Summary
DoubleVerify closed fiscal 2022 with record fourth-quarter and full-year revenue. Fourth-quarter revenue was $133.6 million, up 26.6% from the prior-year quarter. Full-year revenue was $452.4 million, up 36.0%. Fourth-quarter operating income was $28.6 million, up 78.5%, and full-year operating income was $59.0 million, up 121.2%. Operating margin expanded to 21.4% in the fourth quarter, up 6.2 percentage points, and to 13.0% for the full year, up 5.0 percentage points. Net income was mixed. Fourth-quarter net income was $18.1 million, down 36.2% from the prior-year quarter. Full-year net income was $43.3 million, up 47.6%. Full-year diluted EPS was $0.25, up 38.9%. Cash generation remained positive. Fourth-quarter operating cash flow was $36.5 million, up 50.1%, and full-year operating cash flow was $94.9 million, up 14.6%. Capital expenditures rose to $12.3 million in the quarter, up 214.6%, and to $40.0 million for the full year, up 325.5%.
Operational metrics showed broad platform use. DoubleVerify measured 5.5 trillion media transactions in 2022, up 22%, and its measured transaction fee was $0.072, up 7%. Net revenue retention was 127%, and gross revenue retention was over 95% in the fourth quarter and for the year. In the fourth quarter, CTV and Social media transactions measured rose 29% and 33%, respectively. Management pointed to new products, including post-campaign Brand Safety and Suitability measurement on TikTok and Twitter's newsfeed, scalable viewability verification on CTV, and MRC accreditation for DV Authentic Attention. Adjusted EBITDA, a non-GAAP measure, was $48.9 million in the fourth quarter, a 37% margin, and $141.6 million for the full year, a 31% margin. Full-year Adjusted EBITDA increased 29%.
Management issued first-quarter and full-year 2023 guidance. For the first quarter, revenue is expected between $117 million and $119 million, up 22% at the midpoint. Adjusted EBITDA is expected between $28 million and $30 million, a 25% margin at the midpoint. For full year 2023, revenue is expected between $550 million and $564 million, up 23% at the midpoint. Adjusted EBITDA is expected between $164 million and $172 million, a 30% margin at the midpoint. The company did not reconcile Adjusted EBITDA guidance to GAAP net income, saying it cannot quantify stock-based compensation, depreciation and amortization, acquisition-related costs, interest income, and income taxes without unreasonable efforts. That limitation is worth noting because the guidance relies on a non-GAAP profitability measure.
Risks remain familiar for the digital advertising software sector. The filing lists competition, system failures, security breaches, cyberattacks, natural disasters, economic downturns, unstable market conditions, ability to collect payments, data privacy legislation, public criticism of digital advertising technology, international operations, open source software, and a limited operating history. The company also disclosed that it discontinued relationships with Russia-based customers, and it monitors the conflict in Ukraine. Working capital metrics moved in different directions. Days sales outstanding was 113 days at December 31, 2022, compared with 105 days at December 31, 2021. Days payable outstanding was 54 days, compared with 64 days. DoubleVerify noted that fourth-quarter ad spending is typically the highest and first-quarter spending the lowest, so revenue can fluctuate with advertiser budgets. Management plans to keep investing in CTV, mobile apps, and emerging digital channels, and it maintains an active acquisition pipeline.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2022 | Q3 FY2022 | QoQ | Q4 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $133.6M | $112.3M | +19.0% | $105.5M | +26.6% |
| Gross profit | $110.8M | $92.9M | +19.2% | $87.1M | +27.2% |
| Gross margin | 82.9% | 82.8% | +0.1 pp | 82.5% | +0.4 pp |
| Research & development | $26.4M | $23.9M | +10.2% | $17.0M | +54.8% |
| Sales & marketing | $28.9M | $27.1M | +6.5% | $22.7M | +27.5% |
| General & administrative | $18.1M | $19.4M | -6.8% | $23.1M | -21.7% |
| Operating income (loss) | $28.6M | $14.4M | +98.7% | $16.0M | +78.5% |
| Operating margin | 21.4% | 12.8% | +8.6 pp | 15.2% | +6.2 pp |
| Net income (loss) | $18.1M | $10.3M | +74.9% | $28.3M | -36.2% |
| Net margin | 13.5% | 9.2% | +4.3 pp | 26.8% | -13.3 pp |
| Diluted EPS | $0.11 | $0.06 | +$0.05 | $0.18 | -$0.07 |
| Customers | 1,000 | — | — | 1,000 | ±0.0% |
Risks
MD&A states revenues depend on advertiser demand, and a global economic slowdown, inflation, rising interest rates, recessionary fears and geopolitical instability could cause customers to decrease advertising budgets or slow digital ad spend. The filing also reports a $1.0 million increase in bad debt reserves during the year ended December 31, 2022 after discontinuing Russia-based customers.
Risk factors state that although no customer accounted for more than 10% of revenue in 2022, two programmatic partner platforms collected approximately 17% and 14% each of total revenue in 2022 on behalf of advertiser customers. This heightens payment and collection exposure because these partners collect and remit payments.
The platform relies on integrations with demand- and supply-side advertising platforms, ad servers and social platforms, some of which have significant market share and have developed competing products. MD&A notes revenue from programmatic and social integrations grew 50% and 28%, respectively, in 2022, increasing dependence on these partners.
Data privacy and digital advertising laws such as GDPR, CCPA and CPRA impose evolving compliance burdens, and GDPR fines can reach 20 million Euros or 4% of annual global revenue. The filing says application, interpretation and enforcement remain uncertain and may be inconsistent across jurisdictions.
As of December 31, 2022, the company had $343.0 million of goodwill and $248.9 million of other long-lived assets, and it identified $1.5 million of long-lived asset impairment for the year ended December 31, 2022. Impairment analysis is sensitive to expected future cash flows, and further charges could reduce earnings.
The company often has long sales cycles from initial contact to contract execution and implementation, and under usage-based pricing customers control when and how much they use the platform. This makes it difficult to predict when new customers will generate revenue.
The company depends on senior management and key personnel, and competition for technology talent is intense in locations such as New York, Tel Aviv, Singapore, Berlin and London. It grew headcount by more than 50% since 2020 to 902 employees as of December 31, 2022, with 348 based outside the Americas.
The company has completed acquisitions including OpenSlate and Meetrics in 2021 and maintains an active M&A pipeline. Integration may disrupt operations, divert management attention, expose it to unanticipated liabilities, dilute stockholders or lead to goodwill impairment.
Advertisers typically allocate the largest portion of media budgets to Q4 and the lowest to Q1, so Q4 typically reflects the highest measurement activity. Historical revenue growth has masked seasonality, but a declining growth rate or more pronounced seasonal spending could materially affect revenue, cash flow and operating results.
The company operates in numerous foreign countries and has a significant R&D center in Tel Aviv, Israel. Political, economic and military conditions in Israel and the surrounding region, trade disruptions or tensions including Russia's invasion of Ukraine, could adversely affect operations; the company recorded a $1.0 million bad debt reserve increase in 2022 related to discontinuing Russia-based customers.
The company generates significant revenue from use of solutions on social media platforms, and public criticism or ad boycotts on platforms like Facebook and Twitter could reduce demand. MD&A reports revenue from social media platforms represented 37% and 33% of total Measurement revenue in 2022 and 2021, respectively.
The company is subject to taxation in multiple jurisdictions, and adverse tax law changes or disagreements with tax authorities could materially affect results. The Tax Cuts and Jobs Act eliminated current-period deductions for research and development expenditures effective January 1, 2022, requiring capitalization and amortization.
SaaS KPIs
All quarters →Adjusted EBITDA
Adjusted EBITDA Margin
Gross Revenue Retention
Media Transactions Measured (MTM) for CTV
Media Transactions Measured (MTM) growth
Measured Transaction Fee (MTF) growth
Authentic Brand Suitability (ABS) revenue growth
Media Transactions Measured (MTM) for Social
Summary, forecast, risks and KPIs are extracted from DoubleVerify Holdings, Inc.'s SEC filings for Q4 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.