0001838672false00018386722023-08-032023-08-030001838672us-gaap:CommonStockMember2023-08-032023-08-030001838672us-gaap:WarrantMember2023-08-032023-08-03

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 3, 2023

 

 

AdTheorent Holding Company, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			001-40116	85-3978415
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
330 Hudson Street 13th Floor
New York, New York				10013
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (800) 804-1359

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, par value $0.0001 per share		ADTH		The Nasdaq Stock Market
Warrants to purchase common stock		ADTHW		The Nasdaq Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

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Item 2.02 Results of Operations and Financial Condition.

On August 3, 2023, AdTheorent Holding Company, Inc. (the “Company”) released its financial results for the quarter ended June 30, 2023. A copy of the Company’s press release is attached as Exhibit 99.1 to this Form 8-K and incorporated herein by reference.

The information in this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

d) Exhibits.

Exhibit No.		Description
99.1		Press release issued by AdTheorent Holding Company, Inc., dated August 3, 2023.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Comments in this Current Report on Form 8-K and in the exhibit attached hereto contain certain forward-looking statements, which are based on management’s good faith expectations and beliefs concerning future developments. Actual results may differ materially from these expectations as a result of many factors. These factors include, but are not limited to, the risks and uncertainties described in the “Risk Factors” and “Cautionary Statement Regarding Forward Looking Statements” sections of the Company’s Annual Report on Form 10-K, as well as in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s Quarterly Reports on Form 10-Q. The Company does not undertake any obligation to update such forward-looking statements. All market and industry data are based on Company estimates.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			AdTheorent Holding Company, Inc.
Date:	August 3, 2023	By:	/s/ James Lawson
			James Lawson Chief Executive Officer

 

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Exhibit 99.1

 

AdTheorent Holding Company, Inc. Reports Second Quarter 2023 Results and

Reaffirms Full-Year 2023 Outlook

New York, NY — August 3, 2023 — 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 second quarter 2023 financial results.

 

“As we exit the second quarter, we look confidently towards a second half return to meaningful revenue growth, reflected in strong quarter-to-date bookings, growing late-stage pipeline, and impressive results across each of our strategic investments including self-service (or Direct Access), CTV, AdTheorent predictive (ID-free) audience products, and AdTheorent Health,” said James Lawson, CEO of AdTheorent. “This confidence is underpinned by our decade-plus leadership in AI/ML and the near-term launch of our first-of-its-kind self-service Health DSP, an innovation that's already eliciting an overwhelmingly positive response in customer previews.”

Second Quarter 2023 Financial Overview:

Second Quarter and Recent Business and Operating Highlights:

 

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*We prepare our 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 we define and calculate these measures and a reconciliation thereof to the most directly comparable GAAP measures.

Third Quarter and Full-Year 2023 Financial Outlook:

The Company's growth may continue to be impacted in 2023 by macroeconomic factors beyond its control, such as inflationary pressures and recessionary fears. Based on the current business environment, recent performance and the current trends in the marketplace and subject to the risks and uncertainties inherent in forward-looking statements, the Company's outlook for the third quarter and full-year 2023 includes the following:

 

Third quarter 2023:

Full-year ending December 31, 2023:

 

Although the Company provides guidance for Adjusted EBITDA, it is not able to provide guidance for net income, the most directly comparable GAAP measure. Certain elements of the composition of net income, including equity-based compensation, are not predictable, making it impractical for the Company to provide guidance on net income or to reconcile its Adjusted EBITDA guidance to net income without unreasonable efforts. Similarly, although the Company provides guidance for Adjusted Gross Profit, it is not able to provide guidance for Gross Profit, the most directly comparable GAAP measure. Certain elements of the composition of Gross Profit, including equity-based compensation, are not predictable, making it impractical for the Company to provide guidance on Gross Profit or to reconcile its Adjusted Gross Profit guidance to Gross Profit without unreasonable efforts. For the same reasons, the Company is unable to address the probable significance of the unavailable information regarding net income and Gross Profit, which could be material to future 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 A\T. Leveraging only non-sensitive data and 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 an AdExchanger 2022 Top 50 Programmatic Power Player 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 2022, evidencing its continued prioritization of its team, AdTheorent was named a Crain’s Top 100 Best Place to Work in NYC for the ninth consecutive year. AdTheorent ranked fifth in the Large Employer Category and 17th Overall in 2022. For more information, visit adtheorent.com.

 

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Conference Call and Webcast Details:

AdTheorent will host a conference call and webcast at 4:30 p.m. ET today, August 3, 2023, to discuss its second quarter 2023 financial results and business highlights. The conference call can be accessed by dialing (800) 715-9871 from the United States and Canada or (646) 307-1963 International with Conference ID 1908045. The live webcast of the conference call and other materials related to AdTheorent’s financial performance can be accessed from AdTheorent’s investor relations website at investors.adtheorent.com.

