Revenue of $92.8 million, up 0.3% from Q3
2021
Net loss of $52.4 million versus net income of
$2.0 million in Q3 2021
Adjusted EBITDA of $11.7 million, up 4.0% from
Q3 2021
Updating 2022 revenue guidance and maintaining
adjusted EBITDA margin guidance
Comscore, Inc. (Nasdaq: SCOR), a trusted partner for planning,
transacting, and evaluating media across platforms, today reported
financial results for the quarter ended September 30, 2022.
Q3 2022 Financial Highlights
- Revenue for the third quarter was $92.8 million compared to
$92.5 million in Q3 2021
- Cross Platform Solutions revenue grew 14.0% year over year to
$40.4 million, driven by local and national TV measurement and a
continued rebound in Movies
- Digital Ad Solutions revenue declined 8.2% to $52.4 million due
to slower ad spend, which impacted Activation and other digital
products
- Net loss of $52.4 million compared to net income of $2.0
million in Q3 2021, resulting primarily from a non-cash goodwill
impairment charge of $46.3 million and restructuring costs of $5.8
million in Q3 2022
- Adjusted EBITDA of $11.7 million compared to $11.3 million in
Q3 2021
Recent Business Developments
- Launched Comscore TV Pulse, which provides content measurement
data within 48 hours nationally and to all 210 local markets
- Entered into two new currency partnerships – one with Dentsu
that enables the agency network to shift local TV buying to a
Comscore-based currency, supporting transactions on advanced
audiences in all 210 markets, and the other with Fox Television
Stations, which allows the local TV broadcaster to leverage a
Comscore-based currency to support transactions on advanced
audiences across its entire owned and operated footprint
- Expanded a multiyear contract with Scripps, which now includes
using Comscore as currency for all Scripps local stations, adding
16 new markets to our existing relationship
- Partnered with FreeWheel to launch advanced Connected TV
("CTV") contextual targeting capabilities on Beeswax, FreeWheel's
demand-side platform, which provides media buyers with access to
Comscore's privacy-forward Predictive Audiences and CTV brand
protection offering for premium video
- Released a new user interface for Comscore Campaign Ratings,
which is now the only cross-platform campaign measurement product
in the market that can provide deduplicated reach for display and
video across desktop, mobile, linear, and CTV in a single
report
- Extended Charter's endorsement of Comscore as its preferred
local measurement provider to seven years (from five) with an
option to extend for the full 10-year contract term
"Since stepping into the CEO role in July, I’ve been laser
focused on improving speed, execution and profitability. In the
third quarter, we rounded out our executive team with leadership
positions that I believe are critical to the success of Comscore.
We committed to delivering faster data to our customers, and in
September we rolled out our Comscore TV Pulse data with a delivery
speed of 48 hours. We also announced a restructuring plan as a
first step in becoming more cost efficient and better aligning our
operating structure and resources to our strategic priorities. We
continue to see momentum in our local and national television
businesses, and even though the current economic environment is
challenging for our industry, we are excited about what's ahead for
Comscore," said Jon Carpenter, CEO of Comscore.
Third Quarter Summary Results
Revenue in the third quarter was $92.8 million, up 0.3% from
$92.5 million in Q3 2021, driven by double-digit growth in Cross
Platform Solutions revenue from local and national TV measurement
and the continued rebound in our Movies business. We saw a decline
in Digital Ad Solutions revenue from Q3 2021 primarily as a result
of slower ad spend, which impacted Activation and other digital
products.
Our core operating expenses, which include cost of revenues,
sales and marketing, research and development and general and
administrative expenses, were $90.4 million, flat to $90.3 million
in Q3 2021. We also incurred restructuring costs of $5.8 million in
connection with the restructuring plan announced in September
2022.
Due in part to a decline in our stock price and market
capitalization, we performed an interim review of our goodwill at
quarter-end, resulting in a non-cash goodwill impairment charge of
$46.3 million as of September 30, 2022. This charge does not
directly impact the Company's liquidity, cash flows, or future
operations.
Primarily due to the goodwill impairment charge and
restructuring costs, net loss for the quarter was $52.4 million,
compared to net income of $2.0 million in Q3 2021. After accounting
for dividends on our convertible preferred stock, loss per share
attributable to common shares was $(0.60), compared to a loss per
share of $(0.02) in Q3 2021.
