RESTON,
Va., May 9, 2023 /PRNewswire/ -- Comscore, Inc.
(Nasdaq: SCOR), a trusted partner for planning, transacting, and
evaluating media across platforms, today reported financial results
for the quarter ended March 31, 2023.
"Despite a challenging macroeconomic environment, I am pleased
with the progress we're making against our strategic and
operational priorities," said Jon
Carpenter, CEO of Comscore. "Our wins over the course of the
first quarter, including Warner Bros. Discovery, YouTube and IPG
Mediabrands, highlight the breadth of our offerings and the
confidence our clients have in the scale, transparency and
interoperability of our solutions. We remain focused on execution,
delivering best in class cross-platform audience solutions for our
clients and value creation for our shareholders."
Q1 2023 Financial Highlights
- Revenue for the first quarter was $91.6
million compared to $94.0
million in Q1 2022
- Net loss of $8.7 million compared
to $9.3 million in Q1 2022
- Adjusted EBITDA of $5.2 million
compared to $6.8 million in Q1
2022
- FX adjusted EBITDA of $6.7
million compared to $6.4
million in Q1 2022
- Maintaining full year guidance for revenue and adjusted
EBITDA
Recent Business Developments
- Selected by Warner Bros. Discovery as a preferred alternative
currency partner for the 2023-2024 upfront season leveraging our
unparalleled linear and cross-platform audience measurement
solutions
- Expanded partnership with IPG Mediabrand's MAGNA, which will
begin leveraging Comscore's local television ratings data to inform
TV buys across the organization as the company's only alternative
currency provider for local television
- Expanded our Comscore Campaign Ratings relationship with
YouTube through a new engagement to measure incremental reach on
the upcoming NFL Sunday Ticket content addition
- Selected by Tubi, Fox Corporation's ad-supported
video-on-demand streaming service, as a measurement partner for
cross-platform campaign measurement via Comscore Campaign
Ratings
- Entered into a partnership with PubMatic, in which Proximic by
Comscore's Predictive Audiences and Content Targeting solutions
have been integrated into the PubMatic platform, enabling clients
to leverage new targeting options and reach key audiences in
premium, brand safe environments
First Quarter Summary Results
Revenue in the first quarter was $91.6
million, down 2.6% from $94.0
million in Q1 2022, primarily due to a decline in
Digital Ad Solutions revenue from Q1 2022 as a result of
slower ad spend, which impacted our custom digital solutions and
other digital products. Cross Platform Solutions revenue was up
from Q1 2022, with double-digit growth in local TV and
continued strength in our movies business.
Our core operating expenses, which include cost of revenues,
sales and marketing, research and development and general and
administrative expenses, were $91.6
million, a decrease of 6.3% compared to $97.7 million in Q1 2022. The primary driver
of the decline was employee compensation, which decreased from
ongoing restructuring efforts and a higher amount of capitalization
related to internally developed software.
Net loss for the quarter was $8.7
million, compared to $9.3
million in Q1 2022. After accounting for dividends on
our convertible preferred stock, loss per share attributable to
common shares was $(0.13) and
$(0.14) for Q1 2023 and Q1 2022,
respectively.
Adjusted EBITDA for the quarter was $5.2
million, compared to $6.8
million in Q1 2022, resulting in adjusted EBITDA
margins of 5.7% and 7.2%, respectively. Excluding the impact of
foreign currency transactions, FX adjusted EBITDA for the quarter
was $6.7 million, compared to
$6.4 million in Q1 2022.
Adjusted EBITDA and adjusted EBITDA margin exclude stock-based
compensation, restructuring costs, amortization of cloud-computing
implementation costs, change in fair value of contingent
consideration and warrants liability, and other items as presented
in the accompanying tables. FX adjusted EBITDA excludes these items
as well as gain/loss from foreign currency transactions.
Balance Sheet and Liquidity
As of March 31, 2023, cash, cash equivalents and restricted
cash totaled $20.7 million. Total
debt principal, including $16.0
million in outstanding borrowings under our senior secured
revolving credit agreement, was $18.7
million.
2023 Outlook
Based on current trends and expectations, we are maintaining our
guidance for full year 2023 revenue and adjusted EBITDA, with
revenue growth in the low to mid single digits over 2022 and an
adjusted EBITDA margin in the double digits.
