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Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 June 30, 2023

or

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: 001-40349

DoubleVerify Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware

82-2714562

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

462 Broadway

New York, NY, 10013

(Address of Principal Executive Offices)

(212) 631-2111

(Registrant’s telephone number)

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

Title of Each Class

Trading symbol

Name of Exchange on which registered

Common Stock, par value $0.001 per share

DV

New York Stock Exchange

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, a 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 July 20, 2023, there were 167,403,199 shares of the registrant’s common stock, par value $0.001 per share, outstanding.

 

 

Table of Contents

DoubleVerify Holdings, Inc.

Quarterly Report on Form 10-Q

For the Quarter Ended June 30, 2023

TABLE OF CONTENTS

0

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Part I

FINANCIAL INFORMATION (Unaudited)

    

    

Page

Item 1.

Condensed Consolidated Financial Statements

4

Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022

4

Condensed Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2023 and 2022

5

Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022

6

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022

7

Notes to Condensed Consolidated Financial Statements

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

19

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

28

Item 4.

Controls and Procedures

28

Part II

OTHER INFORMATION

Item 1.

Legal Proceedings

29

Item 1A.

Risk Factors

29

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

29

Item 3.

Defaults Upon Senior Securities

30

Item 4.

Mine Safety Disclosures

30

Item 5.

Other Information

30

Item 6.

Exhibits

31

Signatures

32

2

Table of Contents

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (“Quarterly Report”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts included in this Quarterly Report, including, without limitation, statements regarding our future financial position, business strategy, budgets, projected costs, savings and plans and objectives of management for future operations, are forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “plan,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct.

You should read the “Special Note Regarding Forward-Looking Statements” and “Risk Factors” sections of our Annual Report on Form 10-K, for the year ended December 31, 2022 and filed with the Securities and Exchange Commission (“SEC”), on March 1, 2023, for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in this report. There may be other factors not presently known to us or which we currently consider to be immaterial that may cause our actual results to differ materially from the forward-looking statements.

All forward-looking statements attributable to us or persons acting on our behalf apply only as of the date of this Quarterly Report and are expressly qualified in their entirety by the cautionary statements included in this Quarterly Report and in the Annual Report on Form 10-K for the year ended December 31, 2022. We undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events.

“DoubleVerify,” “the DV Authentic Ad,” “Authentic Brand Suitability,” “DV Pinnacle” and other trademarks of ours appearing in this report are our property and we deem them particularly important to the marketing activities conducted by each of our businesses. Solely for convenience, the trademarks, service marks and trade names referred to in this report are without the ® and ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks, service marks and trade names. This report contains additional trade names and trademarks of other companies. We do not intend our use or display of other companies' trade names or trademarks to imply an endorsement or sponsorship of us by such companies, or any relationship with any of these companies.

Unless the context otherwise requires, the terms “DoubleVerify,” ‘‘we,’’ ‘‘us,’’ ‘‘our,’’ and the ‘‘Company,’’ as used in this report refer to DoubleVerify Holdings, Inc. and its consolidated subsidiaries.

3

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

DoubleVerify Holdings, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

    

As of

    

As of

(in thousands, except per share data)

June 30, 2023

December 31, 2022

Assets:

 

  

 

  

Current assets

 

  

 

  

Cash and cash equivalents

$

295,437

$

267,813

Trade receivables, net of allowances for doubtful accounts of $10,757 and $8,893 as of June 30, 2023 and December 31, 2022, respectively

176,007

167,122

Prepaid expenses and other current assets

 

20,715

 

10,161

Total current assets

 

492,159

 

445,096

Property, plant and equipment, net

 

54,793

 

47,034

Operating lease right-of-use assets, net

62,499

64,692

Goodwill

 

343,682

 

343,011

Intangible assets, net

 

122,974

 

135,429

Deferred tax assets

 

4,901

 

35

Other non-current assets

 

1,657

 

1,731

Total assets

$

1,082,665

$

1,037,028

Liabilities and Stockholders' Equity:

 

Current liabilities

 