Adjusted EBITDA for the quarter was $11.7 million, compared to
$11.3 million in Q3 2021, resulting in adjusted EBITDA margins of
12.6% and 12.2%, respectively. Adjusted EBITDA and adjusted EBITDA
margin exclude stock-based compensation, change in fair value of
contingent consideration, financing derivatives and warrants
liability, debt extinguishment costs, amortization of
cloud-computing implementation costs, impairment of goodwill,
restructuring costs, and other items as presented in the
accompanying tables.
Balance Sheet and Liquidity
As of September 30, 2022, cash, cash equivalents and restricted
cash totaled $25.5 million. Total debt principal, including $16.0
million in outstanding borrowings under our senior secured
revolving credit agreement, was $20.0 million.
2022 Outlook
Based on current trends and expectations, we are lowering our
2022 revenue growth estimate to low single digits and are
reaffirming that our adjusted EBITDA margin is expected to exceed
9% for the year.
We do not provide GAAP net (loss) income on a forward-looking
basis because we are unable to predict with reasonable certainty
our future stock-based compensation expense, fair value
adjustments, variable interest expense, litigation and
restructuring expense and any unusual gains or losses without
unreasonable effort. These items are uncertain, depend on various
factors, and could be material to results computed in accordance
with GAAP. For this reason, we are unable without unreasonable
effort to provide a reconciliation of adjusted EBITDA or adjusted
EBITDA margin to the most directly comparable GAAP measure, GAAP
net (loss) income, on a forward-looking basis.
Conference Call Information for Today, Tuesday, November 8,
2022 at 5:00 p.m. ET
Management will host a conference call to discuss the results on
Tuesday, November 8, 2022 at 5:00 p.m. ET. The live audio webcast
along with supplemental information will be accessible at
ir.comscore.com/events-presentations. Participants can obtain
dial-in information by registering for the call at the same web
address and are advised to register in advance of the call to avoid
delays. Following the conference call, a replay will be available
via webcast at ir.comscore.com/events-presentations.
About Comscore
Comscore is a trusted partner for planning, transacting and
evaluating media across platforms. With a data footprint that
combines digital, linear TV, OTT and theatrical viewership
intelligence with advanced audience insights, Comscore allows media
buyers and sellers to quantify their multiscreen behavior and make
business decisions with confidence. A proven leader in measuring
digital and TV audiences and advertising at scale, Comscore is the
industry's emerging, third-party source for reliable and
comprehensive cross-platform measurement.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of federal and state securities laws, including,
without limitation, our expectations, forecasts, plans and opinions
regarding expected revenue growth and adjusted EBITDA margin for
future periods, the impact of new customer contracts and
partnerships on our business and revenue prospects, evolving
economic and industry trends, currency opportunities, product
development and innovation, and restructuring plans and
cost-reduction initiatives. These statements involve risks and
uncertainties that could cause actual events to differ materially
from expectations, including, but not limited to, changes in our
business and customer, partner and vendor relationships; external
market conditions and competition, including changes or declines in
ad spending; evolving privacy and regulatory standards; the
continuing impact of the Covid-19 pandemic and related government
mandates; and our ability to achieve our expected strategic,
financial and operational plans, including the restructuring plan
we announced in September 2022. For additional discussion of risk
factors, please refer to our Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q, and other filings that we make from time to
time with the U.S. Securities and Exchange Commission (the "SEC"),
which are available on the SEC's website (www.sec.gov).
Investors are cautioned not to place undue reliance on our
forward-looking statements, which speak only as of the date such
statements are made. We do not intend or undertake, and expressly
disclaim, any duty or obligation to publicly update any
forward-looking statements to reflect events, circumstances or new
information after the date of this press release, or to reflect the
occurrence of unanticipated events.
Use of Non-GAAP Financial Measures
To provide investors with additional information regarding our
financial results, we are disclosing herein adjusted EBITDA and
adjusted EBITDA margin, which are non-GAAP financial measures used
by our management to understand and evaluate our core operating
performance and trends. We believe that these non-GAAP financial
measures provide useful information to investors and others in
understanding and evaluating our operating results, as they permit
our investors to view our core business performance using the same
metrics that management uses to evaluate our performance.
