EmployeeStockPurchasePlan2021Member2023-01-012023-03-310001819928us-gaap:SellingAndMarketingExpenseMember2023-01-012023-03-310001819928us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-03-310001819928us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-03-310001819928us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001819928us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001819928us-gaap:TreasuryStockCommonMember2024-01-012024-03-310001819928us-gaap:TreasuryStockCommonMember2023-01-012023-03-310001819928dvh:SupplySideCustomerMember2024-03-3100018199282023-01-012023-03-3100018199282024-03-3100018199282023-12-3100018199282024-04-2900018199282024-01-012024-03-31xbrli:sharesiso4217:USDxbrli:pureiso4217:USDxbrli:sharesdvh:segment

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)                                                                                                                                                                                         

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

For the quarterly period ended March 31, 2024

or

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

For the transition period from                      to                     

Commission File Number: 001-40349

DoubleVerify Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware

82-2714562

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

462 Broadway

New York, NY, 10013

(Address of Principal Executive Offices)

(212) 631-2111

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes     No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

  

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of April 29, 2024, there were 171,796,441 shares of the registrant’s common stock, par value $0.001 per share, outstanding.

 

 

DoubleVerify Holdings, Inc.

Quarterly Report on Form 10-Q

For the Quarter Ended March 31, 2024

TABLE OF CONTENTS

0

`

    

    

    

    

 

Part I

FINANCIAL INFORMATION (Unaudited)

    

    

Page

Item 1.

Condensed Consolidated Financial Statements

4

Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023

4

Condensed Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2024 and 2023

5

Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2024 and 2023

6

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 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

21

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

29

Item 4.

Controls and Procedures

29

Part II

OTHER INFORMATION

Item 1.

Legal Proceedings

30

Item 1A.

Risk Factors

30

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

30

Item 3.

Defaults Upon Senior Securities

30

Item 4.

Mine Safety Disclosures

30

Item 5.

Other Information

30

Item 6.

Exhibits

31

Signatures

32

2

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (“Quarterly Report”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts included in this Quarterly Report, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected costs, savings and plans and objectives of management for future operations, are forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “plan,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct.

You should read the “Special Note Regarding Forward-Looking Statements” and “Risk Factors” sections of our Annual Report on Form 10-K, for the year ended December 31, 2023 and filed with the Securities and Exchange Commission (“SEC”), on February 28, 2024, for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in this report. There may be other factors not presently known to us or which we currently consider to be immaterial that may cause our actual results to differ materially from the forward-looking statements.

All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date of this Quarterly Report and are expressly qualified in their entirety by the cautionary statements included in this Quarterly Report and in the Annual Report on Form 10-K for the year ended December 31, 2023. We undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events.

“DoubleVerify,” “the DV Authentic Ad,” “Authentic Brand Suitability,” “DV Pinnacle” and other trademarks of ours appearing in this report are our property and we deem them particularly important to the marketing activities conducted by each of our businesses. Solely for convenience, the trademarks, service marks and trade names referred to in this report are without the ® and ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks, service marks and trade names. This report contains additional trade names and trademarks of other companies. We do not intend our use or display of other companies’ trade names or trademarks to imply an endorsement or sponsorship of us by such companies, or any relationship with any of these companies.

Unless the context otherwise requires, the terms “DoubleVerify,” ‘‘we,’’ ‘‘us,’’ ‘‘our,’’ and the ‘‘Company,’’ as used in this report refer to DoubleVerify Holdings, Inc. and its consolidated subsidiaries.

3

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

DoubleVerify Holdings, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

    

As of

    

As of

(in thousands, except per share data)

March 31, 2024

December 31, 2023

Assets:

 

  

 

  

Current assets

 

  

 

  

Cash and cash equivalents

$

302,017

$

310,131

Short-term investments

32,312

Trade receivables, net of allowances for doubtful accounts of $9,580 and $9,442 as of March 31, 2024 and December 31, 2023, respectively

195,638

206,941

Prepaid expenses and other current assets

 

20,356

 

15,930

Total current assets

 

550,323

 

533,002

Property, plant and equipment, net

 

60,851

 

58,020

Operating lease right-of-use assets, net

64,910

60,470

Goodwill

 

432,865

 

436,008

Intangible assets, net

 

