DoubleVerify Holdings, Inc. [DV] Filings

10-Q 1 dv-20240930x10q.htm 10-Q

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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 September 30, 2024

☐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 October 25, 2024, there were 169,165,009 shares of the registrant’s common stock, par value $0.001 per share, outstanding.

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DoubleVerify Holdings, Inc.

Quarterly Report on Form 10-Q

For the Quarter Ended September 30, 2024

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Part I FINANCIAL INFORMATION (Unaudited)

		Page

Item 1.	Condensed Consolidated Financial Statements	4

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

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

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

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

	Notes to Condensed Consolidated Financial Statements	8

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

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	32

Item 4.	Controls and Procedures	32

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	33

Item 4.	Mine Safety Disclosures	33

Item 5.	Other Information	34

Item 6.	Exhibits	35

Signatures		36

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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.

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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)	September 30, 2024		December 31, 2023
Assets:
Current assets
Cash and cash equivalents	$	311,910	$	310,131
Short-term investments		50,686		—
Trade receivables, net of allowances for doubtful accounts of $9,983 and $9,442 as of September 30, 2024 and December 31, 2023, respectively		193,303		206,941
Prepaid expenses and other current assets		23,609		15,930
Total current assets		579,508		533,002
Property, plant and equipment, net		67,421		58,020
Operating lease right-of-use assets, net		70,432		60,470
Goodwill		437,646		436,008
Intangible assets, net		119,654		140,883
Deferred tax assets		31,732		13,077
Other non-current assets		5,960		1,571
Total assets	$	1,312,353	$	1,243,031
Liabilities and Stockholders' Equity:
Current liabilities
Trade payables	$	13,376	$	12,932
Accrued expenses		46,541		44,264
Operating lease liabilities, current		10,761		9,029
Income tax liabilities		696		5,833
Current portion of finance lease obligations		2,528		2,934
Other current liabilities		14,295		8,863
Total current liabilities		88,197		83,855
Operating lease liabilities, non-current		79,571		71,563
Finance lease obligations		1,331		2,865
Deferred tax liabilities		9,635		8,119
Other non-current liabilities		3,039		2,690
Total liabilities		181,773		169,092
Commitments and contingencies (Note 15)
Stockholders’ equity
Common stock, $0.001 par value, 1,000,000 shares authorized, 173,288 shares issued and 170,631 outstanding as of September 30, 2024; 1,000,000 shares authorized, 171,168 shares issued and 171,146 outstanding as of December 31, 2023		173		171
Additional paid-in capital		949,456		878,331
Treasury stock, at cost, 2,657 shares and 22 shares as of September 30, 2024 and December 31, 2023, respectively		(50,700)		(743)
Retained earnings		231,814		198,983
Accumulated other comprehensive loss, net of income taxes		(163)		(2,803)
Total stockholders’ equity		1,130,580		1,073,939
Total liabilities and stockholders' equity	$	1,312,353	$	1,243,031

See accompanying Notes to unaudited Condensed Consolidated Financial Statements.

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DoubleVerify Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share data)	2024		2023		2024		2023
Revenue	$	169,556	$	143,974	$	466,228	$	400,312
Cost of revenue (exclusive of depreciation and amortization shown separately below)		29,479		26,466		82,199		76,609
Product development		39,306		32,315		115,506		92,811
Sales, marketing and customer support		40,525		32,971		123,260		90,220
General and administrative		23,039		23,280		68,180		63,223
Depreciation and amortization		11,483		10,706		33,415		29,365
Income from operations		25,724		18,236		43,668		48,084
Interest expense		353		288		818		791
Other income, net		(4,225)		(1,633)		(8,561)		(6,843)
Income before income taxes		29,596		19,581		51,411		54,136
Income tax expense		11,395		6,234		18,580		15,775
Net income	$	18,201	$	13,347	$	32,831	$	38,361
Earnings per share:
Basic	$	0.11	$	0.08	$	0.19	$	0.23
Diluted	$	0.10	$	0.08	$	0.19	$	0.22
Weighted-average common stock outstanding:
Basic		170,254		168,606		171,060		166,937
Diluted		173,911		173,980		175,868		172,812
Comprehensive income:
Net income	$	18,201	$	13,347	$	32,831	$	38,361
Other comprehensive income (loss):
Foreign currency cumulative translation adjustment		9,079		(6,417)		2,640		(5,601)
Total comprehensive income	$	27,280	$	6,930	$	35,471	$	32,760

See accompanying Notes to unaudited Condensed Consolidated Financial Statements.