Trade payables

$

8,837

$

6,675

Accrued expenses

 

36,945

 

33,085

Operating lease liabilities, current

8,851

7,041

Income tax liabilities

 

 

11,953

Current portion of finance lease obligations

 

3,139

 

1,846

Other current liabilities

 

8,476

 

8,310

Total current liabilities

 

66,248

 

68,910

Operating lease liabilities, non-current

73,369

74,086

Finance lease obligations

 

3,938

 

779

Deferred tax liabilities

 

1,132

 

12,890

Other non-current liabilities

 

3,756

 

3,504

Total liabilities

148,443

160,169

Commitments and contingencies (Note 13)

 

Stockholders’ equity

 

Common stock, $0.001 par value, 1,000,000 shares authorized, 167,250 shares issued and 167,234 outstanding as of June 30, 2023; 1,000,000 shares authorized, 165,448 shares issued and 165,417 outstanding as of December 31, 2022

167

165

Additional paid-in capital

787,562

756,299

Treasury stock, at cost, 16 shares and 31 shares as of June 30, 2023 and December 31, 2022, respectively

(528)

(796)

Retained earnings

 

152,531

 

127,517

Accumulated other comprehensive loss, net of income taxes

 

(5,510)

 

(6,326)

Total stockholders’ equity

 

934,222

 

876,859

Total liabilities and stockholders' equity

$

1,082,665

$

1,037,028

See accompanying Notes to unaudited Condensed Consolidated Financial Statements.

4

Table of Contents

DoubleVerify Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)

Three Months Ended June 30, 

Six Months Ended June 30, 

(in thousands, except per share data)

    

2023

    

2022

    

2023

    

2022

Revenue

$

133,744

$

109,805

$

256,338

$

206,528

Cost of revenue (exclusive of depreciation and amortization shown separately below)

 

26,191

18,836

 

50,143

 

35,713

Product development

 

31,941

23,222

 

60,496

 

44,810

Sales, marketing and customer support

 

31,537

24,733

 

57,249

 

51,417

General and administrative

 

19,755

21,529

 

39,943

 

41,204

Depreciation and amortization

 

9,676

8,317

 

18,659

 

17,357

Income from operations

 

14,644

 

13,168

 

29,848

 

16,027

Interest expense

 

247

223

 

503

455

Other (income) expense, net

 

(2,476)

145

 

(5,210)

191

Income before income taxes

 

16,873

12,800

 

34,555

 

15,381

Income tax expense

 

4,034

2,510

 

9,541

512

Net income

$

12,839

$

10,290

$

25,014

$

14,869

Earnings per share:

 

 

Basic

$

0.08

$

0.06

$

0.15

$

0.09

Diluted

$

0.07

$

0.06

$

0.15

$

0.09

Weighted-average common stock outstanding:

 

 

 

 

Basic

 

166,540

163,610

166,088

163,114

Diluted

 

172,488

170,223

172,129

170,359

Comprehensive income:

 

 

Net income

$

12,839

$

10,290

$

25,014

$

14,869

Other comprehensive (loss) income:

 

 

Foreign currency cumulative translation adjustment

 

(377)

 

(5,634)

 

816

 

(7,204)

Total comprehensive income

$

12,462

$

4,656

$

25,830

$

7,665

See accompanying Notes to unaudited Condensed Consolidated Financial Statements.

5

Table of Contents

DoubleVerify Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

Accumulated

    

Other

Comprehensive

Additional

Income (Loss)

Total

Common Stock

Treasury Stock

Paid-in

Retained

Net of

Stockholders’

(in thousands)

  

Shares

  

Amount

  

Shares

  

Amount

  

Capital

  

Earnings

  

Income Taxes

  

Equity

Balance as of January 1, 2023

165,448

$

165

31

$

(796)

$

756,299

$

127,517

$

(6,326)

$

876,859

Foreign currency translation adjustment

 

 

 

 

 

1,193

 

1,193

Shares repurchased for settlement of employee tax withholdings

30

(787)

(787)