132,815

 

140,883

Deferred tax assets

 

16,619

 

13,077

Other non-current assets

 

1,810

 

1,571

Total assets

$

1,260,193

$

1,243,031

Liabilities and Stockholders' Equity:

 

Current liabilities

 

Trade payables

$

12,761

$

12,932

Accrued expenses

 

34,218

 

44,264

Operating lease liabilities, current

9,844

9,029

Income tax liabilities

 

6,064

 

5,833

Current portion of finance lease obligations

 

2,640

 

2,934

Other current liabilities

 

9,841

 

8,863

Total current liabilities

 

75,368

 

83,855

Operating lease liabilities, non-current

75,124

71,563

Finance lease obligations

 

2,344

 

2,865

Deferred tax liabilities

 

7,514

 

8,119

Other non-current liabilities

 

2,752

 

2,690

Total liabilities

163,102

169,092

Commitments and contingencies (Note 14)

 

Stockholders’ equity

 

Common stock, $0.001 par value, 1,000,000 shares authorized, 171,756 shares issued and 171,724 outstanding as of March 31, 2024; 1,000,000 shares authorized, 171,168 shares issued and 171,146 outstanding as of December 31, 2023

172

171

Additional paid-in capital

899,354

878,331

Treasury stock, at cost, 32 shares and 22 shares as of March 31, 2024 and December 31, 2023, respectively

(1,146)

(743)

Retained earnings

 

206,139

 

198,983

Accumulated other comprehensive loss, net of income taxes

 

(7,428)

 

(2,803)

Total stockholders’ equity

 

1,097,091

 

1,073,939

Total liabilities and stockholders' equity

$

1,260,193

$

1,243,031

See accompanying Notes to unaudited Condensed Consolidated Financial Statements.

4

DoubleVerify Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)

Three Months Ended March 31, 

(in thousands, except per share data)

    

2024

    

2023

Revenue

$

140,782

$

122,594

Cost of revenue (exclusive of depreciation and amortization shown separately below)

 

26,618

23,952

Product development

 

36,394

28,555

Sales, marketing and customer support

 

37,872

25,712

General and administrative

 

22,075

20,188

Depreciation and amortization

 

10,928

8,983

Income from operations

 

6,895

 

15,204

Interest expense

 

232

256

Other income, net

 

(2,272)

(2,734)

Income before income taxes

 

8,935

17,682

Income tax expense

 

1,779

5,507

Net income

$

7,156

$

12,175

Earnings per share:

 

Basic

$

0.04

$

0.07

Diluted

$

0.04

$

0.07

Weighted-average common stock outstanding:

 

 

Basic

 

171,306

165,631

Diluted

 

176,124

171,657

Comprehensive income:

 

Net income

$

7,156

$

12,175

Other comprehensive (loss) income:

 

Foreign currency cumulative translation adjustment

 

(4,625)

 

1,193

Total comprehensive income

$

2,531

$

13,368

See accompanying Notes to unaudited Condensed Consolidated Financial Statements.

5

DoubleVerify Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

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

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

See accompanying Notes to unaudited Condensed Consolidated Financial Statements.

6

DoubleVerify Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Three Months Ended

March 31, 

(in thousands)

    

2024

    

2023

Operating activities:

 

  

 

  

Net income

$

7,156

$

12,175

Adjustments to reconcile net income to net cash provided by operating activities

 

Bad debt expense

 

907

 

1,285

Depreciation and amortization expense

 

10,928

 

8,983

Amortization of debt issuance costs

 

74

 

74

Non-cash lease expense

1,569

1,658

Deferred taxes

 

(3,963)

 

(5,382)

Stock-based compensation expense

 

20,241

 

11,813

Interest expense, net

 

64

 

Other

677

(2)

Changes in operating assets and liabilities

 

Trade receivables

 

9,626

 

(8,052)

Prepaid expenses and other assets

 

(5,218)

 

(6,874)

Trade payables

 

55

 

3,700

Accrued expenses and other liabilities

 

(10,342)

 

2,048

Net cash provided by operating activities

 

31,774

 

21,426

Investing activities:

 

 

Purchase of property, plant and equipment

 

(6,393)

 

(4,099)

Purchase of short-term investments

(32,211)

Net cash used in investing activities

 