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DoubleVerify Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)


											Accumulated Other
							Additional				Comprehensive		Total
	Common Stock			Treasury Stock			Paid-in		Retained		(Loss) Income		Stockholders’
(in thousands)	Shares	Amount		Shares	Amount		Capital		Earnings		Net of Income Taxes		Equity
Balance as of January 1, 2024	171,168	$	171	22	$	(743)	$	878,331	$	198,983	$	(2,803)	$	1,073,939
Foreign currency translation adjustment	—		—	—		—		—		—		(4,625)		(4,625)
Shares repurchased for settlement of employee tax withholdings	—		—	48		(1,792)		—		—		—		(1,792)
Stock-based compensation expense	—		—	—		—		20,718		—		—		20,718
Common stock issued upon exercise of stock options	153		—	—		—		1,695		—		—		1,695
Common stock issued upon vesting of restricted stock units	435		1	—		—		(1)		—		—		—
Treasury stock reissued upon settlement of equity awards	—		—	(38)		1,389		(1,389)		—		—		—
Net income	—		—	—		—		—		7,156		—		7,156
Balance as of March 31, 2024	171,756		172	32		(1,146)		899,354		206,139		(7,428)		1,097,091
Foreign currency translation adjustment	—		—	—		—		—		—		(1,814)		(1,814)
Shares repurchased for settlement of employee tax withholdings	—		—	30		(660)		—		—		—		(660)
Stock-based compensation expense	—		—	—		—		25,315		—		—		25,315
Common stock issued under employee purchase plan	124		—	—		—		1,914		—		—		1,914
Common stock issued upon exercise of stock options	126		—	—		—		870		—		—		870
Common stock issued upon vesting of restricted stock units	628		1	—		—		(1)		—		—		—
Shares repurchased under the Repurchase Program	—		—	1,369		(25,027)		—		—		—		(25,027)
Treasury stock reissued upon settlement of equity awards	—		—	(41)		1,390		(1,390)		—		—		—
Net income	—		—	—		—		—		7,474		—		7,474
Balance as of June 30, 2024	172,634		173	1,390		(25,443)		926,062		213,613		(9,242)		1,105,163
Foreign currency translation adjustment	—		—	—		—		—		—		9,079		9,079
Shares repurchased for settlement of employee tax withholdings	—		—	34		(636)		—		—		—		(636)
Stock-based compensation expense	—		—	—		—		23,474		—		—		23,474
Common stock issued upon exercise of stock options	53		—	—		—		324		—		—		324
Common stock issued upon vesting of restricted stock units	601		—	—		—		—		—		—		—
Shares repurchased under the Repurchase Program	—		—	1,254		(25,025)		—		—		—		(25,025)
Treasury stock reissued upon settlement of equity awards	—		—	(21)		404		(404)		—		—		—
Net income	—		—	—		—		—		18,201		—		18,201
Balance as of September 30, 2024	173,288	$	173	2,657	$	(50,700)	$	949,456	$	231,814	$	(163)	$	1,130,580

