DoubleVerify Holdings, Inc. [DV] Filings

10-Q 1 dv-20230630x10q.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 June 30, 2023

☐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 July 20, 2023, there were 167,403,199 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 June 30, 2023

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0
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Part I FINANCIAL INFORMATION (Unaudited)

		Page

Item 1.	Condensed Consolidated Financial Statements	4

	Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	4

	Condensed Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2023 and 2022	5

	Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022	6

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022	7

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	28

Item 4.	Controls and Procedures	28

Part II OTHER INFORMATION

Item 1.	Legal Proceedings	29

Item 1A.	Risk Factors	29

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 3.	Defaults Upon Senior Securities	30

Item 4.	Mine Safety Disclosures	30

Item 5.	Other Information	30

Item 6.	Exhibits	31

Signatures		32

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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, 2022 and filed with the Securities and Exchange Commission (“SEC”), on March 1, 2023, 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, 2022. 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)	June 30, 2023		December 31, 2022
Assets:
Current assets
Cash and cash equivalents	$	295,437	$	267,813
Trade receivables, net of allowances for doubtful accounts of $10,757 and $8,893 as of June 30, 2023 and December 31, 2022, respectively		176,007		167,122
Prepaid expenses and other current assets		20,715		10,161
Total current assets		492,159		445,096
Property, plant and equipment, net		54,793		47,034
Operating lease right-of-use assets, net		62,499		64,692
Goodwill		343,682		343,011
Intangible assets, net		122,974		135,429
Deferred tax assets		4,901		35
Other non-current assets		1,657		1,731
Total assets	$	1,082,665	$	1,037,028
Liabilities and Stockholders' Equity:
Current liabilities
Trade payables	$	8,837	$	6,675
Accrued expenses		36,945		33,085
Operating lease liabilities, current		8,851		7,041
Income tax liabilities		—		11,953
Current portion of finance lease obligations		3,139		1,846
Other current liabilities		8,476		8,310
Total current liabilities		66,248		68,910
Operating lease liabilities, non-current		73,369		74,086
Finance lease obligations		3,938		779
Deferred tax liabilities		1,132		12,890
Other non-current liabilities		3,756		3,504
Total liabilities		148,443		160,169
Commitments and contingencies (Note 13)
Stockholders’ equity
Common stock, $0.001 par value, 1,000,000 shares authorized, 167,250 shares issued and 167,234 outstanding as of June 30, 2023; 1,000,000 shares authorized, 165,448 shares issued and 165,417 outstanding as of December 31, 2022		167		165
Additional paid-in capital		787,562		756,299
Treasury stock, at cost, 16 shares and 31 shares as of June 30, 2023 and December 31, 2022, respectively		(528)		(796)
Retained earnings		152,531		127,517
Accumulated other comprehensive loss, net of income taxes		(5,510)		(6,326)
Total stockholders’ equity		934,222		876,859
Total liabilities and stockholders' equity	$	1,082,665	$	1,037,028

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 June 30,				Six Months Ended June 30,
(in thousands, except per share data)	2023		2022		2023		2022
Revenue	$	133,744	$	109,805	$	256,338	$	206,528
Cost of revenue (exclusive of depreciation and amortization shown separately below)		26,191		18,836		50,143		35,713
Product development		31,941		23,222		60,496		44,810
Sales, marketing and customer support		31,537		24,733		57,249		51,417
General and administrative		19,755		21,529		39,943		41,204
Depreciation and amortization		9,676		8,317		18,659		17,357
Income from operations		14,644		13,168		29,848		16,027
Interest expense		247		223		503		455
Other (income) expense, net		(2,476)		145		(5,210)		191
Income before income taxes		16,873		12,800		34,555		15,381
Income tax expense		4,034		2,510		9,541		512
Net income	$	12,839	$	10,290	$	25,014	$	14,869
Earnings per share:
Basic	$	0.08	$	0.06	$	0.15	$	0.09
Diluted	$	0.07	$	0.06	$	0.15	$	0.09
Weighted-average common stock outstanding:
Basic		166,540		163,610		166,088		163,114
Diluted		172,488		170,223		172,129		170,359
Comprehensive income:
Net income	$	12,839	$	10,290	$	25,014	$	14,869
Other comprehensive (loss) income:
Foreign currency cumulative translation adjustment		(377)		(5,634)		816		(7,204)
Total comprehensive income	$	12,462	$	4,656	$	25,830	$	7,665

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
											Comprehensive
							Additional				Income (Loss)		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, 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

Balance as of January 1, 2022	162,347	$	162	50	$	(1,802)	$	717,228	$	84,249	$	(771)	$	799,066
Foreign currency translation adjustment	—		—	—		—		—		—		(1,570)		(1,570)
Shares repurchased for settlement of employee tax withholdings	—		—	41		(1,058)		—		—		—		(1,058)
Stock-based compensation expense	—		—	—		—		10,994		—		—		10,994
Common stock issued to non-employees	4		—	—		—		—		—		—		—
Common stock issued upon exercise of stock options	572		1	—		—		1,677		—		—		1,678
Common stock issued upon vesting of restricted stock units	195		—	—		—		—		—		—		—
Net income	—		—	—		—		—		4,579		—		4,579
Balance as of March 31, 2022	163,118	$	163	91	$	(2,860)	$	729,899	$	88,828	$	(2,341)	$	813,689
Foreign currency translation adjustment	—		—	—		—		—		—		(5,634)		(5,634)
Shares repurchased for settlement of employee tax withholdings	—		—	320		(8,133)		—		—		—		(8,133)
Stock-based compensation expense	—		—	—		—		9,517		—		—		9,517
Common stock issued under employee purchase plan	41		—	—		—		768		—		—		768
Common stock issued upon exercise of stock options	176		—	—		—		838		—		—		838
Common stock issued upon vesting of restricted stock units	798		1	—		—		(1)		—		—		—
Treasury stock reissued upon settlement of equity awards	—		—	(128)		3,447		(3,447)		—		—		—
Net income	—		—	—		—		—		10,290		—		10,290
Balance as of June 30, 2022	164,133	$	164	283	$	(7,546)	$	737,574	$	99,118	$	(7,975)	$	821,335

See accompanying Notes to unaudited Condensed Consolidated Financial Statements.

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DoubleVerify Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Six Months Ended
	June 30,
(in thousands)	2023		2022
Operating activities:
Net income	$	25,014	$	14,869
Adjustments to reconcile net income to net cash provided by operating activities
Bad debt expense		3,706		1,997
Depreciation and amortization expense		18,659		17,357
Amortization of debt issuance costs		147		147
Non-cash lease expense		3,293		3,882
Deferred taxes		(16,639)		(3,974)
Stock-based compensation expense		26,980		20,253
Interest expense		25		72
Loss on disposal of fixed assets		5		1,345
Impairment of long-lived assets		—		1,510
Other		209		(302)
Changes in operating assets and liabilities
Trade receivables		(12,214)		(21,942)
Prepaid expenses and other assets		(11,168)		(949)
Trade payables		2,126		2,262
Accrued expenses and other liabilities		(7,979)		(9,978)
Net cash provided by operating activities		32,164		26,549
Investing activities:
Purchase of property, plant and equipment		(7,671)		(13,606)
Net cash (used in) investing activities		(7,671)		(13,606)
Financing activities:
Proceeds from revolving credit facility		50,000		—
Payments to revolving credit facility		(50,000)		—
Payment of contingent consideration related to Zentrick acquisition		—		(3,247)
Proceeds from common stock issued upon exercise of stock options		5,757		2,516
Proceeds from common stock issued under employee purchase plan		1,138		768
Payments related to offering costs		—		(6)
Finance lease payments		(1,028)		(907)
Shares repurchased for settlement of employee tax withholdings		(2,753)		(9,191)
Net cash provided by (used in) financing activities		3,114		(10,067)
Effect of exchange rate changes on cash and cash equivalents and restricted cash		15		(738)
Net increase in cash, cash equivalents, and restricted cash		27,622		2,138
Cash, cash equivalents, and restricted cash - Beginning of period		267,938		221,725
Cash, cash equivalents, and restricted cash - End of period	$	295,560	$	223,863

Cash and cash equivalents	$	295,437	$	223,738
Restricted cash (included in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets)		123		125
Total cash and cash equivalents and restricted cash	$	295,560	$	223,863
Supplemental cash flow information:
Cash paid for taxes	$	41,284	$	1,161
Cash paid for interest	$	389	$	282
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	$	1,261	$	79,565
Acquisition of equipment under finance lease	$	5,479	$	—
Capital assets financed by accounts payable and accrued expenses	$	480	$	—
Stock-based compensation included in capitalized software development costs	$	411	$	258

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 a leading software platform for digital media measurement and analytics. Our mission is to create stronger, safer, more secure digital transactions that drive optimal outcomes for global advertisers. Through our software platform and the metrics it provides, we help preserve 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, 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 June 30, 2023 and December 31, 2022, the Condensed Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2023 and 2022, the Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022, and the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022 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, 2022.

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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.

Cash and Cash Equivalents

The Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. Pursuant to the Company’s investment policy, its surplus funds are kept as cash or cash equivalents in treasury bills, money market funds and savings accounts to reduce the Company’s exposure to market risk.

3. Revenue

The following table disaggregates revenue between advertiser customers, where revenue is generated based on 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 is as follows:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands)	2023		2022		2023		2022
Activation	$	77,942	$	60,495	$	147,834	$	113,526
Measurement		44,989		38,903		86,374		72,737
Supply-side customer		10,813		10,407		22,130		20,265
Total revenue	$	133,744	$	109,805	$	256,338	$	206,528

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 $52.9 million and $52.7 million as of June 30, 2023 and December 31, 2022, respectively.

4. Goodwill and Intangible Assets

The following is a summary of changes to the goodwill carrying value from December 31, 2022 to June 30, 2023:


(in thousands)
Goodwill at December 31, 2022	$	343,011
Foreign exchange impact		671
Goodwill at June 30, 2023	$	343,682

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DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

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


(in thousands)	June 30, 2023						December 31, 2022
	Gross Carrying		Accumulated		Net Carrying		Gross Carrying		Accumulated		Net Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount
Trademarks and brands	$	11,733	$	(4,717)	$	7,016	$	11,733	$	(4,294)	$	7,439
Customer relationships		145,925		(55,974)		89,951		145,834		(49,587)		96,247
Developed technology		76,785		(50,783)		26,002		76,677		(44,956)		31,721
Non-compete agreements		65		(60)		5		64		(42)		22
Total intangible assets	$	234,508	$	(111,534)	$	122,974	$	234,308	$	(98,879)	$	135,429

Amortization expense related to intangible assets for the three months ended June 30, 2023 and June 30, 2022 was $6.4 million and $6.2 million, respectively. Amortization expense related to intangible assets amounted to $12.6 million for each of the six months ended June 30, 2023 and June 30, 2022.

Estimated future expected amortization expense of intangible assets as of June 30, 2023 is as follows:


(in thousands)
2023 (for remaining six months)	$	13,112
2024		22,792
2025		20,836
2026		16,082
2027		13,872
2028		13,451
Thereafter		22,829
Total	$	122,974

The weighted-average remaining useful life by major asset classes as of June 30, 2023 is as follows:


		(In years)
Trademarks and brands		9
Customer relationships		7
Developed technology		2
Non-compete agreements		1

There were no impairments identified during the six months ended June 30, 2023 or June 30, 2022.

5. Property, Plant and Equipment

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


	As of
(in thousands)	June 30, 2023		December 31, 2022
Computers and peripheral equipment	$	24,739	$	19,189
Office furniture and equipment		3,014		2,542
Leasehold improvements		32,008		29,678
Capitalized software development costs		25,920		22,026
Less accumulated depreciation and amortization		(30,888)		(26,401)
Total property, plant and equipment, net	$	54,793	$	47,034

Table of Contents

DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

For the three months ended June 30, 2023 and June 30, 2022, total depreciation expense was $3.3 million and $2.1 million, respectively. For the six months ended June 30, 2023 and June 30, 2022, total depreciation expense was $6.1 million and $4.8 million, respectively.

Property and equipment under finance lease obligations, consisting of computer equipment, totaled $17.7 million and $12.3 million as of June 30, 2023 and December 31, 2022, respectively. As of June 30, 2023 and December 31, 2022, accumulated depreciation related to property and equipment under finance lease obligations totaled $11.7 million and $11.2 million, respectively. Refer to Note 6, Leases.

6. 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 and six months ended June 30, 2023 and 2022, respectively.


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2023		2022		2023		2022
Lease cost:
Operating lease cost (1)	$	2,582	$	2,747	$	5,169	$	5,625
Finance lease cost:
Depreciation of finance lease assets (2)		314		330		531		702
Interest on finance lease liabilities (3)		43		37		66		79
Short-term lease cost (1)		243		277		489		528
Sublease income (1)		(267)		(89)		(534)		(89)
Total lease cost	$	2,915	$	3,302	$	5,721	$	6,845

Other information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from operating leases	$	1,516	$	1,139	$	2,852	$	2,319
Operating cash outflows from finance leases	$	17	$	37	$	40	$	72
Financing cash outflows from finance leases	$	515	$	427	$	1,028	$	907

(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 June 30, 2023 and 2022, respectively:


	June 30,
	2023	2022
Weighted-average remaining lease term - operating leases (in years)	13.8	14.4
Weighted-average remaining lease term - finance leases (in years)	2.6	2.0
Weighted-average discount rate - operating leases	4.5%	4.4%
Weighted-average discount rate - finance leases	5.2%	3.7%

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 June 30, 2023 are as follows:

DoubleVerify Holdings, Inc. [DV] Filings
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]