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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): March 12, 2024

 

 

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 March 12, 2024, AdTheorent Holding Company, Inc. (the “Company”) released its financial results for the quarter and year ended December 31, 2023. In addition, the Company provides guidance for the full year of 2024. 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 provided in Item 2.02 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 March 12, 2024.
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:	March 12, 2024	By:	/s/ James Lawson
			James Lawson Chief Executive Officer

 

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Exhibit 99.1

 

AdTheorent Holding Company, Inc. Reports Fourth Quarter and Full-Year 2023 Financial Results

Fourth quarter revenue increased 15.2%

Exceeded fourth quarter and full-year guidance

New York, NY — March 12, 2024 — 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 fourth quarter and full-year 2023 financial results.

“AdTheorent completed its second full year as a public company with great momentum, recording more than 15% revenue growth in Q4,” said James Lawson, CEO of AdTheorent. “Our advanced ID-independent machine learning technology and algorithmic audience solutions position us for revenue growth and industry leadership in the post-cookie world, and our team is executing at a high level to take advantage of this significant opportunity.”

Fourth Quarter 2023 Financial Highlights:

Full-Year 2023 Financial Highlights:

 

 

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Business and Operating Highlights:

*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.

Full-Year 2024 Financial Outlook

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 full-year 2024 includes the following:

 

 

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

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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.

 

Conference Call and Webcast Details:

AdTheorent will host a conference call and webcast at 4:30 p.m. ET today, March 12, 2024, to discuss its fourth quarter and fiscal year 2023 financial results and business highlights. The conference call can be accessed by (800) 715-9871 from the United States and Canada or (646) 307-1963 International with Conference ID 8315528. 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 Tuesday, March 19, 2024, 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 8315528. 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:

David DeStefano, ICR

AdTheorentIR@icrinc.com

(203) 682-8383

 

Press Contact:

Melanie Berger, AdTheorent

melanie@adtheorent.com

(850) 567-0082

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ADTHEORENT HOLDING COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited; in thousands, except per share data)

 

		As of December 31,
		2023				2022
ASSETS
Current assets
Cash and cash equivalents		$	70,261			$	72,579
Accounts receivable, net			71,288				56,027
Income tax recoverable			177				145
Prepaid expenses			4,515				1,466
Total current assets			146,241				130,217
Property and equipment, net			457				520
Operating lease right-of-use-assets			5,085				5,732
Investment in SymetryML Holdings			628				789
Customer relationships, net			—				4,475
Other intangible assets, net			7,969				6,708
Goodwill			34,842				34,842
Deferred income taxes, net			10,575				6,962
Other assets			299				359
Total assets		$	206,096			$	190,604
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable			17,910				9,479
Accrued compensation			10,483				8,939
Accrued expenses			4,994				6,224
Operating lease liabilities, current			1,421				1,265
Total current liabilities			34,808				25,907
Warrants			967				2,298
Seller's Earn-Out			10				773
Operating lease liabilities, non-current			5,141				6,201
Total liabilities			40,926				35,179
Commitments and contingencies
Stockholders’ equity
Preferred stock			—				—
Common stock			9				9
Additional paid-in capital			93,304				83,566
Retained earnings			71,857				71,850
Total stockholders' equity			165,170				155,425
Total liabilities and stockholders’ equity		$	206,096			$	190,604

 

 

 

 

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ADTHEORENT HOLDING COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

		Three Months Ended December 31,								Year Ended December 31,
		2023				2022				2023				2022
Revenue		$	59,658			$	51,781			$	170,809			$	166,082
Operating expenses:
Platform operations			28,004				25,237				89,145				83,444
Sales and marketing			13,719				11,478				45,769				44,018
Technology and development			10,371				4,251				20,824				16,644
General and administrative			6,183				5,264				17,821				20,697
Total operating expenses			58,277				46,230				173,559				164,803
Income (loss) from operations			1,381				5,551				(2,750	)			1,279
Interest income, net			715				322				2,465				263
Gain on change in fair value of Seller's Earn-Out			13				1,644				763				17,308
(Loss) gain on change in fair value of warrants			(105	)			1,607				1,331				9,868
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			(8	)			(23	)			(161	)			(72	)
Other income (expense), net			—				3				(49	)			(21	)
Total other income, net			615				3,553				4,349				28,497
Net income before provision for income taxes			1,996				9,104				1,599				29,776
Provision for income taxes			(654	)			(1,528	)			(1,592	)			(988	)
Net income		$	1,342			$	7,576			$	7			$	28,788
Less: Net loss attributable to noncontrolling interest			—				—				—				550
Net income attributable to AdTheorent Holding Company, Inc.		$	1,342			$	7,576			$	7			$	29,338
Earnings per share:
Basic		$	0.02			$	0.09			$	0.00			$	0.34
Diluted		$	0.01			$	0.08			$	0.00			$	0.32
Weighted-average common shares outstanding:
Basic			88,327,865				86,874,191				87,984,917				86,222,972
Diluted			92,620,835				91,822,577				92,465,503				92,621,822

 

 

 

 

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ADTHEORENT HOLDING COMPANY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in thousands)

 

