Le Lézard
Classified in: Science and technology, Business, Covid-19 virus
Subjects: ERN, ERP

IAS Reports Second Quarter 2022 Financial Results


Total revenue increased 34% to $100.3 million; programmatic revenue increased 51%

Net income of $2.0 million, or $0.01 per share at a 2% margin; adjusted EBITDA increased to $31.6 million at a 31% margin

NEW YORK, Aug. 4, 2022 /PRNewswire/ -- Integral Ad Science Holding Corp. (Nasdaq: IAS), a global leader in digital media quality, today announced financial results for the second quarter ended June 30, 2022.

"We exceeded our outlook for the second quarter with 34% revenue growth and strong profitability," said Lisa Utzschneider, CEO of IAS. "Marketers trust IAS as an independent provider of verification, targeting, and optimization solutions. Our programmatic revenue grew 51% in the second quarter driven by continued adoption of Context Control."

Second Quarter 2022 Financial Highlights

Recent Business Highlights

Financial Outlook

Utzschneider commented, "We are revising our full-year outlook to reflect the current macroeconomic environment. We expect full-year 2022 revenue growth of approximately 24% compared to 2021, and we are maintaining our adjusted EBITDA margin outlook for 2022 at prior levels of approximately 31% based on the midpoint of our revised guidance ranges, reinforcing the profitable and durable nature of our business model."

IAS expects revenue and adjusted EBITDA for the third quarter and full-year 2022 in the following ranges:

Third Quarter Ending September 30, 2022:

Year Ending December 31, 2022:

* See "Supplemental Disclosure Regarding Non-GAAP Financial Information" section herein for an explanation of these measures.

 

INTEGRAL AD SCIENCE HOLDING CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 


(IN THOUSANDS, EXCEPT SHARE DATA)

June 30,
2022


December 31,
2021

ASSETS




Current assets:




Cash and cash equivalents

$        77,366


$        73,210

Restricted cash

189


70

Accounts receivable, net

60,186


53,028

Unbilled receivables

34,076


36,210

Prepaid expenses and other current assets

11,749


7,647

Total current assets

183,566


170,165

Property and equipment, net

1,583


1,413

Internal use software, net

19,964


18,100

Intangible assets, net

237,475


258,316

Goodwill

673,501


676,513

Operating lease right-of-use assets

20,763


?

Deferred tax asset, net

848


887

Other long-term assets

4,366


4,143

Total assets

$   1,142,066


$   1,129,537

LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Accounts payable and accrued expenses

$        41,562


$        56,257

Due to related party

166


74

Deferred revenue

395


160

Operating lease liabilities, current

7,096


?

Total current liabilities

49,219


56,491

Accrued rent

?


854

Net deferred tax liability

52,486


53,523

Long-term debt

233,030


242,798

Operating lease liabilities, non-current

21,126


?

Other long-term liabilities

1,639


8,681

Total liabilities

357,500


362,347

Commitments and Contingencies (Note 15)




Stockholders' Equity




Preferred Stock, $0.001 par value, 50,000,000 shares authorized at June 30, 2022;
0 shares issued and outstanding at June 30, 2022 and December 31, 2021.

?


?

Common Stock, $0.001 par value, 500,000,000 shares authorized, 155,498,704 and
154,398,495 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively.

155


154

Additional paid-in-capital

804,175


781,951

Accumulated other comprehensive loss

(8,285)


(315)

Accumulated deficit

(11,479)


(14,600)

Total stockholders' equity

784,566


767,190

Total liabilities and stockholders' equity

$   1,142,066


$   1,129,537

 

INTEGRAL AD SCIENCE HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)




Three Months Ended June 30,


Six Months Ended June 30,

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


2022


2021


2022


2021

Revenue


$       100,328


$         75,075


$       189,570


$       142,027

Operating expenses:









Cost of revenue (excluding depreciation and amortization shown below)


18,132


12,925


34,693


24,344

Sales and marketing


26,482


27,268


49,539


43,813

Technology and development


17,624


20,176


34,611


32,944

General and administrative


18,834


33,044


35,603


41,592

Depreciation and amortization


12,510


14,603


24,968


28,998

Total operating expenses


93,582


108,016


179,414


171,691

Operating income (loss)


