What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-03-12 compared with 2023-03-02 · 161 added, 147 removed, 339 unchanged (48% of the section changed)

12 unchanged sentences

The platforms we measure include televisions, mobile devices, computers, tablets, CTV devices and movie theaters.

The information we analyze crosses geographies, types of content and activities, including websites, mobile and OTT apps, video games, television and movie programming, e-commerce, and advertising.

The information we analyze crosses geographies, types of content and activities, including websites, mobile and over-the-top applications, video games, television and movie programming, e-commerce, and advertising.

Results of Operations

The following table sets forth selected Consolidated Statements of Operations and Comprehensive Loss data as a percentage of revenues for each of the periods indicated.

Percentages may not add due to rounding.

Years Ended December 31,

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Loss from operations (73,601) (19.8) % (74,873) (19.9) % (28,865) (7.9) %

Loss on extinguishment of debt — — % (9,629) (2.6) % — — %

Interest expense, net (1,445) (0.4) % (915) (0.2) % (7,801) (2.1) %

Other income (expense), net 42 — % 9,785 2.6 % (5,778) (1.6) %

Gain (loss) from foreign currency transactions 1,166 0.3 % 2,895 0.8 % (4,490) (1.3) %

(Loss) gain from foreign currency transactions (2,824) (0.8) % 1,166 0.3 % 2,895 0.8 %

Loss on extinguishment of debt — — % — — % (9,629) (2.6) %

Loss before income taxes (77,828) (21.0) % (64,837) (17.2) % (49,178) (13.4) %

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Revenues for the years ended December 31, 2023 and 2022 are as follows:

Year Ended December 31,

Years Ended December 31,

(In thousands) 2023 % of Revenue 2022 % of Revenue $ Variance % Variance

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Total revenues $ 371,343 100.0 % $ 376,423 100.0 % $ (5,080) (1.3) %

Total revenues increased by $9.4 million, or 2.6%, for the year ended December 31, 2022 as compared to 2021.

Digital Ad Solutions revenue decreased primarily due to lower usage of our Activation product as well as a decline in our syndicated digital products and custom digital deliveries.

Additionally, we recognized $2.4 million in license revenue under a multi-year contract in 2021 (related to delivery of our digital measurement products in Europe) that did not recur in 2022.

We believe that macroeconomic factors (including inflation, rising interest rates and supply chain disruptions) caused a reduction or delay in advertising expenditures in 2022, impacting demand for certain digital products.

We expect this trend to continue into 2023.

Cross Platform Solutions revenue increased primarily due to higher TV revenues from new partnerships, higher contract values from renewals and increased agency adoption.

In addition, we recognized $4.1 million more revenue related to cost reimbursements of cloud computing and processing costs attributable to certain custom TV data set deliveries during 2022 compared to 2021.

Our movies revenue increased due to the continued return of consumers to theaters in markets worldwide.

Total revenues decreased by $5.1 million, or 1.3%, for the year ended December 31, 2023 as compared to 2022.

Digital Ad Solutions revenue decreased primarily due to lower revenue from our syndicated digital products driven by lower renewals and lower deliveries of certain custom digital products.

These decreases were partially offset by an increase in Activation and CCR revenue driven by higher usage from multiple customers.

We believe that macroeconomic factors (including inflation, interest rates and supply chain disruptions) continued to cause reductions and delays in advertising expenditures in 2023, which impacted demand for certain digital products.

Cross Platform Solutions revenue decreased primarily due to lower national TV revenue from lower renewals and a one-time custom deliverable in the first quarter of 2022.

These decreases were partially offset by increases in revenue from local TV and movies due to higher renewals and new business.

Revenues for the years ended December 31, 2022 and 2021 are as follows:

Year Ended December 31,

Years Ended December 31,

(In thousands) 2022 % of Revenue 2021 % of Revenue $ Variance % Variance

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Total revenues increased by $9.4 million, or 2.6%, for the year ended December 31, 2022 as compared to 2021.

Digital Ad Solutions revenue increased primarily due to double-digit year-over-year growth related to Activation as we continued to bring new solutions to market.

Additionally, revenue in 2021 included $2.4 million in license revenue recognized under the multi-year contract described above.

This increase was partially offset by lower revenue from our syndicated digital products.

Syndicated digital revenue was lower primarily due to our smaller customers who continued to be impacted by ongoing industry changes in ad buying and consolidations.

Cross Platform Solutions revenue increased primarily due to higher revenue from our TV products.

TV revenue was higher primarily due to new partnerships, increased agency adoption and higher deliveries of custom TV data.

This increase was partially offset by a decrease in our movies business primarily driven by lower revenues during the first quarter of 2021, which reflected the full impact of the COVID-19 pandemic and its effect on theater closures, movie releases and consumer behavior worldwide.

Digital Ad Solutions revenue decreased primarily due to lower usage of our Activation product as well as a decline in our syndicated digital products and custom digital deliveries.

Additionally, we recognized $2.4 million in license revenue under a multi-year contract in 2021 (related to delivery of our digital measurement products in Europe) that did not recur in 2022.

Cross Platform Solutions revenue increased primarily due to higher TV revenues from new partnerships, higher contract values from renewals and increased agency adoption.

Our movies revenue increased due to the continued return of consumers to theaters in markets worldwide in 2022.

Revenues by Geographic Location

Revenue from outside of the United States was $35.6 million, $38.6 million and $45.1 million for the years ended December 31, 2023, 2022, and 2021, respectively.

revenue declined in 2022 primarily due to the $2.4 million in license fee revenue recognized in Europe under a multi-year contract in 2021 that did not recur in 2022, as well as a decline in revenue from our syndicated digital products.

revenue declined in 2023 primarily due to a decline in revenue from our syndicated digital products.

We generate the majority of our revenues from the sale and delivery of our products within the United States.

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revenues to continue to decline as a percentage of our total revenues as a result of relative growth in our domestic product offerings.

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WPP Related Party Revenue

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For the years ended December 31, 2023, 2022, and 2021, related party revenues with WPP and its affiliates were $8.3 million, $11.7 million and $13.6 million, respectively.