(38,604)

 

(4,099)

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

1,695

1,766

Finance lease payments

(815)

(513)

Shares repurchased for settlement of employee tax withholdings

(1,792)

(787)

Net cash (used in) provided by financing activities

 

(912)

 

466

Effect of exchange rate changes on cash and cash equivalents and restricted cash

 

(377)

 

131

Net (decrease) increase in cash, cash equivalents, and restricted cash

 

(8,119)

 

17,924

Cash, cash equivalents, and restricted cash - Beginning of period

 

310,257

 

267,938

Cash, cash equivalents, and restricted cash - End of period

$

302,138

$

285,862

Cash and cash equivalents

$

302,017

$

285,738

Restricted cash (included in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets)

 

121

 

124

Total cash and cash equivalents and restricted cash

$

302,138

$

285,862

Supplemental cash flow information:

 

 

Cash paid for taxes

$

1,324

$

1,708

Cash paid for interest

$

74

$

266

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

$

6,207

$

1,415

Capital assets financed by accounts payable and accrued expenses

$

45

$

378

Stock-based compensation included in capitalized software development costs

$

471

$

179

See accompanying Notes to unaudited Condensed Consolidated Financial Statements.

7

Table of Contents

DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except per share data, unless otherwise stated)

1.    Description of Business

DoubleVerify Holdings, Inc. (the “Company”) is one of the industry’s leading media effectiveness platforms 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. The Company’s solutions provide advertisers unbiased data analytics that enable advertisers to increase the effectiveness, quality and return on their digital advertising investments. The DV Authentic Ad is our proprietary metric of digital media quality, which measures whether a digital ad was delivered in a brand suitable environment, fully viewable, by a real person and in the intended geography. The Company’s software interface, DV Pinnacle, delivers these metrics to our customers in real time, allowing them to access critical performance data on their digital transactions. The Company’s software solutions are integrated across the entire digital advertising ecosystem, including programmatic platforms, social media channels and digital publishers. The Company’s solutions are accredited by the Media Rating Council, which allows the Company’s data to be used as a single source standard in the evaluation and measurement of digital ads.

The Company was incorporated on August 16, 2017, is registered in the state of Delaware and is the parent company of DoubleVerify Midco, Inc. (“MidCo”), which is in turn the parent company of DoubleVerify Inc. On August 18, 2017, DoubleVerify Inc. entered into an agreement and plan of merger (the “Agreement”), whereby the Company and Pixel Merger Sub, Inc. (“Merger Sub”), a wholly-owned subsidiary of the Company, agreed to provide for the merger of the Merger Sub with DoubleVerify Inc. pursuant to the terms and conditions of the Agreement.

On the effective date, Merger Sub was merged with and into DoubleVerify Inc. whereupon the separate corporate existence of Merger Sub ceased and DoubleVerify Inc. continued as the surviving corporation.

Through the merger, the Company acquired 100% of the outstanding equity instruments of DoubleVerify Inc., (the “Acquisition”) resulting in a change of control at the parent level. The merger resulted in the application of acquisition accounting under the provisions of Financial Accounting Standards Board (“FASB”) Topic Accounting Standards Codification (“ASC”) 805, “Business Combinations.”

The Company is headquartered in New York, New York and has wholly-owned subsidiaries in numerous jurisdictions, including Israel, the United Kingdom, the United Arab Emirates, Germany, Singapore, Australia, Canada, Brazil, Belgium, Mexico, France, Japan, Spain, Finland, Italy and India, and operates in one reportable segment.  

2.     Basis of Presentation and Summary of Significant Accounting Policies

Basis of Preparation and Principles of Consolidation

The accompanying Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023, the Condensed Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2024 and 2023, the Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2024 and 2023, and the Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair presentation of the results for the periods shown in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules and regulations of the SEC for interim financial reporting periods. Accordingly, certain information and footnote disclosures have been condensed or omitted pursuant to SEC rules that would ordinarily be required under GAAP for complete financial statements. These unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in its Annual Report on Form 10-K for the year ended December 31, 2023.

