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10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-40116

AdTheorent Holding Company, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	85-3978415
( State or other jurisdiction of incorporation or organization)	(I.R.S. 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

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated filer	☐	Accelerated filer	☒
Non-Accelerated filer	☐	Smaller reporting company	☒
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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 2, 2023, the registrant had 88,241,898 shares of common stock outstanding.

Table of Contents


		Page

PART I.	FINANCIAL INFORMATION	3

Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	3
	Condensed Consolidated Statements of Operations for the three month and nine month periods ended September 30, 2023 and 2022	4
	Condensed Consolidated Statements of Equity for the three month and nine month periods ended September 30, 2023 and 2022	5
	Condensed Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2023 and 2022	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36

PART II.	OTHER INFORMATION	36

Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	37
SIGNATURES

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited).

ADTHEORENT HOLDING COMPANY, INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)


	September 30, 2023		December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	74,339	$	72,579
Accounts receivable, net		48,693		56,027
Income tax recoverable		177		145
Prepaid expenses		2,673		1,466
Total current assets		125,882		130,217
Property and equipment, net		465		520
Operating lease right-of-use assets		4,987		5,732
Investment in SymetryML Holdings		636		789
Customer relationships, net		1,119		4,475
Other intangible assets, net		7,854		6,708
Goodwill		34,842		34,842
Deferred income taxes, net		12,067		6,962
Other assets		308		359
Total assets	$	188,160	$	190,604

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	10,294	$	9,479
Accrued compensation		5,117		8,939
Accrued expenses		5,076		6,224
Operating lease liabilities, current		1,265		1,265
Total current liabilities		21,752		25,907
Warrants		862		2,298
Seller's Earn-Out		23		773
Operating lease liabilities, non-current		5,253		6,201
Total liabilities		27,890		35,179
Stockholders’ equity
Preferred stock, $0.0001 per share, 20,000,000 shares authorized, no shares issued and outstanding as of September 30, 2023 and December 31, 2022		—		—
Common stock, $0.0001 par value, 350,000,000 shares authorized; 88,206,048 and 86,968,309 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		9		9
Additional paid-in capital		89,746		83,566
Retained earnings		70,515		71,850
Total stockholders' equity		160,270		155,425
Total liabilities and stockholders’ equity	$	188,160	$	190,604

See accompanying notes to condensed consolidated financial statements.

ADTHEORENT HOLDING COMPANY, INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenue	$	40,890		$	37,584		$	111,151		$	114,301
Operating expenses:
Platform operations		22,019			19,581			61,141			58,207
Sales and marketing		11,119			11,127			32,050			32,540
Technology and development		3,794			3,955			10,453			12,393
General and administrative		4,113			4,729			11,638			15,433
Total operating expenses		41,045			39,392			115,282			118,573
Loss from operations		(155	)		(1,808	)		(4,131	)		(4,272	)
Interest income (expense), net		707			97			1,750			(59	)
Gain on change in fair value of Seller's Earn-Out		225			2,901			750			15,664
Gain on change in fair value of warrants		1,290			5,674			1,436			8,261
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		5			(39	)		(153	)		(49	)
Other expense, net		(12	)		(5	)		(49	)		(24	)
Total other income, net		2,215			8,628			3,734			24,944
Net income (loss) before income taxes		2,060			6,820			(397	)		20,672
(Provision) benefit for income taxes		(6,254	)		(1,095	)		(938	)		540
Net (loss) income	$	(4,194	)	$	5,725		$	(1,335	)	$	21,212
Less: Net loss attributable to noncontrolling interest		—			—			—			550
Net (loss) income attributable to AdTheorent Holding Company, Inc.	$	(4,194	)	$	5,725		$	(1,335	)	$	21,762
(Loss) earnings per share:
Basic	$	(0.05	)	$	0.07		$	(0.02	)	$	0.25
Diluted	$	(0.05	)	$	0.06		$	(0.02	)	$	0.23
Weighted-average common shares outstanding:
Basic		88,175,813			86,492,025			87,869,345			86,003,514
Diluted		88,175,813			92,122,421			87,869,345			92,885,851

See accompanying notes to condensed consolidated financial statements.