		Year Ended December 31,
		2023				2022
Cash flows from operating activities
Net income		$	7			$	28,788
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses			359				334
Amortization expense			8,872				7,830
Depreciation expense			193				193
Amortization of debt issuance costs			55				55
Gain on change in fair value of Seller's Earn-Out			(763	)			(17,308	)
Gain on change in fair value of warrants			(1,331	)			(9,868	)
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			161				72
Deferred tax benefit			(3,613	)			(6,528	)
Equity-based compensation			9,223				11,188
Seller's Earn-Out equity-based compensation			—				1,364
Changes in operating assets and liabilities:
Accounts receivable			(15,620	)			(425	)
Income taxes recoverable			(32	)			(50	)
Prepaid expenses and other assets			(2,397	)			3,307
Accounts payable			8,376				(2,844	)
Accrued compensation, accrued expenses, and other liabilities			(590	)			(1,039	)
Net cash provided by operating activities		$	2,900			$	13,918
Cash flows from investing activities
Capitalized software development costs			(5,265	)			(2,797	)
Purchase of property and equipment			(108	)			(330	)
Decrease in cash from deconsolidation of SymetryML			—				(69	)
Net cash used in investing activities		$	(5,373	)		$	(3,196	)
Cash flows from financing activities
Cash received for exercised options			306				459
Payments from 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			(466	)			(278	)
Proceeds from employee stock purchase plan			315				—
Net cash provided by (used in) financing activities		$	155			$	(38,236	)
Net decrease in cash and cash equivalents			(2,318	)			(27,514	)
Cash and cash equivalents at beginning of period			72,579				100,093
Cash and cash equivalents at end of period		$	70,261			$	72,579

 

 

 

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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 Company 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 December 31,								Year Ended December 31,
		2023				2022				2023				2022
		(In thousands)
Revenue		$	59,658			$	51,781			$	170,809			$	166,082
Less: Platform operations			28,004				25,237				89,145				83,444
Gross Profit			31,654				26,544				81,664				82,638
Add back: Other platform operations			8,248				7,203				29,567				27,182
Adjusted Gross Profit		$	39,902			$	33,747			$	111,231			$	109,820

 

 

EBITDA and Adjusted EBITDA

EBITDA is a non-GAAP financial measure defined by the Company as net income, before interest income, net, depreciation, amortization and income tax provision. 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 Company management and the Board to understand and evaluate its operating performance and trends, develop short-and long-term operational plans, measure performance goals in employee equity incentive awards, and make strategic decisions regarding the

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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 Company management and the Board.

The following table sets forth a reconciliation of net income to Adjusted EBITDA for the periods presented:

 

		Three Months Ended December 31,								Year Ended December 31,
		2023				2022				2023				2022
		(in thousands)
Net income		$	1,342			$	7,576			$	7			$	28,788
Interest income, net			(715	)			(322	)			(2,465	)			(263	)
Tax provision			654				1,528				1,592				988
Depreciation and amortization			2,446				2,008				9,065				8,023
EBITDA		$	3,727			$	10,790			$	8,199			$	37,536
Equity based compensation			3,299				2,561				9,223				11,188
Seller's Earn-Out equity-based compensation			—				—				—				1,364
Early termination fee (1)			6,300				—				6,300				—
Non-recurring legal fees (2)			222				—				222				—
Transaction costs (3)			—				—				166				(131	)
Gain on change in fair value of Seller's Earn-Out (4)			(13	)			(1,644	)			(763	)			(17,308	)
Loss (gain) on change in fair value of warrants (5)			105				(1,607	)			(1,331	)			(9,868	)
Gain on deconsolidation of SymetryML (6)			—				—				—				(1,939	)
Loss on change in fair value of SAFE Notes (7)			—				—				—				788
Loss on fair value of investment in SymetryML Holdings			8				23				161				72
Separation expense related to headcount reductions			—				—				—				270
Non-core operations (8)			—				—				—				351
Adjusted EBITDA		$	13,648			$	10,123			$	22,177			$	22,323

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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 December 31,								Year Ended December 31,
		2023				2022				2023				2022
		(In thousands, except for percentages)
Gross Profit		$	31,654			$	26,544			$	81,664			$	82,638
Net income		$	1,342			$	7,576			$	7			$	28,788
Net income as a percentage of Gross Profit			4.2	%			28.5	%			0.0	%			34.8	%
Adjusted Gross Profit		$	39,902			$	33,747			$	111,231			$	109,820
Adjusted EBITDA		$	13,648			$	10,123			$	22,177			$	22,323
Adjusted EBITDA as a percentage of Adjusted Gross Profit			34.2	%			30.0	%			19.9	%			20.3	%
Gross Profit		$	31,654			$	26,544			$	81,664			$	82,638
Revenue		$	59,658			$	51,781			$	170,809			$	166,082
Gross Profit as a percentage of Revenue			53.1	%			51.3	%			47.8	%			49.8	%
Revenue		$	59,658			$	51,781			$	170,809			$	166,082
Adjusted Gross Profit		$	39,902			$	33,747			$	111,231			$	109,820
Adjusted Gross Profit as a percentage of Revenue			66.9	%			65.2	%			65.1	%			66.1	%

 

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