8

Table of Contents

DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except per share data, unless otherwise stated)

Use of Estimates and Judgments in the Preparation of the Condensed Consolidated Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expense during the reporting periods. Significant estimates and judgments are inherent in the analysis and measurement of items including, but not limited to: revenue recognition criteria including the determination of principal versus agent revenue considerations, income taxes, the valuation and recoverability of goodwill and intangible assets, the assessment of potential loss from contingencies, assumptions in valuing acquired assets and liabilities assumed in business combinations, the allowance for doubtful accounts, and assumptions used in determining the fair value of stock-based compensation. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. These estimates are based on the information available as of the date of the Condensed Consolidated Financial Statements.

Short-term Investments

Debt Securities

The Company’s accounting for debt securities varies depending on the legal form of the security, our intended holding period for the security, and the nature of the transaction. Investments in marketable debt securities include U.S. treasury bills. The Company considers all of its marketable debt securities as available for use in current operations and, therefore, classifies these securities as Short-term investments on the Condensed Consolidated Balance Sheets. Marketable debt securities are classified as available-for-sale and are initially recorded at fair value. Unrealized gains and losses related to available-for-sale debt securities are recorded as a separate component of Other comprehensive (loss) income, net of tax on the Condensed Consolidated Statements of Operations and Comprehensive Income until realized. Interest on marketable debt securities classified as available-for-sale is included as a component of Other income, net on the Condensed Consolidated Statements of Operations and Comprehensive Income. Refer to Footnote 8, Fair Value Measurement, for further information.

The Company accounts for credit losses on available-for-sale debt securities in accordance with ASC 326, “Financial Instruments - Credit Losses” (“ASC 326”). The Company uses ASC 326 to assess the investment portfolio for impairment at the individual security level and evaluates all securities in an unrealized loss position to determine if the impairment is credit related (realized loss recorded in earnings) or non-credit related (unrealized loss).

Recently Issued Accounting Pronouncements

Segment Reporting – Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The updated standard is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and the update requires retrospective application to all prior periods presented. The Company is currently in the process of evaluating the impact of this standard on the Company’s Condensed Consolidated Financial Statements.

9

Table of Contents

DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except per share data, unless otherwise stated)

Income Taxes – Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which expands annual disclosure requirements related to the rate reconciliation and income taxes paid disclosures. ASU 2023-09 requires consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid to be disaggregated by jurisdiction. The updated standard is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted and the update may be applied on a prospective basis with retrospective application permitted. The Company is currently in the process of evaluating the impact of this standard on the Company’s Condensed Consolidated Financial Statements.

3.     Revenue

The following table disaggregates revenue between advertiser customers, where revenue is generated based on the number of ads measured for Measurement or measured and purchased for Activation, and Supply-side customers, where revenue is generated based on contracts with minimum guarantees or contracts that contain overages after minimum guarantees are achieved.

Disaggregated revenue by customer type was as follows:

Three Months Ended

March 31, 

(in thousands)

    

2024

    

2023

Activation

$

79,322

$

69,892

Measurement

 

49,275

 

41,385

Supply-side customer

 

12,185

 

11,317

Total revenue

$

140,782

$

122,594

Contract assets relate to the Company’s conditional right to consideration for completed performance under the contract (e.g., unbilled receivables). Trade receivables, net of allowance for doubtful accounts, include unbilled receivable balances of $55.1 million and $55.0 million as of March 31, 2024 and December 31, 2023, respectively.

Remaining Performance Obligations

As of March 31, 2024, the Company had $13.9 million of remaining performance obligations which are expected to be recognized over the next one to three years. These non-cancelable supply-side arrangements have original expected durations longer than one year and for which the consideration is not variable. These obligations relate primarily to the Company’s supply-side revenue which represented $12.2 million, or 8.7% of the Company’s total revenue as of March 31, 2024. The vast majority of the Company’s revenue is derived primarily from our advertising customers and partners based on the volume of media transactions, or ads, that our software platform measures, and not from supply-side arrangements. In determining the remaining performance obligations, the Company applied the allowable practical expedient and did not disclose information about (1) contracts remaining performance obligations that have original expected durations of one year or less and (2) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed.

10

Table of Contents

DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except per share data, unless otherwise stated)

4.      Business Combinations

Scibids Technology SAS

On August 14, 2023, the Company acquired all of the outstanding stock of Scibids Technology SAS (“Scibids”), a global leader in artificial intelligence (“AI”) technology for digital campaign optimization. The acquisition combines DoubleVerify’s proprietary data with Scibids’ AI-powered optimization technology to provide advertiser customers with enhanced insights and control over their advertising performance.