Nevertheless, our use of these non-GAAP financial measures has
limitations as an analytical tool, and investors should not
consider these measures in isolation or as a substitute for
analysis of our results as reported under GAAP. Instead, you should
consider these measures alongside GAAP-based financial performance
measures, net (loss) income, various cash flow metrics, and our
other GAAP financial results. Set forth below are reconciliations
of these non-GAAP financial measures to their most directly
comparable GAAP financial measure, net (loss) income. These
reconciliations should be carefully evaluated.
COMSCORE, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
As of
As of
September 30, 2022
December 31, 2021
(In thousands, except share and par value
data)
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
25,086
$
21,854
Restricted cash
425
425
Accounts receivable, net of allowances of
$677 and $1,173, respectively
48,223
72,059
Prepaid expenses and other current
assets
15,207
14,769
Total current assets
88,941
109,107
Property and equipment, net
36,661
36,451
Operating right-of-use assets
25,422
29,186
Deferred tax assets
2,636
2,811
Intangible assets, net
19,622
39,945
Goodwill
386,245
435,711
Other non-current assets
11,546
10,263
Total assets
$
571,073
$
663,474
Liabilities, Convertible Redeemable
Preferred Stock and Stockholders' Equity
Current liabilities:
Accounts payable
$
28,763
$
23,575
Accrued expenses
41,642
45,264
Contract liabilities
52,564
54,011
Customer advances
10,633
11,613
Current operating lease liabilities
7,667
7,538
Warrants liability
2,049
10,520
Other current liabilities
12,321
12,850
Total current liabilities
155,639
165,371
Non-current operating lease
liabilities
31,184
36,055
Non-current portion of accrued data
costs
23,230
16,005
Revolving line of credit
16,000
16,000
Deferred tax liabilities
2,145
2,103
Other non-current liabilities
13,035
16,879
Total liabilities
241,233
252,413
Commitments and contingencies
Convertible redeemable preferred stock,
$0.001 par value; 82,527,609 shares authorized, issued and
outstanding as of September 30, 2022 and December 31, 2021;
aggregate liquidation preference of $207,953 as of September 30,
2022, and $211,863 as of December 31, 2021
187,885
187,885
Stockholders' equity:
Preferred stock, $0.001 par value;
7,472,391 shares authorized as of September 30, 2022 and December
31, 2021, respectively; no shares issued or outstanding as of
September 30, 2022 or December 31, 2021
—
—
Common stock, $0.001 par value;
275,000,000 shares authorized as of September 30, 2022 and December
31, 2021; 98,774,405 shares issued and 92,009,609 shares
outstanding as of September 30, 2022, and 97,172,086 shares issued
and 90,407,290 shares outstanding as of December 31, 2021
92
90
Additional paid-in capital
1,690,609
1,683,883
Accumulated other comprehensive loss
(21,736
)
(12,098
)
Accumulated deficit
(1,297,026
)
(1,218,715
)
Treasury stock, at cost, 6,764,796 shares
as of September 30, 2022 and December 31, 2021
(229,984
)
(229,984
)
Total stockholders' equity
141,955
223,176
Total liabilities, convertible redeemable
preferred stock and stockholders' equity
$
571,073
$
663,474
COMSCORE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
(In thousands, except share and per share
data)
2022
2021
2022
2021
Revenues
$
92,783
$
92,487
$
278,183
$
270,476
Cost of revenues (1) (2)
51,530
49,179
155,915
153,267
Selling and marketing (1) (2)
17,199
15,212
51,850
49,569
Research and development (1) (2)
8,741
9,051
28,190
29,536
General and administrative (1) (2)
12,899
16,895
48,119
45,609
Amortization of intangible assets
6,772
6,172
20,323
18,866
Restructuring
5,784
—
5,784
—
Impairment of goodwill
46,300
—
46,300
—
Total expenses from operations
149,225
96,509
356,481
296,847
Loss from operations
(56,442
)
(4,022
)
(78,298
)
(26,371
)
Other income (expense), net
1,477
5,713
8,467
