Comscore Reports Fourth Quarter and Full Year 2022 Results

COMSCORE, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

As of December 31,

2022

2021

Assets

Current assets:

Cash and cash equivalents

$                 20,044

$                 21,854

Restricted cash

398

425

Accounts receivable, net of allowances of $798 and 1,173, respectively

68,457

72,059

Prepaid expenses and other current assets

15,922

14,769

Total current assets

104,821

109,107

Property and equipment, net

36,367

36,451

Operating right-of-use assets

23,864

29,186

Deferred tax assets

3,351

2,811

Intangible assets, net

13,327

39,945

Goodwill

387,973

435,711

Other non-current assets

10,883

10,263

Total assets

$               580,586

$               663,474

Liabilities, Convertible Redeemable Preferred Stock and Stockholders' Equity

Current liabilities:

Accounts payable

$                 29,090

$                 23,575

Accrued expenses

43,393

45,264

Contract liabilities

52,944

54,011

Customer advances

11,527

11,613

Current operating lease liabilities

7,639

7,538

Warrants liability

718

10,520

Current portion of contingent consideration

7,134

1,037

Other current liabilities

12,646

11,813

Total current liabilities

165,091

165,371

Non-current operating lease liabilities

29,588

36,055

Non-current portion of accrued data costs

25,106

16,005

Revolving line of credit

16,000

16,000

Deferred tax liabilities

2,127

2,103

Other non-current liabilities

10,627

16,879

Total liabilities

248,539

252,413

Commitments and contingencies

Convertible redeemable preferred stock, $0.001 par value; 82,527,609 shares authorized, issued and outstanding as of December 31, 2022 and 2021; aggregate liquidation preference of $211,863 as of December 31, 2022 and 2021

187,885

187,885

Stockholders' equity:

Preferred stock, $0.001 par value; 7,472,391 shares authorized as of December 31, 2022 and 2021; no shares issued or outstanding as of December 31, 2022 or 2021

—

—

Common stock, $0.001 par value; 275,000,000 shares authorized as of December 31, 2022 and 2021; 98,869,738 shares issued and 92,104,942 shares outstanding as of December 31, 2022, and 97,172,086 shares issued and 90,407,290 shares outstanding as of  December 31, 2021

92

90

Additional paid-in capital

1,690,783

1,683,883

Accumulated other comprehensive loss

(15,940)

(12,098)

Accumulated deficit

(1,300,789)

(1,218,715)

Treasury stock, at cost, 6,764,796 shares as of December 31, 2022 and 2021

(229,984)

(229,984)

Total stockholders' equity

144,162

223,176

Total liabilities, convertible redeemable preferred stock and stockholders' equity

$               580,586

$               663,474

COMSCORE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

Years Ended December 31,

2022

2021

2020

Revenues

$             376,423

$               367,013

$               356,036

Cost of revenues ^{(1) (2)}

205,294

203,044

180,712

Selling and marketing ^{(1) (2)}

68,453

66,937

70,220

Research and development ^{(1) (2)}

36,987

39,123

38,706

General and administrative ^{(1) (2)}

61,200

61,736

55,783

Amortization of intangible assets

27,096

25,038

27,219

Impairment of goodwill

46,300

—

—

Restructuring

5,810

—

—

Impairment of right-of-use and long-lived assets

156

—

4,671

Total expenses from operations

451,296

395,878

377,311

Loss from operations

(74,873)

(28,865)

(21,275)

Loss on extinguishment of debt

—

(9,629)

—

Interest expense, net

(915)

(7,801)

(35,805)

Other income (expense), net

9,785

(5,778)

14,554

Gain (loss) from foreign currency transactions

1,166

2,895

(4,490)

Loss before income taxes

(64,837)

(49,178)

(47,016)

Income tax provision

(1,724)

(859)

(902)

Net loss

$             (66,561)

$               (50,037)

$               (47,918)

Net loss available to common stockholders

Net loss

(66,561)

(50,037)

(47,918)

Convertible redeemable preferred stock dividends

(15,513)

(12,623)

—

Total net loss available to common stockholders

$             (82,074)

$               (62,660)

$               (47,918)

Net loss per common share:

Basic and diluted

$                 (0.89)

$                   (0.78)

$                   (0.67)

Weighted-average number of shares used in per share calculation - Common Stock:

Basic and diluted

92,683,564

80,802,053

71,181,496

Comprehensive loss:

Net loss

$             (66,561)

$               (50,037)

$               (47,918)

Other comprehensive (loss) income:

Foreign currency cumulative translation adjustment

(3,842)

(5,068)

5,303

Total comprehensive loss

$             (70,403)

$               (55,105)

$               (42,615)

⁽¹⁾ Excludes amortization of intangible assets, which is presented separately in the Consolidated Statements of Operations and Comprehensive Loss.

⁽²⁾ Stock-based compensation expense is included in the line items above as follows:

Years Ended December 31,

2022

2021

2020

Cost of revenues

$                 1,144

$                   1,603

$                   1,288

Selling and marketing

1,021

1,791

2,226

Research and development

827

1,079

886

General and administrative

5,186

9,375

5,673

Total stock-based compensation expense

$                 8,178

$                 13,848

$                 10,073

COMSCORE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Years Ended December 31,

2022

2021

2020

Operating activities:

Net loss

$             (66,561)

$               (50,037)

$               (47,918)

Adjustments to reconcile net loss to net cash provided by operating activities:

Impairment of goodwill

46,300

—

—

Amortization of intangible assets

27,096

25,038

27,219

Depreciation

16,828

15,793

14,064

Stock-based compensation expense

8,178

13,848

10,073

Non-cash operating lease expense

6,060

5,345

5,555

Change in fair value of contingent consideration liability

2,558

—

—

Amortization expense of finance leases

2,364

2,188

1,652

Bad debt expense (benefit)

312

(80)

1,693

Amortization of deferred financing costs

163

378

1,560

Impairment of right-of-use and long-lived assets

156

—

4,671

Deferred tax (benefit) provision

(475)

(1,719)

10

Change in fair value of warrant liability

(9,802)

7,689

(4,894)

Loss on extinguishment of debt

—

9,629

—

Non-cash interest expense on senior secured convertible notes

—

4,692

9,180

Accretion of debt discount

—

1,620

7,571

Change in fair value of financing derivatives

—

(1,800)

(10,287)

Other

1,435

1,082

908

Changes in operating assets and liabilities, net of effect of acquisition:

Accounts receivable

2,596

(2,081)

2,024

Prepaid expenses and other assets

(805)

(1,145)

(6,283)

Accounts payable, accrued expenses, and other liabilities

7,396

(4,210)

(17,095)

Contract liability and customer advances

(1,587)

(10,777)

7,341

Operating lease liabilities

(7,275)

(5,597)

(6,327)

Net cash provided by operating activities

34,937

9,856

717

Investing activities:

Capitalized internal-use software costs

(16,685)

(14,747)

(15,078)

Purchases of property and equipment

(1,137)

(803)

(477)

Cash and restricted cash acquired from acquisition

—

902

—

Net cash used in investing activities

(17,822)

(14,648)

(15,555)

Financing activities:

Payments for dividends on convertible redeemable preferred stock

(15,512)

(4,760)

—

Principal payments on finance leases

(2,519)

(2,138)

(1,754)

Principal payment and extinguishment costs on senior secured convertible notes

—

(204,014)

—

Principal payment and extinguishment costs on secured term note

—

(14,031)

—

Proceeds from borrowings on revolving line of credit

—

16,000

—

Proceeds from issuance of convertible redeemable preferred stock, net of issuance costs

—

187,885

—

Other

(101)

(1,394)

(342)

Net cash used in financing activities

(18,132)

(22,452)

(2,096)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(820)

(1,218)

902

Net decrease in cash, cash equivalents and restricted cash

(1,837)

(28,462)

(16,032)

Cash, cash equivalents and restricted cash at beginning of period

22,279

50,741

66,773

Cash, cash equivalents and restricted cash at end of period

$               20,442

$                 22,279

$                 50,741

As of December 31,

2022

2021

2020

Cash and cash equivalents

$                 20,044

$                 21,854

$                 31,126

Restricted cash

398

425

19,615

Total cash, cash equivalents and restricted cash

$                 20,442

$                 22,279

$                 50,741

Years Ended December 31,

2022

2021

2020

(In thousands)

(Unaudited)

(Unaudited)

(Unaudited)

GAAP net loss

$               (66,561)

$               (50,037)

$               (47,918)

Amortization of intangible assets

27,096

25,038

27,219

Depreciation

16,828

15,793

14,064

Income tax provision

1,724

859

902

Interest expense, net

915

7,801

35,805

Amortization expense of finance leases

2,364

2,188

1,652

EBITDA

(17,634)

1,642

31,724

Adjustments:

Stock-based compensation expense

8,178

13,848

10,073

Loss on extinguishment of debt

—

9,629

—

Amortization of cloud-computing implementation costs

1,435

712

—

Change in fair value of contingent consideration liability

2,558

—

—

Impairment of right-of-use and long-lived assets

156

—

4,671

Impairment of goodwill

46,300

—

—

Restructuring

5,810

—

—

Loss on asset disposition

7

—

—

Other (income) expense, net ⁽¹⁾

(9,802)

6,039

(14,164)

Non-GAAP adjusted EBITDA

$                37,008

$                31,870

$                32,304

Non-GAAP adjusted EBITDA margin ⁽²⁾

9.8 %

8.7 %

9.1 %

⁽¹⁾ Adjustments to other (income) expense, net reflect non-cash changes in the fair value of warrants liability, financing derivatives, and interest make-whole derivative included in other (income) expense, net on our Consolidated Statements of Operations and Comprehensive Loss.

⁽²⁾ Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue reported on our Consolidated Statements of Operations and Comprehensive Loss for the applicable period.