The preliminary allocations of the purchase price for Scibids are subject to revisions as additional information is obtained about the facts and circumstances that existed as of the acquisition date. The revisions may have a significant impact on the accompanying Condensed Consolidated Financial Statements. The allocations of the purchase price will be finalized once all information is obtained and assessed, not to exceed one year from the acquisition date. As of March 31, 2024, the purchase price allocation for Scibids is subject to the finalization of working capital adjustments.

5.    Goodwill and Intangible Assets

The following is a summary of changes to the goodwill carrying value from December 31, 2023 to March 31, 2024:

(in thousands)

    

    

Goodwill at December 31, 2023

$

436,008

Foreign exchange impact

(3,143)

Goodwill at March 31, 2024

$

432,865

The following table summarizes the Company’s intangible assets and related accumulated amortization:

(in thousands)

March 31, 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

$

(5,351)

$

6,382

$

11,734

$

(5,140)

$

6,594

Customer relationships

 

160,687

(66,462)

 

94,225

 

161,173

 

(62,955)

 

98,218

Developed technology

 

92,443

(60,235)

 

32,208

 

93,013

 

(56,942)

 

36,071

Non-compete agreements

65

(65)

66

(66)

Total intangible assets

$

264,928

$

(132,113)

$

132,815

$

265,986

$

(125,103)

$

140,883

Amortization expense related to intangible assets for the three months ended March 31, 2024 and March 31, 2023 was $7.3 million and $6.2 million, respectively.

Estimated future expected amortization expense of intangible assets as of March 31, 2024 is as follows:

(in thousands)

    

    

2024 (for remaining nine months)

$

21,417

2025

26,751

2026

21,997

2027

18,081

2028

14,928

2029

12,577

Thereafter

 

17,064

Total

$

132,815

11

Table of Contents

DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except per share data, unless otherwise stated)

The weighted-average remaining useful life by major asset classes as of March 31, 2024 is as follows:

    

(In years)

Trademarks and brands

 

8

Customer relationships

 

7

Developed technology

2

There were no impairments of Goodwill or Intangible assets identified during the three months ended March 31, 2024 and March 31, 2023.

6.     Property, Plant and Equipment

Property, plant and equipment, including equipment under finance lease obligations and capitalized software development costs, consisted of the following:

As of

(in thousands)

March 31, 2024

December 31, 2023

Computers and peripheral equipment

    

$

25,982

    

$

25,013

Office furniture and equipment

 

3,334

 

3,170

Leasehold improvements

 

33,153

 

32,595

Capitalized software development costs

 

39,708

 

35,039

Less accumulated depreciation and amortization

 

(41,326)

 

(37,797)

Total property, plant and equipment, net

$

60,851

$

58,020

For the three months ended March 31, 2024 and March 31, 2023, total depreciation expense was $3.6 million and $2.7 million, respectively.

Property and equipment under finance lease obligations, consisting of computer equipment, totaled $17.8 million as of March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024 and December 31, 2023, accumulated depreciation related to property and equipment under finance lease obligations totaled $13.6 million and $12.9 million, respectively. Refer to Note 7, Leases.

There were no impairments of Property, plant and equipment identified during the three months ended March 31, 2024 and March 31, 2023.

12

Table of Contents

DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except per share data, unless otherwise stated)

7.     Leases

The following table presents lease cost and cash paid for amounts included in the measurement of lease liabilities for finance and operating leases for the three months ended March 31, 2024 and 2023, respectively.

