AdTheorent Holding Company, Inc. (Nasdaq: ADTH) (“AdTheorent” or
“the Company”), a machine learning pioneer and industry leader
using privacy-forward solutions to deliver measurable value for
programmatic advertisers, today announced its first quarter 2024
financial results.
First Quarter 2024 Financial Overview:
- Revenue was $34.9 million, a 6.7%
increase compared to $32.7 million in the first quarter of
2023.
- Gross profit was $14.3 million, down
0.2%, from the first quarter of 2023. Gross Profit Margin was
40.9%, compared to 43.7% in the first quarter of 2023.
- Adjusted Gross Profit* increased $1.5
million, or 7.1%, to $22.4 million compared to the first quarter of
2023. Adjusted Gross Profit Margin was 64.2% compared to 64.0% in
the first quarter of 2023.
- Net loss was $9.9 million compared to
$5.2 million in the first quarter of 2023. In the first quarter of
2024, the Company recognized a total of $5.8 million of net mark to
market losses related to fair value of the Seller's Earn-Out and
Warrants liabilities compared to net losses of $0.04 million in the
first quarter of 2023.
- Adjusted EBITDA* decreased $0.2
million, or 50.0%, to $0.2 million compared to first quarter 2023.
Adjusted EBITDA as a percentage of Adjusted Gross Profit of 1.0%
represented a decrease from 2.2% in the first quarter of 2023.
Business and Operating Highlights:
- Average revenue per active customer
increased 3.5% year-over-year.
- AdTheorent’s self-service momentum
continued, with 60% year-over-year revenue growth and a 95%
year-over-year increase in total customers. Additionally,
AdTheorent self-service CTV revenue grew 95%.
- AdTheorent Health revenue grew 34.3%
year-over-year.
- AdTheorent Health’s algorithm-based
and ID-independent health audiences yielded strong customer
adoption with 95 active campaigns running in the first quarter of
2024, an 86% sequential increase from the 51 campaigns running in
the fourth quarter of 2023.
- AdTheorent was awarded “Enabling
Technology Company of the Year” by the prestigious MMA SMARTIES™ X
Global awards. In addition, AdTheorent won four campaign-specific
MMA SMARTIES™ X Global awards with valued partners The Wine Group,
TRG, and Choctaw Casinos & Resorts.
*The Company prepares its consolidated financial statements in
accordance with the U.S. generally accepted accounting principles
(“GAAP”). Adjusted Gross Profit and Adjusted EBITDA are non-GAAP
financial measures. See the supplementary schedules in this press
release for a discussion of how the Company defines and calculates
these measures and a reconciliation thereof to the most directly
comparable GAAP measures.
Transaction with Cadent:
On April 1, 2024, the Company announced its entry into a
definitive agreement to be acquired by Cadent, LLC for
approximately $324 million in cash, or $3.21 per share (the
“Merger”). The Merger is expected to be completed by the third
quarter of 2024 and is subject to approval by AdTheorent’s
stockholders, expiration or termination of the applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as well as other customary closing conditions. Upon
completion of the Merger, AdTheorent common stock will no longer be
listed on the Nasdaq Stock Exchange or trade in any other public
market. A press release describing the details of the Merger can be
found on the investor relations page of AdTheorent’s website at
investors.adtheorent.com. Due to the pending Merger,
AdTheorent will not provide updated guidance or host a conference
call or webcast to discuss first quarter 2024 results.
About AdTheorent:
AdTheorent uses advanced machine learning technology and
privacy-forward solutions to deliver impactful advertising
campaigns for marketers. AdTheorent's advanced machine
learning-powered media buying platform powers its predictive
targeting, predictive audiences, geo-intelligence, audience
extension solutions and in-house creative capability, Studio AT.
Focused on the predictive value of machine learning models,
AdTheorent's product suite and flexible transaction models allow
advertisers to identify the most qualified potential consumers
coupled with the optimal creative experience to deliver superior
results, measured by each advertiser's real-world business goals.
AdTheorent is headquartered in New York, with fourteen locations
across the United States and Canada.