6,746


(32,941)


10,156


(29,664)

Interest expense, net


(1,814)


(5,167)


(3,240)


(12,126)

Net income (loss) before income taxes


4,932


(38,108)


6,916


(41,790)

(Provision) benefit from income taxes


(2,971)


3,045


(3,796)


3,958

Net income (loss)


$           1,961


$        (35,063)


$           3,120


$        (37,832)

Net income (loss) per share ? basic and diluted(1)


$             0.01


$            (0.26)


$             0.02


$            (0.28)

Weighted average shares outstanding:









Basic


155,140,684


133,981,985


154,812,037


133,996,147

Diluted


156,973,684


133,981,985


157,309,858


133,996,147

Other comprehensive loss:









Foreign currency translation adjustments


(6,996)


718


(7,970)


(1,186)

Total comprehensive loss


$          (5,035)


$        (34,345)


$          (4,850)


$        (39,018)


(1) Amounts for periods prior to the Company's conversion to a Delaware corporation have been retrospectively adjusted to give effect to the corporate conversion.

 

INTEGRAL AD SCIENCE HOLDING CORP.





CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS'/STOCKHOLDERS' EQUITY





(UNAUDITED)









































Three Months Ended June 30, 2022





















Common Stock













(IN THOUSANDS, EXCEPT SHARES)



Shares


Amount


Additional
paid-in capital


Accumulated
other
comprehensive
loss


Accumulated
deficit


Total
stockholders'
equity





Balance, April 1, 2022



155,016,271


$                 155


$            792,616


$              (1,289)


$        (13,441)


$          778,041





RSUs vested



277,119


-


-


-


-


-





Option exercises



205,314


-


850


-


-


850





Stock-based compensation



-


-


10,709


-


-


10,709





Foreign currency translation adjustment



-


-


-


(6,996)


-


(6,996)





Net income



-


-


-


-


1,961


1,961





Balance, June 30, 2022



155,498,704


$                 155


$            804,175


$              (8,285)


$        (11,479)


$          784,566









































Six Months Ended June 30, 2022





















Common Stock













(IN THOUSANDS, EXCEPT UNITS AND SHARES)



Shares


Amount


Additional
paid-in capital


Accumulated
other
comprehensive
loss


Accumulated
deficit


Total
stockholders'
equity





Balance, January 1, 2022



154,398,495


$                 154


$            781,951


$                 (315)


$        (14,600)


$          767,190





RSUs vested



289,213


-


-


-


-


-





Option exercises



810,996


1


3,381


-


-


3,382





Stock-based compensation



-


-


18,843


-


-


18,843





Foreign currency translation adjustment



-


-


-


(7,970)


-


(7,970)





Net income



-


-


-


-


3,120


3,120





Balance, June 30, 2022



155,498,704


$                 155


$            804,175


$              (8,285)


$        (11,479)


$          784,566













































































Three Months Ended June 30, 2021





















Member's Interest


Common Stock









(IN THOUSANDS, EXCEPT UNITS AND SHARES)



Units (1) 


Amount


Shares


Amount


Additional
paid-in capital


Accumulated
other
comprehensive
income


Accumulated
deficit


Total members'/
stockholders'
equity

Balance, April 1, 2021



133,957,034


$           553,304


-


$                      -


$                   -


$             2,619


$      (130,322)


$              425,601

Option exercises



246,369


1,075


-


-


3,360


-


-


4,435

Stock-based compensation



-


-


-


-


38,148


-


-


38,148

Foreign currency translation adjustment



-


-


-


-


-


718


-


718

Net loss



-


-


-


-


-


-


(35,063)


(35,063)

Conversion to Delaware corporation (Note 1)



(134,203,403)


(554,379)


134,203,403


134


388,860


-


165,385


-

Balance, June 30, 2021



-


$                      -


134,203,403


$                  134


$        430,368


$             3,337


$                   -


$              433,839





































Six Months Ended June 30, 2021





































Member's Interest


Common Stock









(IN THOUSANDS, EXCEPT UNITS AND SHARES)



Units (1) 


Amount


Shares


Amount


Additional
paid-in capital


Accumulated
other
comprehensive
income (loss)


Accumulated
deficit


Total members'/
stockholders'
equity

Balance, January 1, 2021



134,039,494


$           553,717


-


$                     -


$                -


$             4,523


$      (126,761)


$              431,479

Repurchase of units



(99,946)


(413)


-


-


-


-


(791)


(1,204)

Units vested



17,486


-


-


-


-


-


-


-

Option exercises



246,369


1,075


-


-


3,360


-


-


4,435

Stock-based compensation



-


-


-


-


38,148


?