    

Three Months Ended March 31, 

(in thousands)

2024

2023

Lease cost:

Operating lease cost (1)

$

2,637

$

2,587

Finance lease cost:

Depreciation of finance lease assets (2)

619

217

Interest on finance lease liabilities (3)

64

23

Short-term lease cost (1)

317

246

Sublease income (1)

(267)

Total lease cost

$

3,637

$

2,806

 

 

Other information:

Cash paid for amounts included in the measurement of lease liabilities

Operating cash outflows from operating leases

$

2,516

$

1,336

Operating cash outflows from finance leases

$

74

$

23

Financing cash outflows from finance leases

$

815

$

513

(1)Included in Cost of revenue, Sales, marketing and customer support, Product development and General and administrative expenses in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.
(2)Included in Depreciation and amortization in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.
(3)Included in Interest expense in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

The following table presents weighted-average remaining lease terms and weighted-average discount rates for finance and operating leases as of March 31, 2024 and 2023, respectively:

    

March 31, 

2024

 

2023

Weighted-average remaining lease term - operating leases (in years)

 

12.9

13.9

Weighted-average remaining lease term - finance leases (in years)

 

2.1

1.4

Weighted-average discount rate - operating leases

4.7%

4.5%

Weighted-average discount rate - finance leases

 

5.4%

3.7%

13

Table of Contents

DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except per share data, unless otherwise stated)

Maturities of lease liabilities as of March 31, 2024 were as follows:

    

March 31, 2024

(in thousands)

Operating Leases

Finance Leases

2024 (for remaining nine months)

$

7,802

$

2,325

2025

 

9,410

 

2,150

2026

 

8,140

 

819

2027

 

7,586

 

2028

 

7,731

 

2029

8,154

Thereafter

67,157

Total lease payments

 

115,980

 

5,294

Less amount representing interest

 

(31,012)

 

(310)

Present value of total lease payments

$

84,968

$

4,984

There were no impairments of Operating lease right-of-use assets identified during the three months ended March 31, 2024 and March 31, 2023.

8.     Fair Value Measurement

The following tables present the Company’s financial instruments that are measured at fair value on a recurring basis:

As of March 31, 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

$

50,083

$

$

$

50,083

Short-term investments

$

32,312

$

$

$

32,312

As of December 31, 2023

Quoted Market

 

Prices in Active

Significant

Markets for

Significant Other

Unobservable

 

Identical Assets

 

Observable Inputs

Inputs

Tota1 Fair Value

(in thousands)

(Level 1)

(Level 2)

 

(Level 3)

Measurements

Assets:

    

 

  

    

 

  

    

 

  

    

 

  

Cash equivalents

 

$

61,463

$

$

 

$

61,463

 

Cash equivalents consisted of treasury bills with original maturities at the date of purchase of three months or less and money market funds of $50.1 million and $61.5 million as of March 31, 2024 and December 31, 2023, respectively.

Short-term investments consisted of treasury bills of $32.3 million as of March 31, 2024. As of March 31, 2024, all of the Company’s Short-term investments are contractually due within one year.

14

Table of Contents

DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except per share data, unless otherwise stated)

As of March 31, 2024 and December 31, 2023, the amortized cost of the Company’s treasury bills approximated fair value. For the three months ended March 31, 2024, the Company did not record any unrealized gains, unrealized losses, or credit losses.

9.     Long-term Debt

On October 1, 2020, DoubleVerify Inc., as borrower (the “Borrower”), and MidCo, as guarantor, entered into an amendment and restatement agreement with the banks and other financial institutions party thereto, as lenders, and Capital One, National Association, as administrative agent, letter of credit issuer and swing lender, and others, to (i) amend and restate the Company’s prior credit agreement, as amended and restated on October 1, 2020 (the “Credit Agreement”) and (ii) replace the Company’s prior credit facilities with a new senior secured revolving credit facility (the “New Revolving Credit Facility”) in an aggregate principal amount of $150.0 million (with a letter of credit facility of up to $15.0 million as a sublimit). Subject to certain terms and conditions, the Borrower is entitled to request additional term loan facilities or increases in the revolving credit commitments under the New Revolving Credit Facility. The New Revolving Credit Facility is payable in quarterly installments for interest, with the principal balance due in full at maturity on October 1, 2025. Additional fees paid quarterly include fees for the unused revolving facility and unused letter of credit. The commitment fee on any unused balance is payable periodically and may range from 0.25% to 0.40% based upon the Borrower’s total net leverage ratio calculated in accordance with the Credit Agreement.

On March 29, 2023, the Company entered into an amendment to the New Revolving Credit Facility to replace the LIBOR based interest rate with a Secured Overnight Financing Rate (“SOFR”) based interest rate. The New Revolving Credit Facility bears interest at SOFR plus 2.00% or the Alternate Base Rate plus 1.00% (at the Company’s option), which may vary from time to time based on the Borrower’s total net leverage ratio calculated in accordance with the Credit Agreement.

