DoubleVerify(DV) - 2025 Q2 - Quarterly Report

Part I Item 1. Condensed Consolidated Financial Statements This section presents DoubleVerify Holdings' unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025 Condensed Consolidated Balance Sheets The balance sheet as of June 30, 2025, shows increased total assets driven by goodwill, decreased cash, and higher total liabilities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $211,784 | $292,820 | | Total current assets | $462,361 | $559,051 | | Goodwill | $516,587 | $427,621 | | Total assets | $1,296,928 | $1,276,210 | | Liabilities & Equity | | | | Total current liabilities | $104,901 | $103,482 | | Total liabilities | $206,913 | $192,751 | | Total stockholders' equity | $1,090,015 | $1,083,459 | - Goodwill increased by approximately $89 million, primarily due to the acquisition of Rockerbox, Inc.[15][39] - Cash and cash equivalents decreased by $81.0 million, reflecting cash used for the Rockerbox acquisition ($82.6 million) and share repurchases ($82.2 million), partially offset by cash from operations[15][20] Condensed Consolidated Statements of Operations and Comprehensive Income Q2 2025 revenue grew 21.2% with increased net income, while H1 2025 revenue grew 19.4% but net income decreased due to higher tax expense Key Performance Metrics (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $189,021 | $155,890 | $354,082 | $296,672 | | Income from operations | $13,548 | $11,049 | $20,311 | $17,944 | | Net income | $8,758 | $7,474 | $11,119 | $14,630 | | Diluted EPS | $0.05 | $0.04 | $0.07 | $0.08 | - Operating expenses increased across all categories, with notable rises in Product development (18.6% YoY for Q2) and General and administrative (28.2% YoY for Q2), reflecting continued investment and acquisition-related costs[16] - Income tax expense for the first six months of 2025 was $13.6 million, a significant increase from $7.2 million in the same period of 2024, leading to a decrease in year-to-date net income despite higher pre-tax income[16] Condensed Consolidated Statements of Cash Flows Net cash from operations increased, while significant cash was used for investing (acquisitions) and financing (share repurchases), resulting in a net cash decrease Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $87,276 | $67,655 | | Net cash used in investing activities | ($86,707) | ($95,495) | | Net cash used in financing activities | ($86,044) | ($24,562) | | Net decrease in cash | ($80,928) | ($53,252) | - The primary use of cash in investing activities was $82.6 million for the acquisition of Rockerbox, net of cash acquired[20] - Financing activities were dominated by $82.2 million used for share repurchases under the company's authorized programs[20] Notes to Condensed Consolidated Financial Statements The notes detail revenue disaggregation, the Rockerbox acquisition, share repurchase programs, and a new class action lawsuit Disaggregated Revenue by Customer Type (Six Months Ended June 30, in thousands) | Type | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Activation | $204,121 | $166,793 | +22.4% | | Measurement | $116,326 | $104,092 | +11.8% | | Supply-side | $33,635 | $25,787 | +30.4% | | Total revenue | $354,082 | $296,672 | +19.4% | - On March 13, 2025, the Company acquired Rockerbox, Inc., a marketing attribution leader, for a total purchase price of $82.3 million, net of cash acquired, adding $72.1 million to goodwill[32][33] - The company fully utilized its $150.0 million Repurchase Program and began a new $200.0 million program, spending a total of $82.2 million to repurchase 5.1 million shares across both programs in the first six months of 2025[83][85] - A class action lawsuit was filed against the Company on May 22, 2025, alleging violations of the Securities Exchange Act of 1934, which the company intends to defend vigorously[89] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition and operational results for the second quarter and first half of 2025 Results of Operations Revenue grew significantly in Q2 and H1 2025 across all segments, driven by increased media transactions, while operating expenses also rose due to investments Revenue Growth by Customer Type (Q2 2025 vs Q2 2024) | Customer Type | Q2 2025 Revenue | Q2 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | Activation | $108,950 | $87,471 | 25% | | Measurement | $62,895 | $54,817 | 15% | | Supply-side | $17,176 | $13,602 | 26% | | Total revenue | $189,021 | $155,890 | 21% | - Total Advertiser revenue growth was driven by a 19% increase in Media Transactions Measured for the three months ended June 30, 2025[113] - General and administrative expenses increased by 28% in Q2 2025, primarily due to higher personnel costs, professional fees, and $0.5 million in costs related to the Rockerbox acquisition[120] Adjusted EBITDA Adjusted EBITDA increased in Q2 and H1 2025, with margins remaining stable, reflecting adjustments for non-cash and M&A-related expenses Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $8,758 | $7,474 | $11,119 | $14,630 | | Adjustments | $48,516 | $39,293 | $90,809 | $70,270 | | Adjusted EBITDA | $57,274 | $46,767 | $101,928 | $84,900 | | Adjusted EBITDA Margin | 30% | 30% | 29% | 29% | Liquidity and Capital Resources The company maintains strong liquidity with substantial cash and an undrawn credit facility, financing operations primarily through cash flow and using funds for acquisitions and share repurchases - As of June 30, 2025, the company had cash and cash equivalents of $211.8 million and an undrawn $200.0 million revolving credit facility[129][130] - In August 2024, the company entered into a new credit agreement for a $200.0 million senior secured revolving credit facility, replacing its prior facility, with no debt outstanding as of June 30, 2025[53][132][136] - During the first six months of 2025, the company repurchased a total of 5.1 million shares for $82.2 million, with $140.0 million remaining available under the New Repurchase Program as of June 30, 2025[85][140] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section confirms no material changes to the company's market risks since the 2024 Annual Report on Form 10-K - Market risks as of June 30, 2025, have not materially changed from those discussed in the 2024 Annual Report on Form 10-K[149] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - Based on an evaluation as of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[149] - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[150] Part II Item 1. Legal Proceedings This section discloses a class action lawsuit filed against the company, which it intends to vigorously defend - A securities class action lawsuit was filed on May 22, 2025, alleging violations of the Securities Exchange Act of 1934 between November 10, 2023, and February 27, 2025[154] - The company believes it is not necessary to accrue a litigation reserve at this time and intends to vigorously defend against the claims[154] Item 1A. Risk Factors This section confirms no material changes to the company's risk factors since the 2024 Annual Report on Form 10-K - No material changes have been made to the risk factors described in the 2024 Annual Report on Form 10-K[155] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reports no common stock repurchases during the three months ended June 30, 2025 - The company did not repurchase any of its common stock during the three-month period ending June 30, 2025[156] Item 5. Other Information This section discloses the Chief Legal Officer's adoption of a Rule 10b5-1 trading plan for share sales - On June 18, 2025, Chief Legal Officer Andrew E. Grimmig adopted a Rule 10b5-1 trading plan for the sale of 26,076 shares, expiring March 17, 2026[159] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications and XBRL data - The report includes standard exhibits such as Sarbanes-Oxley certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (101 series)[160]