Stock-based compensation expense

 

 

 

11,992

 

 

 

11,992

Common stock issued upon exercise of stock options

527

1

1,765

1,766

Common stock issued upon vesting of restricted stock units

182

 

 

 

 

 

 

Treasury stock reissued upon settlement of equity awards

(35)

914

(914)

Net income

 

 

 

 

12,175

 

 

12,175

Balance as of March 31, 2023

166,157

$

166

26

$

(669)

$

769,142

$

139,692

$

(5,133)

$

903,198

Foreign currency translation adjustment

(377)

(377)

Shares repurchased for settlement of employee tax withholdings

57

(1,966)

(1,966)

Stock-based compensation expense

15,399

15,399

Common stock issued under employee purchase plan

49

1,138

1,138

Common stock issued upon exercise of stock options

711

1

3,990

3,991

Common stock issued upon vesting of restricted stock units

333

Treasury stock reissued upon settlement of equity awards

(67)

2,107

(2,107)

Net income

12,839

12,839

Balance as of June 30, 2023

167,250

$

167

16

$

(528)

$

787,562

$

152,531

$

(5,510)

$

934,222

Balance as of January 1, 2022

162,347

$

162

50

$

(1,802)

$

717,228

$

84,249

$

(771)

$

799,066

Foreign currency translation adjustment

 

 

 

 

 

(1,570)

 

(1,570)

Shares repurchased for settlement of employee tax withholdings

 

41

 

(1,058)

 

 

 

 

(1,058)

Stock-based compensation expense

 

 

 

10,994

 

 

 

10,994

Common stock issued to non-employees

4

Common stock issued upon exercise of stock options

572

1

1,677

1,678

Common stock issued upon vesting of restricted stock units

195

Net income

 

 

 

 

4,579

 

 

4,579

Balance as of March 31, 2022

163,118

$

163

91

$

(2,860)

$

729,899

$

88,828

$

(2,341)

$

813,689

Foreign currency translation adjustment

(5,634)

(5,634)

Shares repurchased for settlement of employee tax withholdings

320

(8,133)

(8,133)

Stock-based compensation expense

9,517

9,517

Common stock issued under employee purchase plan

41

768

768

Common stock issued upon exercise of stock options

176

838

838

Common stock issued upon vesting of restricted stock units

798

1

(1)

Treasury stock reissued upon settlement of equity awards

(128)

3,447

(3,447)

Net income

10,290

10,290

Balance as of June 30, 2022

164,133

$

164

283

$

(7,546)

$

737,574

$

99,118

$

(7,975)

$

821,335

See accompanying Notes to unaudited Condensed Consolidated Financial Statements.

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DoubleVerify Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Six Months Ended

June 30, 

(in thousands)

    

2023

    

2022

Operating activities:

 

  

 

  

Net income

$

25,014

$

14,869

Adjustments to reconcile net income to net cash provided by operating activities

 

Bad debt expense

 

3,706

 

1,997

Depreciation and amortization expense

 

18,659

 

17,357

Amortization of debt issuance costs

 

147

 

147

Non-cash lease expense

3,293

3,882

Deferred taxes

 

(16,639)

 

(3,974)

Stock-based compensation expense

 

26,980

 

20,253

Interest expense

 

25

 

72

Loss on disposal of fixed assets

5

1,345

Impairment of long-lived assets

 

 

1,510

Other

209

(302)

Changes in operating assets and liabilities

 

Trade receivables

 

(12,214)

 

(21,942)

Prepaid expenses and other assets

 

(11,168)

 

(949)

Trade payables

 

2,126

 

2,262

Accrued expenses and other liabilities

 

(7,979)

 

(9,978)

Net cash provided by operating activities

 

32,164

 

26,549

Investing activities:

 

 

Purchase of property, plant and equipment

 

(7,671)

 

(13,606)

Net cash (used in) investing activities

 

(7,671)

 

(13,606)

Financing activities:

 

 

Proceeds from revolving credit facility

50,000

Payments to revolving credit facility

(50,000)