The New Revolving Credit Facility contains a number of significant negative covenants. Subject to certain exceptions, these covenants require the Borrower to comply with certain requirements and restrictions on its ability to, among other things: incur indebtedness; create liens; engage in mergers or consolidations; make investments, loans and advances; pay dividends or other distributions and repurchase capital stock; sell assets; engage in certain transactions with affiliates; enter into sale and leaseback transactions; and make certain accounting changes. As a result of these restrictions, substantially all of the net assets of the Borrower are restricted from distribution to the Company or any holders of its equity.

The New Revolving Credit Facility has a first priority lien on substantially all of the assets of MidCo, the Borrower and Ad-Juster Inc., the Company’s indirect subsidiary. The New Revolving Credit Facility requires the Borrower to remain in compliance with a maximum total net leverage ratio and a minimum fixed charge coverage ratio, each as defined in the Credit Agreement.

As of March 31, 2024, the maximum total net leverage ratio and minimum fixed charge coverage ratio was 3.5x and 1.25x, respectively. The Borrower was in compliance with all covenants under the New Revolving Credit Facility as of March 31, 2024.

As of March 31, 2024 and December 31, 2023, there was no outstanding debt under the New Revolving Credit Facility.

10.     Income Tax

The Company’s quarterly income tax provision is calculated using an estimated annual effective income tax rate (“ETR”) based on historical information and forward-looking estimates. The Company’s estimated annual ETR may fluctuate due to changes in forecasted annual pre-tax income, and changes to forecasted permanent book to tax differences (e.g., non-deductible expenses).

15

Table of Contents

DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except per share data, unless otherwise stated)

The Company’s ETR for a particular reporting period may fluctuate as the result of changes to the valuation allowance for net deferred tax assets, the impact of anticipated tax settlements with federal, state, or foreign tax authorities, or the impact of tax law changes. The Company identifies items that are unusual and non-recurring in nature and treats these as discrete events. The tax effect of these discrete events is booked entirely in the quarter in which they occur.

During the three months ended March 31, 2024, the Company recorded an income tax provision of $1.8 million, resulting in an effective tax rate of 19.9%, that includes the effects of various permanent book-to-tax adjustments, foreign tax rate differences, U.S. tax on foreign operations, and U.S. state/local taxes, which represent a rate impact of (10.9%). During the three months ended March 31, 2023, the Company recorded an income tax provision of $5.5 million, resulting in an effective tax rate of 31.1%.

A valuation allowance has been established against a small amount of foreign capital losses and certain U.S. tax loss carryforwards. All other net deferred tax assets have been determined to be more likely than not realizable. The Company regularly reviews its deferred tax assets for recoverability and would establish a valuation allowance if it believed that such assets may not be recovered, taking into consideration historical operating results, expectations of future earnings, changes in its operations, and the expected timing of the reversals of existing temporary differences.

The Company accounts for uncertainty in income taxes utilizing ASC 740-10, “Income Taxes.” ASC 740-10 clarifies whether or not to recognize assets or liabilities for tax positions taken that may be challenged by a tax authority. It prescribes a recognition threshold and measurement attribute for financial statement disclosure of tax positions taken or expected to be taken. This interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, and disclosures. The application of ASC 740-10 requires judgment related to the uncertainty in income taxes and could impact the Company’s effective tax rate.

The Company and its subsidiaries file income tax returns with the Internal Revenue Service (“IRS”) in various state and international jurisdictions. The Company’s Israeli subsidiary is under audit by the Israeli Tax Authority for the 2021 and later tax years. The Company is also under audit by the Commonwealth of Massachusetts for the 2019 and 2020 tax years. These examinations may lead to ordinary course adjustments or proposed adjustments to the Company’s taxes. Aside from the aforementioned, the Company is not currently under audit in any other jurisdiction.