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, May 9,
2023 at 5:00 p.m. ET
Management will host a conference call to discuss the results on
Tuesday, May 9, 2023 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
2023, the impact of new customer contracts and partnerships on our
business and revenue prospects, evolving economic and industry
trends, currency opportunities, product integration 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;
changes or declines in ad spending or other macroeconomic factors;
evolving privacy and regulatory standards; 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 in this press release adjusted
EBITDA, adjusted EBITDA margin and FX adjusted EBITDA, 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 income (loss), 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 income
(loss). These reconciliations should be carefully evaluated.
Press
Marie Scoutas
Comscore, Inc.
917-213-2032
press@comscore.com
Investors
John
Tinker
Comscore, Inc.
212-203-2129
jtinker@comscore.com
COMSCORE,
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
As of
|
|
As of
|
|
March 31,
2023
|
|
December 31,
2022
|
(In thousands, except
share and par value data)
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
20,274
|
|
$
20,044
|
Restricted
cash
|
398
|
|
398
|
Accounts receivable,
net of allowances of $646 and $798, respectively
|
62,988
|
|
68,457
|
Prepaid expenses and
other current assets
|
15,839
|
|
15,922
|
Total current
assets
|
99,499
|
|
104,821
|
Property and equipment,
net
|
37,160
|
|
36,367
|
Operating right-of-use
assets
|
23,804
|
|
23,864
|
Deferred tax
assets
|
3,575
|
|
3,351
|
Intangible assets,
net
|
10,516
|
|
13,327
|
Goodwill
|
388,263
|
|
387,973
|
Other non-current
assets
|
10,826
|
|
10,883
|
Total
assets
|
$
573,643
|
|
$
580,586
|
Liabilities,
Convertible Redeemable Preferred Stock and Stockholders'
Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
33,694
|
|
$
29,090
|
Accrued
expenses
|
36,289
|
|
43,393
|
Contract
liabilities
|
56,868
|
|
52,944
|
Customer
advances
|
11,688
|
|
11,527
|
Current portion of
contingent consideration
|
3,623
|
|
7,134
|
Current operating
lease liabilities
|
7,861
|
|
7,639
|
Warrants
liability
|
2,533
|
|
718
|
Other current
liabilities
|
14,958
|
|
12,646
|
Total current
liabilities
|
167,514
|
|
165,091
|
Non-current operating
lease liabilities
|
28,787
|
|
29,588
|
Non-current portion of
accrued data costs
|
26,882
|
|
25,106
|
Revolving line of
credit
|
16,000
|
|
16,000
|
Deferred tax
liabilities
|
2,719
|
|
2,127
|
Other non-current
liabilities
|
7,078
|
|
10,627
|
Total
liabilities
|
248,980
|
|
248,539
|
Commitments and
contingencies
|
|
|
|
Convertible redeemable
preferred stock, $0.001 par value; 82,527,609 shares authorized,
issued and
outstanding as of March 31, 2023 and December 31, 2022;
aggregate liquidation preference of
$215,688 as of March 31, 2023, and $211,863 as of
December 31, 2022
|
187,885
|
|
187,885
|
Stockholders'
equity:
|
|
|
|
Preferred stock,
$0.001 par value; 7,472,391 shares authorized as of March 31,
2023 and
December 31, 2022, respectively; no shares issued or
outstanding as of March 31, 2023 or
December 31, 2022
|
—
|
|
—
|
Common stock, $0.001
par value; 275,000,000 shares authorized as of March 31, 2023
and
December 31, 2022; 99,124,324 shares issued and 92,359,528
shares outstanding as of
March 31, 2023, and 98,869,738 shares issued and 92,104,942