AdTheorent is consistently recognized with numerous technology,
product, growth and workplace awards. AdTheorent was named “Best
Buy-Side Programmatic Platform” in the 2023 Digiday Technology
Awards and was honored with an AI Breakthrough Award and “Most
Innovative Product” (B.I.G. Innovation Awards) for six consecutive
years. Additionally, AdTheorent is the only seven-time recipient of
Frost & Sullivan's “Digital Advertising Leadership Award.” In
September 2023, evidencing its continued prioritization of its
team, AdTheorent was named a Crain’s Top 100 Best Place to Work in
NYC for the tenth consecutive year. AdTheorent ranked tenth in the
Large Employer category and 26th overall in 2023. For more
information, visit adtheorent.com.
Forward-Looking Statements:
This communication contains “forward-looking statements” within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include, without limitation, any statement that may
predict, forecast, indicate or imply future results, performance or
achievements, and may contain words such as “believe,”
“anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” or
words or phrases with similar meaning. Such statements may also
include statements regarding the completion of the proposed merger
and the expected timing of the completion of the proposed merger,
the management of AdTheorent upon completion of the proposed merger
and AdTheorent’s plans upon completion of the proposed
merger. Forward-looking statements should not be read as a
guarantee of future performance or results and will not necessarily
be accurate indications of the times at, or by, which such
performance or results will be achieved. Forward-looking statements
contained in this press release relate to, among other things, the
Company’s projected financial performance and operating results,
including projected revenue, Adjusted Gross Profit and Adjusted
EBITDA, as well as statements regarding inflationary pressures and
recessionary fears.
Forward-looking statements are based on current expectations,
forecasts and assumptions that involve risks and uncertainties,
including, but not limited to, the market for programmatic
advertising developing slower or differently than the Company’s
expectations, the demands and expectations of clients and the
ability to attract and retain clients and other economic,
competitive, governmental and technological factors outside of the
Company's control, that may cause the Company's business, strategy
or actual results to differ materially from the forward-looking
statements. The Company does not intend and undertakes no
obligation to update any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
may be required by applicable law. Investors are referred to
AdTheorent's filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K and any subsequent filings
on Forms 10-Q or 8-K, for additional information regarding the
risks and uncertainties that may cause actual results to differ
materially from those expressed in any forward-looking
statement.
Investor Contact:David DeStefano,
ICRAdTheorentIR@icrinc.com (203) 682-8383
Press Contact:Melanie Berger,
AdTheorentMelanie@adtheorent.com(850) 567-0082
ADTHEORENT HOLDING COMPANY, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(in thousands) |
|
|
March 31, |
|
|
December 31, |
|
|
2024 |
|
|
2023 |
|
ASSETS |
(unaudited) |
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
$ |
69,202 |
|
|
$ |
70,261 |
|
Accounts receivable, net |
|
55,233 |
|
|
|
71,288 |
|
Income tax recoverable |
|
163 |
|
|
|
177 |
|
Prepaid expenses |
|
5,974 |
|
|
|
4,515 |
|
Total current assets |
|
130,572 |
|
|
|
146,241 |
|
Property and equipment, net |
|
437 |
|
|
|
457 |
|
Operating lease right of use assets |
|
4,794 |
|
|
|
5,085 |
|
Investment in SymetryML Holdings |
|
742 |
|
|
|
628 |
|
Other intangible assets, net |
|
8,204 |
|
|
|
7,969 |
|
Goodwill |
|
34,842 |
|
|
|
34,842 |