Balance as of January 1, 2023	165,448	$	165	31	$	(796)	$	756,299	$	127,517	$	(6,326)	$	876,859
Foreign currency translation adjustment	—		—	—		—		—		—		1,193		1,193
Shares repurchased for settlement of employee tax withholdings	—		—	30		(787)		—		—		—		(787)
Stock-based compensation expense	—		—	—		—		11,992		—		—		11,992
Common stock issued upon exercise of stock options	527		1	—		—		1,765		—		—		1,766
Common stock issued upon vesting of restricted stock units	182		—	—		—		—		—		—		—
Treasury stock reissued upon settlement of equity awards	—		—	(35)		914		(914)		—		—		—
Net income	—		—	—		—		—		12,175		—		12,175
Balance as of March 31, 2023	166,157		166	26		(669)		769,142		139,692		(5,133)		903,198
Foreign currency translation adjustment	—		—	—		—		—		—		(377)		(377)
Shares repurchased for settlement of employee tax withholdings	—		—	57		(1,966)		—		—		—		(1,966)
Stock-based compensation expense	—		—	—		—		15,399		—		—		15,399
Common stock issued under employee purchase plan	49		—	—		—		1,138		—		—		1,138
Common stock issued upon exercise of stock options	711		1	—		—		3,990		—		—		3,991
Common stock issued upon vesting of restricted stock units	333		—	—		—		—		—		—		—
Treasury stock reissued upon settlement of equity awards	—		—	(67)		2,107		(2,107)		—		—		—
Net income	—		—	—		—		—		12,839		—		12,839
Balance as of June 30, 2023	167,250		167	16		(528)		787,562		152,531		(5,510)		934,222
Foreign currency translation adjustment	—		—	—		—		—		—		(6,417)		(6,417)
Shares repurchased for settlement of employee tax withholdings	—		—	28		(945)		—		—		—		(945)
Issuance of common stock as consideration for acquisition	1,642		2	—		—		52,935		—		—		52,937
Stock-based compensation expense	—		—	—		—		16,088		—		—		16,088
Common stock issued upon exercise of stock options	653		1	—		—		2,052		—		—		2,053
Common stock issued upon vesting of restricted stock units	373		—	—		—		—		—		—		—
Treasury stock reissued upon settlement of equity awards	—		—	(31)		1,076		(1,076)		—		—
Net income	—		—	—		—		—		13,347		—		13,347
Balance as of September 30, 2023	169,918	$	170	13	$	(397)	$	857,561	$	165,878	$	(11,927)	$	1,011,285

See accompanying Notes to unaudited Condensed Consolidated Financial Statements.

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DoubleVerify Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Nine Months Ended
	September 30,
(in thousands)	2024		2023
Operating activities:
Net income	$	32,831	$	38,361
Adjustments to reconcile net income to net cash provided by operating activities
Bad debt expense		3,546		6,901
Depreciation and amortization expense		33,415		29,365
Amortization of debt issuance costs		334		221
Non-cash lease expense		5,329		4,899
Deferred taxes		(17,253)		(19,721)
Stock-based compensation expense		67,906		42,771
Interest (income) expense, net		(854)		176
Loss on disposal of fixed assets		—		5
Other		1,360		874
Changes in operating assets and liabilities, net of effects of business combinations
Trade receivables		10,333		(25,787)
Prepaid expenses and other assets		(12,592)		(9,370)
Trade payables		617		2,475
Accrued expenses and other liabilities		(2,692)		(3,484)
Net cash provided by operating activities		122,280		67,686
Investing activities:
Purchase of property, plant and equipment		(19,792)		(12,309)
Acquisition of businesses, net of cash acquired		—		(67,240)
Purchase of short-term investments		(81,937)		—
Proceeds from maturity of short-term investments		32,210		—
Net cash used in investing activities		(69,519)		(79,549)
Financing activities:
Proceeds from revolving credit facility		—		50,000
Payments to revolving credit facility		—		(50,000)
Proceeds from common stock issued upon exercise of stock options		2,889		7,810
Proceeds from common stock issued under employee purchase plan		1,914		1,138
Finance lease payments		(1,940)		(1,605)
Shares repurchased under the Repurchase Program		(50,052)		—
Shares repurchased for settlement of employee tax withholdings		(3,088)		(3,698)
Net cash (used in) provided by financing activities		(50,277)		3,645
Effect of exchange rate changes on cash and cash equivalents and restricted cash		150		(389)
Net increase (decrease) in cash, cash equivalents, and restricted cash		2,634		(8,607)
Cash, cash equivalents, and restricted cash - Beginning of period		310,257		267,938
Cash, cash equivalents, and restricted cash - End of period	$	312,891	$	259,331