11.   Earnings Per Share

The following table reconciles the numerators and denominators used in computations of the basic and diluted EPS for the three months ended March 31, 2024 and March 31, 2023:

Three Months Ended

March 31, 

2024

2023

Numerator:

    

  

    

  

Net Income (basic and diluted)

$

7,156

$

12,175

Denominator:

 

 

Weighted-average common shares outstanding

 

171,306

 

165,631

Dilutive effect of share-based awards

 

4,818

 

6,026

Weighted-average dilutive shares outstanding

 

176,124

 

171,657

Basic earnings per share

$

0.04

$

0.07

Diluted earnings per share

$

0.04

$

0.07

Approximately 6.2 million and 7.1 million weighted average shares issuable under stock-based awards were not included in the diluted EPS calculation in the three months ended March 31, 2024 and March 31, 2023, respectively, because they were antidilutive.

16

Table of Contents

DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except per share data, unless otherwise stated)

12.   Stock-Based Compensation

Employee Equity Incentive Plan

On September 20, 2017, the Company established its 2017 Omnibus Equity Incentive Program (the “2017 Plan”) which provides for the granting of equity-based awards to certain employees, directors, independent contractors, consultants and agents. Under the 2017 Plan, the Company may grant non-qualified stock options, stock appreciation rights, restricted stock units, and other stock-based awards.

On April 19, 2021, the Company established its 2021 Omnibus Equity Incentive Plan (“2021 Equity Plan”). The 2021 Equity Plan provides for the grant of stock options (including qualified incentive stock options and nonqualified stock options), stock appreciation rights, restricted stock, restricted stock units, dividend equivalents, and other stock or cash settled incentive awards.

Stock Options

Options become exercisable subject to vesting schedules up to four years from the date of the grant and subject to certain timing restrictions upon an employee’s separation of service and no later than 10 years after the grant date.

A summary of stock option activity as of and for the three months ended March 31, 2024 is as follows:

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

 

(194)

8.78

Options forfeited

 

(23)

28.49

Outstanding as of March 31, 2024

 

9,775

$

17.15

6.67

$

176,726

Options expected to vest as of March 31, 2024

 

2,744

$

25.70

8.07

$

26,257

Options exercisable as of March 31, 2024

 

6,906

$

13.58

6.08

$

149,377

Stock options include grants to executives that contain both market-based and performance-based vesting conditions. There were no stock options granted that contain both market-based and performance-based vesting conditions during the three months ended March 31, 2024. During the three months ended March 31, 2024, there were no stock options exercised and 1,373 market-based and performance-based stock options remain outstanding as of March 31, 2024.

The total intrinsic value of options exercised during the three months ended March 31, 2024 and March 31, 2023 was $5.1 million and $12.8 million, respectively.

The Company’s board of directors (the “Board”) did not declare or pay dividends on any Company stock during the three months ended March 31, 2024 and March 31, 2023.

Restricted Stock Units (“RSUs”)

RSUs are subject to vesting schedules up to four years from the date of the grant and subject to certain restrictions upon employee separation.

17

Table of Contents

DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except per share data, unless otherwise stated)

A summary of RSUs activity as of and for the three months ended March 31, 2024 is as follows:

    

RSUs

Number of

Weighted Average

Shares

Grant Date Fair Value

Outstanding as of December 31, 2023

4,720

$

28.03

Granted

 

2,387

33.88

Vested

 

(435)

27.13

Forfeited

 

(65)

28.48

Outstanding as of March 31, 2024

 

6,607

$

30.20

The total grant date fair value of RSUs that vested during the three months ended March 31, 2024 was $11.8 million.

Performance Stock Units (“PSUs”)

PSUs are subject to vesting and performance periods of up to approximately three years from the date of the grant.

A summary of PSUs activity as of and for the three months ended March 31, 2024 is as follows:

PSUs

Weighted 

Average Grant 

Number of 

Date Fair 

    

Shares

    

Value

Outstanding as of December 31, 2023

480

$

41.31

Granted

186

41.28

Vested

Forfeited

Outstanding as of March 31, 2024

 

666

$

41.30

The fair market value of PSUs with market-based and service-based vesting conditions granted for the years presented has been estimated on the grant date using the Monte Carlo Simulation model with the following assumptions:

    

2024

Risk‑free interest rate (percentage)

 

3.9 - 4.1

Expected dividend yield (percentage)

 

Expected volatility (percentage)

 

46.7

Stock-based Compensation Expense

Total stock-based compensation expense recorded in the Condensed Consolidated Statements of Operations and Comprehensive Income was as follows: