Viant(DSP) - 2023 Q4 - Annual Report

PART I Business Viant Technology Inc. provides a cloud-based demand-side platform (DSP) for programmatic advertising, leveraging a proprietary people-based data approach to reduce reliance on third-party cookies - Viant's core product is a cloud-based demand-side platform (DSP) for programmatic ad buying across omnichannel inventory[23][24] - The platform utilizes a proprietary Household ID and identity graph, offering a people-based data approach as an alternative to cookie-based tracking, a strategic advantage given Google's planned cookie deprecation by end of 2024[29] Key Financial Performance (2021-2023) | Fiscal Year Ended | Revenue (in millions) | Net Loss (in millions) | Adjusted EBITDA (in millions) | | :--- | :--- | :--- | :--- | | Dec 31, 2023 | $222.9 | $(9.9) | $29.1 | | Dec 31, 2022 | $197.2 | $(48.1) | $(6.1) | | Dec 31, 2021 | $224.1 | $(37.6) | $37.1 | - The U.S. programmatic advertising market is projected to grow from $121.8 billion in 2022 to $178.3 billion in 2025, a 14% CAGR, indicating strong market tailwinds[30][33] - As of December 31, 2023, the company held 37 issued patents and 9 pending patent applications for proprietary products and technologies[48][80] Risk Factors The company faces significant risks across business operations, data privacy, intellectual property, and capital structure, including platform enhancement, evolving regulations, and cybersecurity threats - Business and operational risks include dependence on platform enhancement, the evolving market shift away from cookies, intense competition, long sales cycles, and macroeconomic impacts on advertising budgets[86][87][90][92][98] - Data privacy and technology risks stem from stringent, evolving laws (e.g., CCPA, GDPR) and changes by tech giants like Google and Apple, which could significantly impact data availability and platform operations[142][163][164] - Cybersecurity risks include potential cyber-attacks on IT systems and data, which could result in operational disruption, litigation, regulatory fines, and reputational damage[168][169] - Capital structure and tax risks involve dependence on distributions from Viant Technology LLC, substantial payments under the Tax Receivable Agreement (TRA), and the implications of its dual-class stock structure and 'controlled company' status[189][192][217][218] Unresolved Staff Comments The company reports no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[241] Cybersecurity Viant maintains a cybersecurity risk management program, overseen by the Board's Audit Committee, with no identified material threats to its business - The company has a cybersecurity risk management program based on the CIS Critical Security Controls Version 8 framework to protect critical systems and information[242][243] - Cybersecurity governance is overseen by the Board's Audit Committee, with the Chief Information Officer (CIO) having primary management responsibility[246][248] - As of the report date, no cybersecurity threats have been identified that materially affect or are reasonably likely to materially affect operations, business strategy, or financial condition[245] Properties The company's headquarters are in Irvine, California, leased until May 2031, with 9 additional leased office spaces and no owned real property - The company's headquarters are in Irvine, CA, leased for approximately 56,000 square feet until May 2031[250] - Viant leases 9 other office spaces in the U.S. and does not own any real property[250] Legal Proceedings The company is involved in ordinary course legal proceedings but is not party to any litigation expected to have a material adverse effect - The company is not currently a party to any litigation expected to have a material adverse effect on its business[251] Mine Safety Disclosures This item is not applicable to the company - Not applicable[252] PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Viant's Class A common stock trades on Nasdaq under "DSP", with no public market for Class B, and the company has not paid cash dividends - The company's Class A common stock trades on Nasdaq under the symbol "DSP", with no public market for Class B common stock[255] - Viant has never paid cash dividends and has no current plans to do so[257] - There were no issuer purchases of equity securities during the reporting period[258] Reserved This item is reserved Management's Discussion and Analysis of Financial Condition and Results of Operations In fiscal 2023, Viant achieved 13.1% revenue growth to $222.9 million and a significant improvement in net loss and Adjusted EBITDA, driven by increased advertiser spend and cost controls, maintaining strong liquidity Financial Highlights (FY 2023 vs. FY 2022) | Metric | FY 2023 (in millions) | FY 2022 (in millions) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $222.9 | $197.2 | 13.1% | | Gross