ADTHEORENT HOLDING COMPANY, INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(in thousands, except for number of shares)

(unaudited)


	Common Stock
	Shares		Amount		Additional Paid-in Capital			Retained Earnings			Noncontrolling Interests		Total Stockholders' Equity
December 31, 2022		86,968,309	$	9	$	83,566		$	71,850		$	—		155,425
Equity-based compensation		—		—		1,552			—			—		1,552
Exercises of options		80,520		—		57			—			—		57
Vesting of restricted stock, net of shares withheld for taxes		605,854		—		(399	)		—			—		(399	)
Shares issued under employee stock purchase plan		111,433		—		172			—			—		172
Net loss		—		—		—			(5,223	)				(5,223	)
March 31, 2023		87,766,116	$	9	$	84,948		$	66,627		$	—	$	151,584
Equity-based compensation		—		—		1,932			—			—		1,932
Exercises of options		152,947		—		93			—			—		93
Vesting of restricted stock, net of shares withheld for taxes		51,834		—		(38	)		—			—		(38	)
Net income		—		—		—			8,082			—		8,082
June 30, 2023		87,970,897	$	9	$	86,935		$	74,709		$	—	$	161,653
Equity-based compensation		—		—		2,697			—			—		2,697
Vesting of restricted stock, net of shares withheld for taxes		114,179		—		(29	)		—			—		(29	)
Shares issued under employee stock purchase plan		120,972		—		143			—			—		143
Net loss		—		—		—			(4,194	)		—		(4,194	)
September 30, 2023		88,206,048	$	9	$	89,746		$	70,515		$	—	$	160,270

See accompanying notes to condensed consolidated financial statements.

ADTHEORENT HOLDING COMPANY, INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (continued)

(in thousands, except for number of shares)

(unaudited)


	Common Stock
	Shares		Amount		Additional Paid-in Capital			Retained Earnings			Noncontrolling Interests			Total Stockholders' Equity
December 31, 2021		85,743,994	$	9	$	70,778		$	42,512		$	(1,416	)		111,883
Equity-based compensation		—		—		1,988			—			—			1,988
Seller's Earn-Out equity-based compensation		—		—		492			—			—			492
Conversion of SAFE Notes into SymetryML preferred stock		—		—		—			—			3,938			3,938
SymetryML preferred stock issuance		—		—		—			—			400			400
Deconsolidation of SymetryML Holdings		—		—		—			—			(2,372	)		(2,372	)
Net loss		—		—		—			(41,740	)		(550	)		(42,290	)
March 31, 2022		85,743,994	$	9	$	73,258		$	772		$	—		$	74,039
Equity-based compensation		—		—		3,856			—			—			3,856
Seller's Earn-Out equity-based compensation		—		—		499			—			—			499
Exercises of options		355,629		—		183			—			—			183
Exercises of warrants		10		—		—			—			—			—
Transaction cost adjustment		—		—		55			—			—			55
Net income		—		—		—			57,777			—			57,777
June 30, 2022		86,099,633	$	9	$	77,851		$	58,549		$	—		$	136,409
Equity-based compensation		—		—		2,783			—			—			2,783
Seller's Earn-Out equity-based compensation		—		—		373			—			—			373
Exercises of options		244,922		—		163			—			—			163
Vesting of restricted stock, net of shares withheld for taxes		346,875		—		(231	)		—			—			(231	)
Net income		—		—		—			5,725			—			5,725
September 30, 2022		86,691,430	$	9	$	80,939		$	64,274		$	—		$	145,222

See accompanying notes to condensed consolidated financial statements.

ADTHEORENT HOLDING COMPANY, INC AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities
Net (loss) income	$	(1,335	)	$	21,212
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Provision for credit losses		10			240
Amortization expense		6,473			5,872
Depreciation expense		146