-


38,148

Foreign currency translation adjustment



-


-






-


(1,186)


-


(1,186)

Net loss



-


-






-


-


(37,832)


(37,832)

Conversion to Delaware corporation (Note 1)



(134,203,403)


(554,379)


134,203,403


134


388,860


-


165,385


-

Balance, June 30, 2021



-


$                      -


134,203,403


$                  134


$        430,368


$             3,337


$                   -


$              433,839



















(1) Amounts for periods prior to the Company's conversion to a Delaware corporation have been retrospectively adjusted to give effect to the corporate conversion.





 

INTEGRAL AD SCIENCE HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)




Six Months Ended June 30,

(IN THOUSANDS)


2022


2021

Cash flows from operating activities:





Net income (loss)


$              3,120


$           (37,832)

Adjustments to reconcile net income (loss) to net cash provided by operating activities





Depreciation and amortization


24,968


28,998

Stock-based compensation


18,860


41,531

Deferred tax benefit


(728)


(6,582)

Amortization of debt issuance costs


232


683

Allowance for (reversal of) doubtful accounts


485


99

Non-cash interest expense


?


395

Impairment of assets


49


?

Changes in operating assets and liabilities:





Decrease (increase) in accounts receivable


(9,654)


3,718

Decrease in unbilled receivables


1,639


2,769

Increase in prepaid expenses and other current assets


(4,560)


(2,791)

Increase in operating leases, net


(223)


?

Increase in other long-term assets


(326)


(602)

Increase (decrease) in accounts payable and accrued expenses


(10,986)


2,852

Increase in accrued rent


?


128

Increase (decrease) in deferred revenue


221


(377)

Increase in due to/from related party


108


67

Net cash provided by operating activities


23,205


33,056

Cash flows from investing activities:





Payment for acquisitions, net of acquired cash


(1,604)


?

(Purchase of) property and equipment


(460)


(318)

Acquisition and development of internal use software and


(6,124)


(7,778)

Net cash used in investing activities


(8,188)


(8,096)

Cash flows from financing activities:





Principal payments on capital lease obligations


?


(219)

Cash paid for unit repurchases


?


(1,204)

Initial public offering costs paid


?


(2,767)

Repayment of short-term debt


(1,885)


?

Repayment of long-term debt


(10,000)


?

Proceeds from exercise of stock options


3,381


1,075

Net cash used in financing activities


(8,504)


(3,115)

Net increase in cash, cash equivalents and restricted cash


6,513


21,845

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


(2,246)


(553)

Cash, cash equivalents and restricted cash at beginning of period


76,078


54,721

Cash, cash equivalents, and restricted cash, at end of period


$            80,345


$            76,013

Supplemental Disclosures:





Cash paid during the period for:





Interest


$              3,025


$            11,710

Taxes


$            10,098


$              1,170

Non-cash investing and financing activities:





Deferred offering costs accrued, not yet paid


$                   ?


$              2,956

Property and equipment acquired included in accounts payable


$                 338


$                 127

Internal use software acquired included in accounts payable


$              1,130


$                 630

Conversion of members' equity to additional paid-in capital


$                   ?


$          165,385

Lease liabilities arising from right of use assets


$            28,222


$                   ?

 

Supplemental Disclosure Regarding Non-GAAP Financial Information

We use supplemental measures of our performance, which are derived from our consolidated financial information, but which are not presented in our consolidated financial statements prepared in accordance with GAAP. Adjusted EBITDA is the primary financial performance measure used by management to evaluate our business and monitor ongoing results of operations. Adjusted EBITDA is defined as income/loss before depreciation and amortization, stock-based compensation, interest expense, income taxes, acquisition, restructuring and integration costs, IPO readiness costs, foreign exchange gains and losses, and other one-time, non-recurring costs. Adjusted EBITDA margin represents the adjusted EBITDA for the applicable period divided by the revenue for that period presented in accordance with GAAP.