|
Deferred income taxes, net |
|
11,647 |
|
|
|
10,575 |
|
Other assets |
|
397 |
|
|
|
299 |
|
Total assets |
$ |
191,635 |
|
|
$ |
206,096 |
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable |
$ |
13,586 |
|
|
$ |
17,910 |
|
Accrued compensation |
|
3,012 |
|
|
|
10,483 |
|
Accrued expenses |
|
5,442 |
|
|
|
4,994 |
|
Operating lease liabilities, current |
|
1,436 |
|
|
|
1,421 |
|
Total current liabilities |
|
23,476 |
|
|
|
34,808 |
|
Warrants |
|
6,730 |
|
|
|
967 |
|
Seller's Earn-Out |
|
5 |
|
|
|
10 |
|
Operating lease liabilities, non-current |
|
4,779 |
|
|
|
5,141 |
|
Total liabilities |
|
34,990 |
|
|
|
40,926 |
|
Stockholders’ equity |
|
|
|
|
|
Preferred Stock |
|
— |
|
|
|
— |
|
Common Stock |
|
9 |
|
|
|
9 |
|
Additional paid-in capital |
|
94,631 |
|
|
|
93,304 |
|
Retained earnings |
|
62,005 |
|
|
|
71,857 |
|
Total stockholders' equity |
|
156,645 |
|
|
|
165,170 |
|
Total liabilities and
stockholders’ equity |
$ |
191,635 |
|
|
$ |
206,096 |
|
ADTHEORENT HOLDING COMPANY, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited; in thousands, except share
and per share data) |
|
Three Months Ended March 31, |
|
|
2024 |
|
|
2023 |
|
Revenue |
$ |
34,857 |
|
|
$ |
32,674 |
|
Operating expenses: |
|
|
|
|
|
Platform operations |
|
20,601 |
|
|
|
18,387 |
|
Sales and marketing |
|
10,862 |
|
|
|
10,307 |
|
Technology and development |
|
3,222 |
|
|
|
3,291 |
|
General and administrative |
|
5,771 |
|
|
|
3,936 |
|
Total operating expenses |
|
40,456 |
|
|
|
35,921 |
|
Loss from operations |
|
(5,599 |
) |
|
|
(3,247 |
) |
Interest income, net |
|
646 |
|
|
|
619 |
|
Gain on change in fair value of Seller's Earn-Out |
|
5 |
|
|
|
233 |
|
Loss on change in fair value of warrants |
|
(5,763 |
) |
|
|
(269 |
) |
Gain (loss) on fair value of investment in SymetryML Holdings |
|
114 |
|
|
|
(168 |
) |
Other expense, net |
|
(4 |
) |
|
|
(41 |
) |
Total other (loss) income,
net |
|
(5,002 |
) |
|
|
374 |
|
Net loss before income taxes |
|
(10,601 |
) |
|
|
(2,873 |
) |
Benefit (provision) for income
taxes |
|
749 |
|
|
|
(2,350 |
) |
Net loss |
$ |
(9,852 |
) |
|
$ |
(5,223 |
) |
Loss per share: |
|
|
|
|
|
Basic |
$ |
(0.11 |
) |
|
$ |
(0.06 |
) |
Diluted |
$ |
(0.11 |
) |
|
$ |
(0.06 |
) |
Weighted-average common shares
outstanding: |
|
|
|
|
|
Basic |
|
90,449,398 |
|
|
|
87,551,278 |
|
Diluted |
|
90,449,398 |
|
|
|
87,551,278 |
|
ADTHEORENT HOLDING COMPANY, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWS(Unaudited; in thousands) |
|
|
|
|
Three Months Ended March 31, |
|
|
2024 |
|
|
2023 |
|
Cash flows from operating
activities |
|
|
|
|
|
Net loss |
$ |
(9,852 |
) |
|
$ |
(5,223 |
) |
Adjustments to reconcile net loss
to net cash provided by operating activities: |
|
|
|
|
|
Provision for credit losses |
|
(200 |
) |
|
|
— |
|
Amortization expense |
|
1,403 |
|
|
|
2,059 |
|
Depreciation expense |
|
47 |
|
|
|
49 |
|
Amortization of debt issuance costs |
|
14 |
|
|
|
14 |
|
Gain on change in fair value of Seller's Earn-Out |
|
(5 |
) |
|
|
(233 |
) |
Loss on change in fair value of warrants |
|
5,763 |
|
|
|
269 |
|
Loss (gain) on fair value of investment in SymetryML Holdings |
|
(114 |
) |
|
|
168 |
|
Deferred tax benefit |
|
(1,072 |
) |
|
|
(1,326 |
) |
Equity-based compensation |
|
2,041 |
|
|
|
1,480 |
|
Changes in operating assets and
liabilities: |
|
|
|
|
|
Accounts receivable |
|
16,255 |
|
|
|
16,719 |
|
Income taxes recoverable |
|
14 |
|
|
|
(46 |
) |
Prepaid expenses and other assets |
|
(1,280 |
) |
|
|
(1,824 |
) |
Accounts payable |
|
(4,412 |
) |
|
|
(572 |
) |
Accrued compensation, accrued expenses, and other liabilities |
|
(7,370 |
) |
|
|
(7,423 |
) |
Net cash provided by operating
activities |
|
1,232 |
|
|
|
4,111 |
|
Cash flows from investing
activities |
|
|
|
|
|
Capitalized software development costs |
|
(1,448 |
) |
|
|
(1,196 |
) |
Purchase of property and equipment |
|
(33 |
) |
|
|
(23 |