Profit | $102.5 | $80.4 | 27.4% | | Contribution ex-TAC | $143.4 | $124.7 | 15.0% | | Net Loss | $(9.9) | $(48.1) | 79.3% improvement | | Adjusted EBITDA | $29.1 | $(6.1) | 574.6% improvement | - Revenue growth in 2023 was primarily driven by a 57% increase from marketers in the retail and public services industry verticals[294] - Sales and marketing expenses decreased by 21% in 2023, primarily due to lower personnel and advertising costs[298] - The company maintains strong liquidity with $216.5 million in cash and cash equivalents and $231.6 million in working capital as of December 31, 2023, with no outstanding balance on its $75.0 million revolving credit facility[359][367] Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate exposure on its variable-rate credit facility, though no outstanding balance existed as of December 31, 2023 - The company is exposed to interest rate risk through its variable-rate revolving credit facility[401] - As of December 31, 2023, there was no outstanding balance on the credit facility, eliminating market risk from interest rate changes at that time[401] Financial Statements and Supplementary Data This section presents the company's audited consolidated financial statements for fiscal years 2021-2023, including statements of operations, balance sheets, equity, cash flows, and notes - The financial statements were audited by Deloitte & Touche LLP, which issued an unqualified opinion[405] Consolidated Statements of Operations Summary (in thousands) | Year Ended Dec 31 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Revenue | $222,934 | $197,168 | $224,127 | | Loss from operations | $(18,296) | $(49,260) | $(42,795) | | Net loss | $(9,943) | $(48,089) | $(37,609) | | Net loss attributable to Viant | $(3,443) | $(11,913) | $(7,742) | | Loss per share (basic & diluted) | $(0.23) | $(0.84) | $(0.63) | Consolidated Balance Sheets Summary (in thousands) | As of Dec 31 | 2023 | 2022 | | :--- | :--- | :--- | | Total Assets | $404,911 | $377,883 | | Cash and cash equivalents | $216,458 | $206,573 | | Total Liabilities | $130,522 | $112,115 | | Total Equity | $274,389 | $265,768 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants regarding accounting and financial disclosure - None[559] Controls and Procedures Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with no material changes reported - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2023[560] - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2023, based on the COSO 2013 framework[563] - The Annual Report omits an auditor's attestation report on internal control over financial reporting due to exemptions for emerging growth companies and non-accelerated filers[564] Other Information The company reports no other material information and no director or officer adopted or terminated a Rule 10b5-1 trading arrangement in Q4 2023 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended December 31, 2023[568] Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the company - Not applicable[569] PART III Directors, Executive Officers and Corporate Governance Information on directors, executive officers, and corporate governance is incorporated by reference from the 2024 Proxy Statement - Required information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders[572] Executive Compensation Information regarding executive compensation is incorporated by reference from the 2024 Proxy Statement - Required information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders[574] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information on security ownership by beneficial owners and management is incorporated by reference from the 2024 Proxy Statement - Required information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders[575] Certain Relationships and Related Transactions, and Director Independence Information on certain relationships, related party transactions, and director independence is incorporated by reference from the 2024 Proxy Statement - Required information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders[576] Principal Accountant Fees and Services Information on principal accountant fees and services is incorporated by reference from the 2024 Proxy Statement - Required information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders[577] PART IV Exhibits and Financial Statement Schedules This section lists exhibits filed with the Annual Report, with financial statement schedules omitted as information is included elsewhere - Financial statement schedules are omitted as they are not applicable or the information is already included in the financial statements[580] - The Exhibit Index lists all documents filed, including corporate governance documents, material contracts, and compensatory plans[581] Form 10-K Summary The company reports that there is no Form 10-K summary - None[583]