Payment of contingent consideration related to Zentrick acquisition

(3,247)

Proceeds from common stock issued upon exercise of stock options

5,757

2,516

Proceeds from common stock issued under employee purchase plan

1,138

768

Payments related to offering costs

(6)

Finance lease payments

(1,028)

(907)

Shares repurchased for settlement of employee tax withholdings

(2,753)

(9,191)

Net cash provided by (used in) financing activities

 

3,114

 

(10,067)

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

 

15

 

(738)

Net increase in cash, cash equivalents, and restricted cash

 

27,622

 

2,138

Cash, cash equivalents, and restricted cash - Beginning of period

 

267,938

 

221,725

Cash, cash equivalents, and restricted cash - End of period

$

295,560

$

223,863

Cash and cash equivalents

$

295,437

$

223,738

Restricted cash (included in prepaid expenses and other current assets on the Condensed Consolidated Balance Sheets)

 

123

 

125

Total cash and cash equivalents and restricted cash

$

295,560

$

223,863

Supplemental cash flow information:

 

 

Cash paid for taxes

$

41,284

$

1,161

Cash paid for interest

$

389

$

282

Non-cash investing and financing activities:

 

 

Right-of-use assets obtained in exchange for new operating lease liabilities, net of impairments and tenant improvement allowances

$

1,261

$

79,565

Acquisition of equipment under finance lease

$

5,479

$

Capital assets financed by accounts payable and accrued expenses

$

480

$

Stock-based compensation included in capitalized software development costs

$

411

$

258

See accompanying Notes to unaudited Condensed Consolidated Financial Statements.

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DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except per share data, unless otherwise stated)

1.    Description of Business

DoubleVerify Holdings, Inc. (the “Company”) is a leading software platform for digital media measurement and analytics. Our mission is to create stronger, safer, more secure digital transactions that drive optimal outcomes for global advertisers. Through our software platform and the metrics it provides, we help preserve the fair value exchange between buyers and sellers of digital media. The Company’s solutions provide advertisers unbiased data analytics that enable advertisers to increase the effectiveness, quality and return on their digital advertising investments. The DV Authentic Ad is our proprietary metric of digital media quality, which measures whether a digital ad was delivered in a brand suitable environment, fully viewable, by a real person and in the intended geography. The Company’s software interface, DV Pinnacle, delivers these metrics to our customers in real time, allowing them to access critical performance data on their digital transactions. The Company’s software solutions are integrated across the entire digital advertising ecosystem, including programmatic platforms, social media channels and digital publishers. The Company’s solutions are accredited by the Media Rating Council, which allows the Company’s data to be used as a single source standard in the evaluation and measurement of digital ads.

The Company was incorporated on August 16, 2017, is registered in the state of Delaware and is the parent company of DoubleVerify Midco, Inc. (“MidCo”), which is in turn the parent company of DoubleVerify Inc. On August 18, 2017, DoubleVerify Inc. entered into an agreement and plan of merger (the “Agreement”), whereby the Company and Pixel Merger Sub, Inc. (“Merger Sub”), a wholly-owned subsidiary of the Company, agreed to provide for the merger of the Merger Sub with DoubleVerify Inc. pursuant to the terms and conditions of the Agreement.

On the effective date, Merger Sub was merged with and into DoubleVerify Inc. whereupon the separate corporate existence of Merger Sub ceased and DoubleVerify Inc. continued as the surviving corporation.

Through the merger, the Company acquired 100% of the outstanding equity instruments of DoubleVerify Inc., (the “Acquisition”) resulting in a change of control at the parent level. The merger resulted in the application of acquisition accounting under the provisions of Financial Accounting Standards Board (“FASB”) Topic Accounting Standards Codification (“ASC”) 805, “Business Combinations.”

The Company is headquartered in New York, New York and has wholly-owned subsidiaries in numerous jurisdictions including Israel, the United Kingdom, the United Arab Emirates, Germany, Singapore, Australia, Canada, Brazil, Belgium, Mexico, France, Japan, Spain, Finland, and India, and operates in one reportable segment.  