COMSCORE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

(In thousands, except share and per share data)

Three Months Ended December 31,

2022

2021

Revenues

$                 98,240

$                 96,537

Cost of revenues ^{(1) (2)}

49,379

49,777

Selling and marketing ^{(1) (2)}

16,603

17,368

Research and development ^{(1) (2)}

8,797

9,587

General and administrative ^{(1) (2)}

13,081

16,127

Impairment of right-of-use and long-lived assets

156

—

Restructuring 

26

—

Amortization of intangible assets

6,773

6,172

Total expenses from operations

94,815

99,031

Income (loss) from operations

3,425

(2,494)

Other income, net

1,318

3,291

(Loss) gain from foreign currency transactions

(4,562)

1,011

Interest expense, net

(255)

(232)

(Loss) income before income taxes

(74)

1,576

Income tax benefit

221

1,307

Net income

$                      147

$                   2,883

Net loss available to common stockholders

Net income

147

2,883

Convertible redeemable preferred stock dividends

(3,910)

(3,910)

Total net loss available to common stockholders

$                 (3,763)

$                 (1,027)

Net loss per common share:

Basic and diluted

$                   (0.04)

$                   (0.01)

Weighted-average number of shares used in per share calculation - Common Stock:

Basic and diluted

93,580,777

83,495,247

Comprehensive income:

Net income

$                      147

$                   2,883

Other comprehensive income (loss):

Foreign currency cumulative translation adjustment

5,796

(1,731)

Total comprehensive income

$                   5,943

$                   1,152

⁽¹⁾ Excludes amortization of intangible assets, which is presented separately in the Consolidated Statements of Operations and Comprehensive Income.

⁽²⁾ Stock-based compensation expense is included in the line items above as follows:

Three Months Ended December 31,

2022

2021

Cost of revenues

$                      267

$                        49

Selling and marketing

217

112

Research and development

200

(83)

General and administrative

280

2,614

Total stock-based compensation expense

$                      964

$                   2,692

Three Months Ended December 31,

2022

2021

(In thousands)

(Unaudited)

(Unaudited)

GAAP net income

$                  147

$                   2,883

Amortization of intangible assets

6,773

6,172

Depreciation

4,286

3,920

Income tax benefit

(221)

(1,307)

Amortization expense of finance leases

489

703

Interest expense, net

255

232

EBITDA

11,729

12,603

Adjustments:

Stock-based compensation expense

964

2,692

Amortization of cloud-computing implementation costs

359

370

Restructuring

26

—

Change in fair value of contingent consideration liability

111

—

Right-of-use asset impairment

156

—

Other income, net ⁽¹⁾

(1,324)

(3,249)

Non-GAAP adjusted EBITDA

$             12,021

$                 12,416

Non-GAAP adjusted EBITDA margin ⁽²⁾

12.2 %

12.9 %

⁽¹⁾ Adjustments to other income, net reflect non-cash changes in the fair value of warrants liability included in other income, net on our Consolidated Statements of Operations and Comprehensive Income.

⁽²⁾ Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue reported on our Consolidated Statements of Operations and Comprehensive Income for the applicable period.

Year Ended December 31,

(In thousands)

2022

% of Revenue

2021

% of Revenue

$ Variance

% Variance

Digital Ad Solutions

$       212,510

56.5 %

$       221,979

60.5 %

$         (9,469)

(4.3) %

Cross Platform Solutions⁽¹⁾

163,913

43.5 %

145,034

39.5 %

18,879

13.0 %

Total revenues

$       376,423

100.0 %

$       367,013

100.0 %

$           9,410

2.6 %

⁽¹⁾ Cross Platform Solutions revenue includes revenue from our movies business, which grew from $30.6 million in the year ended December 31, 2021 to $33.9 million in the year ended December 31, 2022.

Three Months Ended December 31,

(In thousands)

2022

(Unaudited)

% of Revenue

2021

(Unaudited)

% of Revenue

$ Variance

% Variance

Digital Ad Solutions

$         55,383

56.4 %

$         59,398

61.5 %

$         (4,015)

(6.8) %

Cross Platform Solutions⁽¹⁾

42,857

43.6 %

37,139

38.5 %

5,718

15.4 %

Total revenues

$         98,240

100.0 %

$         96,537

100.0 %

$           1,703

1.8 %

⁽¹⁾ Cross Platform Solutions revenue includes revenue from our movies business, which grew from $8.5 million in the fourth quarter of 2021 to $8.6 million in the fourth quarter of 2022.

Three Months Ended (Unaudited)

Year Ended

(In thousands)

March 31, 2022

June 30,

2022

September 30, 2022

December 31, 2022

December 31, 2022

% of Total 2022  Revenue

Digital Ad Solutions

$         53,137

$         51,630

$         52,360

$         55,383

$       212,510

56.5 %

Cross Platform Solutions

40,829

39,804

40,423

42,857

163,913

43.5 %

Total revenues

$         93,966

$         91,434

$         92,783

$         98,240

$       376,423

100.0 %