Following the completion of the call until 11:59 p.m. ET on Thursday, August 10, 2023, a telephone replay will be available by dialing (800) 770-2030 from the United States and Canada, or (609) 800-9909 International with Conference ID 1908045. A webcast replay will also be available at investors.adtheorent.com for 12 months.

 

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. 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:

April Scee, ICR

AdTheorentIR@icrinc.com

(646) 277-1219

 

Press Contact:

Melanie Berger, AdTheorent

Press@adtheorent.com

(850) 567-0082

 

 

 

 

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ADTHEORENT HOLDING COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in thousands)

 

		June 30,				December 31,
		2023				2022
ASSETS
Current assets
Cash and cash equivalents		$	73,061			$	72,579
Accounts receivable, net			42,362				56,027
Income tax recoverable			177				145
Prepaid expenses			10,026				1,466
Total current assets			125,626				130,217
Property and equipment, net			494				520
Operating lease right of use assets			5,234				5,732
Investment in SymetryML Holdings			631				789
Customer relationships, net			2,237				4,475
Other intangible assets, net			7,412				6,708
Goodwill			34,842				34,842
Deferred income taxes, net			10,037				6,962
Other assets			345				359
Total assets		$	186,858			$	190,604
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	8,759			$	9,479
Accrued compensation			3,117				8,939
Accrued expenses			4,097				6,224
Operating lease liabilities, current			1,268				1,265
Total current liabilities			17,241				25,907
Warrants			2,152				2,298
Seller's Earn-Out			248				773
Operating lease liabilities, non-current			5,564				6,201
Total liabilities			25,205				35,179
Stockholders’ equity
Preferred Stock			—				—
Common Stock			9				9
Additional paid-in capital			86,935				83,566
Retained earnings			74,709				71,850
Total stockholders' equity			161,653				155,425
Total liabilities and stockholders’ equity		$	186,858			$	190,604

 

 

 

 

 

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ADTHEORENT HOLDING COMPANY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in thousands, except share and per share data)

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2023				2022				2023				2022
Revenue		$	37,587			$	42,476			$	70,261			$	76,717
Operating expenses:
Platform operations			20,735				20,854				39,122				38,626
Sales and marketing			10,624				11,083				20,931				21,413
Technology and development			3,368				4,153				6,659				8,438
General and administrative			3,589				5,103				7,525				10,704
Total operating expenses			38,316				41,193				74,237				79,181
(Loss) income from operations			(729	)			1,283				(3,976	)			(2,464	)
Interest income (expense), net			424				(47	)			1,043				(156	)
Gain on change in fair value of Seller's Earn-Out			292				37,419				525				12,763
Gain on change in fair value of warrants			415				18,523				146				2,587
Gain on deconsolidation of SymetryML			—				—				—				1,939
Loss on change in fair value of SAFE Notes			—				—				—				(788	)
Gain (loss) on fair value of investment in SymetryML Holdings			10				(10	)			(158	)			(10	)
Other income (expense), net			4				(1	)			(37	)			(19	)
Total other income, net			1,145				55,884				1,519				16,316
Net income (loss) before income taxes			416				57,167				(2,457	)			13,852
Benefit for income taxes			7,666				610				5,316				1,635
Net income		$	8,082			$	57,777			$	2,859			$	15,487
Less: Net loss attributable to noncontrolling interest			—				—				—				550
Net income attributable to AdTheorent Holding Company, Inc.		$	8,082			$	57,777			$	2,859			$	16,037
Earnings per share:
Basic		$	0.09			$	0.67			$	0.03			$	0.19
Diluted		$	0.09			$	0.62			$	0.03			$	0.17
Weighted-average common shares outstanding:
Basic			87,874,081				85,766,302				87,713,571				85,775,210
Diluted			92,787,955				93,402,650				92,407,260				93,283,519

 

 

 

 

 

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ADTHEORENT HOLDING COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in thousands)

 

		Six Months Ended June 30,
		2023				2022
Cash flows from operating activities
Net income		$	2,859			$	15,487
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses			—				172
Amortization expense			4,204				3,950
Depreciation expense			98				92
Amortization of debt issuance costs			28				28
Gain on change in fair value of Seller's Earn-Out			(525	)			(12,763	)
Gain on change in fair value of warrants			(146	)			(2,587	)
Gain on deconsolidation of SymetryML			—				(1,939	)
Loss on change in fair value of SAFE Notes			—				788
Loss on fair value of investment in SymetryML Holdings			158				10
Deferred tax benefit			(3,075	)			(3,236	)
Equity-based compensation			3,340				5,844
Seller's Earn-Out equity-based compensation			—				991
Changes in operating assets and liabilities:
Accounts receivable			13,665				11,675
Income taxes recoverable			(32	)			(4	)
Prepaid expenses and other assets			(8,076	)			(3,626	)
Accounts payable			(779	)			(2,440	)
Accrued compensation, accrued expenses, and other liabilities			(8,583	)			(9,153	)
Net cash provided by operating activities			3,136				3,289
Cash flows from investing activities
Capitalized software development costs			(2,470	)			(1,240	)
Purchase of property and equipment			(69	)			(211	)
Decrease in cash from deconsolidation of SymetryML			—				(69	)
Net cash used in investing activities			(2,539	)			(1,520	)
Cash flows from financing activities
Cash received for exercised options			150				183
Payment of revolver borrowings			—				(39,017	)
Proceeds from SAFE Notes			—				200
Proceeds from SymetryML preferred stock issuance			—				400
Taxes paid related to net settlement of restricted stock awards			(437	)			—
Proceeds from employee stock purchase plan			172				—
Net cash used in financing activities			(115	)			(38,234	)
Net increase (decrease) in cash and cash equivalents			482				(36,465	)
Cash and cash equivalents at beginning of period			72,579				100,093
Cash and cash equivalents at end of period		$	73,061			$	63,628

 

 

 

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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 June 30,								Six Months Ended June 30,
		2023				2022				2023				2022
		(In thousands)
Revenue		$	37,587			$	42,476			$	70,261			$	76,717
Less: Platform operations			20,735				20,854				39,122				38,626
Gross Profit			16,852				21,622				31,139				38,091
Add back: Other platform operations			7,190				6,724				13,800				13,240
Adjusted Gross Profit		$	24,042			$	28,346			$	44,939			$	51,331

EBITDA and Adjusted EBITDA

EBITDA is a non-GAAP financial measure defined by us as net income, before interest (income) expense, net; depreciation, amortization; and income tax benefit. Adjusted EBITDA is defined as EBITDA before equity-based compensation expense, transaction costs, non-core operations and other non-recurring items. Net income 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

 

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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 income to Adjusted EBITDA for the periods presented:

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2023				2022				2023				2022
		(In thousands)
Net income		$	8,082			$	57,777			$	2,859			$	15,487
Interest (income) expense, net			(424	)			47				(1,043	)			156
Tax benefit			(7,666	)			(610	)			(5,316	)			(1,635	)
Depreciation and amortization			2,194				1,954				4,302				4,042
EBITDA		$	2,186			$	59,168			$	802			$	18,050
Equity-based compensation			1,860				3,856				3,340				5,844
Seller's Earn-Out equity-based compensation			—				499				—				991
Transaction costs (1)			—				(271	)			166				(131	)
Gain on change in fair value of Seller's Earn-Out (2)			(292	)			(37,419	)			(525	)			(12,763	)
Gain on change in fair value of warrants (3)			(415	)			(18,523	)			(146	)			(2,587	)
Gain on deconsolidation of SymetryML (4)			—				—				—				(1,939	)
Loss on change in fair value of SAFE Notes (5)			—				—				—				788
(Gain) loss on fair value of investment in SymetryML Holdings			(10	)			10				158				10
Non-core operations (6)			—				—				—				351
Adjusted EBITDA		$	3,329			$	7,320			$	3,795			$	8,614

 

 

 

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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 June 30,								Six Months Ended June 30,
		2023				2022				2023				2022
		(In thousands, except percentages)
Gross Profit		$	16,852			$	21,622			$	31,139			$	38,091
Net income		$	8,082			$	57,777			$	2,859			$	15,487
Net income as a percentage of Gross Profit			48.0	%			267.2	%			9.2	%			40.7	%
Adjusted Gross Profit		$	24,042			$	28,346			$	44,939			$	51,331
Adjusted EBITDA		$	3,329			$	7,320			$	3,795			$	8,614
Adjusted EBITDA as a percentage of Adjusted Gross Profit			13.8	%			25.8	%			8.4	%			16.8	%
Gross Profit		$	16,852			$	21,622			$	31,139			$	38,091
Revenue		$	37,587			$	42,476			$	70,261			$	76,717
Gross Profit as a percentage of Revenue			44.8	%			50.9	%			44.3	%			49.7	%
Revenue		$	37,587			$	42,476			$	70,261			$	76,717
Adjusted Gross Profit		$	24,042			$	28,346			$	44,939			$	51,331
Adjusted Gross Profit as a percentage of Revenue			64.0	%			66.7	%			64.0	%			66.9	%

 

 

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