shares outstanding as of
December 31, 2022
|
92
|
|
92
|
Additional paid-in
capital
|
1,694,378
|
|
1,690,783
|
Accumulated other
comprehensive loss
|
(14,423)
|
|
(15,940)
|
Accumulated
deficit
|
(1,313,285)
|
|
(1,300,789)
|
Treasury stock, at
cost, 6,764,796 shares as of March 31, 2023 and
December 31, 2022
|
(229,984)
|
|
(229,984)
|
Total stockholders'
equity
|
136,778
|
|
144,162
|
Total liabilities,
convertible redeemable preferred stock and stockholders'
equity
|
$
573,643
|
|
$
580,586
|
COMSCORE,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
(Unaudited)
|
|
|
Three Months Ended
March 31,
|
(In thousands, except
share and per share data)
|
2023
|
|
2022
|
Revenues
|
$
91,558
|
|
$
93,966
|
|
|
|
|
Cost of
revenues (1) (2)
|
51,929
|
|
52,918
|
Selling and marketing
(1) (2)
|
17,154
|
|
17,166
|
Research and
development (1) (2)
|
8,919
|
|
9,532
|
General and
administrative (1) (2)
|
13,574
|
|
18,117
|
Amortization of
intangible assets
|
2,811
|
|
6,779
|
Restructuring
|
998
|
|
—
|
Total expenses from
operations
|
95,385
|
|
104,512
|
Loss from
operations
|
(3,827)
|
|
(10,546)
|
Other (expense) income,
net
|
(1,812)
|
|
2,433
|
(Loss) gain from
foreign currency transactions
|
(1,466)
|
|
420
|
Interest expense,
net
|
(352)
|
|
(200)
|
Loss before income
taxes
|
(7,457)
|
|
(7,893)
|
Income tax
provision
|
(1,214)
|
|
(1,383)
|
Net loss
|
$
(8,671)
|
|
$
(9,276)
|
Net loss available to
common stockholders:
|
|
|
|
Net loss
|
(8,671)
|
|
(9,276)
|
Convertible redeemable
preferred stock dividends
|
(3,825)
|
|
(3,825)
|
Total net loss
available to common stockholders:
|
$
(12,496)
|
|
$
(13,101)
|
Net loss per common
share:
|
|
|
|
Basic and
diluted
|
$
(0.13)
|
|
$
(0.14)
|
Weighted-average number
of shares used in per share calculation - Common Stock:
|
|
|
|
Basic and
diluted
|
93,850,266
|
|
91,686,733
|
Comprehensive
loss:
|
|
|
|
Net loss
|
$
(8,671)
|
|
$
(9,276)
|
Other comprehensive
income (loss):
|
|
|
|
Foreign currency
cumulative translation adjustment
|
1,517
|
|
(541)
|
Total comprehensive
loss
|
$
(7,154)
|
|
$
(9,817)
|
|
|
|
|
(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
March 31,
|
|
2023
|
|
2022
|
Cost of
revenues
|
$
78
|
|
$
301
|
Selling and
marketing
|
105
|
|
263
|
Research and
development
|
55
|
|
200
|
General and
administrative
|
879
|
|
1,772
|
Total stock-based
compensation expense
|
$
1,117
|
|
$
2,536
|
COMSCORE,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
Three Months Ended
March 31,
|
(In
thousands)
|
2023
|
|
2022
|
Operating
activities:
|
|
|
|
Net loss
|
$
(8,671)
|
|
$
(9,276)
|
Adjustments to
reconcile to net cash provided by operating activities:
|
|
|
|
Depreciation
|
4,724
|
|
4,191
|
Amortization of
intangible assets
|
2,811
|
|
6,779
|
Change in fair value
of warrants liability
|
1,815
|
|
(2,435)
|
Non-cash operating
lease expense
|
1,395
|
|
1,483
|
Stock-based
compensation expense
|
1,117
|
|
2,536
|
Deferred tax
provision
|
566
|
|
513
|
Amortization expense
of finance leases
|
429
|
|
704
|
Change in fair value
of contingent consideration liability
|
96
|
|
2,348
|
Other
|
254
|
|
469
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
5,868
|
|
7,301
|
Prepaid expenses and
other assets
|
38
|
|
(1,270)
|
Accounts payable,
accrued expenses and other liabilities
|
(4,914)
|
|
(2,288)
|
Contract liabilities
and customer advances
|
3,540
|
|
3,209
|
Operating lease
liabilities
|
(1,817)
|
|
(1,856)
|
Net cash provided by
operating activities
|
7,251
|
|
12,408
|
|
|
|
|
Investing
activities:
|
|
|
|
Capitalized
internal-use software costs
|
(5,345)
|
|
(3,452)
|
Purchases of property
and equipment
|
(487)
|
|
(347)
|
Net cash used in
investing activities
|
(5,832)
|
|
(3,799)
|
|
|
|
|
Financing
activities:
|
|
|
|
Contingent
consideration payment at initial value
|
(1,037)
|
|
—
|
Principal payments on
finance leases
|
(445)
|
|
(796)
|
Other
|
(174)
|
|
48
|
Net cash used in
financing activities
|
(1,656)
|
|
(748)
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
467
|
|
(86)
|
Net increase in cash,
cash equivalents and restricted cash
|
230
|
|
7,775
|
Cash, cash equivalents
and restricted cash at beginning of period
|
20,442
|
|
22,279
|
Cash, cash equivalents
and restricted cash at end of period
|
$
20,672
|
|
$
30,054
|
|
|
|
|
|
As of March
31,
|
|
2023
|
|
2022
|
Cash and cash
equivalents
|
$
20,274
|
|
$
29,629
|
Restricted
cash
|
398
|
|
425
|
Total cash, cash
equivalents and restricted cash
|
$
20,672
|
|
$
30,054
|
Reconciliation of Non-GAAP Financial Measures
The following table presents a reconciliation of GAAP net loss
to non-GAAP adjusted EBITDA, adjusted EBITDA margin and non-GAAP FX
adjusted EBITDA for each of the periods identified:
|
Three Months Ended
March 31,
|
(In
thousands)
|
2023
(Unaudited)
|
|
2022
(Unaudited)
|
GAAP net
loss
|
$
(8,671)
|
|
$
(9,276)
|
|
|
|
|
Depreciation
|
4,724
|
|
4,191
|
Amortization of
intangible assets
|
2,811
|
|
6,779
|
Income tax
provision
|
1,214
|
|
1,383
|
Amortization expense of
finance leases
|
429
|
|
704
|
Interest expense,
net
|
352
|
|
200
|
EBITDA
|
859
|
|
3,981
|
|
|
|
|
Adjustments:
|
|
|
|
Stock-based
compensation expense
|
1,117
|
|
2,536
|
Restructuring
|
998
|
|
—
|
Amortization of
cloud-computing implementation costs
|
359
|
|
359
|
Change in fair value of
contingent consideration liability
|
96
|
|
2,348
|
Other expense (income),
net (1)
|
1,815
|
|
(2,435)
|
Non-GAAP adjusted
EBITDA
|
$
5,244
|
|
$
6,789
|
Non-GAAP adjusted
EBITDA margin (2)
|
5.7 %
|
|
7.2 %
|
|
|
|
|
Adjustments:
|
|
|
|
Loss (gain) from
foreign currency transactions
|
1,466
|
|
(420)
|
Non-GAAP FX adjusted
EBITDA
|
$
6,710
|
|
$
6,369
|
|
(1) Adjustments to other expense
(income), net reflect non-cash changes in the fair value
of warrants liability included in other (expense) income, net
on our Condensed Consolidated Statements of Operations and
Comprehensive Loss.
|
(2) Adjusted EBITDA margin is
calculated by dividing adjusted EBITDA by revenues reported on our
Condensed Consolidated Statements of Operations and Comprehensive
Loss for the applicable period.
|
Revenues
Revenues from our two offerings of products and services are as
follows:
|
Three Months Ended
March 31,
|
|
|
|
|
(In
thousands)
|
2023
(Unaudited)
|
|
% of
Revenue
|
|
2022
(Unaudited)
|
|
% of
Revenue
|
|
$
Variance
|
|
%
Variance
|
Digital Ad
Solutions
|
$
50,447
|
|
55.1 %
|
|
$
53,137
|
|
56.5 %
|
|
$
(2,690)
|
|
(5.1) %
|
Cross Platform
Solutions(1)
|
41,111
|
|
44.9 %
|
|
40,829
|
|
43.5 %
|
|
282
|
|
0.7 %
|
Total
revenues
|
$
91,558
|
|
100.0 %
|
|
$
93,966
|
|
100.0 %
|
|
$
(2,408)
|
|
(2.6) %
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Cross
Platform Solutions revenue includes revenue from our movies
business, which grew from $8.2 million in the first quarter of 2022
to $8.8 million in the first
quarter of 2023.
|
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SOURCE Comscore, Inc.