Cash and cash equivalents	$	311,910	$	259,212
Restricted cash - current (included in Prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets)		128		119
Restricted cash - non-current (included in Other non-current assets on the Condensed Consolidated Balance Sheets)		853		—
Total cash and cash equivalents and restricted cash	$	312,891	$	259,331
Supplemental cash flow information:
Cash paid for taxes	$	36,141	$	52,738
Cash paid for interest	$	430	$	427
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	$	14,553	$	2,017
Acquisition of equipment under finance lease	$	—	$	5,479
Capital assets financed by accounts payable and accrued expenses	$	82	$	—
Stock-based compensation included in capitalized software development costs	$	1,585	$	708
Common stock issued in connection with acquisition	$	—	$	52,937
Liabilities for contingent consideration	$	—	$	1,193

See accompanying Notes to unaudited Condensed Consolidated Financial Statements.

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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 artificial intelligence (“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 September 30, 2024 and December 31, 2023, the Condensed Consolidated Statements of Operations and Comprehensive Income for the three and nine months ended September 30, 2024 and 2023, the Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2024 and 2023, and the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 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.

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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.

Restricted Cash

Restricted cash represents amounts pledged as collateral for certain agreements with third parties. Upon satisfying the terms of the relevant agreements, the funds are expected to be released and available for use by the Company. Restricted cash is recorded in the Condensed Consolidated Balance Sheets in Prepaid expenses and other current assets or Other non-current assets, depending on if such funds will be released and available for use by the Company within the next twelve months.

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 income (loss), 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 Note 8 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).

Debt Issuance Costs

The New Revolving Credit Facility (as defined in Note 9) includes debt issuance costs that meet the definition of an asset and are recorded in the Condensed Consolidated Balances Sheets in Other non-current assets. Debt issuance costs for the New Revolving Credit Facility are amortized to interest expense over the contractual term of the underlying debt instrument on a straight-line basis through the maturity date of the New Revolving Credit Facility on August 12, 2029.

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DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

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.

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 and purchased for Activation or measured for Measurement, and Supply-side, 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				Nine Months Ended
	September 30,				September 30,
(in thousands)	2024		2023		2024		2023
Activation	$	96,791	$	81,700	$	263,584	$	229,534
Measurement		58,468		51,263		162,560		137,637
Supply-side		14,297		11,011		40,084		33,141
Total revenue	$	169,556	$	143,974	$	466,228	$	400,312

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 $59.3 million and $55.0 million as of September 30, 2024 and December 31, 2023, respectively.

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DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Remaining Performance Obligations

As of September 30, 2024, the Company had $29.7 million of remaining performance obligations which are expected to be recognized over the next one to three years. These non-cancelable 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 $40.1 million, or 8.6% of the Company’s total revenue for the nine months ended September 30, 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.

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 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 total purchase price of $121.1 million, net of cash acquired, includes measurement period adjustments of $0.3 million recorded during the nine months ended September 30, 2024. The effect of these adjustments on the preliminary purchase price allocation was a decrease to the purchase consideration of $0.3 million and a corresponding decrease recorded to Goodwill on the Condensed Consolidated Balance Sheets.

As of September 30, 2024, the purchase price allocation for Scibids is final.

5. Goodwill and Intangible Assets

The following is a summary of changes to the goodwill carrying value from December 31, 2023 to September 30, 2024:


(in thousands)
Goodwill at December 31, 2023		$

DoubleVerify Holdings, Inc. [DV] Filings
10-Q	[2024-11-06]
10-Q	[2024-07-30]
10-Q	[2024-05-07]
10-K	[2024-02-28]
10-Q	[2023-11-09]
10-Q	[2023-07-31]
10-Q	[2023-05-10]
10-K	[2023-03-01]
10-Q	[2022-11-08]
10-Q	[2022-08-03]
10-Q	[2022-05-10]
10-K	[2022-03-08]
S-1	[2021-11-15]
10-Q	[2021-11-09]
10-Q	[2021-07-29]
10-Q	[2021-05-26]
S-1	[2021-03-17]