) |
Net cash used in investing
activities |
|
(1,481 |
) |
|
|
(1,219 |
) |
Cash flows from financing
activities |
|
|
|
|
|
Cash received for exercised options |
|
238 |
|
|
|
57 |
|
Taxes paid related to net settlement of restricted stock
awards |
|
(1,199 |
) |
|
|
(399 |
) |
Proceeds from employee stock purchase plan |
|
151 |
|
|
|
172 |
|
Net cash used in financing
activities |
|
(810 |
) |
|
|
(170 |
) |
Net (decrease) increase
in cash and cash equivalents |
|
(1,059 |
) |
|
|
2,722 |
|
Cash and cash equivalents
at beginning of period |
|
70,261 |
|
|
|
72,579 |
|
Cash and cash equivalents
at end of period |
$ |
69,202 |
|
|
$ |
75,301 |
|
Non-GAAP Financial Measures
The Company uses financial measures that are not calculated in
accordance with GAAP including Adjusted EBITDA and Adjusted Gross
Profit. The Company's management believes that this information can
assist investors in evaluating the Company's operational trends,
financial performance, and cash generating capacity and make
strategic decisions. Management believes these non-GAAP measures
allow investors to evaluate the Company’s financial performance
using some of the same measures as management.
Because of the limitations associated with these non-GAAP
financial measures, “Adjusted Gross Profit,” “EBITDA,” “Adjusted
EBITDA,” “Adjusted Gross Profit as a percentage of Revenue” and
“Adjusted EBITDA as a percent of Adjusted Gross Profit” should not
be considered in isolation or as a substitute for performance
measures calculated in accordance with GAAP. The Company
compensates for these limitations by relying primarily on its GAAP
results and using non-GAAP measures on a supplemental basis. You
should review the reconciliation of the non-GAAP financial measures
below and not rely on any single financial measure to evaluate
AdTheorent's business.
The tables below show the Company’s non-GAAP financial metrics
reconciled to the comparable GAAP financial metrics included in
this release.
Adjusted Gross Profit
Adjusted Gross Profit is a non-GAAP profitability measure.
Adjusted Gross Profit is a non-GAAP financial measure of campaign
profitability, monitored by management and the board, used to
evaluate the Company's operating performance and trends, develop
short- and long-term operational plans, and make strategic
decisions regarding the allocation of capital. The Company believes
this measure provides a useful period-to-period comparison of
campaign profitability and is useful information to investors and
the market in understanding and evaluating its operating results in
the same manner as its management and board. Gross profit is the
most comparable GAAP measurement, which is calculated as revenue
less platform operations costs. In calculating Adjusted Gross
Profit, the Company adds back other platform operations costs,
which consist of amortization expense related to capitalized
software, depreciation expense, allocated costs of personnel which
set up and monitor campaign performance, and platform hosting,
license, and maintenance costs, to gross profit.
The following table sets forth a reconciliation of revenue to
Adjusted Gross Profit for the periods presented:
|
Three Months Ended March 31, |
|
|
2024 |
|
|
2023 |
|
|
(In thousands) |
|
Revenue |
$ |
34,857 |
|
|
$ |
32,674 |
|
Less: Platform operations |
|
20,601 |
|
|
|
18,387 |
|
Gross Profit |
|
14,256 |
|
|
|
14,287 |
|
Add back: Other platform
operations |
|
8,118 |
|
|
|
6,610 |
|
Adjusted Gross Profit |
$ |
22,374 |
|
|
$ |
20,897 |
|
|
EBITDA and Adjusted EBITDA
EBITDA is a non-GAAP financial measure defined by the Company as
net loss, before interest income, net; depreciation, amortization;
and income tax (benefit) provision. Adjusted EBITDA is defined as
EBITDA before equity-based compensation expense, transaction costs,
non-core operations and other non-recurring items. Net loss is the
most comparable GAAP measurement.
Collectively these non-GAAP financial measures are key
profitability measures used by the Company's management and board
to understand and evaluate its operating performance and trends,
develop short-and long-term operational plans and make strategic
decisions regarding the allocation of capital. The Company believes
that these measures can provide useful period-to-period comparisons
of campaign profitability. Accordingly, the Company believes that
these measures provide useful information to investors and the
market in understanding and evaluating its operating results in the
same manner as its management and board.
The following table sets forth a reconciliation of net loss to
Adjusted EBITDA for the periods presented:
|
Three Months Ended March 31, |
|
|
2024 |
|
|
2023 |
|
|
(In thousands) |
|
Net loss |
$ |
(9,852 |
) |
|
$ |
(5,223 |
) |
Interest income, net |
|
(646 |
) |
|
|
(619 |
) |
Tax (benefit) provision |
|
(749 |
) |
|
|
2,350 |
|
Depreciation and
amortization |
|
1,450 |
|
|
|
2,108 |
|
EBITDA |
$ |
(9,797 |
) |
|
$ |
(1,384 |
) |
Equity-based compensation |
|
2,041 |
|
|
|
1,480 |
|
Transaction costs (1) |
|
2,345 |
|
|
|
166 |
|
Gain on change in fair value
of Seller's Earn-Out (2) |
|
(5 |
) |
|
|
(233 |
) |
Loss on change in fair value
of warrants (3) |
|
5,763 |
|
|
|
269 |
|
(Gain) loss on fair value of
investment in SymetryML Holdings |
|
(114 |
) |
|
|
168 |
|
Adjusted EBITDA |
$ |
233 |
|
|
$ |
466 |
|
|
(1) |
For the three
months ended March 31, 2024, these costs include professional fees
related to the Merger Agreement announced on April 1, 2024. For the
three months ended March 31, 2023, these costs include professional
fees directly related to the SPAC merger with MCAP Acquisition
Corporation (the “Business Combination”) on December 22, 2021. |
|
|
|
|
(2) |
In connection with the Business Combination, a Seller's
Earn-Out liability was recorded. The gains represent the decrease
in fair value of the Seller's Earn-Out in the three months ended
March 31, 2024 and 2023. |
|
|
|
|
(3) |
In connection with the Business Combination, a liability for
warrants was recorded. The losses represent the increase in fair
value of the warrants in the three months ended March 31, 2024
and 2023. |
|
|
|
The following table presents Adjusted EBITDA as
a Percentage of Adjusted Gross Profit and Adjusted Gross
Profit as a Percentage of Revenue:
|
Three Months Ended March 31, |
|
|
2024 |
|
|
2023 |
|
|
(In thousands, except percentages) |
|
Gross Profit |
$ |
14,256 |
|
|
$ |
14,287 |
|
Net loss |
$ |
(9,852 |
) |
|
$ |
(5,223 |
) |
Net loss as a percentage of
Gross Profit |
|
-69.1 |
% |
|
|
-36.6 |
% |
Adjusted Gross Profit |
$ |
22,374 |
|
|
$ |
20,897 |
|
Adjusted EBITDA |
$ |
233 |
|
|
$ |
466 |
|
Adjusted EBITDA as a
percentage of Adjusted Gross Profit |
|
1.0 |
% |
|
|
2.2 |
% |
Gross Profit |
$ |
14,256 |
|
|
$ |
14,287 |
|
Revenue |
$ |
34,857 |
|
|
$ |
32,674 |
|
Gross Profit as a percentage
of Revenue |
|
40.9 |
% |
|
|
43.7 |
% |
Revenue |
$ |
34,857 |
|
|
$ |
32,674 |
|
Adjusted Gross Profit |
$ |
22,374 |
|
|
$ |
20,897 |
|
Adjusted Gross Profit as a
percentage of Revenue |
|
64.2 |
% |
|
|
64.0 |
% |
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