(9,069
)
Gain from foreign currency
transactions
2,781
1,180
5,728
1,884
Interest expense, net
(284
)
(169
)
(660
)
(7,569
)
Loss on extinguishment of debt
—
—
—
(9,629
)
(Loss) income before income taxes
(52,468
)
2,702
(64,763
)
(50,754
)
Income tax benefit (provision)
86
(722
)
(1,945
)
(2,166
)
Net (loss) income
$
(52,382
)
$
1,980
$
(66,708
)
$
(52,920
)
Net loss available to common
stockholders:
Net (loss) income
$
(52,382
)
$
1,980
$
(66,708
)
$
(52,920
)
Convertible redeemable preferred stock
dividends
(3,910
)
(3,910
)
(11,603
)
(8,713
)
Total net loss available to common
stockholders:
$
(56,292
)
$
(1,930
)
$
(78,311
)
$
(61,633
)
Net loss per common share:
Basic and diluted
$
(0.60
)
$
(0.02
)
$
(0.85
)
$
(0.77
)
Weighted-average number of shares used in
per share calculation - Common Stock:
Basic and diluted
93,347,017
82,185,009
92,380,984
79,951,857
Comprehensive (loss) income:
Net (loss) income
$
(52,382
)
$
1,980
$
(66,708
)
$
(52,920
)
Other comprehensive loss:
Foreign currency cumulative translation
adjustment
(4,553
)
(1,917
)
(9,638
)
(3,337
)
Total comprehensive (loss) income
$
(56,935
)
$
63
$
(76,346
)
$
(56,257
)
(1) Excludes amortization of intangible
assets, which is presented as a separate line item.
(2) Stock-based compensation expense is
included in the line items above as follows:
Three Months Ended September
30,
Nine Months Ended September
30,
2022
2021
2022
2021
Cost of revenues
$
155
$
231
$
877
$
1,554
Selling and marketing
132
208
804
1,679
Research and development
116
170
627
1,162
General and administrative
1,013
2,425
4,906
6,761
Total stock-based compensation expense
$
1,416
$
3,034
$
7,214
$
11,156
COMSCORE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September
30,
(In thousands)
2022
2021
Operating activities:
Net loss
$
(66,708
)
$
(52,920
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Amortization of intangible assets
20,323
18,866
Depreciation
12,542
11,873
Stock-based compensation expense
7,214
11,156
Non-cash operating lease expense
4,540
3,952
Change in fair value of contingent
consideration liability
2,447
—
Amortization expense of finance leases
1,875
1,485
Deferred tax (benefit) provision
(90
)
652
Change in fair value of warrants
liability
(8,471
)
10,938
Loss on extinguishment of debt
—
9,629
Non-cash interest expense on senior
secured convertible notes
—
4,692
Impairment of goodwill
46,300
—
Other
1,456
660
Changes in operating assets and
liabilities:
Accounts receivable
22,143
(12,661
)
Prepaid expenses and other assets
(1,081
)
283
Accounts payable, accrued expenses and
other liabilities
3,159
6,632
Contract liabilities and customer
advances
(3,448
)
(12,563
)
Operating lease liabilities
(5,665
)
(3,795
)
Net cash provided by (used in) operating
activities
36,536
(1,121
)
Investing activities:
Capitalized internal-use software
costs
(12,402
)
(10,925
)
Purchases of property and equipment
(823
)
(744
)
Net cash used in investing activities
(13,225
)
(11,669
)
Financing activities:
Payments for dividends on convertible
redeemable preferred stock
(15,512
)
(4,760
)
Principal payments on finance leases
(2,004
)
(1,475
)
Principal payment and extinguishment costs
on senior secured convertible notes
—
(204,014
)
Principal payment and extinguishment costs
on secured term note
—
(14,031
)
Proceeds from borrowing on revolving line
of credit
—
16,000
Proceeds from issuance of convertible
redeemable preferred stock, net of issuance costs
—
188,183
Other
(61
)
(429
)
Net cash used in financing activities
(17,577
)
(20,526
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(2,502
)
(691
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
3,232
(34,007
)
Cash, cash equivalents and restricted cash
at beginning of period
22,279
50,741
Cash, cash equivalents and restricted cash
at end of period
$
25,511
$
16,734
As of September 30,
2022
2021
Cash and cash equivalents
$
25,086
$