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Cost of Revenues

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Cost of revenues also includes costs to obtain multichannel video programming distributor ("MVPD") data sets and panel, census-based and other data sets used in our products as well as operational costs associated with our data centers, including depreciation expense associated with computer equipment and internally developed software that supports our panels and systems.

Additionally, cost of revenues includes allocated overhead, lease expense and other facilities-related costs.

Additionally, cost of revenues includes allocated overhead, lease expense and other facilities-related costs and depreciation expense generated by general purpose equipment and software.

Cost of revenues for the years ended December 31, 2023 and 2022 are as follows:

Year Ended December 31,

Years Ended December 31,

(In thousands) 2023 % of Revenue 2022 % of Revenue

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Panel costs 13,370 3.6 % 15,747 4.2 % (2,377) (15.1) %

Sample and survey costs 7,013 1.9 % 7,008 1.9 % 5 0.1 %

Professional fees 7,734 2.1 % 5,954 1.6 % 1,780 29.9 %

Sample and survey costs 6,452 1.7 % 7,013 1.9 % (561) (8.0) %

Technology 4,114 1.1 % 4,701 1.2 % (587) (12.5) %

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Cost of revenues increased by $0.3 million, or 0.1%, for the year ended December 31, 2023 as compared to 2022.

Systems and bandwidth costs increased primarily due to cloud computing and processing costs attributable to certain custom TV data set deliveries, including $4.1 million that was recognized as revenue in 2022 as described above.

Lease expense and depreciation increased due to higher depreciation primarily driven by the addition of capitalized internal-use software costs as a result of our acquisition of Shareablee in 2021.

These increases were offset by a decrease in data costs primarily due to an amended data licensing agreement with Charter Communications, which resulted in a credit of $4.5 million recognized in 2022.

Additionally, other expenses decreased primarily due to higher contract fulfillment costs associated with the delivery of our cross-platform products in Europe in 2021.

Lease expense and depreciation increased due to higher depreciation primarily driven by an increase in capitalized internal-use software costs.

Professional fees increased primarily due to an increase in consulting services related to our transformation initiatives.

Systems and bandwidth costs increased primarily due to cloud computing and processing costs attributable to certain custom TV data set deliveries.

Data costs increased primarily due to an amendment to our data licensing agreement with Charter Communications, which resulted in a credit of $4.5 million recognized in 2022 compared to a credit of $2.5 million recognized in 2023.

Employee costs decreased primarily due to an increase in employee compensation capitalized in 2023 related to capitalized software projects as we are allocating more resources to product development, as well as a decrease in employee headcount related to our restructuring plan.

Panel costs decreased primarily due to lower recruitment and support costs for our desktop and mobile panels.

Cost of revenues for the years ended December 31, 2022 and 2021 are as follows:

Year Ended December 31,

Years Ended December 31,

(In thousands) 2022 % of Revenue 2021 % of Revenue

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Sample and survey costs 7,013 1.9 % 7,008 1.9 % 5 0.1 %

Technology 5,689 1.6 % 5,710 1.6 % (21) (0.4) %

Professional fees 5,954 1.6 % 5,109 1.4 % 845 16.5 %

Royalties and resellers 4,039 1.1 % (33) — % 4,072 NM (1)

Technology 4,701 1.2 % 5,689 1.6 % (988) (17.4) %

Royalties and resellers 3,534 0.9 % 4,039 1.1 % (505) (12.5) %

Other 1,093 0.3 % 3,908 1.1 % (2,815) (72.0) %

Total cost of revenues $ 205,294 54.5 % $ 203,044 55.3 % $ 2,250 1.1 %

(1) Calculation is not meaningful.

Cost of revenues increased by $2.3 million, or 1.1%, for the year ended December 31, 2022 as compared to 2021.

Data costs increased primarily due to higher TV data licensing costs to expand our data footprint and data rights, including our expanded data license with Charter Communications.

Royalties and resellers expenses increased primarily due to a $2.0 million one-time, non-cash benefit related to certain revenue share arrangements recorded in the fourth quarter of 2020, lower costs during 2020 due to less revenue associated with revenue sharing arrangements, and a reclassification of costs historically captured in data costs to better reflect the nature of the services provided.

Lease expense and depreciation increased due to higher depreciation primarily driven by the addition of capitalized internal-use software costs as a result of our acquisition of Shareablee in 2021.

These increases were offset by a decrease in data costs primarily due to the amendment of our data licensing agreement with Charter Communications, which resulted in a credit of $4.5 million recognized in 2022.

Additionally, other expenses decreased primarily due to higher contract fulfillment costs associated with the delivery of our cross-platform products in Europe in 2021.

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bandwidth costs increased primarily due to increases in cloud-based data storage and bandwidth capacity.

Employee costs increased as we allocated more employee resources towards support of our products and operating infrastructure and modified certain employee incentive compensation.

Lease expense and depreciation increased primarily due to higher depreciation driven by previously capitalized internal-use software costs.

Sample and survey costs increased primarily due to higher sales and deliveries of digital marketing solutions.

Other expenses increased primarily due to higher contract fulfillment costs associated with the delivery of our cross-platform products in Europe.

Offsetting these increases was a decrease in panel costs primarily due to lower recruitment and support costs for our mobile panels.

Selling and Marketing

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Selling and marketing expenses for the years ended December 31, 2023 and 2022 are as follows:

Year Ended December 31,

Years Ended December 31,

(In thousands) 2023 % of Revenue 2022 % of Revenue $ Variance % Variance

Employee costs $ 50,337 13.6 % $ 55,416 14.7 % $ (5,079) (9.2) %

Lease expense and depreciation 3,849 1.0 % 4,217 1.1 % (368) (8.7) %

Technology 3,149 0.8 % 3,360 0.9 % (211) (6.3) %

Professional fees 3,120 0.8 % 2,464 0.7 % 656 26.6 %

Lease expense and depreciation 3,106 0.9 % 3,849 1.0 % (743) (19.3) %

Marketing and advertising 2,155 0.6 % 1,751 0.5 % 404 23.1 %

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Total selling and marketing expenses $ 63,322 17.1 % $ 68,453 18.2 % $ (5,131) (7.5) %

Selling and marketing expenses increased by $1.5 million, or 2.3%, for the year ended December 31, 2022 as compared to 2021.

Marketing and advertising expense increased primarily due to increased participation in marketing events during 2022.

Selling and marketing expenses decreased by $5.1 million, or 7.5%, for the year ended December 31, 2023 as compared to 2022.

Employee costs decreased primarily due to a decrease in employee headcount related to our restructuring plan and lower commissions.

Selling and marketing expenses for the years ended December 31, 2022 and 2021 are as follows:

Year Ended December 31,

Years Ended December 31,

(In thousands) 2022 % of Revenue 2021 % of Revenue $ Variance % Variance

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Total selling and marketing expenses $ 68,453 18.2 % $ 66,937 18.2 % $ 1,516 2.3 %

Selling and marketing expenses decreased by $3.3 million, or 4.7%, for the year ended December 31, 2021 as compared to 2020.

Employee costs decreased primarily due to lower commission expense and a decrease in employee headcount.

Lease and depreciation expense decreased primarily due to lower rent as we reduced our office footprint and sublet two locations during 2020.

Selling and marketing expenses increased by $1.5 million, or 2.3%, for the year ended December 31, 2022 as compared to 2021.

Marketing and advertising expense increased primarily due to increased participation in marketing events during 2022.

Research and Development

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Research and development expenses for the years ended December 31, 2023 and 2022 are as follows:

Year Ended December 31,

Years Ended December 31,

(In thousands) 2023 % of Revenue 2022 % of Revenue $ Variance % Variance

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Total research and development expenses $ 33,701 9.1 % $ 36,987 9.8 % $ (3,286) (8.9) %

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Research and development expenses decreased by $3.3 million, or 8.9%, for the year ended December 31, 2023 as compared to 2022.

Lease and depreciation expense decreased primarily due to lower rent as we reduced our office footprint.

Professional fees decreased primarily due to a decrease in consulting services.

Technology expenses decreased due to decreases in various license and maintenance agreements compared to 2021.

Employee costs decreased primarily due to an increase in employee compensation capitalized in 2023 in relation to capitalized software projects as we are allocating more resources to product development, as well as a decrease in employee headcount related to our restructuring plan.

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Research and development expenses for the years ended December 31, 2022 and 2021 are as follows:

Year Ended December 31,

Years Ended December 31,

(In thousands) 2022 % of Revenue 2021 % of Revenue $ Variance % Variance

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Total research and development expenses $ 36,987 9.8 % $ 39,123 10.7 % $ (2,136) (5.5) %

Research and development expenses increased by $0.4 million, or 1.1%, for the year ended December 31, 2021 as compared to 2020.

Employee costs increased primarily due to higher stock-based compensation expense and the modification of certain employee incentive compensation.

Research and development expenses decreased by $2.1 million, or 5.5%, for the year ended December 31, 2022 as compared to 2021.

Lease and depreciation expense decreased primarily due to lower rent as we reduced our office footprint.

Professional fees decreased primarily due to a decrease in consulting services.

Technology expenses decreased due to decreases in various license and maintenance agreements compared to 2021.

General and Administrative

General and administrative expenses consist primarily of employee costs including salaries, benefits, stock-based compensation and other related costs, and related expenses for executive management, finance, human capital, legal and other administrative functions, as well as professional fees, overhead, including allocated overhead, which is comprised of lease expense and other facilities-related costs, depreciation expense related to general purpose equipment and software, and expenses incurred for other general corporate purposes.

General and administrative expenses consist primarily of employee costs including salaries, benefits, stock-based compensation and other related costs, and related expenses for executive management, finance, human capital, legal and other administrative functions, as well as professional fees, overhead, including allocated overhead, which is comprised of lease expense and other facilities-related costs, depreciation expense related to general purpose equipment and software, amortization of cloud-computing implementation costs, changes in the fair value of our contingent consideration liability, Board of Directors compensation and expenses incurred for other general corporate purposes.

General and administrative expenses for the years ended December 31, 2023 and 2022 are as follows:

Year Ended December 31,

Years Ended December 31,

(In thousands) 2023 % of Revenue 2022 % of Revenue $ Variance % Variance

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General and administrative expenses decreased by $10.0 million, or 16.4%, for the year ended December 31, 2023 as compared to 2022.

Employee costs decreased primarily due to lower stock-based compensation expense as a result of various executive departures in 2022 offset by an increase in salary costs.

These decreases were partially offset by an increase in Other primarily related to change in fair value of the contingent consideration recognized as part of the business combination described in Footnote 2 , Summary of Significant Accounting Policies .

Employee costs decreased primarily due to lower stock-based compensation expense in 2023 and severance expense related to the retirement of our former CEO which was recognized in 2022.

Other expense decreased primarily due to change in fair value of the contingent consideration recognized as part of our acquisition of Shareablee in 2021, as described in Footnote 2 , Summary of Significant Accounting Policies .

In addition, Other expense decreased due to lower recruiting expense and operating tax expense.

Professional fees decreased primarily due to a decrease in audit fees.

General and administrative expenses for the years ended December 31, 2022 and 2021 are as follows:

Year Ended December 31,

Years Ended December 31,

(In thousands) 2022 % of Revenue 2021 % of Revenue $ Variance % Variance

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Total general and administrative expenses $ 61,200 16.3 % $ 61,736 16.8 % $ (536) (0.9) %

(1) Calculation is not meaningful.

General and administrative expenses increased by $6.0 million, or 10.7%, for the year ended December 31, 2021 as compared to 2020.

Employee costs increased primarily due to higher stock-based compensation expense and the modification of certain employee incentive compensation.

Professional fees increased primarily due to increased consulting and audit fees in 2021 related to implementation support for our new ERP system.

These increases were offset by a decrease in other, primarily related to higher bad debt expense in the first half of 2020 as a result of the COVID-19 pandemic.

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General and administrative expenses decreased by $0.5 million, or 0.9%, for the year ended December 31, 2022 as compared to 2021.

Employee costs decreased primarily due to lower stock-based compensation expense as a result of various executive departures in 2022 offset by an increase in salary costs.

These decreases were partially offset by an increase in Other expense primarily related to change in fair value of the contingent consideration recognized as part of our acquisition of Shareablee.

Amortization of Intangible Assets

Amortization expense consists of charges related to the amortization of intangible assets associated with acquisitions, primarily our Rentrak merger in which we acquired $170.3 million of finite-lived intangible assets.

Amortization of intangible assets increased by $2.1 million, or 8.2%, for 2022 as compared to 2021 primarily due to amortization related to the customer relationships, methodologies and technology acquired as part of the Shareablee acquisition in December 2021.

Amortization of intangible assets decreased by $2.2 million, or 8.0%, for 2021 as compared to 2020 due primarily to certain acquired software and customer relationship intangibles having reached the end of their useful lives.

Amortization expense consists of charges related to the amortization of intangible assets associated with acquisitions, primarily our 2016 Rentrak merger.

Amortization of intangible assets decreased by $21.9 million, or 80.8%, for 2023 as compared to 2022 primarily due to amortization related to certain customer relationships, methodologies and technology intangibles related to the Rentrak merger reaching the end

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of their useful lives.

Amortization of intangible assets increased by $2.1 million, or 8.2%, for 2022 as compared to 2021 due primarily to amortization related to certain software and customer relationships, methodologies and technology acquired as part of the Shareablee acquisition in December 2021.

Impairment of Goodwill

As of September 30, 2022, as a result of a decline in our stock price and market capitalization, among other factors, we performed an interim impairment review of our goodwill in conjunction with our October 1, 2022 annual testing date.

Our reporting unit did not pass the goodwill impairment test, and as a result we recorded a $46.3 million non-cash impairment charge.

We performed a quantitative impairment test on our annual testing date as of October 1, 2023.

Our reporting unit did not pass the goodwill impairment test, and as a result we recorded a $34.1 million non-cash impairment charge in the quarter ended December 31, 2023.

In the second quarter of 2023, we performed an interim impairment review of our goodwill.

Our reporting unit did not pass the goodwill impairment test, and as a result we recorded a $44.1 million non-cash impairment charge in the quarter ended June 30, 2023.

As of September 30, 2022, we performed an interim impairment review of our goodwill in conjunction with our October 1, 2022 annual testing date.

Our reporting unit did not pass the goodwill impairment test, and as a result we recorded a $46.3 million non-cash impairment charge in the quarter ended September 30, 2022.

For further information refer to Footnote 10 , Goodwill and Intangible Assets and Item 7 , Critical Accounting Estimates .

Restructuring

We incurred restructuring expenses of $5.8 million for the year ended December 31, 2022, related to the implementation of a restructuring plan that included a workforce reduction.

Certain other initiatives are expected to be completed as part of the restructuring plan, as described in Footnote 1 5 , Organizational Restructuring .

No restructuring expenses were incurred during 2021 or 2020.

Organizational Restructuring

We incurred restructuring expenses of $6.2 million and $5.8 million for the years ended December 31, 2023 and 2022, respectively, related to the implementation of a restructuring plan that included a workforce reduction communicated in 2022.

We expect the 2022 restructuring plan to be substantially complete in 2024.

For further information refer to Footnote 15 , Organizational Restructuring .

No restructuring expenses were incurred during 2021.

Impairment of Right-of-use and Long-lived Assets

In 2020, we recorded a $4.7 million impairment charge related to our facility lease right-of-use assets and associated leasehold improvements for certain properties on the market for sublease.

The impairment charge was driven by changes in our projected undiscounted cash flows for certain properties, primarily as a result of changes in the real estate market related to the COVID-19 pandemic, that led to an increase in the estimated marketing time and a reduction of expected receipts.

In 2023, we recorded a $1.5 million impairment charge related to certain office space lease right-of-use assets and related long-lived assets.

The impairment charge was driven by our abandonment of certain leased office spaces prior to the end of the lease terms.

For further information refer to Footnote 2 , Summary of Significant Accounting Policies .

Loss on Extinguishment of Debt

Loss on extinguishment of debt represents the difference between the carrying value of our debt instruments and any consideration paid to our creditors in the form of cash or shares of our Common Stock on the extinguishment date.

In 2021, we recorded a $9.6 million loss on debt extinguishment related to the payoff of our senior secured convertible notes issues to Starboard Value LP (the "Notes") and a subsidiary-issued secured promissory note (the "Secured Term Note") on March 10, 2021.

In 2021, we recorded a $9.6 million loss on debt extinguishment related to the payoff of our senior secured convertible notes issued to Starboard Value LP (the "Notes") and a subsidiary-issued secured promissory note (the "Secured Term Note") on March 10, 2021.

The primary drivers of the extinguishment loss were the write-off of unamortized deferred financing costs and issuance discounts, the issuance of additional shares of Common Stock in connection with the extinguishment, and the derecognition of the interest rate reset derivative liability on the Notes.

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Interest expense relates to interest on our Notes, Secured Term Note, Revolving Credit Agreement, sale-leaseback agreement, and our finance leases.

Interest expense, net, increased $0.5 million during 2023 to $1.4 million as compared to $0.9 million in 2022.

The increase in interest expense for the year ended December 31, 2023 as compared to 2022 was primarily due to a higher interest rate on debt under our Revolving Credit Agreement, as described in Footnote 6 , Debt.

Interest expense, net, decreased $6.9 million during 2022 to $0.9 million as compared to $7.8 million in 2021.

The decrease in interest expense for the year ended December 31, 2022 as compared to 2021 was primarily due to the extinguishment of the Notes and the Secured Term Note in March 2021, as described in Footnote 6 , Debt .

Interest expense, net, decreased to $7.8 million in 2021 as compared to $35.8 million in 2020.

Interest expense decreased in 2021 primarily due to the extinguishment of the Notes and the Secured Term Note in March 2021.

Refer to Footnote 6 , Debt for information on our debt and related extinguishments.

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Other Income (Expense), Net

Other income (expense), net represents income and expenses incurred that are generally not recurring in nature or are not part of our normal operations.

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The following is a summary of other income (expense), net:

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Total other income (expense), net $ 42 $ 9,785 $ (5,778)

Total other income, net for the year ended December 31, 2023 was negligible as compared to total other income, net of $9.8 million in 2022.

The decrease in other income, net was primarily driven by larger gains from the change in fair value of warrants liability recognized in 2022 compared to 2023, due to a decrease in the trading price of our Common Stock in 2022 and an exercise price adjustment in 2023.

For additional information about the change in fair value of warrants liability, refer to Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity .

Total other income, net for the year ended December 31, 2022 was $9.8 million as compared to total other expense, net of $5.8 million in 2021.

The increase in other income, net was primarily driven by gains from the change in fair value of warrants liability due to a decrease in the trading price of our Common Stock during the year.

This compared to other expense, net for 2021 due to the loss on the warrants liability resulting from an exercise price adjustment described in Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity , and an increase in the trading price of our Common Stock during 2021.

Total other expense, net for the year ended December 31, 2021 was $5.8 million as compared to total other income, net of $14.6 million in 2020.

The shift from other income, net was largely driven by a loss from the change in the fair value of our warrants liability and lower gains from the change in fair value of our financing derivatives.

The loss on the warrants liability for 2021 was due primarily to the exercise price adjustment described in Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity , and an increase in the trading price of our Common Stock during 2021 .

The gain on the financing derivatives was primarily due to the passage of time as our remaining future interest obligations declined over the term of the Notes prior to their extinguishment in March 2021.

Gain (Loss) from Foreign Currency Transactions

The increase in other income, net was primarily driven by gains from the change in fair value of warrants liability due to a decrease in the trading price of our Common Stock during 2022.

This compared to other expense, net for 2021 due to an exercise price adjustment described in Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity , and an increase in the trading price of our Common Stock during 2021.

(Loss) Gain from Foreign Currency Transactions

Our foreign currency transactions are recorded as a result of fluctuations in the exchange rate between the transactional currency and the functional currency of foreign subsidiary transactions.

Our foreign currency exposures that relate to the translation to U.S.

Dollars are in a net liability position, and our foreign currency exposures that relate to the translation from U.S.

Dollars are in a net asset position.

For the year ended December 31, 2023, the loss from foreign currency transactions was $2.8 million.

The loss was primarily driven by fluctuations in the Chilean Peso against the U.S.

Dollar and Euro and the U.S.

Dollar against the Euro and Argentine Peso.

For the year ended December 31, 2022, the gain from foreign currency transactions was $1.2 million.

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Dollar and Chilean Peso against the Euro.

For the year ended December 31, 2020, the loss from foreign currency transactions was $4.5 million.

The loss was primarily driven by fluctuations in the Chilean Peso against both the U.S.

Dollar and Brazilian Real and the U.S.

Dollar against the Euro.

Income Tax Provision

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federal statutory rate primarily due to the effects of certain permanent items, foreign tax rate differences, and increases in the valuation allowance against our domestic deferred tax assets.

Included within tax expense for the year ended December 31, 2023 is an income tax adjustment of $20.9 million related to the impairment of goodwill.

Also included in the total tax expense is an income tax expense of $15.1 million for an increase in the valuation allowance recorded against our deferred tax assets to offset the tax benefit of our operating losses in the U.S.

and certain foreign jurisdictions.

Income tax expense of $0.7 million has also been included for permanent differences in the book and tax treatment of certain stock-based compensation, executive compensation, and other nondeductible expenses.

These tax adjustments, along with state and local taxes, are the primary drivers of the annual effective income tax rate.

Included within tax expense for the year ended December 31, 2022 is income tax benefit of $2.6 million for permanent differences in the book and tax treatment of nontaxable gain on fair market value adjustment of stock warrants, offset by certain nondeductible stock-based compensation and executive compensation.

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federal statutory rate, are the primary drivers of the annual effective income tax rate.

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Included within tax expense for the year ended December 31, 2021 are income tax adjustments of $9.2 million for permanent differences in the book and tax treatment of certain stock-based compensation, limitations on the deductibility of certain executive compensation, nondeductible interest expense on debt instruments and associated derivatives, and other nondeductible expenses.

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valuation allowance as a result of the Shareablee acquisition.

Included within tax expense for the year ended December 31, 2020 are income tax adjustments of $8.9 million for permanent differences in the book and tax treatment of certain stock-based compensation, limitations on the deductibility of certain executive compensation, nondeductible

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interest expense on debt instruments and associated derivatives, and other nondeductible expenses.

Also included is an adjustment of $11.2 million for a permanent difference related to foreign earnings taxable in the U.S.

as a result of a tax restructuring that occurred during the year.

Liquidity and Capital Resources

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Effect of exchange rate changes on cash, cash equivalents and restricted cash 748 (820) (1,218)

Net decrease in cash, cash equivalents and restricted cash (1,837) (28,462) (16,032)

Net increase (decrease) in cash, cash equivalents and restricted cash 2,494 (1,837) (28,462)

Our principal uses of cash consist of cash paid for data, payroll and other operating expenses, including restructuring-related costs and expenses incurred in prior periods;

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On June 30, 2022, we made cash dividend payments totaling $15.5 million to the holders of our Preferred Stock, representing dividends accrued for the period from June 30, 2021 through June 29, 2022.

The next scheduled dividend payment date for the Preferred Stock is June 30, 2023, and as of December 31, 2022, accrued dividends for the Preferred Stock totaled $7.9 million.

In 2023, each holder of Preferred Stock waived its right to receive on June 30, 2023 (and subsequently on December 31, 2023) the annual dividends otherwise payable by us on that date.

The deferred dividends will continue to accrue and accumulate at a rate of 9.5% per year until declared and paid, with payment to occur on or before June 30, 2024.

As of December 31, 2023, accrued dividends for the Preferred Stock totaled $24.1 million.

At an annual meeting of stockholders held on June 15, 2023 (the "Annual Meeting"), our stockholders approved proposals permitting the payment of annual dividends on the Preferred Stock in the form of cash, shares of Common Stock, additional shares of Preferred Stock, or a combination thereof, subject to conditions set forth in the Certificate of Designations governing the Preferred Stock.

On May 5, 2021, we entered into the Revolving Credit Agreement with Bank of America N.A.

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As of December 31, 2023, we had outstanding borrowings of $16.0 million and outstanding letters of credit totaling $3.2 million under the Revolving Credit Agreement, leaving a remaining borrowing capacity of $20.8 million.

The outstanding borrowings under the Revolving Credit Agreement are classified within current liabilities as the facility matures in May 2024.

We do not currently have an agreement in place to extend or refinance the facility upon its maturity.

Macroeconomic Factors

During 2020 and 2021, the COVID-19 pandemic and related government mandates and restrictions had a significant impact on the media, advertising and entertainment industries in which we operate.

The pandemic also had an impact on our business, including with respect to the execution of new and renewal contracts, the impact of closed movie theaters on our customers, customer payment delays and requests to modify contractual payment terms.

In response to the COVID-19 pandemic, we took actions in 2020 and 2021 to mitigate the liquidity impact, including freezing hiring, exiting non-critical consultants and contractors, terminating or negotiating reductions in vendor agreements and leases, and reducing certain travel, marketing, recruiting and other corporate activities.

Although we cannot quantify the impact that the pandemic may have on our business in the future, we saw positive recovery in 2022, including the reopening of theaters in most markets worldwide.

At the same time, however, macroeconomic factors such as inflation, rising interest rates, and supply chain disruptions caused some advertisers to reduce or delay advertising expenditures in the second half of 2022.

These declines had a direct impact on demand for our products, particularly those for which we recognize revenue based on impressions used.

We expect that softness in the advertising market will continue to affect our business in 2023.

Over the past two years, macroeconomic challenges such as inflation, rising interest rates, capital market disruptions and recession concerns have caused some advertisers to reduce or delay advertising expenditures.

These declines have had a direct impact on demand for our products, particularly those that are tied to discretionary advertising spend.

We expect that softness in the advertising market will continue to affect our business into 2024.

Although we cannot quantify the impact of macroeconomic factors on our future results, any worsening of ad market conditions could negatively impact our financial position and liquidity.

Preferred Stock

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Shares of Preferred Stock are convertible into Common Stock as described in Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity .

As of December 31, 2022, each share of Preferred Stock was convertible into 1.038542 shares of Common Stock, with such conversion rate scheduled to return to 1.00 upon payment of accrued dividends on June 30, 2023.

The holders of Preferred Stock are entitled to participate in all dividends declared on the Common Stock on an as-converted basis and are also entitled to a cumulative dividend at the rate of 7.5% per annum, payable annually in arrears and subject to increase under certain specified circumstances.

As of December 31, 2023, each share of Preferred Stock was convertible into 0.055915 shares of Common Stock, with such conversion rate scheduled to return to 0.05 upon payment of accrued dividends.

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In addition, such holders are entitled to request, and we must take all actions reasonably necessary to pay, a one-time special dividend on the Preferred Stock equal to the highest dividend that our Board of Directors determines can be paid at the applicable time (or a lesser amount agreed by the holders), subject to additional conditions and limitations described in Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity .

We may be obligated to obtain debt financing in order to effectuate the special dividend, which could significantly impact our financial position and liquidity depending on the timing and scope of the dividend payment and related financing.

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Moreover, this obligation could lead us to refinance or terminate the Revolving Credit Agreement prior to its maturity, due to its restrictions on our ability to incur additional debt.

At the Annual Meeting held on June 15, 2023, our stockholders approved proposals permitting the payment of annual dividends on the Preferred Stock in the form of cash, shares of Common Stock, additional shares of Preferred Stock, or a combination thereof, subject to conditions set forth in the Certificate of Designations governing the Preferred Stock.

On the same date, each holder of Preferred Stock waived its right to receive on June 30, 2023 the annual dividends otherwise payable by us on that date.

Upon receipt of the waivers, our Board unanimously agreed to defer the June 2023 payment in order to provide flexibility to our management team to continue to execute our strategic plan and consider dividend payment options later in the year.

Under the waivers and the Certificate of Designations, the deferred dividends would accrue and accumulate at a rate of 9.5% per year from June 30, 2023 until declared and paid, with payment to occur on or before December 31, 2023.

On December 26, 2023, at our request, each holder of our Preferred Stock waived its right to receive the deferred dividends on or before December 31, 2023.

Under these most recent waivers and the Certificate of Designations, the deferred dividends will continue to accrue at a rate of 9.5% per year until paid, with payment to occur on or before June 30, 2024, subject to certain conditions.

Payment of annual dividends (including deferred dividends) in the form of cash could significantly impact our financial position and liquidity.

The proceeds from the Preferred Stock issuance were used to repay the Notes.

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Revolving Credit Agreement

On May 5, 2021, we entered into the Revolving Credit Agreement, which matures on May 5, 2024.

On May 5, 2021, we entered into the Revolving Credit Agreement, which matures in May 2024.

The Revolving Credit Agreement provides a borrowing capacity equal to $40.0 million (increased from $25.0 million on February 25, 2022).

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The amount we are able to borrow under the Revolving Credit Agreement is subject to compliance with the financial covenants, satisfaction of various conditions precedent to borrowing and other provisions of the Revolving Credit Agreement.

Notably, the Revolving Credit Agreement (as amended) contains financial covenants that require us to maintain a minimum Consolidated Asset Coverage Ratio and minimum Liquidity through maturity, minimum Consolidated EBITDA for periods through December 31, 2023, and a minimum Consolidated Fixed Charge Coverage Ratio for periods after December 31, 2023 (each term as defined in the Revolving Credit Agreement).

Notably, the Revolving Credit Agreement (as amended) contains financial covenants that require us to maintain a minimum Consolidated Asset Coverage Ratio and minimum Liquidity through maturity, and a minimum Consolidated Fixed Charge Coverage Ratio for periods after December 31, 2023 (each term as defined in the Revolving Credit Agreement).

As of December 31, 2023, we were in compliance with our covenants under the Revolving Credit Agreement, and based on our current plans, we do not anticipate a breach of these covenants that would result in an event of default under the Revolving Credit Agreement.

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While we continue to take steps to reduce our outstanding trade payables and improve our working capital position, our liquidity could be negatively affected if we are unable to generate sufficient cash from operations to satisfy outstanding payables and meet our other financial obligations as they come due.

Our liquidity could also be negatively affected if we are unable to repay or refinance our outstanding borrowings under the Revolving Credit Agreement upon its maturity in 2024.

Our liquidity could also be negatively affected if we are unable to repay or refinance our outstanding borrowings under the Revolving Credit Agreement upon its maturity in May 2024.

For additional information on the Revolving Credit Agreement, refer to Footnote 6 , Debt .

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On October 14, 2019, we issued 136,425 shares of Common Stock to CVI upon exercise by CVI of the Series C Warrants.

As a result of this exercise, the number of shares issuable under our Series A Warrants was increased by 2,728,513.

As a result of this exercise, the number of

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shares issuable under our Series A Warrants was increased by 136,425.

On January 29, 2020, the Series B-1 Warrants expired unexercised.

On August 3, 2020, the Series B-2 Warrants expired unexercised.

For additional information on the Private Placement and the 2021 adjustment to the exercise price of our Series A Warrants in connection with the Preferred Stock issuance (which adjustment could reduce the cash proceeds we receive upon exercise of the Series A Warrants), refer to Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity .

The exercise price of our Series A warrants was adjusted in connection with the Preferred Stock transactions in March 2021 and further adjusted in connection with shares issued to non-executive employees under our annual incentive compensation plan in March 2023.

For additional information on the Private Placement and the adjustments to our Series A Warrants (which adjustments could reduce the cash proceeds we receive upon exercise of the Series A Warrants), refer to Footnote 5 , Convertible Redeemable Preferred Stock and Stockholders' Equity .

Restricted Cash

Restricted cash represents security deposits for subleased office space.

As of December 31, 2022 and 2021, we had $0.4 million of restricted cash.

Repayment of the Secured Term Note in 2021 resulted in the termination of the collateralization requirement thereunder, and no cash was restricted relating to the Secured Term Note as of December 31, 2022.

We also transferred outstanding letters of credit totaling $3.4 million under the Revolving Credit Agreement, which further reduced our restricted cash balance as this facility does not require letters of credit to be cash collateralized.

As of December 31, 2023 and 2022, we had $0.2 million and $0.4 million of restricted cash, respectively.

Operating Activities

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Our primary uses of cash from operating activities include personnel costs and costs related to data and infrastructure used to develop and maintain our products and services.

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Cash provided by operating activities is calculated by adjusting our net loss for changes in working capital, as well as by excluding non-cash items such as:

depreciation, non-cash operating lease expense, amortization expense of finance leases and intangible assets, impairment of right-of-use assets and goodwill, stock-based compensation, deferred tax provision, change in the fair value of financing derivatives, warrants liability and equity securities, loss on extinguishment of debt, non-cash interest expense on the Notes, accretion of debt discount, and amortization of deferred financing costs.

depreciation, non-cash operating lease expense, amortization expense of finance leases and intangible assets, impairment of right-of-use assets and goodwill, stock-based compensation, deferred tax provision, change in the fair value of financing derivatives, warrants liability and contingent consideration liability, loss on extinguishment of debt, non-cash interest expense on the Notes, accretion of debt discount, and amortization of deferred financing costs.

Net cash provided by operating activities in 2023 was $28.9 million compared to $34.9 million in 2022.

The decrease in cash provided by operating activities was partially attributable to a net decrease in cash generated from operating assets and liabilities, with $10.5 million of cash used for the year ended December 31, 2023 as compared to $0.3 million of cash generated for the year ended December 31, 2022.

The lower amount of cash generated from operating assets and liabilities in 2023 was primarily due to severance payments made in 2023, as well as the first payment of contingent consideration for our 2021 Shareablee acquisition.

Other contributors to the decrease in cash provided by operating activities were lower revenue, lower adjustments for amortization and stock-based compensation expense and change in fair value of contingent consideration in 2023, offset by the change in fair value of our warrants liability and depreciation.

Net cash provided by operating activities in 2022 was $34.9 million compared to $9.9 million in 2021.

The increase in cash provided by operating activities was primarily reflective of higher revenues, shorter billing cycles, and improved cash collections during 2022 as compared to 2021.

These increases were partially offset by payments of $4.6 million related to our organizational restructuring during 2022.

Net cash provided by operating activities in 2021 was $9.9 million compared to $0.7 million in 2020.

The increase in cash provided by operating activities was primarily attributable to a decrease in the cash interest paid on the Notes in 2021 of $21.4 million compared to 2020 (interest of $10.8 million on the Notes was paid in shares of Common Stock in 2021).

Offsetting the reduction in cash interest paid was a net decrease in operating assets and liabilities of $23.8 million for 2021 compared to $20.3 million for 2020.

The decrease in operating assets and liabilities was primarily due to decreases in our accounts payable and accrued expense balances in 2021 as we paid invoices related to expenses incurred in prior periods.

Investing Activities

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Net cash used in investing activities in 2023 was $23.8 million compared to $17.8 million in 2022.

The increase in cash used in investing activities was primarily due to an increase in cash paid for capitalized internally developed software offset by cash acquired from our 2021 acquisition of Shareablee.

The increase in cash used in investing activities was primarily due to an increase in cash paid for capitalized internally developed software as we increased our focus on product infrastructure and innovation in 2023.

Net cash used in investing activities in 2022 was $17.8 million compared to $14.6 million in 2021.

The decrease in cash used in investing activities was primarily due to net cash received as part of the Shareablee acquisition in 2021.

Financing Activities

Net cash used in financing activities in 2023 was $3.4 million compared to $18.1 million in 2022.

The decrease in cash used for financing activities was primarily due to the deferral of accrued dividends due to holders of the Preferred Stock in 2023, as described under "Preferred Stock" above.

This was offset by a portion of the first payment of contingent consideration for our 2021 Shareablee acquisition initially recorded at fair value and paid in 2023.

Net cash used in financing activities in 2022 was $18.1 million compared to $22.5 million in 2021.

The decrease in cash used for financing activities was primarily due to repayment of the Notes and the Secured Term Note in 2021, which outflows were partially offset by cash proceeds received from the issuance of the Preferred Stock (net of related transaction costs) in the same year.

These decreases were partially offset by a net increase of $10.8 million in cash dividends paid to holders of the Preferred Stock in 2022, reflecting a full annual dividend period, as compared to 2021, which included only a partial dividend period.

Net cash used in financing activities in 2021 was $22.5 million compared to $2.1 million in 2020.

The increase in cash used in financing activities was primarily due to the repayment of the Notes and the Secured Term Note and payment of $4.8 million in cash dividends to the holders of the Preferred Stock in 2021.

These increases in cash used were partially offset by cash proceeds of $204.0 million from the issuance of the Preferred Stock (net of $16.1 million in related transaction costs) and cash proceeds of $16.0 million from borrowing under the Revolving Credit Agreement.

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Contractual Payment Obligations

We have certain long-term contractual arrangements that have fixed and determinable payment obligations including unconditional purchase obligations with MVPDs and connected (Smart) TV data providers, operating and financing leases, and data storage and bandwidth arrangements.

We have certain long-term contractual arrangements that have fixed and determinable payment obligations including purchase obligations with MVPDs and connected (Smart) TV data providers, operating and financing leases, and data storage and bandwidth arrangements.

We have data licensing agreements with a number of MVPDs and other providers for set-top box and connected TV data.

These agreements have remaining terms from one to eight years.

These agreements have remaining terms from one to seven years.

As of December 31, 2023, the total fixed payment obligations related to set-top box and connected TV data agreements are $298.5 million and $30.4 million, respectively.

In addition, we expect to make variable payments related to a set-top box data agreement totaling an estimated $8.8 million by the end of 2023.

We have both operating and financing leases related to corporate office space and equipment.

Our leases have remaining terms from one to five years.

Our leases have remaining terms from less than one to four years.

As of December 31, 2023, the total fixed payment obligation related to these agreements is $41.6 million.

We have an agreement for cloud-based data storage and bandwidth to help process and store our data.

The remaining term for this agreement is one year.

The remaining term for this agreement is two years.

As of December 31, 2023, the total fixed payment obligation related to this agreement is $28.8 million.

Future Capital Requirements

Our ability to generate cash is subject to our performance, general economic conditions, industry trends and other factors, including the timing of cash collections from our customers, data costs and other trade payables, service of our debt and lease facilities and dividend payment obligations, and expenses from ongoing compliance efforts and legal matters.

To the extent that our existing cash, cash equivalents and

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operating cash flow, together with savings from repayment of the Notes and Secured Term Note and cost-reduction initiatives undertaken by our management, are insufficient to fund our future activities and requirements, we may need to raise additional funds through public or private equity or debt financing.

Our ability to generate cash is subject to our performance, general economic conditions, industry trends and other factors, including the timing of cash collections from our customers, data costs and other trade payables, service of our debt and lease facilities, dividend payment obligations, and expenses from ongoing compliance efforts and legal matters.

To the extent that our existing cash, cash equivalents and operating cash flow, together with savings from repayment of prior debt arrangements and cost-reduction initiatives undertaken by our management, are insufficient to fund our future activities and requirements, we may need to raise additional funds through public or private equity or debt financing.

We may also be required to raise additional funds in order to repay our Revolving Credit Agreement upon maturity or pay a special dividend to holders of our Preferred Stock, as described above.

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The determination of SSP also impacts the amount of revenues we can recognize in transactions where consideration is exchanged with counterparties as described above.

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The valuation of goodwill involves the use of management's estimates and assumptions and can have a significant impact on future operating results.

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The discounted cash flow model requires the use of various assumptions in developing the present value of projected cash flows, the following of which are significant to our analysis:

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Projected financial performance:

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The discount rates selected for the 2023, 2022 and 2021 annual impairment analyses were 22.0%, 27.0% and 19.0%, respectively.

Our selected discount rate was higher in 2022 primarily due to the increase in risk-free interest rates, cost of debt, unlevered beta assumptions, and company-specific risk premium ("CSRP").

The increase in CSRP was related to the utilization of higher growth rates in earnings before interest, taxes, depreciation, and amortization.

Our selected discount rate was lower in 2023 in comparison to 2022 primarily due to the decrease in unlevered beta assumptions and company-specific risk premium ("CSRP").

The decrease in CSRP was related to the utilization of lower growth rates in earnings before interest, taxes, depreciation, and amortization.

Under the market approach, the fair value is determined using certain financial metrics of publicly traded companies or historically completed transactions of comparable businesses.

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We determine fair value primarily based on selected market multiples based on current and projected revenues compared to business enterprise value, with an estimated control premium as applicable.

As of September 30, 2022, we concluded that it was more likely than not that the estimated fair value of our reporting unit was less than its carrying value.

In our assessment, we considered the decline in our stock price and market capitalization among other factors.

As of October 1, 2023, we concluded that it was more likely than not that the estimated fair value of our reporting unit was less than its carrying value.

In our assessment, we considered the decline in our revenue, stock price, and market capitalization among other factors.

We performed a quantitative goodwill impairment test in conjunction with the annual test using a discounted cash flow model, supported by a market approach.

Our reporting unit did not pass the goodwill impairment test, and as a result we recorded a $46.3 million non-cash impairment charge.

Goodwill allocated to our single reporting unit as of December 31, 2022 was $388.0 million, including $19.2 million initially attributable to our acquisition of Shareablee in 2021.

Our reporting unit did not pass the goodwill impairment test, and as a result we recorded a $34.1 million non-cash impairment charge in the quarter ended December 31, 2023.

As of June 30, 2023, we concluded that it was more likely than not that the estimated fair value of our reporting unit was less than its carrying value.

In our assessment, we considered the decline in our stock price and market capitalization among other factors.

We performed a quantitative goodwill impairment test using a discounted cash flow model, supported by a market approach.

Our reporting unit did not pass the goodwill impairment test, and as a result we recorded a $44.1 million non-cash impairment charge in the quarter ended June 30, 2023.

Goodwill allocated to our single reporting unit as of December 31, 2023 was $310.4 million.

The projected long-term cash flows used in our fair value estimate are consistent with our most recent operating plan and are dependent on the successful execution of our business plan, overall industry growth rates and the competitive environment.

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If the reporting unit's future performance falls below our expectations, or if there are negative revisions to our fair value assumptions, including those that are significant and discussed above, we may need to record a material, non-cash goodwill impairment charge in a future period.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis