comScore, Inc. (NASDAQ:SCOR) Q4 2021 Earnings Conference Call February 28, 2022 5:00 PM ET Company Participants John Tinker – Vice President-Investor Relations Bill Livek – Chief Executive Officer Jon Carpenter – Chief Financial Officer Conference Call Participants Laura Martin – Needham Jason Kreyer – Craig-Hallum Matthew Thornton – Truist Securities Benjamin Huang – Jefferies Operator Good day and thank you for standing by. Welcome to the Comscore Fourth Quarter 2021 Financial Results Conference Call. At ...

Table of Contents 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, 2021 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: 001-33520 _______ ...

comScore, Inc. (NASDAQ:SCOR) Q3 2021 Earnings Conference Call November 8, 2021 5:00 PM ET Company Participants John Tinker - Vice President of Investor Relations Bill Livek - Executive Vice Chairman & Chief Executive Officer Mary Margaret Curry - Senior Vice President & Controller Chris Wilson - Chief Commercial Officer Conference Call Participants Alan Gould - Loop Capital Jason Kreyer - Craig-Hallum Laura Martin - Needham Operator Ladies and gentlemen, thank you for standing by and welcome to the comScore ...

Financial Data and Key Metrics Changes - The company reported second quarter revenue of $87.7 million, a decrease from $88.6 million in the same quarter last year [27] - The net loss for the second quarter was $18.5 million compared to a net loss of $10.4 million in the same period last year [33] - Adjusted EBITDA for the second quarter was $2.6 million, down from $9.2 million for the same period last year [33] - Total cash at the end of the second quarter was $17.7 million, down from $50.7 million at the end of the previous year [34] Business Line Data and Key Metrics Changes - Revenue from Ratings and Planning was $62.4 million, down from $63.8 million, primarily due to lower syndicated digital revenue [27] - TV revenue comprised 43% of Ratings and Planning revenue, up from 40% last year, while syndicated digital revenue comprised 46%, down from 48% [28] - Revenue from Analytics and Optimization increased to $17.8 million from $16.9 million, driven by higher Lift and Survey revenue and a 65% year-over-year increase in Activation revenue [29] - Movies Reporting and Analytics revenue was $7.5 million, down from $7.9 million year-over-year but up 10% sequentially [30] Market Data and Key Metrics Changes - The company experienced a rebound in the movie business as U.S. theaters reopened, with expectations for box office revenues to return to pre-pandemic levels over the next year [23][24] - The company signed new agreements with major studios and expanded relationships, indicating a positive trend in the movie industry [24] Company Strategy and Development Direction - The company is focusing on growing its business and investing in new products following the completion of a recapitalization transaction [5] - The integration with Google Ad Data Hubs is expected to enhance cross-platform advertising measurement, which is a strategic move to capture more market share [16][18] - The company aims to expand its predictive audience measurement capabilities beyond North America, indicating a strategy for global growth [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing effects of the pandemic but expressed optimism about new contracts generating revenue in the latter half of 2021 and into 2022 [9][10] - The management highlighted the importance of adapting to changes in media consumption and the need for modern measurement solutions [8] - There is cautious optimism regarding the recovery of the advertising market, with expectations for higher revenue in the second half of the year [35] Other Important Information - The company announced the planned departure of its Chief Financial Officer, Greg Fink, who played a critical role in the company's recovery [25] - The company is in the early stages of measuring out-of-home advertising, with agreements signed with major digital out-of-home advertising companies [22] Q&A Session Summary Question: Can you talk about how the YouTube announcements drive long-term revenue growth? - Management explained that the integration allows for validation of true reach for campaigns on YouTube and YouTube TV, which is expected to enhance revenue opportunities [40] Question: Why did it take longer to sign some contracts? - Management noted that the cautious spending environment among media customers contributed to the delays, but they are optimistic about future revenue from signed contracts [56] Question: What is the outlook for the movie business? - Management anticipates a return to pre-pandemic revenue levels as theaters are reopening, and they are focused on measuring movie consumption across various platforms [60]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unaudited financial statements detail the company's financial position, operations, and cash flows, reflecting a major recapitalization and debt extinguishment [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Account | June 30, 2021 (Unaudited) | December 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $16,659 | $31,126 | | Total current assets | $93,844 | $137,030 | | **Total assets** | **$627,379** | **$677,970** | | Total current liabilities | $177,479 | $184,275 | | Senior secured convertible notes | $— | $192,895 | | **Total liabilities** | **$240,873** | **$448,980** | | Convertible redeemable preferred stock | $187,885 | $— | | **Total stockholders' equity** | **$198,621** | **$228,990** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Three Months Ended June 30 (in thousands) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | | :--- | :--- | :--- | | Revenues | $87,659 | $88,566 | | Loss from operations | $(10,890) | $(2,742) | | Net loss | $(18,545) | $(10,401) | | Net loss available to common stockholders | $(22,413) | $(10,401) | | Basic and diluted EPS | $(0.28) | $(0.15) | Six Months Ended June 30 (in thousands) | Metric | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Revenues | $177,989 | $178,094 | | Loss from operations | $(22,349) | $(15,493) | | Loss on extinguishment of debt | $(9,629) | $— | | Net loss | $(54,900) | $(23,585) | | Net loss available to common stockholders | $(59,703) | $(23,585) | | Basic and diluted EPS | $(0.76) | $(0.34) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Six Months Ended June 30 (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $10,860 | $(1,792) | | Net cash used in investing activities | $(7,723) | $(7,881) | | Net cash used in financing activities | $(35,876) | $(1,046) | | **Net decrease in cash, cash equivalents and restricted cash** | **$(33,061)** | **$(11,263)** | - Financing activities in the first six months of 2021 were dominated by the net effect of receiving **$188.2 million** in proceeds from issuing convertible redeemable preferred stock, largely used for the **$204.0 million** extinguishment of senior secured convertible notes and a **$14.0 million** payment on a secured term note[26](index=26&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail significant accounting policies and events, including the March 2021 preferred stock issuance for debt extinguishment, and new data license and credit facility agreements - On March 10, 2021, the company issued **82,527,609 shares** of **Series B Convertible Preferred Stock** for net proceeds of **$188.2 million**, classified as **mezzanine equity** due to a contingent redemption feature upon a change of control[39](index=39&type=chunk)[42](index=42&type=chunk) - Proceeds from preferred stock issuance were used to extinguish **$204.0 million** senior secured convertible notes and a secured promissory note on March 10, 2021, resulting in a **$9.6 million** loss on debt extinguishment[37](index=37&type=chunk)[65](index=65&type=chunk)[70](index=70&type=chunk) Revenue by Solution Group (in thousands) | Revenue by Solution Group (in thousands) | Q2 2021 | Q2 2020 | | :--- | :--- | :--- | | Ratings and Planning | $62,418 | $63,779 | | Analytics and Optimization | $17,764 | $16,894 | | Movies Reporting and Analytics | $7,477 | $7,893 | | **Total** | **$87,659** | **$88,566** | - On May 5, 2021, the company entered into a new senior secured revolving credit agreement with a borrowing capacity of **$25.0 million**[72](index=72&type=chunk)[73](index=73&type=chunk) - Concurrent with the new investment, the company entered into a **ten-year Data License Agreement** with Charter Communications, involving gradually increasing license fees from **$10.0 million** in year one to **$32.3 million** in year ten[109](index=109&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, liquidity, and capital resources, highlighting flat Q2 2021 revenue, increased operating loss, and a major financing transaction [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q2 2021 revenues decreased slightly to **$87.7 million**, with increased cost of revenues leading to a wider operating loss of **$10.9 million** Revenue by Solution Group (in thousands) | Revenue by Solution Group (in thousands) | Q2 2021 | Q2 2020 | % Change | | :--- | :--- | :--- | :--- | | Ratings and Planning | $62,418 | $63,779 | (2.1)% | | Analytics and Optimization | $17,764 | $16,894 | 5.1% | | Movies Reporting and Analytics | $7,477 | $7,893 | (5.3)% | | **Total revenues** | **$87,659** | **$88,566** | **(1.0)%** | - The decrease in **Movies Reporting and Analytics revenue** continued to be impacted by theater closures and delayed releases due to the **COVID-19 pandemic**[131](index=131&type=chunk) - Cost of revenues for Q2 2021 increased by **$6.4 million (14.3%)** year-over-year, primarily driven by a **$3.5 million** increase in data costs and a **$1.3 million** increase in systems and bandwidth costs[138](index=138&type=chunk) - A loss on debt extinguishment of **$9.6 million** was recorded in Q1 2021 related to the payoff of senior secured convertible notes and the secured term note[153](index=153&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity was altered in Q1 2021 by a **$188.2 million** preferred stock issuance for debt repayment, a new **$25.0 million** revolving credit facility, and substantial contractual obligations - As of June 30, 2021, principal liquidity sources included **$17.7 million** in cash, cash equivalents, and restricted cash, plus availability under a new Revolving Credit Agreement[165](index=165&type=chunk) - On March 10, 2021, the company issued preferred stock for net proceeds of **$188.2 million**, used to repay its senior secured convertible notes[167](index=167&type=chunk)[168](index=168&type=chunk) - In May 2021, the company entered into a new three-year, **$25.0 million** senior secured revolving credit agreement, under which **$8.0 million** was borrowed in July 2021[169](index=169&type=chunk)[177](index=177&type=chunk) Contractual Payment Obligations (in millions) | Contractual Payment Obligation | Amount as of June 30, 2021 | | :--- | :--- | | MVPD Data Licensing Agreements | $384.9 million | | Operating and Financing Leases | $66.6 million | | Cloud-based Data Storage | $24.5 million | [Critical Accounting Policies](index=34&type=section&id=Critical%20Accounting%20Policies) Critical accounting policies include those for new Preferred Stock classified as mezzanine equity and the early adoption of ASU 2020-06 for convertible instruments - The new **Series B Convertible Preferred Stock** is classified as **mezzanine equity** due to a contingent redemption feature upon a change of control[200](index=200&type=chunk) - Effective January 1, 2021, the company early-adopted **ASU 2020-06**, simplifying accounting for convertible instruments, with no impact on previously issued senior secured convertible notes[202](index=202&type=chunk)[203](index=203&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20about%20Market%20Risk) The company faces market risks from its **$19.4 million** warrants liability, sensitive to stock price changes, and interest rate fluctuations on its new revolving credit facility - The company has a **$19.4 million** warrants liability as of June 30, 2021, whose fair value is sensitive to the company's stock price[208](index=208&type=chunk) - A **10% increase** in common stock price would result in a **$2.5 million increase** in Series A Warrants' fair value, while a **10% decrease** would result in a **$2.4 million decrease**[209](index=209&type=chunk) - The company is subject to **interest rate risk** from its variable-rate **Revolving Credit Agreement**, though exposure was not material as of June 30, 2021[210](index=210&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2021, with no material changes, and expects to complete a new ERP system implementation in Q3 2021 - The principal executive and financial officers concluded that disclosure controls and procedures were **effective** as of June 30, 2021[213](index=213&type=chunk) - The company is implementing a new **enterprise resource planning (ERP) system**, expected to be completed in **Q3 2021**, to improve internal control over financial reporting[215](index=215&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company reports on legal proceedings, primarily a privacy class action lawsuit that received final settlement approval on April 12, 2021, with costs covered by insurance - A **privacy class action lawsuit** against the company received final court approval for settlement on **April 12, 2021**, with **no admission of liability** and costs **covered by insurance**[117](index=117&type=chunk)[219](index=219&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) Key risks include restrictive covenants and potential default under the new revolving credit facility, alongside implementation challenges for the new ERP system - The new Revolving Credit Agreement contains **restrictive covenants** that could **limit operating flexibility** by restricting additional debt, investments, and dividends[223](index=223&type=chunk) - Failure to meet **financial covenants**, such as minimum Consolidated EBITDA, could result in an **event of default** and **acceleration of outstanding debt** under the credit facility[224](index=224&type=chunk)[225](index=225&type=chunk) - Delays or errors in implementing the new **enterprise resource planning (ERP) system** could **adversely affect** transaction recording, financial reporting, and business process management[226](index=226&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities, no use of proceeds from registered equity, and no equity purchases during Q2 2021 - There were **no unregistered sales of equity securities** during the three months ended June 30, 2021[227](index=227&type=chunk) [Item 3. Defaults Upon Senior Securities](index=39&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section is not applicable as the company reports no defaults upon senior securities [Item 4. Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) This section is not applicable [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including corporate governance documents, the new Credit Agreement, and CEO/CFO certifications

Financial Data and Key Metrics Changes - The company reported first quarter revenue of $90.3 million, an increase from $89.5 million in the same quarter last year, marking the first year-over-year increase since Q4 2018 [29] - Adjusted EBITDA for the first quarter was $5.6 million, down from $6.4 million in the prior year, impacted by higher data costs but benefiting from lower operating costs [37] - The net loss for the first quarter was $36.4 million, compared to a net loss of $13.2 million in the same period last year, including a non-cash charge of $15.3 million related to debt extinguishment [36] Business Line Data and Key Metrics Changes - Revenue from ratings and planning was $65.8 million, up from $63.5 million, driven by higher TV revenue and international cross-platform services [29] - Analytics and optimization revenue increased to $17.7 million from $15.5 million, attributed to higher custom solutions and activation revenue [32] - Movies reporting and analytics revenue decreased to $6.8 million from $10.5 million, impacted by theater closures and delayed releases due to the pandemic [33] Market Data and Key Metrics Changes - TV revenue comprised 46% of ratings and planning revenue, up from 42% last year, while syndicated digital revenue decreased to 45% from 50% [31] - The company expects revenue from the movie business to rebound as theaters reopen, with early signs of recovery noted in box office sales [22][23] Company Strategy and Development Direction - The company is focused on capitalizing on opportunities in both traditional and direct-to-consumer media platforms, enhancing its measurement capabilities [4][6] - Plans to enter new markets and expand product offerings are in place, with a focus on privacy-focused solutions to recapture customers [6][8] - The company aims to improve revenue and margins through investments in data inputs and new commercial relationships [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about revenue growth in the second half of 2021, driven by new products and partnerships [38] - The company anticipates a 3% to 5% revenue increase for 2021, with adjusted EBITDA margins expected to be between 6% and 8% [38] - Management noted that the pandemic's impact on the movie industry is expected to lessen as theaters reopen [22][23] Other Important Information - The company completed a recapitalization transaction that significantly reduced outstanding debt, providing financial flexibility for future investments [4] - A new partnership with Dish Media Sling was announced, aimed at enhancing cross-platform measurement capabilities [20] Q&A Session Summary Question: Revenue growth cadence over the next three quarters - Management is optimistic about revenue growth in the back half of 2021, with expectations for improving quarters throughout the year [42][43]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for the quarter ended March 31, 2021, show a net loss of $36.4 million, compared to a net loss of $13.2 million in the prior-year period, with total assets decreasing to $643.6 million from $678.0 million at year-end 2020 Condensed Consolidated Balance Sheet Highlights (As of March 31, 2021) | Account | March 31, 2021 ($ thousands) | December 31, 2020 ($ thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $29,075 | $31,126 | | Total current assets | $107,460 | $137,030 | | Total assets | $643,636 | $677,970 | | **Liabilities & Equity** | | | | Total current liabilities | $181,187 | $184,275 | | Total liabilities | $237,045 | $448,980 | | Convertible redeemable preferred stock | $188,183 | $— | | Total stockholders' equity | $218,408 | $228,990 | Condensed Consolidated Statement of Operations Highlights (Three Months Ended March 31) | Account | 2021 ($ thousands) | 2020 ($ thousands) | | :--- | :--- | :--- | | Revenues | $90,330 | $89,528 | | Loss from operations | ($11,459) | ($12,751) | | Loss on extinguishment of debt | ($9,629) | $— | | Net loss | ($36,355) | ($13,184) | | Net loss per common share (Basic and diluted) | ($0.49) | ($0.19) | Condensed Consolidated Statement of Cash Flows Highlights (Three Months Ended March 31) | Activity | 2021 ($ thousands) | 2020 ($ thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $17,888 | ($4,781) | | Net cash used in investing activities | ($3,692) | ($3,917) | | Net cash used in financing activities | ($30,477) | ($549) | | Net decrease in cash, cash equivalents and restricted cash | ($16,869) | ($10,174) | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant financial events in Q1 2021, including a major financing transaction, revenue disaggregation, related party transactions, a privacy class-action lawsuit settlement, and a new revolving credit agreement - On March 10, 2021, the company issued **82,527,609 shares** of Series B Convertible Preferred Stock for gross proceeds of **$204.0 million** to Charter, Qurate, and Pine, with proceeds used to repay senior secured convertible notes[32](index=32&type=chunk)[39](index=39&type=chunk) - A loss on debt extinguishment of **$9.6 million** was recorded in Q1 2021 related to the payoff of the senior secured convertible notes and the secured term note[37](index=37&type=chunk) Revenue by Solution Group (Three Months Ended March 31) | Solution Group | 2021 (in thousands) | 2020 (in thousands) | | :--- | :--- | :--- | | Ratings and Planning | $65,806 | $63,521 | | Analytics and Optimization | $17,701 | $15,501 | | Movies Reporting and Analytics | $6,823 | $10,506 | | **Total** | **$90,330** | **$89,528** | - Concurrent with the financing transaction, the company entered into a ten-year Data License Agreement with Charter, with license fees increasing from **$10.0 million** in year one to **$32.3 million** in year ten[109](index=109&type=chunk) - Subsequent to quarter end, on May 5, 2021, the company entered into a new three-year, **$25.0 million** senior secured revolving credit agreement with Bank of America[122](index=122&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a slight 0.9% increase in total revenue to $90.3 million for Q1 2021, driven by growth in Ratings and Planning and Analytics and Optimization, offset by a sharp decline in Movies Reporting and Analytics due to the COVID-19 pandemic's impact on theaters [Results of Operations](index=23&type=section&id=Results%20of%20Operations) For Q1 2021, total revenue increased by 0.9% to $90.3 million, driven by growth in Ratings and Planning and Analytics and Optimization, while Movies Reporting and Analytics revenue fell due to theater closures Revenue Variance by Solution Group (Q1 2021 vs Q1 2020) | Solution Group | Q1 2021 Revenue (in thousands) | Q1 2020 Revenue (in thousands) | % Variance | | :--- | :--- | :--- | :--- | | Ratings and Planning | $65,806 | $63,521 | +3.6% | | Analytics and Optimization | $17,701 | $15,501 | +14.2% | | Movies Reporting and Analytics | $6,823 | $10,506 | -35.1% | | **Total revenues** | **$90,330** | **$89,528** | **+0.9%** | - Cost of revenues increased by **$6.9 million** (15.1%) YoY, primarily due to a **$3.0 million** increase in data costs for an expanded data footprint and a **$2.4 million** increase in other license costs for European cross-platform products[138](index=138&type=chunk) - General and administrative expenses decreased by **$1.1 million** (6.9%) YoY, driven by a **$1.6 million** reduction in professional fees and a **$1.1 million** decrease in other expenses, partially offset by a **$1.7 million** increase in employee costs[144](index=144&type=chunk) - A **$9.6 million** loss on debt extinguishment was recorded in Q1 2021 from the payoff of senior secured convertible notes and a secured promissory note[147](index=147&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2021, the company held $33.9 million in cash, cash equivalents, and restricted cash, following a significant recapitalization in March 2021 that raised $204.0 million to extinguish existing debt and improve financial position - In March 2021, the company issued and sold shares of Series B Convertible Preferred Stock to Charter, Qurate, and Pine for gross proceeds of **$204.0 million**[160](index=160&type=chunk) - The proceeds from the preferred stock issuance were used to repay the **$204.0 million** in senior secured convertible notes and the **$13.0 million** secured term note[161](index=161&type=chunk)[172](index=172&type=chunk)[174](index=174&type=chunk) Cash Flow Summary (Three Months Ended March 31) | Cash Flow Activity | 2021 ($ thousands) | 2020 ($ thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $17,888 | ($4,781) | | Net cash used in investing activities | ($3,692) | ($3,917) | | Net cash used in financing activities | ($30,477) | ($549) | - On May 5, 2021, the company entered into a new **$25.0 million** senior secured revolving credit agreement, which was undrawn as of the filing date[167](index=167&type=chunk)[169](index=169&type=chunk) [Critical Accounting Policies](index=31&type=page&id=Critical%20Accounting%20Policies) The company highlights new critical accounting policies related to the March 2021 financial restructuring, including the classification of newly issued Series B Convertible Preferred Stock as mezzanine equity and the early adoption of ASU 2020-06 - The newly issued Preferred Stock is classified as mezzanine equity on the balance sheet because it is contingently redeemable upon events like a change of control, which are outside the company's control[190](index=190&type=chunk) - The company early-adopted ASU 2020-06, simplifying the accounting for convertible instruments, with no embedded features requiring bifurcation except for the change of control redemption feature[192](index=192&type=chunk)[193](index=193&type=chunk) - The company applied ASC 470, Debt, to account for the repayment of its debt, recognizing a **$9.6 million** loss on extinguishment in Q1 2021[194](index=194&type=chunk)[195](index=195&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=32&type=page&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company identifies two primary market risks: warrants liability, sensitive to common stock price changes, and foreign currency risk from global operations - The company is subject to market risk from its outstanding warrants liability, which was valued at **$12.8 million** as of March 31, 2021[197](index=197&type=chunk) - A 10% increase or decrease in the company's common stock price would result in a corresponding **$1.7 million** increase or decrease in the fair value of the Series A Warrants[198](index=198&type=chunk) [Item 4. Controls and Procedures](index=33&type=page&id=Item%204.%20Controls%20and%20Procedures) As of March 31, 2021, the company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that as of March 31, 2021, the company's disclosure controls and procedures were effective[201](index=201&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the first quarter of 2021[202](index=202&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=34&type=page&id=Item%201.%20Legal%20Proceedings) The company reports on a privacy class action lawsuit (Rushing, et al v. The Walt Disney Company, et al.) where a settlement was reached and received final court approval on April 12, 2021 - The company reached a settlement in the Rushing, et al v. The Walt Disney Company, et al. privacy class action lawsuit, which received final court approval on April 12, 2021[118](index=118&type=chunk)[206](index=206&type=chunk) [Item 1A. Risk Factors](index=34&type=page&id=Item%201A.%20Risk%20Factors) The company highlights a new risk factor concerning the planned implementation of a new enterprise resource planning (ERP) system in the second half of 2021, which could adversely affect financial reporting and business operations - A new risk factor has been identified related to the implementation of a new enterprise resource planning (ERP) system planned for the second half of 2021[208](index=208&type=chunk) - Potential issues with the ERP implementation include delays, errors, and disruptions that could impair financial reporting, distract management, and negatively impact the business[208](index=208&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=page&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On January 25, 2021, the company issued 2,802,454 shares of its common stock as a payment-in-kind for $6.1 million in interest due on its senior secured convertible notes, an unregistered sale under Section 4(a)(2) of the Securities Act - On January 25, 2021, the company issued **2,802,454 shares** of common stock in lieu of a **$6.1 million** cash interest payment on its notes[209](index=209&type=chunk) [Item 5. Other Information](index=35&type=page&id=Item%205.%20Other%20Information) On May 5, 2021, the company entered into a new three-year senior secured revolving credit agreement with Bank of America, providing a borrowing capacity of $25.0 million and including financial covenants effective at future dates - On May 5, 2021, the company entered into a new three-year, **$25.0 million** senior secured revolving credit agreement[214](index=214&type=chunk)[215](index=215&type=chunk) - The credit agreement includes financial covenants for minimum Consolidated EBITDA (starting before June 30, 2022) and a minimum Fixed Charge Coverage Ratio (starting on or after June 30, 2022)[218](index=218&type=chunk)[219](index=219&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, agreements related to the recent preferred stock issuance and data license agreement, and officer certifications

Financial Data and Key Metrics Changes - The company reported fourth quarter revenue of $90 million, down from $95.2 million in the same quarter last year [32] - Adjusted EBITDA for the fourth quarter was $9.4 million, compared to $5.5 million for the same period last year, with a full year adjusted EBITDA of over $32 million in 2020, up from $6 million in 2019 [42][12] - The net loss for the fourth quarter was $13.2 million, an improvement from a net loss of $21.4 million in the same period last year [42] Business Line Data and Key Metrics Changes - Revenue from ratings and planning in the fourth quarter was $63.6 million, down from $66.8 million year-over-year, primarily due to declines in syndicated digital products [33] - Analytics and optimization revenue increased to $19.3 million from $17.7 million year-over-year, driven by higher custom digital marketing solutions revenue [34] - Movies reporting and analytics revenue fell to $7.1 million from $10.7 million in the prior year, impacted by ongoing theater closures [36] Market Data and Key Metrics Changes - The company noted that its international digital services, which represent about 25% of its syndicated digital services, were harder hit by COVID-19 but are expected to resume growth later in 2021 [11] - The connected TV business is gaining momentum, with advertising agency clients increasingly embracing advanced audience metrics [9] Company Strategy and Development Direction - The company aims to eliminate outstanding debt and invest in next-generation products with the support of new strategic investors [4] - Focus on privacy-safe measurement and preparation for a cookieless world, leveraging predictive audience solutions [14][16] - Expansion into international markets is strategic, with a focus on profitability and partnerships with large tech companies [110] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about revenue growth in 2021, expecting a 3% to 5% increase, particularly in the second half of the year [45] - The first quarter of 2021 is expected to be impacted by lower movie revenue, but improvements are anticipated as the year progresses [46] - Management highlighted the importance of partnerships in the connected TV space and the competitive landscape [58] Other Important Information - The company ended the fourth quarter with total cash of $50.7 million, down from $66.8 million at the end of 2019, primarily due to cash interest payments [43] - A non-cash charge related to debt extinguishment and associated derivatives is expected in the first quarter, estimated between $15 million and $25 million [49] Q&A Session Summary Question: Investment spend and product roadmap - Management indicated that investments will focus on leveraging existing data sets to create new products, with progress already made in 2020 [54][56] Question: Importance of partnerships in connected TV - Management emphasized that partnerships are crucial for effective advertising and data integration, and they do not need to own everything to succeed [58] Question: 2021 margin guidance - Management expects margins to improve throughout the year, with revenue growth leading to margin expansion by the end of 2021 [63] Question: Movie revenue recovery - Management believes movie revenue will bottom out in the first quarter, with expectations for recovery as theaters reopen [37][46] Question: Approach to declining payments to MVPDs - Management stated that customers use multiple measurement sources, and the company is well-positioned to capitalize on its census measurement approach [88] Question: Preparing for risks of email-based IDs - Management has been preparing for changes in the advertising landscape since 2019 and believes they are in a strong position to adapt [94]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________________________________________________________ Form 10-K __________________________________________________________________ (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 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 ...

comScore, Inc. (NASDAQ:SCOR) Q3 2020 Results Conference Call November 9, 2020 5:00 PM ET Company Participants Christopher Ferris - Director-Investor Relations Bill Livek - Chief Executive Officer Greg Fink - Chief Financial Officer Conference Call Participants Laura Martin - Needham Matthew Thornton - Truist Securities Alan Gould - Loop Capital Richard Kramer - Arete Research Operator Ladies and gentlemen, thank you for standing by, and welcome to the comScore Third Quarter 2020 Financial Results Conference ...