For the periods included herein, we also present operating expenses excluding stock-based compensation for comparability since there were no stock-based compensation expense for the periods prior to the Company's initial public offering.

We use non-GAAP financial measures to supplement financial information presented on a GAAP basis. We believe that excluding certain items from our GAAP results allows management to better understand our consolidated financial performance from period to period and better project our future consolidated financial performance as forecasts are developed at a level of detail different from that used to prepare GAAP-based financial measures. Moreover, we believe these non-GAAP financial measures provide our shareholders with useful information to help them evaluate our operating results by facilitating an enhanced understanding of our operating performance and enabling them to make more meaningful period-to-period comparisons. Although we believe these measures are useful to investors and analysts for the same reasons they are useful to management, as discussed below, these measures are not a substitute for, or superior to, U.S. GAAP financial measures or disclosures. Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.

IAS is unable to provide a reconciliation for forward-looking guidance of Adjusted EBITDA and corresponding margin to net income (loss) and corresponding margin, the most closely comparable GAAP measures, because certain material reconciling items, such as depreciation and amortization, interest expense, income tax expense (benefit) and acquisition, restructuring and integration expenses, cannot be estimated due to factors outside of IAS's control and could have a material impact on the reported results. However, IAS estimates stock-based compensation expense for the third quarter of 2022 in the range of $13.5 million to $15 million and for the full year 2022 in the range of $46 million to $50 million. A reconciliation is not available without unreasonable effort.

Reconciliations of historical Adjusted EBITDA and corresponding margin to their most directly comparable GAAP financial measures, net income/loss and corresponding margin, and operating expenses excluding stock-based compensation to operating expenses, are presented below. We encourage you to review the reconciliations in conjunction with the presentation of the non-GAAP financial measures for each of the periods presented. In future fiscal periods, we may exclude such items and may incur income and expenses similar to these excluded items.

 

Reconciliation of Adjusted EBITDA




Three Months Ended June 30,


Six Months Ended June 30,

(in thousands)


2022


2021


2022


2021

Net income (loss)


$         1,961


$      (35,063)


$         3,120


$     (37,832)

Depreciation and amortization


12,510


14,603


24,968


28,998

Stock-based compensation


10,721


41,531


18,860


41,531

Interest expense, net


1,814


5,167


3,240


12,126

Provision (benefit) from income taxes


2,971


(3,045)


3,796


(3,958)

Acquisition, restructuring and integration costs


2,129


2,408


2,878


2,578

IPO readiness costs


?


93


?


1,038

Foreign currency transaction gains


(512)


?


(512)


?

Loss on disposal of assets


?


?


49


?

Adjusted EBITDA


$       31,594


$       25,694


$       56,399


$      44,481

Revenue


$     100,328


$       75,075


$     189,570


$    142,027

Net income (loss) margin


2 %


(47) %


2 %


(27) %

Adjusted EBITDA margin


31 %


34 %


30 %


32 %

 

Operating Expenses Excluding Stock-Based Compensation  

(Non-GAAP)

















Three Months Ended,


Three Months Ended,



June 30, 2022


June 30, 2021







Stock-Based
Compensation


Operating Expenses
excluding stock-based
compensation




Stock-Based
Compensation


Operating Expenses
excluding stock-based
compensation




(IN THOUSANDS)

Operating Expenses




Operating Expenses



$ Change


% Change

Cost of revenue

$                      18,132


$                           101


$                      18,031


$                         12,925


$                    -


$                    12,925

$          5,106


40 %

Sales and marketing

26,482


3,662


22,820


27,268


10,807


16,461

6,359


39 %

Technology and development

17,624


2,276


15,348


20,176


7,009


13,167

2,181


17 %

General and administrative

18,834


4,682


14,152


33,044


23,715


9,329

4,823


52 %

Depreciation and amortization

12,510


-


12,510


14,603


-


14,603

(2,093)