15,940
Restricted cash
425
794
Total cash, cash equivalents and
restricted cash
$
25,511
$
16,734
Reconciliation of Non-GAAP Financial Measures
The following table presents a reconciliation of GAAP net (loss)
income to non-GAAP adjusted EBITDA and adjusted EBITDA margin for
each of the periods identified:
Three Months Ended September
30,
Nine Months Ended September
30,
(In thousands)
2022 (Unaudited)
2021 (Unaudited)
2022 (Unaudited)
2021 (Unaudited)
GAAP net (loss) income
$
(52,382
)
$
1,980
$
(66,708
)
$
(52,920
)
Amortization of intangible assets
6,772
6,172
20,323
18,866
Depreciation
4,186
3,882
12,542
11,873
Amortization expense of finance leases
515
543
1,875
1,484
Income tax (benefit) provision
(86
)
722
1,945
2,166
Interest expense, net
284
169
660
7,569
EBITDA
(40,711
)
13,468
(29,363
)
(10,962
)
Adjustments:
Stock-based compensation expense
1,416
3,034
7,214
11,156
Amortization of cloud-computing
implementation costs
358
342
1,076
342
Change in fair value of contingent
consideration liability
44
—
2,447
—
Loss on extinguishment of debt
—
—
—
9,629
Restructuring
5,784
—
5,784
—
Impairment of goodwill
46,300
—
46,300
—
Other (income) expense, net (1)
(1,476
)
(5,582
)
(8,464
)
9,288
Non-GAAP adjusted EBITDA
$
11,715
$
11,262
$
24,994
$
19,453
Non-GAAP adjusted EBITDA margin (2)
12.6
%
12.2
%
9.0
%
7.2
%
(1) Adjustments to other (income) expense,
net reflect non-cash changes in the fair value of financing
derivatives, interest make-whole derivative and warrants liability
included in other income (expense), net on our Condensed
Consolidated Statements of Operations and Comprehensive (Loss)
Income.
(2) Adjusted EBITDA margin is calculated
by dividing adjusted EBITDA by revenue reported on our Condensed
Consolidated Statements of Operations and Comprehensive (Loss)
Income for the applicable period.
We do not provide GAAP net (loss) income on a forward-looking
basis because we are unable to predict with reasonable certainty
our future stock-based compensation expense, fair value
adjustments, variable interest expense, litigation and
restructuring expense and any unusual gains or losses without
unreasonable effort. These items are uncertain, depend on various
factors, and could be material to results computed in accordance
with GAAP. For this reason, we are unable without unreasonable
effort to provide a reconciliation of adjusted EBITDA or adjusted
EBITDA margin to the most directly comparable GAAP measure, GAAP
net (loss) income, on a forward-looking basis.
Revenues
Revenues from our two offerings of products and services are as
follows:
Three Months Ended September
30,
(In thousands)
2022 (Unaudited)
% of Revenue
2021 (Unaudited)
% of Revenue
$ Variance
% Variance
Digital Ad Solutions
$
52,360
56.4
%
$
57,039
61.7
%
$
(4,679
)
(8.2
) %
Cross Platform Solutions(1)
40,423
43.6
%
35,448
38.3
%
4,975
14.0
%
Total revenues
$
92,783
100.0
%
$
92,487
100.0
%
$
296
0.3
%
(1) Cross Platform Solutions revenue
includes revenue from our movies business, which grew from $7.9
million in the third quarter of 2021 to $8.7 million in the third
quarter of 2022.
Nine Months Ended September
30,
(In thousands)
2022 (Unaudited)
% of Revenue
2021 (Unaudited)
% of Revenue
$ Variance
% Variance
Digital Ad Solutions
$
157,127
56.5
%
$
162,581
60.1
%
$
(5,454
)
(3.4
) %
Cross Platform Solutions(1)
121,056
43.5
%
107,895
39.9
%
13,161
12.2
%
Total revenues
$
278,183
100.0
%
$
270,476
100.0
%
$
7,707
2.8
%
(1) Cross Platform Solutions revenue
includes revenue from our movies business, which grew from $22.2
million in the first nine months of 2021 to $25.3 million in the
first nine months of 2022.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221108006183/en/
Press Bill Daddi Daddi Brand Communications 917-620-3717
press@comscore.com
Investors John Tinker Comscore, Inc. 212-203-2129
jtinker@comscore.com
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