2.     Basis of Presentation and Summary of Significant Accounting Policies

Basis of Preparation and Principles of Consolidation

The accompanying Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022, the Condensed Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2023 and 2022, the Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022, and the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022 reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair presentation of the results for the periods shown in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules and regulations of the SEC for interim financial reporting periods. Accordingly, certain information and footnote disclosures have been condensed or omitted pursuant to SEC rules that would ordinarily be required under GAAP for complete financial statements. These unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in its Annual Report on Form 10-K for the year ended December 31, 2022.

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DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except per share data, unless otherwise stated)

Use of Estimates and Judgments in the Preparation of the Condensed Consolidated Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expense during the reporting periods. Significant estimates and judgments are inherent in the analysis and measurement of items including, but not limited to: revenue recognition criteria including the determination of principal versus agent revenue considerations, income taxes, the valuation and recoverability of goodwill and intangible assets, the assessment of potential loss from contingencies, assumptions in valuing acquired assets and liabilities assumed in business combinations, the allowance for doubtful accounts, and assumptions used in determining the fair value of stock-based compensation. Management bases its estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. These estimates are based on the information available as of the date of the Condensed Consolidated Financial Statements.

Cash and Cash Equivalents

The Company considers all short-term highly liquid investments with an original maturity at the date of purchase of three months or less to be cash equivalents. Pursuant to the Company’s investment policy, its surplus funds are kept as cash or cash equivalents in treasury bills, money market funds and savings accounts to reduce the Company’s exposure to market risk.

3.     Revenue

The following table disaggregates revenue between advertiser customers, where revenue is generated based on number of ads measured for Measurement or measured and purchased for Activation, and Supply-side customers, where revenue is generated based on contracts with minimum guarantees or contracts that contain overages after minimum guarantees are achieved.

Disaggregated revenue by customer type is as follows:

Three Months Ended

    

Six Months Ended

June 30, 

June 30, 

(in thousands)

    

2023

    

2022

    

2023

    

2022

Activation

$

77,942

$

60,495

$

147,834

$

113,526

Measurement

 

44,989

 

38,903

 

86,374

 

72,737

Supply-side customer

 

10,813

 

10,407

 

22,130

 

20,265

Total revenue

$

133,744

$

109,805

$

256,338

$

206,528

Contract assets relate to the Company’s conditional right to consideration for completed performance under the contract (e.g., unbilled receivables). Trade receivables, net of allowance for doubtful accounts, include unbilled receivable balances of $52.9 million and $52.7 million as of June 30, 2023 and December 31, 2022, respectively.

4.    Goodwill and Intangible Assets

The following is a summary of changes to the goodwill carrying value from December 31, 2022 to June 30, 2023:

(in thousands)

    

    

Goodwill at December 31, 2022

$

343,011

Foreign exchange impact

671

Goodwill at June 30, 2023

$

343,682

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DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except per share data, unless otherwise stated)

The following table summarizes the Company’s intangible assets and related accumulated amortization:

(in thousands)

June 30, 2023

    

December 31, 2022

Gross Carrying

Accumulated

Net Carrying

Gross Carrying

Accumulated

Net Carrying

    

Amount

    

Amortization

    

Amount

    

Amount

    

Amortization

    

Amount

Trademarks and brands

$

11,733

$

(4,717)

$

7,016

$

11,733

$

(4,294)

$

7,439

Customer relationships

 

145,925

(55,974)

 

89,951

 

145,834

 

(49,587)

 

96,247

Developed technology

 

76,785

(50,783)

 

26,002

 

76,677

 

(44,956)

 

31,721

Non-compete agreements

65

(60)

5

64

(42)

22

Total intangible assets

$

234,508

$

(111,534)

$

122,974

$

234,308

$

(98,879)

$

135,429

Amortization expense related to intangible assets for the three months ended June 30, 2023 and June 30, 2022 was $6.4 million and $6.2 million, respectively. Amortization expense related to intangible assets amounted to $12.6 million for each of the six months ended June 30, 2023 and June 30, 2022.

Estimated future expected amortization expense of intangible assets as of June 30, 2023 is as follows:

(in thousands)

    

    

2023 (for remaining six months)

$

13,112

2024

22,792

2025

20,836

2026

16,082

2027

13,872

2028

13,451

Thereafter

 

22,829

Total

$

122,974

The weighted-average remaining useful life by major asset classes as of June 30, 2023 is as follows:

    

(In years)

Trademarks and brands

 

9

Customer relationships

 

7

Developed technology

2

Non-compete agreements

 

1

There were no impairments identified during the six months ended June 30, 2023 or June 30, 2022.

5.     Property, Plant and Equipment

Property, plant and equipment, including equipment under finance lease obligations and capitalized software development costs, consists of the following:

As of

(in thousands)

June 30, 2023

December 31, 2022

Computers and peripheral equipment

    

$

24,739

    

$

19,189

Office furniture and equipment

 

3,014

 

2,542

Leasehold improvements

 

32,008

 

29,678

Capitalized software development costs

 

25,920

 

22,026

Less accumulated depreciation and amortization

 

(30,888)

 

(26,401)

Total property, plant and equipment, net

$

54,793

$

47,034

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DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except per share data, unless otherwise stated)

For the three months ended June 30, 2023 and June 30, 2022, total depreciation expense was $3.3 million and $2.1 million, respectively. For the six months ended June 30, 2023 and June 30, 2022, total depreciation expense was $6.1 million and $4.8 million, respectively.

Property and equipment under finance lease obligations, consisting of computer equipment, totaled $17.7 million and $12.3 million as of June 30, 2023 and December 31, 2022, respectively. As of June 30, 2023 and December 31, 2022, accumulated depreciation related to property and equipment under finance lease obligations totaled $11.7 million and $11.2 million, respectively. Refer to Note 6, Leases.

6.     Leases

The following table presents lease cost and cash paid for amounts included in the measurement of lease liabilities for finance and operating leases for the three and six months ended June 30, 2023 and 2022, respectively.

    

Three Months Ended June 30, 

 

Six Months Ended June 30, 

(in thousands)

2023

2022

 

2023

2022

Lease cost:

Operating lease cost (1)

$

2,582

$

2,747

$

5,169

$

5,625

Finance lease cost:

Depreciation of finance lease assets (2)

314

330

531

702

Interest on finance lease liabilities (3)

43

37

66

79

Short-term lease cost (1)

243

277

489

528

Sublease income (1)

(267)

(89)

(534)

(89)

Total lease cost

$

2,915

$

3,302

$

5,721

$

6,845

 

 

 

 

Other information:

Cash paid for amounts included in the measurement of lease liabilities

Operating cash outflows from operating leases

$

1,516

$

1,139

$

2,852

$

2,319

Operating cash outflows from finance leases

$

17

$

37

$

40

$

72

Financing cash outflows from finance leases

$

515

$

427

$

1,028

$

907

(1)Included in Cost of revenue, Sales, marketing and customer support, Product development and General and administrative expenses in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.
(2)Included in Depreciation and amortization in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.
(3)Included in Interest expense in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

The following table presents weighted-average remaining lease terms and weighted-average discount rates for finance and operating leases as of June 30, 2023 and 2022, respectively:

    

June 30, 

2023

 

2022

Weighted-average remaining lease term - operating leases (in years)

 

13.8

14.4

Weighted-average remaining lease term - finance leases (in years)

 

2.6

2.0

Weighted-average discount rate - operating leases

4.5%

4.4%

Weighted-average discount rate - finance leases

 

5.2%

3.7%

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DoubleVerify Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in thousands, except per share data, unless otherwise stated)

Maturities of lease liabilities as of June 30, 2023 are as follows:

    

June 30, 2023

(in thousands)

Operating Leases

Finance Leases

2023 (for remaining six months)

$

4,625

$

2,022

2024

 

8,581

 

2,579

2025

 

7,598

 

2,150

2026

 

6,782