(14) %

Total operating expenses

$                      93,582


$                      10,721


$                      82,861


$                       108,016


$             41,531


$                    66,485

$        16,376


25 %















































Six Months Ended,


Six Months Ended,



June 30, 2022


June 30, 2021







Stock-Based
Compensation


Operating Expenses
excluding stock-based
compensation




Stock-Based
Compensation


Operating Expenses
excluding stock-based
compensation




(IN THOUSANDS)

Operating Expenses




Operating Expenses



$ Change


% Change

Cost of revenue

$                      34,693


$                           157


$                      34,536


$                         24,344


$                    -


$                    24,344

$        10,192


42 %

Sales and marketing

49,539


6,193


43,346


43,813


10,807


33,006

10,340


31 %

Technology and development

34,611


3,811


30,800


32,944


7,009


25,935

4,865


19 %

General and administrative

35,603


8,699


26,904


41,592


23,715


17,877

9,027


50 %

Depreciation and amortization

24,968


-


24,968


28,998


-


28,998

(4,030)


(14) %

Total operating expenses

$                    179,414


$                      18,860


$                    160,554


$                       171,691


$             41,531


$                   130,160

$        30,394


23 %

 

Conference Call and Webcast Information
IAS will host a conference call and live webcast to discuss its second quarter 2022 financial results today at 5:00 p.m. ET. To access the conference call, please dial U.S./Canada Toll-Free: 800-715-9871 International: 646-307-1963 Conference ID: 5570558. A live webcast and replay will be available on IAS's investor relations website: https://investors.integralads.com

About Integral Ad Science
Integral Ad Science (IAS) is a global leader in digital media quality. IAS makes every impression count, ensuring that ads are viewable by real people, in safe and suitable environments, activating contextual targeting, and driving supply path optimization. Our mission is to be the global benchmark for trust and transparency in digital media quality for the world's leading brands, publishers, and platforms. We do this through data-driven technologies with actionable real-time signals and insight. Founded in 2009 and headquartered in New York, IAS works with thousands of top advertisers and premium publishers worldwide. For more information, visit integralads.com.

Forward-Looking Statements
This earnings press release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this press release are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate," "estimate," "expect," "project," "plan," "intend," "believe," "may," "will," "should," "can have," "likely," and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, growth rates and financial results or our plans and objectives for future operations, growth initiatives or strategies are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including: (i) geopolitical, economic and market conditions, including heightened inflation, slower growth or recession, changes to fiscal and monetary policy, higher interest rates, currency fluctuations, challenges in the supply chain and any disruptions in European economies as a result of the conflict in Ukraine; (ii) the adverse effect on our business, operating results, financial condition, and prospects from the ongoing COVID-19 pandemic; (iii) our dependence on the overall demand for advertising; (iv) a failure to innovate or make the right investment decisions; (v) our failure to maintain or achieve industry accreditation standards; (vi) our ability to compete successfully with our current or future competitors in an intensely competitive market; (vii) our dependence on integrations with advertising platforms, demand-side providers ("DSPs") and proprietary platforms that we do not control; (viii) our international expansion; (ix) our ability to expand into new channels; (x) our ability to sustain our profitability and revenue growth rate decline; (xi) risks that our customers do not pay or choose to dispute their invoices; (xii) risks of material changes to revenue share agreements with certain DSPs; (xiii) the impact that any future acquisitions, strategic investments, or alliances may have on our business, financial condition, and results of operations; (xiv) interruption by man-made problems such as terrorism, computer viruses, or social disruption impacting advertising spending; (xv) the risk of failures in the systems and infrastructure supporting our solutions and operations; and (xvi) other factors disclosed in our filings with the SEC. Given these factors, as well as other variables that may affect our operating results, you should not rely on forward-looking statements, assume that past financial performance will be a reliable indicator of future performance, or use historical trends to anticipate results or trends in future periods.

We derive many of our forward-looking statements from our operating budgets and forecasts, which are based on many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. The forward-looking statements included in this press release are made only as of the date hereof. We undertake no obligation to update or revise any forward- looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

Investor Contact:
Jonathan Schaffer / Lauren Hartman
[email protected]

Media Contact:
[email protected]

SOURCE Integral Ad Science, Inc.


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News published on 4 august 2022 at 16:05 and distributed by: